Table of Contents

As filed with the Securities and Exchange Commission on May 3, 2021

Registration No. 333-252603

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

AMENDMENT NO. 4

TO

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

NORTHERN STAR ACQUISITION CORP.

(Exact name of Registrant as specified in its charter)

 

 

 

Delaware   6770   85-1872418
(State or other jurisdiction of
incorporation or organization)
  (Primary standard industrial
classification code number)
  (I.R.S. Employer
Identification Number)

c/o Graubard Miller

The Chrysler Building

405 Lexington Avenue

New York, New York 10174

(212) 818-8800

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

Joanna Coles, Chief Executive Officer

Northern Star Acquisition Corp.

c/o Graubard Miller

The Chrysler Building

405 Lexington Avenue

New York, New York 10174

(212) 818-8800

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

With copies to:

 

David Alan Miller, Esq.
Jeffrey M. Gallant, Esq.
Graubard Miller
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Telephone: (212) 818-8800
Fax: (212) 818-8881
 

Matthew S. Miller, Esq.

General Counsel

Barkbox, Inc.

221 Canal Street

New York, NY 10013

Telephone: 855-501-2275

 

Melissa B. Marks, Esq.

Jeffrey R. Vetter, Esq.

Keith J. Scherer, Esq.

Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP

1250 Broadway, 23rd Floor

New York, New York 10001

Telephone: (212) 730-8133

Fax: (877) 881-3007

 

Michael J. Mies, Esq.

Skadden, Arps, Slate, Meagher & Flom LLP

525 University Avenue

Palo Alto, California 94301

Telephone: (650) 470-4500

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective and all other conditions to the transactions contemplated by the Agreement and Plan of Reorganization described in the included proxy statement/prospectus have been satisfied or waived.

If the securities being registered on this form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:  ☐

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer      Accelerated filer  
Non-accelerated filer      Smaller reporting company  
     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 7(a)(2)(B) of the Securities Act.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ☐

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of Each Class of

Security to Be Registered

 

Amount

to Be

Registered

  Proposed
Maximum
Offering Price
Per Security
  Proposed
Maximum
Aggregate
Offering Price
  Amount of
Registration Fee

Common Stock

  155,000,000(1)(2)   $13.87(3)   $2,149,850,000   $234,548.64(4)(5)

 

 

(1)

Represents a good faith estimate of the maximum number of shares of the registrant’s common stock to be issued or reserved for issuance by Northern Star Acquisition Corp. to the security holders of Barkbox, Inc., a Delaware corporation, upon consummation of the business combination described herein.

(2)

Pursuant to Rule 416(a) of the Securities Act, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.

(3)

Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices of the registrant’s Class A common stock (which will be the registrant’s sole class of common stock after the business combination described herein) on January 25, 2021 (a date within five business days prior to the date of this Registration Statement). This calculation is in accordance with Rule 457(f)(1) of the Securities Act of 1933, as amended.

(4)

Calculated pursuant to Rule 457 of the Securities Act by multiplying the proposed maximum aggregate offering price of securities to be registered by 0.0001091.

(5)

Previously paid.

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


Table of Contents

The information in this preliminary prospectus supplement and the accompanying prospectus is not complete and may be changed. This preliminary prospectus supplement and the accompanying prospectus are not an offer to sell these securities and are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED MAY 3, 2021

PROXY STATEMENT FOR ANNUAL MEETING OF

NORTHERN STAR ACQUISITION CORP.

 

 

PROSPECTUS FOR UP TO 155,000,000 SHARES OF COMMON STOCK

 

 

The board of directors of Northern Star Acquisition Corp., a Delaware corporation (“Northern Star”), has unanimously approved the Agreement and Plan of Reorganization, dated as of December 16, 2020 (the “Merger Agreement”), by and among Northern Star, NSAC Merger Sub Corp., a Delaware corporation and wholly owned subsidiary of Northern Star (“Merger Sub”), and Barkbox, Inc., a Delaware corporation (“BARK”), pursuant to which Merger Sub will merge with and into BARK, with BARK surviving as a wholly owned subsidiary of Northern Star and the securityholders of BARK becoming securityholders of NSAC (the “Merger”). We sometimes refer to the Merger and the other transactions contemplated by the Merger Agreement as the “Business Combination” and to Northern Star after the Business Combination as “New BARK.”

Pursuant to the Merger Agreement, each share of BARK’s common and preferred stock issued and outstanding immediately prior to the effective time of the Merger (including each share of BARK’s common stock issued as a result of the conversion of certain of BARK’s convertible promissory notes, as more fully described in this proxy statement/prospectus) will be automatically converted into the right to receive a number of shares of Northern Star common stock equal to the Exchange Ratio. The “Exchange Ratio” is the quotient obtained by dividing 150,000,000 by the fully-diluted number of shares of BARK’s common stock outstanding immediately prior to the effective time of the Merger (as determined in accordance with the Merger Agreement and more fully described in this proxy statement/prospectus). Northern Star presently estimates that the Exchange Ratio will be approximately [8.7479]. The exact Exchange Ratio will not be known until the closing of the Business Combination, and accordingly will not be known at the time of the annual meeting of stockholders of Northern Star being held to consider the Merger Agreement, among other proposals.

Each of the options to purchase BARK’s common stock, whether or not exercisable and whether or not vested, and each of the warrants to purchase BARK’s common and preferred stock, in each case that is outstanding immediately prior to the effective time of the Merger, will be assumed by Northern Star and converted into an option or warrant, as the case may be, to purchase a number of shares of Northern Star common stock equal to the number of shares of BARK’s common stock subject to such option or warrant immediately prior to the effective time (or the number of shares of common stock issuable upon conversion of the preferred stock subject to such warrant) multiplied by the Exchange Ratio, at an exercise price equal to the exercise price immediately prior to the effective time divided by the Exchange Ratio.

BARK’s outstanding convertible promissory notes issued in 2019 and 2020 will be converted into shares of BARK’s common stock immediately prior to the effective time of the Merger. All shares of BARK’s common stock issued upon such conversion will be entitled to receive shares of Northern Star common stock in the Merger as described above. BARK’s 5.50% convertible senior secured notes due 2025 (the “2025 Notes”) issued under an indenture with U.S. Bank National Association will be assumed by Northern Star at the effective time and will become convertible at the election of the holders into shares of Northern Star common stock. See the section entitled “The Business Combination Proposal—Structure of the Merger—Consideration to BARK Securityholders.

Accordingly, this proxy statement/prospectus covers up to an aggregate of 155,000,000 shares of Northern Star common stock, representing the estimated maximum number of shares to be issued or reserved for issuance to the securityholders of BARK at the closing of the Business Combination.

In connection with the Merger, Northern Star has entered into subscription agreements with certain investors (the “PIPE Investors”), pursuant to which such PIPE Investors have agreed to purchase an aggregate of 20,000,000 shares of Northern Star common stock in a private placement at a price of $10.00 per share for an aggregate commitment of $200,000,000. The closing of the private placement is expected to take place concurrently with the closing of the Business Combination. The subscription agreements are subject to certain conditions, including, among other things, the closing of the Business Combination.

Proposals to approve the Merger Agreement and the other matters discussed in this proxy statement/prospectus will be presented at the annual meeting of stockholders of Northern Star scheduled to be held on                     , 2021.

Northern Star’s units, Class A common stock and warrants are currently listed on the New York Stock Exchange (the “NYSE”) under the symbols STIC.U, STIC and STIC.WS, respectively. Northern Star intends to apply for listing on the NYSE of the Northern Star common stock and warrants, under the proposed symbols BARK and BARK.WS, respectively, to be effective at the consummation of the Business Combination. Northern Star’s units will not be listed on the NYSE following consummation of the Business Combination and such units will automatically be separated into their component securities without any action needed to be taken on the part of the holders. Furthermore, each outstanding share of Northern Star’s Class B common stock will convert into one share of Northern Star’s Class A common stock at the closing of the Business Combination, the Class B common stock will cease to exist and Northern Star will thereafter have a single class of common stock. It is a condition to the consummation of the Business Combination that the shares of Northern Star common stock to be issued in the Merger be approved for listing on the NYSE (subject only to official notice of issuance thereof and public holder requirements), but there can be no assurance such listing condition will be met. If such listing condition is not met, the Business Combination will not be consummated unless the listing condition is waived by the parties to the Merger Agreement.

Northern Star is an “emerging growth company” and “smaller reporting company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), and has elected to comply with certain reduced public company reporting requirements. See “Summary of the Proxy Statement/Prospectus—Emerging Growth Company.”

 

 

This proxy statement/prospectus provides you with detailed information about the Merger and other matters to be considered at the annual meeting of Northern Star’s stockholders. We encourage you to carefully read this entire document. You should also carefully consider the risk factors described in “Risk Factors beginning on page 39 of this proxy statement/prospectus. These securities have not been approved or disapproved by the Securities and Exchange Commission or any state securities commission nor has the Securities and Exchange Commission or any state securities commission passed upon the accuracy or adequacy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

 

 

This proxy statement/prospectus incorporates by reference important business and financial information about Northern Star from documents Northern Star has filed with the Securities and Exchange Commission that are not included in or delivered with this proxy statement/prospectus. You can obtain documents incorporated by reference in this proxy statement/prospectus and other filings of Northern Star with the Securities and Exchange Commission by visiting its website at www.sec.gov or requesting them in writing or by telephone from Northern Star at the following address:

Ms. Joanna Coles

Northern Star Acquisition Corp.

c/o Graubard Miller

The Chrysler Building

405 Lexington Avenue, 11th Floor

New York, NY 10174

Tel: (212) 818-8800

You will not be charged for any of these documents that you request. Stockholders requesting documents should do so by                     , 2021 in order to receive them before the annual meeting.

 

 

This proxy statement/prospectus is dated                     , 2021, and is first being mailed to Northern Star security holders on or about such date.


Table of Contents

NORTHERN STAR ACQUISITION CORP.

c/o Graubard Miller

The Chrysler Building

405 Lexington Avenue, 11th Floor

New York, NY 10174

NOTICE OF

ANNUAL MEETING

TO BE HELD ON                     , 2021

TO THE STOCKHOLDERS OF NORTHERN STAR ACQUISITION CORP:

NOTICE IS HEREBY GIVEN that an annual meeting of stockholders of Northern Star Acquisition Corp. (“Northern Star” or, after the completion of the transactions described herein, “New BARK”), a Delaware corporation, will be held at                     . eastern time, on                     , 2021. Due to health concerns stemming from the COVID-19 pandemic, and to support the health and well-being of our stockholders, the annual meeting will be a virtual meeting, held solely over the Internet by means of a live audio webcast. You are cordially invited to attend and participate in the annual meeting accessing the meeting web portal located at http://www.virtualshareholdermeeting.com/STIC2021. The annual meeting will be held for the following purposes:

 

  (1)

Proposal No. 1—The Business Combination Proposal—to consider and vote upon a proposal to approve and adopt the Agreement and Plan of Reorganization, dated as of December 16, 2020 (the “Merger Agreement”), by and among Northern Star, NSAC Merger Sub Corp., a Delaware corporation and wholly owned subsidiary of Northern Star (“Merger Sub”), and Barkbox, Inc., a Delaware corporation (“BARK”), a copy of which is attached to this proxy statement/prospectus as Annex A, and the transactions contemplated thereby (the “Business Combination”), including the merger of Merger Sub with and into BARK, with BARK surviving as a wholly owned subsidiary of Northern Star (the “Merger”), and the issuance of shares of Northern Star common stock to BARK’s stockholders in the Merger—we refer to this proposal as the “business combination proposal”;

 

  (2)

Proposal No. 2—The PIPE Proposal—to consider and vote upon a proposal to approve the issuance of an aggregate of 20,000,000 shares of Northern Star common stock in a private placement at a price of $10.00 per share, for an aggregate purchase price of $200,000,000 (the “PIPE Transaction”), the closing of which is subject to certain conditions, including, among other things, the closing of the Business Combination—we refer to this proposal as the “PIPE proposal”;

 

  (3)

The Charter Proposals—to consider and vote upon separate proposals to approve amendments to Northern Star’s current amended and restated certificate of incorporation to:

 

  (i)

change the name of Northern Star to “The Original BARK Company”, as opposed to the current name of “Northern Star Acquisition Corp.” (Proposal No. 3);

 

  (ii)

increase the number of shares of common stock Northern Star is authorized to issue to 500,000,000 shares, as opposed to the current number of 150,000,000 shares, and to remove the provisions for Northern Star’s current Class B common stock (the shares of which will all convert into shares of Class A common stock in connection with the Business Combination) so that the Class B common stock will cease to exist and Northern Star will have a single class of common stock (Proposal No. 4);

 

  (iii)

add supermajority voting provisions requiring the affirmative vote of the holders of 66 2/3% of the voting power of all of the then outstanding shares of the capital stock of New BARK to amend certain provisions of the second amended and restated certificate of incorporation, to adopt, amend or repeal any provision of the bylaws, or to remove any director, or the entire Board of Directors (Proposal No. 5); and

 

  (iii)

remove the various provisions applicable only to special purpose acquisition companies (such as the obligation to dissolve and liquidate if a business combination is not consummated within a certain period of time) and make certain other immaterial changes that the Northern Star board deems appropriate (Proposal No. 6)—we refer to Proposals 3, 4 and 5, collectively, as the “charter proposals”;


Table of Contents
  (4)

Proposal No. 7—The Director Election Proposal—to elect seven directors who, upon the closing of the Business Combination, will be the directors of New BARK—we refer to this proposal as the “director election proposal”;

 

  (5)

Proposal No. 8—The Incentive Plan Proposal—to consider and vote upon a proposal to approve the 2021 Equity Incentive Plan (the “2021 Plan”), which is an incentive compensation plan for employees and other service providers of Northern Star and its subsidiaries, including, after the Merger, BARK and its subsidiaries—we refer to this proposal as the “incentive plan proposal”;

 

  (6)

Proposal No. 9—The ESPP Proposal—to consider and vote upon a proposal to approve the 2021 Employee Stock Purchase Plan (the “ESPP”), which provides for employees and other service providers of Northern Star and its subsidiaries, including, after the Merger, BARK and its subsidiaries, to purchase shares of Northern Star common stock—we refer to this proposal as the “ESPP proposal”; and

 

  (7)

Proposal No. 10—The Adjournment Proposal—to consider and vote upon a proposal to adjourn the annual meeting to a later date or dates if it is determined by the officer presiding over the annual meeting that more time is necessary for Northern Star to consummate the Merger and the other transactions contemplated by the Merger Agreement—we refer to this proposal as the “adjournment proposal.”

We also will transact any other business as may properly come before the annual meeting or any adjournment or postponement thereof.

The items of business listed above are more fully described elsewhere in the proxy statement/prospectus. Whether or not you intend to attend the annual meeting, we urge you to read the attached proxy statement/prospectus in its entirety, including the annexes and accompanying financial statements, before voting. IN PARTICULAR, WE URGE YOU TO CAREFULLY READ THE SECTION IN THE PROXY STATEMENT/PROSPECTUS ENTITLED “RISK FACTORS.

Only holders of record of Northern Star’s Class A and Class B common stock (collectively, “Northern Star common stock”) at the close of business on April 5, 2021 (the “record date”) are entitled to notice of the annual meeting and to vote and have their votes counted at the annual meeting and any adjournments or postponements of the annual meeting.

After careful consideration, Northern Star’s board of directors has determined that each of the business combination proposal, the PIPE proposal, the charter proposals, the election of the seven nominees identified in this proxy statement/prospectus to serve as directors, the incentive plan proposal, the ESPP proposal, and the adjournment proposal is fair to and in the best interests of Northern Star and its stockholders and unanimously recommends that you vote or give instruction to vote “FOR” the business combination proposal, “FOR” the PIPE proposal, “FOR” each of the charter proposals, “FOR” the election of the seven director nominees identified in this proxy statement/prospectus, “FOR” the incentive plan proposal, “FOR” the ESPP proposal and “FOR” the adjournment proposal, if presented. When you consider the recommendations of Northern Star’s board of directors, you should keep in mind that Northern Star’s directors and officers may have interests in the Business Combination that conflict with, or are different from, your interests as a stockholder of Northern Star. See the section entitled “The Business Combination Proposal—Interests of the Sponsor and Northern Star’s Directors and Officers in the Business Combination.”

The closing of the Business Combination is conditioned on approval of the business combination proposal, the PIPE proposal, the charter proposals, the incentive plan proposal and the ESPP proposal and on the election of the seven nominees identified in this proxy statement/prospectus to serve as directors of Northern Star. If any of the proposals is not approved or the seven nominees identified in this proxy statement/prospectus to serve as directors of Northern Star after the closing of the Business Combination are not elected, and the applicable closing condition in the Merger Agreement is not waived, the remaining proposals will not be presented to stockholders for a vote.

All Northern Star stockholders are cordially invited to attend and participate in the annual meeting by accessing the meeting web portal located at http://www.virtualshareholdermeeting.com/STIC2021. To ensure your representation at the annual meeting, however, you are urged to complete, sign, date and return the enclosed


Table of Contents

proxy card as soon as possible. If you are a holder of record of Northern Star common stock on the record date, you may also cast your vote at the annual meeting. If your Northern Star common stock is held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the annual meeting, obtain a proxy from your broker or bank.

A complete list of Northern Star stockholders of record entitled to vote at the annual meeting will be available for ten days before the annual meeting at the principal executive offices of Northern Star for inspection by stockholders during business hours for any purpose germane to the annual meeting.

Your vote is important regardless of the number of shares you own. Whether you plan to attend the annual meeting virtually or not, please complete, sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly voted and counted.

If you have any questions or need assistance voting your common stock, please contact D.F. King & Co., Inc., our proxy solicitor, by calling (866) 406-2284, or banks and brokers can call collect at (212) 269-5550. Questions can also be sent by email to BARK@dfking.com. This notice of annual meeting is and the proxy statement/prospectus relating to the Business Combination will be available at http://www.virtualshareholdermeeting.com/STIC2021.

Thank you for your participation. We look forward to your continued support.

By Order of the Board of Directors

/s/ Joanna Coles

Joanna Coles

Chief Executive Officer

                    , 2021

IF YOU RETURN YOUR SIGNED PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS.

ALL HOLDERS (THE “PUBLIC STOCKHOLDERS”) OF SHARES OF NORTHERN STAR CLASS A COMMON STOCK ISSUED IN NORTHERN STAR’S INITIAL PUBLIC OFFERING (THE “PUBLIC SHARES”) HAVE THE RIGHT TO HAVE THEIR PUBLIC SHARES CONVERTED INTO CASH IN CONNECTION WITH THE PROPOSED BUSINESS COMBINATION. PUBLIC STOCKHOLDERS ARE NOT REQUIRED TO AFFIRMATIVELY VOTE FOR OR AGAINST THE BUSINESS COMBINATION PROPOSAL, TO VOTE ON THE BUSINESS COMBINATION PROPOSAL AT ALL, OR TO BE HOLDERS OF RECORD ON THE RECORD DATE IN ORDER TO HAVE THEIR SHARES CONVERTED INTO CASH. THIS MEANS THAT ANY PUBLIC STOCKHOLDER HOLDING PUBLIC SHARES MAY EXERCISE CONVERSION RIGHTS REGARDLESS OF WHETHER THEY ARE EVEN ENTITLED TO VOTE ON THE BUSINESS COMBINATION PROPOSAL.

TO EXERCISE CONVERSION RIGHTS, HOLDERS MUST TENDER THEIR STOCK TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY, NORTHERN STAR’S TRANSFER AGENT, NO LATER THAN TWO (2) BUSINESS DAYS PRIOR TO THE ANNUAL MEETING. YOU MAY TENDER YOUR STOCK BY EITHER DELIVERING YOUR STOCK CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DEPOSIT WITHDRAWAL AT CUSTODIAN SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE CONVERTED INTO CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR CONVERSION RIGHTS. SEE “ANNUAL MEETING OF NORTHERN STAR STOCKHOLDERS—CONVERSION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.


Table of Contents

TABLE OF CONTENTS

 

FREQUENTLY USED TERMS

     ii  

FORWARD-LOOKING STATEMENTS

     iv  

SUMMARY OF THE MATERIAL TERMS OF THE MERGER

     1  

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS

     4  

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

     15  

SUMMARY HISTORICAL FINANCIAL INFORMATION OF NORTHERN STAR

     32  

SUMMARY HISTORICAL FINANCIAL INFORMATION OF BARK

     33  

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     35  

COMPARATIVE PER SHARE DATA

     37  

RISK FACTORS

     39  

THE BUSINESS COMBINATION PROPOSAL

     86  

THE MERGER AGREEMENT

     107  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

     116  

THE PIPE PROPOSAL

     130  

THE CHARTER PROPOSALS

     132  

THE DIRECTOR ELECTION PROPOSAL

     134  

EXECUTIVE COMPENSATION

     146  

THE INCENTIVE PLAN PROPOSAL

     154  

THE ESPP PROPOSAL

     159  

THE ADJOURNMENT PROPOSAL

     162  

OTHER INFORMATION RELATED TO NORTHERN STAR

     163  

BUSINESS OF BARK

     172  

BARK’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     187  

BENEFICIAL OWNERSHIP OF SECURITIES

     210  

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

     216  

DESCRIPTION OF NEW BARK’S SECURITIES AFTER THE MERGER

     220  

INFORMATION ON NORTHERN STAR AND BARK SECURITIES AND DIVIDENDS

     235  

APPRAISAL RIGHTS

     235  

STOCKHOLDER PROPOSALS

     235  

OTHER STOCKHOLDER COMMUNICATIONS

     236  

EXPERTS

     236  

DELIVERY OF DOCUMENTS TO STOCKHOLDERS

     236  

WHERE YOU CAN FIND MORE INFORMATION

     237  

INDEX TO FINANCIAL STATEMENTS

     F-1  

Annexes

 

Annex A – Merger Agreement

     A-1  

Annex B – Second Amended and Restated Certificate of Incorporation

     B-1  

Annex C – 2021 Equity Incentive Plan

     C-1  

Annex D – 2021 Employee Stock Purchase Plan

     D-1  

You should rely only on the information contained or incorporated by reference in this proxy statement/prospectus in determining whether to vote in favor of the Business Combination and the other proposals. No one has been authorized to provide you with information that is different from that contained in this proxy statement/prospectus. This proxy statement/prospectus is dated                     , 2021. You should not assume that the information contained or incorporated by reference in this proxy statement/prospectus is accurate as of any date other than that date. Neither the mailing of this proxy statement/prospectus to Northern Star securityholders nor the issuance by Northern Star of its common stock in connection with the Business Combination will create any implication to the contrary.

 

i


Table of Contents

FREQUENTLY USED TERMS

As used in this proxy statement/prospectus:

 

   

2025 Notes” means the 5.50% convertible senior secured notes due 2025 (CUSIP No. 067605AA3) issued to Cede & Co. on November 27, 2020 under an indenture, dated as of November 27, 2020, between BARK and U.S. Bank National Association, as trustee and collateral agent;

 

   

annual meeting” means the annual meeting of the stockholders of Northern Star that is the subject of this proxy statement/prospectus;

 

   

BARK” means Barkbox, Inc., a Delaware corporation;

 

   

Business Combination” means the Merger and the other transactions contemplated by the Merger Agreement;

 

   

Charter” means the second amended and restated certificate of incorporation of New BARK following the Merger;

 

   

Code” means the Internal Revenue Code of 1986, as amended;

 

   

combined company” means Northern Star following the closing of the Business Combination (at which time, subject to stockholder approval, Northern Star will be renamed “The Original BARK Company” and is referred to by us as “New BARK”);

 

   

convertible notes issued in 2019 and 2020” means the convertible promissory notes issued by BARK in 2019 and 2020, other than the 2025 Notes;

 

   

DGCL” means the Delaware General Corporation Law, as amended;

 

   

Exchange Act” means the Securities Exchange Act of 1934, as amended;

 

   

Exchange Ratio” means the exchange ratio obtained by dividing 150,000,000 by the fully-diluted number of shares of BARK’s common stock outstanding immediately prior to the effective time of the Merger (as determined in accordance with the Merger Agreement and more fully described in this proxy statement/prospectus);

 

   

founder shares” means the 6,358,750 shares of Northern Star’s Class B common stock outstanding that were issued prior to Northern Star’s initial public offering, each of which will convert into one share of Northern Star’s Class A common stock in connection with the closing of the Business Combination;

 

   

HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

 

   

initial stockholders” means the holders of the founder shares prior to Northern Star’s initial public offering;

 

   

JOBS Act” means the Jumpstart Our Business Startups Act of 2012, as amended;

 

   

Marcum” means Marcum LLP, an independent registered public accounting firm serving as auditors for Northern Star;

 

   

Merger” means the merger of Merger Sub with and into BARK, with BARK surviving as a wholly owned subsidiary of Northern Star;

 

   

Merger Agreement” means the Agreement and Plan of Reorganization, dated as of December 16, 2020, by and among Northern Star, Merger Sub and BARK;

 

   

Merger Consideration” means the aggregate number of shares of Northern Star’s common stock that the securityholders of BARK have the right to receive upon consummation of the Merger;

 

   

Merger Sub” means NSAC Merger Sub Corp., a Delaware corporation and a wholly owned subsidiary of Northern Star;

 

ii


Table of Contents
   

New BARK” means Northern Star (or following its name change, The Original BARK Company) after the consummation of the Business Combination, including, unless the context otherwise requires, its operating subsidiary, BARK;

 

   

Northern Star” means Northern Star Acquisition Corp., a Delaware corporation, which is expected to be renamed “The Original BARK Company” upon the closing of the Business Combination (unless the context otherwise requires, references to “Northern Star” and “New BARK” after the closing of the Business Combination refer to the combined company, including its operating subsidiary, BARK);

 

   

Northern Star common stock” means, prior to the Merger, Northern Star’s Class A common stock and Class B common stock collectively and, after the Merger, Northern Star’s common stock;

 

   

NYSE” means the New York Stock Exchange;

 

   

private warrants” means the 4,558,000 warrants of Northern Star sold to the Sponsor in a private placement that took place simultaneously with Northern Star’s initial public offering;

 

   

public shares” means the shares of Northern Star’s Class A common stock included in the units issued in Northern Star’s initial public offering;

 

   

public stockholders” means holders of public shares, including the Sponsor and Northern Star’s officers and directors to the extent they hold public shares; provided, that the holders of founder shares will be considered a “public stockholder” only with respect to any public shares held by them;

 

   

public warrants” means the redeemable warrants exercisable for shares of Northern Star’s Class A common stock included in the units issued in Northern Star’s initial public offering;

 

   

record date” means April 5, 2021;

 

   

SEC” means the Securities and Exchange Commission;

 

   

Securities Act” means the Securities Act of 1933, as amended;

 

   

Sponsor” means Northern Star Sponsor LLC, a Delaware limited liability company and an affiliate of certain of Northern Star’s officers and directors; and

 

   

U.S. GAAP” means generally accepted accounting principles in the United States.

 

iii


Table of Contents

FORWARD-LOOKING STATEMENTS

Certain information in this proxy statement/prospectus constitutes forward-looking statements within the definition of the Private Securities Litigation Reform Act of 1995. However, because Northern Star is a “blank check” company, the safe-harbor provisions of that act do not apply to statements made in this proxy statement/prospectus. You can identify these statements by forward-looking words such as “may,” “expect,” “anticipate,” “contemplate,” “believe,” “estimate,” “intends” and “continue” or similar words. You should read statements that contain these words carefully because they:

 

   

discuss future expectations;

 

   

contain projections of future results of operations or financial condition; or

 

   

state other “forward-looking” information.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this proxy statement/prospectus.

All forward-looking statements included herein attributable to any of Northern Star, BARK or any person acting on either party’s behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable laws and regulations, Northern Star and BARK undertake no obligations to update these forward-looking statements to reflect events or circumstances after the date of this proxy statement/prospectus or to reflect the occurrence of unanticipated events.

Northern Star believes it is important to communicate its expectations to its securityholders. However, there may be events in the future that Northern Star is not able to predict accurately or over which it has no control. The section in this proxy statement/prospectus entitled “Risk Factors” and the other cautionary language discussed in this proxy statement/prospectus provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described by Northern Star in such forward-looking statements.

Before you grant your proxy or instruct your bank or broker how to vote, or vote on the business combination proposal, the PIPE proposal, the charter proposals, the director election proposal, the incentive plan proposal or the adjournment proposal, you should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement/prospectus may adversely affect New BARK and/or BARK.

 

iv


Table of Contents

SUMMARY OF THE MATERIAL TERMS OF THE MERGER

 

   

The parties to the Merger are Northern Star, Merger Sub and BARK. Pursuant to the Merger Agreement, Merger Sub will merge with and into BARK, with BARK surviving as a wholly owned subsidiary of Northern Star and the securityholders of BARK becoming securityholders of Northern Star. See the sections entitled “The Business Combination Proposal” and “The Merger Agreement.”

 

   

BARK is a company of dog obsessed people dedicated to making dogs happy. BARK is a vertically integrated, data driven, omnichannel brand serving dogs across the four key categories of Play, Food, Health, and Home. BARK’s dog-obsessed team applies its unique, data-driven understanding of what makes each dog special to design playstyle-specific toys, delicious and satisfying treats, food, and wellness supplements, and best in class offerings that foster the health and happiness of dogs. Founded in 2012, BARK loyally serves dogs nationwide with monthly subscription offerings, BarkBox and Super Chewer; a personalized meal delivery service for dogs, BARK Eats; custom collections through online marketplaces and via brick and mortar retail partners, including Target and Amazon; wellness products that meet dogs’ needs with BARK Bright through monthly subscriptions; BARK’S add to box (“ATB”) platform; and individually on its website BarkShop.com.

 

   

Pursuant to the Merger Agreement, each share of BARK’s common and preferred stock issued and outstanding immediately prior to the effective time of the Merger (including each share of BARK’s common stock issued as a result of the conversion of certain of BARK’s convertible promissory notes, as more fully described in this proxy statement/prospectus) will be automatically converted into the right to receive a number of shares of Northern Star common stock equal to the Exchange Ratio. Northern Star presently estimates that the Exchange Ratio will be approximately [8.7479]. The exact Exchange Ratio will not be known until the closing of the Business Combination, and accordingly will not be known at the time of the annual meeting. See the section entitled “The Business Combination Proposal—Structure of the Merger.

 

   

Each of the options to purchase BARK’s common stock, whether or not exercisable and whether or not vested, and each of the warrants to purchase BARK’s common and preferred stock, in each case that is outstanding immediately prior to the effective time of the Merger, will be assumed by Northern Star and converted into an option or warrant, as the case may be, to purchase a number of shares of Northern Star common stock equal to the number of shares of BARK’s common stock subject to such option or warrant immediately prior to the effective time (or the number of shares of common stock issuable upon conversion of the preferred stock subject to such warrant) multiplied by the Exchange Ratio, at an exercise price equal to the exercise price immediately prior to the effective time divided by the Exchange Ratio. See the section entitled “The Business Combination Proposal—Structure of the Merger.

 

   

BARK’s outstanding convertible promissory notes issued in 2019 and 2020 will be converted into shares of BARK’s common stock immediately prior to the effective time of the Merger. All shares of BARK’s common stock issued upon such conversion will be entitled to receive shares of Northern Star common stock in the Merger as described above. BARK’s 2025 Notes will be assumed by Northern Star at the effective time and will become convertible at the election of the holder into shares of Northern Star common stock. See the section entitled “The Business Combination Proposal—Structure of the Merger.

 

   

In connection with the execution of the Merger Agreement, Northern Star entered into subscription agreements with certain investors (the “PIPE Investors”), pursuant to which such PIPE Investors have agreed to purchase an aggregate of 20,000,000 shares of Northern Star common stock in a private placement at a price of $10.00 per share for an aggregate commitment of $200,000,000 (the “PIPE Transaction”). The closing of the private placement is expected to take place concurrently with the closing of the Business Combination. The subscription agreements are subject to certain conditions, including, among other things, the closing of the Business Combination. For more information about

 

1


Table of Contents
 

the subscription agreements and the PIPE Transaction, please see the sections entitled “The Business Combination Proposal—Related Agreements—Subscription Agreements for PIPE Transaction”, “The PIPE Proposal” and “Certain Relationships and Related Person Transactions—Northern Star Related Person Transactions—Subscription Agreements.”

 

   

Assuming that none of BARK’s options or warrants are exercised or forfeited and no additional options, warrants or other derivative securities are granted or issued by BARK prior to the closing of the Business Combination, and based on interest accrued on BARK’s convertible promissory notes through April 27, 2021, an estimated 117,108,696 shares of Northern Star common stock will be issued to BARK’s former stockholders and former holders of BARK’s 2019 Convertible Promissory Notes and 2020 Convertible Promissory Notes and an estimated 39,210,930 shares of Northern Star common stock will be reserved for issuance upon exercise of BARK’s options and warrants and conversion of BARK’s 2025 Notes assumed by Northern Star. The actual number of shares of Northern Star common stock to be issued in the Merger will depend on the exercise, forfeiture or issuance of BARK’s options, warrants and other derivative securities prior to closing. See the section entitled “The Business Combination Proposal—Structure of the Merger.

 

   

Based on the assumptions in the preceding paragraph, and further assuming that no holder of Northern Star’s public shares exercises conversion rights as described in this proxy statement/prospectus, immediately after the closing of the Business Combination, BARK’s former stockholders and former holders of BARK’s 2019 Convertible Promissory Notes and 2020 Convertible Promissory Notes will hold approximately 69.3% of the issued and outstanding Northern Star common stock, the PIPE Investors will hold approximately 11.8% of the issued and outstanding Northern Star common stock, and the current stockholders of Northern Star (including the Sponsor) will hold approximately 18.8% of the issued and outstanding Northern Star common stock. See the section entitled “The Business Combination Proposal—Structure of the Merger.

 

   

Certain of BARK’s stockholders have entered or will enter into a lock-up agreement (“Lock-Up Agreement”), which provides that shares of Northern Star common stock to be issued to them in the Merger will be subject to a 12-month lock-up period, during which, subject to certain exceptions, they will not, directly or indirectly, sell, transfer or otherwise dispose of their shares to be issued in the Merger, which period may be earlier terminated if the reported closing sale price of the Northern Star common stock equals or exceeds $15.00 per share (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations or other similar transactions) for a period of 20 trading days during any 30-trading-day period commencing at least 150 days following the consummation of the Merger. In addition, Northern Star has agreed to cause its initial stockholders to amend the existing lock-up restrictions applicable to them and enter into agreements substantially identical to the Lock-Up Agreement, so that the lock-up restrictions with respect to the initial stockholders’ Northern Star common stock will be identical to the lock-up restrictions applicable to BARK’s stockholders who have entered, or will enter, into the Lock-Up Agreement. Furthermore, pursuant to a letter agreement executed in connection with Northern Star’s initial public offering, the private warrants will not be transferable, assignable or salable by the Sponsor until 30 days after the completion of Northern Star’s initial business combination. See the section entitled “The Business Combination Proposal—Structure of the Merger.

 

   

The Merger Agreement provides that either Northern Star or BARK may terminate the Merger Agreement if the Merger is not consummated on or before June 30, 2021, provided that the right to terminate the Merger Agreement will not be available to any party whose action or failure to act has been a principal cause of or primarily resulted in the failure of the Merger to occur on or before such date and such action or failure to act constitutes a breach of the Merger Agreement. See the section entitled “The Merger Agreement—Termination.”

 

   

In addition to voting on proposals to approve the Business Combination and the PIPE Transaction, the stockholders of Northern Star will vote on proposals to: (i) approve amendments to Northern Star’s current amended and restated certificate of incorporation (a) to change the name of Northern Star to “The Original BARK Company”, (b) to increase the number of shares of common stock Northern Star

 

2


Table of Contents
 

is authorized to issue to 500,000,000 shares and remove the provisions for Northern Star’s current Class B common stock (the shares of which will all convert into shares of Class A common stock in connection with the Business Combination) so that the Class B common stock will cease to exist and Northern Star will have a single class of common stock, (c) to add supermajority voting provisions requiring the affirmative vote of the holders of 66 2/3% of the voting power of all of the then outstanding shares of the capital stock of New BARK to amend certain provisions of the second amended and restated certificate of incorporation, to adopt, amend or repeal any provision of the bylaws, or to remove any director, or the entire Board of Directors, and (d) to remove the various provisions applicable only to special purpose acquisition companies (such as the obligation to dissolve and liquidate if a business combination is not consummated within a certain period of time) and make certain other immaterial changes that the Northern Star board deems appropriate; (ii) elect seven directors who, upon the closing of the Business Combination, will be the directors of Northern Star; (iii) approve Northern Star’s 2021 Equity Incentive Plan (the “2021 Plan”); (iv) approve Northern Star’s 2021 Employee Stock Purchase Plan (the “ESPP”); and (v) adjourn the annual meeting to a later date or dates, if it is determined by the officer presiding over the annual meeting that more time is necessary for Northern Star to consummate the Merger and the other transactions contemplated by the Merger Agreement. The approval of these proposals (other than the adjournment proposal) by the stockholders of Northern Star is a condition to the consummation of the Business Combination. See the sections entitled “The Charter Proposals,” “The Director Election Proposal,” “The Incentive Plan Proposal,” “The ESPP Proposal,” and “The Adjournment Proposal.”

 

   

Pursuant to the terms of the Merger Agreement, the parties thereto have agreed to nominate the following persons to serve as the initial directors of Northern Star upon the closing of the Business Combination: as Class A directors serving until Northern Star’s 2022 annual meeting of stockholders, Jon Ledecky, Henrik Werdelin and Betsy McLaughlin; as Class B directors serving until Northern Star’s 2023 annual meeting of stockholders, Joanna Coles and Matt Meeker; and as Class C directors serving until Northern Star’s 2024 annual meeting of stockholders, Manish Joneja and Jim McGinty. See the section entitled “The Director Election Proposal.”

 

   

Upon completion of the Merger, the executive officers of Northern Star will include Matthew Meeker, as Executive Chairman, and Manish Joneja, as Chief Executive Officer, and the other persons described under “The Director Election Proposal—Information about Executive Officers, Directors and Nominees.”

 

   

Certain stockholders of BARK and Northern Star will enter into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which they will be granted certain rights to have registered, in certain circumstances, the resale under the Securities Act of certain shares of Northern Star common stock held by them, subject to certain conditions set forth therein. Northern Star will terminate its existing registration rights agreement with the Northern Star initial stockholders. See the section entitled “The Business Combination Proposal—Related Agreements.”

 

   

In connection with the execution of the Merger Agreement, certain of BARK’s officers, directors, founders and their family members and 5% or greater holders of BARK’s stock (the “Supporting Holders”), who collectively hold approximately 77.5% of the issued and outstanding shares of BARK’s common stock on an as-converted basis as of April 5, 2021, have entered into agreements with Northern Star (the “Support Agreements”) pursuant to which the Supporting Holders have agreed, among other things, to vote all of their respective shares of BARK’s stock in favor of the Merger at a meeting called to approve the Merger by BARK’s stockholders (or in an action by written consent approving the Merger). See the section entitled “The Business Combination Proposal—Related Agreements.”

 

3


Table of Contents

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS

The questions and answers below highlight only selected information set forth elsewhere in this proxy statement/prospectus and only briefly address some commonly asked questions about the annual meeting and the proposals to be presented at the annual meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that may be important to Northern Star stockholders. Stockholders are urged to carefully read this entire proxy statement/prospectus, including the annexes and the other documents referred to or incorporated by reference herein, to fully understand the proposed Business Combination and the voting procedures for the annual meeting.

 

Q.

Why am I receiving this proxy statement/prospectus?

 

A.

Northern Star and BARK have agreed to a business combination under the terms of the Merger Agreement that is described in this proxy statement/prospectus. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A and Northern Star encourages its stockholders to read it in its entirety. Northern Star’s stockholders are being asked to consider and vote upon a proposal to approve and adopt the Merger Agreement and the Business Combination, including the Merger of Merger Sub with and into BARK, with BARK surviving as a wholly owned subsidiary of Northern Star and the securityholders of BARK becoming securityholders of Northern Star, and the issuance of shares of Northern Star common stock to BARK stockholders in the Merger. We refer to this proposal as the “business combination proposal.” See the section entitled “The Business Combination Proposal.”

 

Q.

Are there any other matters being presented to stockholders at the meeting?

 

A.

In addition to voting on the business combination proposal, the stockholders of Northern Star will vote on the following:

 

  1.

A proposal to approve the issuance of an aggregate of 20,000,000 shares of Northern Star common stock in the PIPE Transaction, the closing of which is subject to certain conditions, including, among other things, the closing of the Business Combination. We refer to this proposal as the “PIPE proposal.” See the section entitled “The PIPE Proposal.”

 

  2.

Separate proposals to approve amendments to Northern Star’s current amended and restated certificate of incorporation to: (i) change the name of Northern Star to “The Original BARK Company”, as opposed to the current name of “Northern Star Acquisition Corp.”; (ii) increase the number of shares of common stock Northern Star is authorized to issue to 500,000,000 shares, as opposed to the current number of 150,000,000 shares, and remove the provisions for Northern Star’s current Class B common stock (the shares of which will all convert into shares of Class A common stock in connection with the Business Combination) so that the Class B common stock will cease to exist and Northern Star will have a single class of common stock; (iii) add supermajority voting provisions requiring the affirmative vote of the holders of 66 2/3% of the voting power of all of the then outstanding shares of the capital stock of New BARK to amend certain provisions of the second amended and restated certificate of incorporation, to adopt, amend or repeal any provision of the bylaws, or to remove any director, or the entire Board of Directors; and (iv) remove the various provisions applicable only to special purpose acquisition corporations (such as the obligation to dissolve and liquidate if a business combination is not consummated within a certain period of time) and make certain other immaterial changes that the Northern Star board deems appropriate. We refer to these proposals collectively as the “charter proposals.” A copy of Northern Star’s proposed second amended and restated certificate of incorporation effectuating the foregoing amendments is attached to this proxy statement/prospectus as Annex B. See the section entitled “The Charter Proposals.”

 

  3.

The election of seven directors who, upon the closing of the Business Combination, will be the directors of Northern Star. We refer to this proposal as the “director election proposal.” See the section entitled “The Director Election Proposal.”

 

4


Table of Contents
  4.

A proposal to approve the 2021 Plan. We refer to this proposal as the “incentive plan proposal.” A copy of the 2021 Plan is attached to this proxy statement/prospectus as Annex C. See the section entitled “The Incentive Plan Proposal.”

 

  5.

A proposal to approve the ESPP. We refer to this proposal as the “ESPP proposal.” A copy of the ESPP is attached to this proxy statement/prospectus as Annex D. See the section entitled “The ESPP Proposal.”

 

  6.

A proposal to adjourn the annual meeting to a later date or dates if it is determined by the officer presiding over the annual meeting that more time is necessary for Northern Star to consummate the Merger and the other transactions contemplated by the Merger Agreement. We refer to this proposal as the “adjournment proposal.” See the section entitled “The Adjournment Proposal.”

Northern Star will hold the annual meeting of its stockholders to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the proposed Business Combination and the other matters to be acted upon at the annual meeting. Stockholders should read it carefully.

The closing of the Business Combination is conditioned on approval of the business combination proposal, the PIPE proposal, the charter proposals, the incentive plan proposal and the ESPP proposal and on the election of the seven nominees identified in this proxy statement/prospectus to serve as directors of Northern Star. If any of the proposals is not approved or the director nominees are not elected and the applicable closing condition in the Merger Agreement is not waived, the remaining proposals will not be presented to stockholders for a vote.

The vote of stockholders is important. Regardless of how many shares you own, you are encouraged to vote as soon as possible after carefully reviewing this proxy statement/prospectus.

 

Q:

Why is Northern Star providing stockholders with the opportunity to vote on the Business Combination?

 

A:

In connection with the Business Combination, we may issue up to an estimated maximum of 155,000,000shares of Northern Star common stock, representing up to approximately 488% of the shares of Northern Star common stock outstanding on the date of this proxy statement/prospectus. NYSE Listing Rules require stockholder approval of certain transactions that result in the issuance of 20% or more of a company’s outstanding voting power or shares of common stock outstanding before the issuance of stock or securities and for any issuance that results in a change in control. Because we may issue 20% or more of our outstanding voting power and outstanding common stock in connection with the Business Combination and such issuance will result in a change in control, we are required to obtain stockholder approval of such issuances pursuant to NYSE Listing Rules. Similarly, in connection with the PIPE Transaction, we may issue 20,000,000 shares of Northern Star common stock, representing up to an estimated 63% of the shares of Northern Star common stock outstanding on the date of this proxy statement/prospectus. Approval of Northern Star’s stockholders is also required for the adoption of Northern Star’s second amended and restated certificate of incorporation, for adoption of the 2021 Plan under the NYSE Listing Rules, to enable Northern Star to issue incentive stock options under the 2021 Plan and to enable the ESPP to qualify under Section 423 of the Code. The closing of the Business Combination is conditioned on the approval of the business combination proposal, the PIPE proposal, the charter proposals, the incentive plan proposal and the ESPP proposal and on the election of the seven nominees identified in this proxy statement/prospectus to serve as directors of Northern Star at the annual meeting.

 

Q.

I am a Northern Star warrant holder. Why am I receiving this proxy statement/prospectus?

 

A.

The holders of Northern Star warrants are entitled to purchase Northern Star common stock at a purchase price of $11.50 per share beginning on the later of November 13, 2021 and 30 days after the closing of the Business Combination. This proxy statement/prospectus includes important information about Northern Star

 

5


Table of Contents
  and the business of Northern Star and its subsidiaries following the closing of the Business Combination. Because holders of Northern Star warrants will be entitled to purchase Northern Star common stock beginning on the later of November 13, 2021 and 30 days after the closing of the Business Combination, we urge you to read the information contained in this proxy statement/prospectus carefully.

 

Q.

What will happen to Northern Star’s securities upon consummation of the Business Combination?

 

A.

Northern Star’s units, Class A common stock and warrants are currently listed on the NYSE under the symbols STIC.U, STIC and STIC WS, respectively. Northern Star intends to apply for listing on the NYSE of the Northern Star common stock and warrants, under the proposed symbols BARK and BARK WS, respectively, to be effective at the consummation of the Business Combination. Northern Star’s units will not be listed on the NYSE following consummation of the Business Combination and such units will automatically be separated into their component securities without any action needed to be taken on the part of the holders of such units. Furthermore, each outstanding share of Northern Star’s Class B common stock will convert into one share of Northern Star’s Class A common stock at the closing, the Class B common stock will cease to exist and Northern Star will have a single class of common stock.

It is a condition to the consummation of the Business Combination that the shares of Northern Star common stock to be issued in the Merger are approved for listing on the NYSE (subject only to official notice of issuance thereof and public holder requirements), but there can be no assurance such listing condition will be met. If such listing condition is not met, the Business Combination will not be consummated unless the listing condition is waived by the parties to the Merger Agreement.

Northern Star warrant holders and those stockholders who do not elect to have their Northern Star shares converted into a pro rata share of the trust account need not submit their common stock or warrant certificates, and such shares and warrants will remain outstanding.

BARK’s warrants and BARK’s 2025 Notes assumed by Northern Star pursuant to the Merger Agreement will not be listed or traded on a national securities exchange and are not expected to be quoted or traded on the over-the-counter markets.

 

Q.

Why is Northern Star proposing the Business Combination?

 

A.

Northern Star was organized to effect a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities.

On November 13, 2020, Northern Star completed its initial public offering of units, with each unit consisting of one share of Class A common stock and one-third of one redeemable warrant, with each whole warrant entitling the holder to purchase one share of Class A common stock at a price of $11.50, raising total gross proceeds of approximately $250,000,000. On November 24, 2020, Northern Star consummated the sale of an additional 435,000 units sold pursuant to the underwriters’ over-allotment option at an offering price of $10.00 per unit. At the closing of the initial public offering and the over-allotment option, Northern Star consummated the sale of 4,558,000 private warrants at a price of $1.50 per warrant. A total of $254,350,000 of the net proceeds was deposited into the trust account. Since its initial public offering, Northern Star’s activity has been limited to the evaluation of business combination candidates.

BARK is a company of dog obsessed people dedicated to making dogs happy. BARK is a vertically integrated, data driven, omnichannel brand serving dogs across the four key categories of Play, Food, Health, and Home. BARK’s dog-obsessed team applies its unique, data-driven understanding of what makes each dog special to design playstyle-specific toys, delicious and satisfying treats, food, and wellness supplements, and best in class offerings that foster the health and happiness of dogs. Founded in 2012, BARK loyally serves dogs nationwide with monthly subscription offerings, BarkBox and Super Chewer; a personalized meal delivery service for dogs, BARK Eats; custom collections through online marketplaces and via brick and mortar retail partners, including Target and Amazon; wellness products that meet dogs’ needs with BARK Bright through monthly subscriptions; BARK’S ATB platform; and individually on its website BarkShop.com.

 

6


Table of Contents

Based on Northern Star’s due diligence investigations of BARK and the industry in which BARK operates, including the financial and other information provided by BARK to Northern Star in the course of evaluating a business combination with BARK and negotiating the Merger Agreement, Northern Star believes that BARK has a very appealing market opportunity and growth profile, strong position in its industry and a compelling valuation. As a result, Northern Star believes that a business combination with BARK will provide Northern Star stockholders with an opportunity to participate in the ownership of a company with significant growth potential. See the section entitled “The Business Combination Proposal—Northern Star’s Board of Directors’ Reasons for Approval of the Business Combination.

 

Q.

Did Northern Star’s board of directors obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

 

A.

No. Northern Star’s board of directors did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. Accordingly, investors will be relying solely on the judgment of Northern Star’s board of directors in valuing BARK and assuming the risk that the Northern Star board may not have properly valued the business. However, Northern Star’s officers and directors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and have substantial experience with mergers and acquisitions. Furthermore, in analyzing the Business Combination, Northern Star’s board of directors conducted significant due diligence on BARK. Based on the foregoing, Northern Star’s board of directors concluded that its members’ experience and backgrounds enabled it to make the necessary analyses and determinations regarding the Business Combination, including that the Business Combination was fair from a financial perspective to its stockholders and that BARK’s fair market value was at least 80% of the assets held in Northern Star’s trust account (net of amounts previously disbursed to management for tax obligations and working capital purposes and excluding the amount of deferred underwriting discounts held in trust) at the time of the agreement to enter into the Business Combination. There can be no assurance, however, that Northern Star’s board of directors was correct in its assessment of the Business Combination. For a complete discussion of the factors utilized by Northern Star’s board of directors in approving the Business Combination, see the section entitled “The Business Combination Proposal.”

 

Q.

Do I have conversion rights?

 

A.

If you are a holder of public shares, you have the right to demand that Northern Star convert such shares into a pro rata portion of the cash held in Northern Star’s trust account, calculated as of two business days prior to the consummation of the Business Combination. We sometimes refer to these rights to demand conversion of the public shares as “conversion rights.”

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of his or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking conversion rights with respect to 20% or more of the public shares. Accordingly, all public shares in excess of 20% held by a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be converted.

Under Northern Star’s amended and restated certificate of incorporation, the Business Combination may not be consummated if Northern Star has net tangible assets of less than $5,000,001 either immediately prior to or upon consummation of the Business Combination, after taking into account the conversion into cash of all public shares properly demanded to be converted by holders of public shares, the completion of the Business Combination and the completion of the PIPE Transaction. Because the net tangible assets of the combined company will exceed this threshold as a result of the PIPE Transaction, all of the public shares may be converted and Northern Star can still consummate the Business Combination. However, the combined company must meet certain distribution criteria, including having a minimum of 1,100,000 publicly held shares, in order to be listed on the NYSE, which is a condition to closing the Business Combination.

 

7


Table of Contents
Q.

How do I exercise my conversion rights?

 

A.

A holder of public shares may exercise conversion rights regardless of whether it votes for or against the business combination proposal or does not vote on such proposal at all, or if it is a holder of public shares on the record date. If you are a holder of public shares and wish to exercise your conversion rights, you must demand that Northern Star convert your public shares into cash, and deliver your public shares to Northern Star’s transfer agent physically or electronically using The Depository Trust Company’s Deposit/Withdrawal at Custodian (“DWAC”) System no later than two (2) business days prior to the annual meeting. Any holder of public shares seeking conversion will be entitled to a full pro rata portion of the amount then in the trust account (which, for illustrative purposes, was approximately $254,384,000, or $10.00 per share, as of the record date), less any owed but unpaid taxes on the funds in the trust account. Such amount will be paid promptly upon consummation of the Business Combination. There are currently no owed but unpaid income taxes on the funds in the trust account.

Any request for conversion, once made by a holder of public shares, may be withdrawn at any time prior to the time the vote is taken with respect to the business combination proposal at the annual meeting. If you deliver your shares for conversion to Northern Star’s transfer agent and later decide prior to the annual meeting not to elect conversion, you may request that Northern Star’s transfer agent return the shares (physically or electronically). You may make such request by contacting Northern Star’s transfer agent at the address listed at the end of this section.

Any written demand of conversion rights must be received by Northern Star’s transfer agent at least two (2) business days prior to the vote taken on the business combination proposal at the annual meeting. No demand for conversion will be honored unless the holder’s stock has been delivered (either physically or electronically) to the transfer agent.

If you are a holder of public shares (including through the ownership of Northern Star units) and you exercise your conversion rights, it will not result in the loss of any Northern Star warrants that you may hold (including those contained in any units you hold). Your warrants will become exercisable to purchase one share of Northern Star common stock for a purchase price of $11.50 beginning on the later of November 13, 2021 and 30 days after consummation of the Business Combination.

 

Q.

Do I have appraisal rights if I object to the proposed Business Combination?

 

A.

No. Neither Northern Star stockholders nor its unit or warrant holders have appraisal rights in connection with the Business Combination under Delaware law. See the section entitled “Appraisal Rights.

 

Q.

What happens to the funds deposited in the trust account after consummation of the Business Combination?

 

A.

Of the net proceeds of Northern Star’s initial public offering and simultaneous private placement of warrants, approximately $254.4 million was placed in the trust account immediately following the initial public offering. After consummation of the Business Combination, the funds in the trust account will be used to pay, on a pro rata basis, holders of the public shares who exercise conversion rights, to pay fees and expenses incurred in connection with the Business Combination for marketing of BARK’s current and expanded subscription and product offerings, increasing BARK’s employee headcount to support its growth and for working capital, capital expenditures and general corporate purposes.

 

Q.

What happens if a substantial number of public stockholders vote in favor of the business combination proposal and exercise their conversion rights?

 

A.

Northern Star’s public stockholders may vote in favor of the Business Combination and still exercise their conversion rights, although they are not required to vote either for or against the Business Combination, or vote at all, in order to exercise such conversion rights. Accordingly, the Business Combination may be

 

8


Table of Contents
  consummated even though the funds available from the trust account and the number of public stockholders are substantially reduced as a result of conversion by public stockholders. Although the requirement that Northern Star have at least $5,000,001 of net tangible assets will be satisfied as a result of the PIPE Transaction even if all of the public shares are converted, with fewer public shares and public stockholders, the trading markets for Northern Star common stock and warrants following the closing of the Business Combination may be less liquid than the market for Northern Star common stock and warrants were prior to the Merger, and Northern Star may not be able to meet the listing standards of the NYSE or an alternative national securities exchange, which is a condition to closing the Business Combination. For example, the combined company must meet certain distribution criteria, including having a minimum of 1,100,000 publicly held shares, in order to be listed on the NYSE. In addition, with fewer funds available from the trust account, the capital infusion from the trust account into BARK’s business will be reduced and BARK may not be able to fully achieve its business plans or goals.

 

Q.

What happens if the Business Combination is not consummated?

 

A.

If Northern Star does not complete the Business Combination with BARK for whatever reason, Northern Star would search for another target business with which to complete a business combination. If Northern Star does not complete the Business Combination with BARK or another business combination by November 13, 2022 (or such later date as may be approved by Northern Star stockholders in an amendment to its amended and restated certificate of incorporation), Northern Star must redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to an amount then held in the trust account (net of taxes payable and less up to $100,000 of interest to pay dissolution expenses). The Sponsor and Northern Star’s officers and directors have waived their redemption rights with respect to their founder shares in the event a business combination is not effected in the required time period, and, accordingly, the founder shares held by them will be worthless. Additionally, in the event of such liquidation, there will be no distribution with respect to our outstanding warrants. Accordingly, the warrants will expire worthless.

 

Q.

How do the Sponsor and the officers and directors of Northern Star intend to vote on the proposals?

 

A.

The Sponsor, as well as Northern Star’s officers and directors, beneficially own and are entitled to vote an aggregate of 20% of the outstanding Northern Star common stock. These holders have agreed to vote their shares in favor of the business combination proposal and the other proposals being presented at the meeting and in favor of the election of the seven nominees identified in this proxy statement/prospectus to serve as directors of Northern Star. In addition to the shares of Northern Star common stock held by the Sponsor and Northern Star’s officers and directors, Northern Star would need 9,538,126, or 37.5%, of the 25,435,000 public shares sold in Northern Star’s initial public offering to be voted in favor of the business combination proposal, the PIPE proposal, the charter proposals, the incentive plan proposal, the ESPP proposal and the adjournment proposal in order for them to be approved (assuming all outstanding shares are voted on each proposal).

 

Q.

Will Northern Star enter into any financing arrangements in connection with the Business Combination?

 

A.

Yes. On December 16, 2020, in connection with the execution of the Merger Agreement, Northern Star entered into subscription agreements with the PIPE Investors, pursuant to which such PIPE Investors have agreed to purchase an aggregate of 20,000,000 shares of Northern Star common stock in a private placement at a price of $10.00 per share for an aggregate commitment of $200,000,000. The subscription agreements are subject to certain customary conditions, including, among other things, the closing of the Business Combination. The purpose of the PIPE Transaction is to ensure the combined company has a minimum amount of capital to operate its business following the transaction and for marketing of BARK’s current and expanded subscription and product offerings, increasing BARK’s employee headcount to support its growth and for working capital, capital expenditures and general corporate purposes.

 

9


Table of Contents
Q.

What interests do the Sponsor and the current officers and directors of Northern Star have in the Business Combination?

 

A.

In considering the recommendation of Northern Star’s board of directors to vote in favor of the Business Combination, stockholders should be aware that, aside from their interests as stockholders, our Sponsor and certain of our directors and officers have interests in the business combination that are different from, or in addition to, those of other stockholders generally. Our directors were aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to stockholders that they approve the Business Combination and in agreeing to vote their shares in favor of the Business Combination. Stockholders should take these interests into account in deciding whether to approve the Business Combination. These interests include, among other things, the fact that:

 

   

If the Business Combination with BARK or another business combination is not consummated by November 13, 2022 (or such later date as may be approved by Northern Star’s stockholders), Northern Star will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares for cash and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, the 6,358,750 founder shares held by the Sponsor and Northern Star’s directors and officers, which were acquired for an aggregate purchase price of $25,000 prior to Northern Star’s initial public offering, would be worthless because the holders are not entitled to participate in any redemption or distribution with respect to such shares. On the other hand, if the Merger is consummated, each outstanding founder share will convert into one share of Northern Star common stock at the closing. Such shares had an aggregate market value of $72,616,925 based upon the closing price of $11.42 per share on the NYSE on April 5, 2021.

 

   

The Sponsor, which is affiliated with certain of Northern Star’s directors and officers, purchased an aggregate of 4,558,000 private warrants from Northern Star for an aggregate purchase price of approximately $6.837 million (or $1.50 per warrant). These purchases took place on a private placement basis simultaneously with the consummation of Northern Star’s initial public offering. All of the proceeds Northern Star received from these purchases were placed in the trust account. Such warrants had an aggregate market value of $14,950,240 based upon the closing price of $3.28 per warrant on the NYSE on April 5, 2021. The private warrants will become worthless if Northern Star does not consummate a business combination by November 13, 2022 (or such later date as may be approved by Northern Star stockholders in an amendment to its amended and restated certificate of incorporation).

 

   

If Northern Star is unable to complete a business combination within the required time period, the Sponsor will be personally liable under certain circumstances described herein to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Northern Star for services rendered or contracted for or products sold to Northern Star. If Northern Star consummates a business combination, on the other hand, Northern Star will be liable for all such claims.

 

   

The Sponsor and Northern Star’s officers and directors and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on Northern Star’s behalf, such as identifying and investigating possible business targets and business combinations. However, if Northern Star fails to consummate an initial business combination within the required period, they will not have any claim against the trust account for reimbursement. Accordingly, Northern Star may not be able to reimburse these expenses if the Business Combination with BARK or another business combination is not completed by November 13, 2022 (or such later date as may be approved by Northern Star stockholders in an amendment to its amended and restated certificate of incorporation). As of April 5, 2021, the Sponsor and Northern Star’s officers and directors and their affiliates had incurred approximately $25,000 of unpaid reimbursable expenses.

 

   

It is currently contemplated that Jonathan J. Ledecky and Joanna Coles will be directors of New BARK after the closing of the Business Combination (assuming that the seven nominees identified in this

 

10


Table of Contents
 

proxy statement/prospectus to serve as directors of New BARK after the closing of the Business Combination are elected). As such, in the future, each will receive any cash fees, stock options or stock awards that the New BARK board of directors determines to pay to its non-executive directors.

 

   

The Merger Agreement provides for the continued indemnification of Northern Star’s current directors and officers and the purchase of directors and officers liability insurance covering Northern Star’s current directors and officers.

 

   

Northern Star’s officers and directors (or their affiliates) may make loans from time to time to Northern Star to fund certain capital requirements. As of the date of this proxy statement/prospectus, no such loans have been made, but loans may be made after the date of this proxy statement/prospectus. If the Business Combination is not consummated, the loans will not be repaid and will be forgiven except to the extent there are funds available to Northern Star outside of the trust account.

 

Q.

When do you expect the Business Combination to be completed?

 

A.

It is currently anticipated that the Business Combination will be consummated promptly following the Northern Star annual meeting, which is set for             , 2021; however, such meeting could be adjourned or postponed to a later date, as described elsewhere in this proxy statement/prospectus. For a description of the conditions for the completion of the Business Combination, see the section entitled “The Merger Agreement—Conditions to the Closing of the Business Combination.

 

Q.

What do I need to do now?

 

A.

Northern Star urges you to carefully read and consider the information contained or incorporated by reference in this proxy statement/prospectus, including the annexes, and to consider how the Business Combination will affect you as a stockholder and/or warrantholder of Northern Star. Stockholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card.

 

Q.

When and where will the meeting take place?

 

A.

The annual meeting will be held on             , 2021, at                  eastern time, solely over the Internet by means of a live audio webcast.

 

Q.

How do I attend the Annual Meeting?

 

A.

Due to health concerns stemming from the COVID-19 pandemic, and to support the health and well-being of our stockholders, the annual meeting will be a virtual meeting. You may attend and participate in the annual meeting webcast by accessing the meeting web portal located at http://www.virtualshareholdermeeting.com/STIC2021. Stockholders participating in the annual meeting will be able to listen only and will not be able to speak during the annual meeting webcast. To participate in the virtual meeting, a stockholder of record will need the 16-digit control number included on their proxy card or instructions that accompanied their proxy materials, if applicable, or will need to obtain a proxy form from their broker, bank or other nominee.

 

Q.

How do I vote?

 

A.

If you are a holder of record of Northern Star common stock on the record date, you may vote by attending the annual meeting and submitting a ballot via the meeting web portal or by submitting a proxy for the annual meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold your shares in “street name,” you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly voted and counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or attend the annual meeting as described above and submit a ballot via the meeting web portal.

 

11


Table of Contents
Q.

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A.

No. A “broker non-vote” occurs when a broker submits a proxy that states that the broker does not vote for some or all of the proposals because the broker has not received instructions from the beneficial owners on how to vote on the proposals and the broker does not have discretionary authority to vote in the absence of such instructions. Under the applicable NYSE rules and interpretations, brokers do not have discretionary authority to vote on certain of the proposals to be considered at the annual meeting. Accordingly, your broker, bank or nominee cannot vote your shares on such proposals unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee.

 

Q.

May I change my vote after I have mailed my signed proxy card?

 

A.

Yes. Stockholders of record may send a later-dated, signed proxy card to Northern Star’s transfer agent at the address set forth below so that it is received prior to the vote at the annual meeting, or submit a ballot through the meeting web portal during the annual meeting webcast. Stockholders of record also may revoke their proxy by sending a notice of revocation to Northern Star’s transfer agent, which must be received prior to the vote at the annual meeting. If you hold your shares in “street name,” you should contact your broker, bank or nominee to change your instructions on how to vote.

 

Q.

What constitutes a quorum for the annual meeting?

 

A:

A quorum is the minimum number of shares of Northern Star common stock that must be present to hold a valid meeting. A quorum will be present at the Northern Star annual meeting if a majority of all the outstanding shares entitled to vote at the meeting are represented at the virtual annual meeting either by attendance through the meeting web portal or by proxy. Abstentions and broker non-votes will count as present for the purposes of establishing a quorum. Northern Star’s Class A common stock and Class B common stock are entitled vote together as a single class on all matters to be considered at the annual meeting.

 

Q.

What stockholder vote thresholds are required for the approval of each proposal brought before the annual meeting?

 

A.

The business combination proposal. The approval of the business combination proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock present and entitled to vote at the annual meeting to approve the Business Combination. The holders of founder shares own an aggregate of 6,358,750 shares of Class B common stock of Northern Star, representing 20% of the outstanding Northern Star common stock, and have agreed to vote in favor of the business combination proposal; as a result, only 9,538,126 public shares, or approximately 37.5% of the public shares, are required to be voted in favor of the proposal in order for it to be approved (assuming all outstanding shares are present and entitled to vote).

The PIPE proposal. The approval of the PIPE proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock present and entitled to vote at the annual meeting.

The charter proposals. The approval of each of the charter proposals will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock on the record date.

The director election proposal. The election of directors requires a plurality vote of the Northern Star common stock present and entitled to vote at the annual meeting. A plurality means that the individuals who receive the largest number of votes cast “FOR” are elected as directors.

 

12


Table of Contents

The incentive plan proposal. The approval of the incentive plan proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock present and entitled to vote at the annual meeting.

The ESPP proposal. The approval of the ESPP proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock present and entitled to vote at the annual meeting.

The adjournment proposal. The approval of the adjournment proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock present and entitled to vote at the annual meeting.

 

Q.

What happens if I fail to take any action with respect to the annual meeting?

 

A.

If you fail to take any action with respect to the meeting and the Business Combination is approved by stockholders and consummated, you will continue to be a holder of Northern Star common stock or warrants, as applicable, and the business of BARK will become the business of Northern Star. As a corollary, failure to deliver your stock certificate(s) to Northern Star’s transfer agent (either physically or electronically) no later than two (2) business days prior to the annual meeting means you will not have any right in connection with the Merger to convert your shares into a pro rata share of the funds held in Northern Star’s trust account.

If you fail to take any action with respect to the annual meeting and the Business Combination is not approved, you will continue to be a stockholder and/or warrant holder of Northern Star, as applicable, and Northern Star will continue to search for another target business with which to complete an initial business combination. If Northern Star does not complete an initial business combination by November 13, 2022 (or such later date as may be approved by Northern Star stockholders in an amendment to its amended and restated certificate of incorporation), Northern Star must cease all operations except for the purpose of winding up, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to an amount then on deposit in the trust account, including interest earned on the trust account and not previously released to Northern Star (net of taxes payable and less up to $100,000 of interest to pay dissolution expenses), and as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate.

 

Q.

What should I do with my share and/or warrant certificates?

 

A.

Warrant holders and those stockholders who do not elect to have their Northern Star shares converted into a pro rata share of the trust account need not submit their certificates. Northern Star stockholders who exercise their conversion rights must deliver their share certificates to Northern Star’s transfer agent (either physically or electronically) no later than two (2) business days prior to the annual meeting as described above.

 

Q.

What should I do if I receive more than one set of voting materials?

 

A.

Stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your shares of Northern Star common stock.

 

13


Table of Contents
Q.

Who can help answer my questions?

 

A.

If you have questions about the Merger or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card, you should contact:

Ms. Joanna Coles

Northern Star Acquisition Corp.

c/o Graubard Miller

The Chrysler Building

405 Lexington Avenue, 11th Floor

New York, NY 10174

Tel: (212) 818-8800

or the proxy solicitor at:

D.F. King & Co., Inc.

48 Wall Street, 22nd Floor

New York, New York 10005

Shareholders (toll-free):

Banks and Brokers:

E-mail: BARK@dfking.com

You may also obtain additional information about Northern Star from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.” If you are a holder of public shares and you intend to seek conversion of your shares, you will need to deliver your shares (either physically or electronically) to Northern Star’s transfer agent at the address below at least two (2) business days prior to the vote at the annual meeting. If you have questions regarding the certification of your position or delivery of your stock, please contact:

Mr. Mark Zimkind

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, New York 10004

E-mail: mzimkind@continentalstock.com

 

14


Table of Contents

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information set forth elsewhere in this proxy statement/prospectus and does not purport to contain all of the information that may be important to you. To better understand the proposals to be submitted for a vote at the annual meeting, including the business combination proposal, you should read this entire document and the documents incorporated by reference herein carefully, including the Merger Agreement attached to this proxy statement/prospectus as Annex A. The Merger Agreement is the legal document that governs the Merger that will be undertaken in connection with the Business Combination. It is also described in detail in this proxy statement/prospectus in the section entitled “The Merger Agreement.”

The Parties

Northern Star

Northern Star Acquisition Corp. was formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. Northern Star was incorporated under the laws of the State of Delaware on July 8, 2020.

On November 13, 2020, Northern Star closed its initial public offering of 25,000,000 units, with each unit consisting of one share of Class A common stock and one-third of one redeemable warrant, with each whole warrant entitling the holder to purchase one share of Class A common stock at a price of $11.50 commencing on the later of November 13, 2021 and 30 days after the consummation of an initial business combination. The units from Northern Star’s initial public offering were sold at an offering price of $10.00 per unit, generating total gross proceeds of $250 million. Simultaneously with the consummation of its initial public offering, Northern Star consummated the private sale of 4,500,000 private warrants at $1.50 per warrant generating gross proceeds of $6.75 million. A total of $250,000,000 was deposited into the trust account and the remaining proceeds, net of underwriting discounts and commissions and other costs and expenses, became available to be used as working capital to provide for business, legal and accounting due diligence on prospective business combinations and continuing general and administrative expenses. On November 24, 2020, Northern Star consummated the sale of an additional 435,000 units sold pursuant to the underwriters’ over-allotment option at an offering price of $10.00 per unit. Simultaneously with the consummation of the closing of the over-allotment option, Northern Star consummated the sale of an additional 58,000 private warrants at a price of $1.50 per warrant. A total of $4,350,000 of the net proceeds was deposited into the trust account, bringing the aggregate proceeds held in the Trust Account to $254,350,000. Northern Star’s initial public offering was conducted pursuant to a registration statement on Form S-1 (Registration No. 333-249138) that became effective on November 10, 2020. As of April 5, 2021, the record date, there was approximately $254,384,000 held in the trust account.

Northern Star’s units, Class A common stock and warrants are listed on the NYSE under the symbols STIC.U, STIC and STIC.WS, respectively.

The mailing address of Northern Star’s principal executive office is c/o Graubard Miller, The Chrysler Building, 405 Lexington Avenue, 11th Floor, New York, NY 10174, and its telephone number is (212) 818-8800. After the consummation of the Business Combination, Northern Star’s principal executive office will be that of BARK.

Merger Sub

NSAC Merger Sub Corp. is a wholly owned subsidiary of Northern Star formed solely for the purpose of effectuating the Merger described herein. Merger Sub was incorporated under the laws of Delaware on December 14, 2020. Merger Sub owns no material assets and does not operate any business.



 

15


Table of Contents

The mailing address of Merger Sub’s principal executive office is c/o Graubard Miller, The Chrysler Building, 405 Lexington Avenue, 11th Floor, New York, NY 10174, and its telephone number is (212) 818-8800. As a result of the consummation of the Merger, Merger Sub will cease to exist.

BARK

BARK is a company of dog obsessed people dedicated to making dogs happy. BARK is a vertically integrated, data driven, omnichannel brand serving dogs across the four key categories of Play, Food, Health, and Home. BARK’s dog-obsessed team applies its unique, data-driven understanding of what makes each dog special to design playstyle-specific toys, delicious and satisfying treats, food, and wellness supplements, and best in class offerings that foster the health and happiness of dogs. Founded in 2012, BARK loyally serves dogs nationwide with monthly subscription offerings, BarkBox and Super Chewer; a personalized meal delivery service for dogs, BARK Eats; custom collections through online marketplaces and via brick and mortar retail partners, including Target and Amazon; wellness products that meet dogs’ needs with BARK Bright through monthly subscriptions; BARK’S ATB platform; and individually on its website BarkShop.com.

The mailing address of BARK’s principal executive office is 221 Canal Street, Floor 6, New York, New York 10013, and its telephone number is 1-855-501-BARK (1-855-501-2275). After the consummation of the Business Combination, BARK will be a wholly owned subsidiary of New BARK.

This proxy statement/prospectus includes certain registered trademarks, including trademarks that are the property of BARK and its affiliates. This proxy statement/prospectus also includes other trademarks, service marks and trade names owned by BARK or other companies. All trademarks, service marks and traded names included herein are the property of their respective owners.

Emerging Growth Company

Northern Star is an “emerging growth company,” as defined under the JOBS Act. As an emerging growth company, Northern Star is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. These include, but are not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and the requirement to obtain stockholder approval of any golden parachute payments not previously approved.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Northern Star has elected to take advantage of such extended transition period.

Northern Star will remain an emerging growth company until the earlier of (1) December 31, 2025 (the last day of the fiscal year following the fifth anniversary of the consummation of Northern Star’s initial public offering), (2) the last day of the fiscal year in which Northern Star has total annual gross revenue of at least $1.07 billion, (3) the last day of the fiscal year in which Northern Star is deemed to be a “large accelerated filer,” as defined in the Exchange Act, and (4) the date on which Northern Star has issued more than $1.0 billion in nonconvertible debt during the prior three-year period.

The Business Combination Proposal (Proposal No. 1)

The stockholders of Northern Star will vote on a proposal to approve and adopt the Merger Agreement and the Business Combination, including the Merger of Merger Sub with and into BARK, with BARK surviving as a



 

16


Table of Contents

wholly owned subsidiary of Northern Star and the securityholders of BARK becoming securityholders of Northern Star, and the issuance of shares of Northern Star common stock to BARK’s stockholders in the Merger.

After consideration of the factors identified and discussed in the section entitled “The Business Combination Proposal—Northern Star’s Board of Directors’ Reasons for Approval of the Business Combination,” Northern Star’s board of directors concluded that the Merger met all of the requirements disclosed in the prospectus for Northern Star’s initial public offering, including that BARK has a fair market value equal to at least 80% of the balance of the funds in the trust account (net of amounts previously disbursed to management for tax obligations and working capital purposes and excluding the amount of deferred underwriting discounts held in trust) at the time of the execution of the Merger Agreement.

A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A. You are encouraged to read the Merger Agreement in its entirety. See the section entitled “The Business Combination Proposal—Structure of the Merger” for more information.

Consideration to BARK Securityholders

Under the Merger Agreement, each share of BARK’s common and preferred stock issued and outstanding immediately prior to the effective time of the Merger (including each share of BARK’s common stock issued as a result of the conversion of certain of BARK’s convertible promissory notes, as more fully described in this proxy statement/prospectus) will be automatically converted into the right to receive a number of shares of Northern Star common stock equal to the Exchange Ratio. The Exchange Ratio is the quotient obtained by dividing 150,000,000 by the fully-diluted number of shares of BARK’s common stock outstanding immediately prior to the effective time of the Merger (as determined in accordance with the Merger Agreement and more fully described in this proxy statement/prospectus). Northern Star presently estimates that the Exchange Ratio will be approximately [8.7479]. The exact Exchange Ratio will not be known until the closing of the Business Combination, and accordingly will not be known at the time of the annual meeting.

Each of the options to purchase BARK’s common stock, whether or not exercisable and whether or not vested, and each of the warrants to purchase BARK’s common and preferred stock, in each case that is outstanding immediately prior to the effective time of the Merger, will be assumed by Northern Star and converted into an option or warrant, as the case may be, to purchase a number of shares of Northern Star common stock equal to the number of shares of BARK’s common stock subject to such option or warrant immediately prior to the effective time (or the number of shares of common stock issuable upon conversion of the preferred stock subject to such warrant) multiplied by the Exchange Ratio, at an exercise price equal to the exercise price immediately prior to the effective time divided by the Exchange Ratio. BARK has agreed in the Merger Agreement to take all actions necessary to effectuate the foregoing treatment of the options and warrants.

BARK’s outstanding convertible promissory notes issued in 2019 and 2020 will be converted into shares of BARK’s common stock immediately prior to the effective time of the Merger. All shares of BARK’s common stock issued upon such conversion will be entitled to receive shares of Northern Star common stock in the Merger as described above. BARK’s 2025 Notes will be assumed by Northern Star at the effective time and will become convertible at the election of the holder into shares of Northern Star common stock.

See the section entitled “The Business Combination Proposal—Structure of the Merger.

PIPE Transaction

In connection with the execution of the Merger Agreement, Northern Star entered into subscription agreements with the PIPE Investors pursuant to which such PIPE Investors have agreed to purchase an aggregate of



 

17


Table of Contents

20,000,000 shares of Northern Star’s Class A common stock in the PIPE Transaction at a price of $10.00 per share for an aggregate commitment of $200,000,000. The subscription agreements are subject to certain conditions, including, among other things, the closing of the Business Combination.

See the sections entitled “The Business Combination Proposal—Related Agreements—Subscription Agreements for PIPE Transaction”, “The PIPE Proposal” and “Certain Relationships and Related Person Transactions—Northern Star Related Person Transactions—Subscription Agreements.”

Pro Forma Ownership of Northern Star Upon Closing

Assuming that none of BARK’s options or warrants are exercised or forfeited and no additional options, warrants or other derivative securities are granted by BARK prior to the closing of the Business Combination, and based on interest accrued on BARK’s convertible promissory notes through April 27, 2021, an estimated 117,108,696 shares of Northern Star common stock will be issued to BARK’s former securityholders and an estimated 39,210,930 shares of Northern Star common stock will be reserved for issuance upon exercise of BARK’s options and warrants and conversion of BARK’s 2025 Notes assumed by Northern Star. The actual number of shares of Northern Star common stock to be issued in the Merger will depend on the exercise, forfeiture or issuance of BARK’s options, warrants and other derivative securities prior to closing.

Based on the assumptions in the preceding paragraph, and further assuming that no holder of Northern Star’s public shares exercises conversion rights as described in this proxy statement/prospectus, immediately after the closing of the Business Combination, BARK’s former stockholders will hold approximately 69.3% of the issued and outstanding Northern Star common stock, the PIPE Investors will hold approximately 11.8% of the issued and outstanding Northern Star common stock, and the current stockholders of Northern Star will hold approximately 18.8% of the issued and outstanding Northern Star common stock.

See the section entitled “The Business Combination Proposal—Structure of the Merger.

Additional Matters Being Voted On

In addition to voting on the business combination proposal, the stockholders of Northern Star will vote on the following proposals.

The PIPE Proposal (Proposal No. 2)

The stockholders of Northern Star will vote on a proposal to approve the issuance of an aggregate of 20,000,000 shares of Northern Star common stock in the PIPE Transaction, the closing of which is subject to certain conditions, including, among other things, the closing of the Business Combination. See the section entitled “The PIPE Proposal.”

The Charter Proposals (Proposals Nos. 3-6)

The stockholders of Northern Star will vote on separate proposals to approve amendments to Northern Star’s current amended and restated certificate of incorporation to:

 

  (i)

change the name of Northern Star to “The Original BARK Company”, as opposed to the current name of “Northern Star Acquisition Corp.” (Proposal No. 3);

 

  (ii)

increase the number of shares of common stock Northern Star is authorized to issue to 500,000,000 shares, as opposed to the current number of 150,000,000 shares, and remove the provisions for



 

18


Table of Contents
  Northern Star’s current Class B common stock (the shares of which will all convert into shares of Class A common stock in connection with the Business Combination) so that the Class B common stock will cease to exist and Northern Star will have a single class of common stock (Proposal No. 4);

 

  (iii)

add supermajority voting provisions requiring the affirmative vote of the holders of 66 2/3% of the voting power of all of the then outstanding shares of the capital stock of New BARK to amend certain provisions of the second amended and restated certificate of incorporation, to adopt, amend or repeal any provision of the bylaws, or to remove any director, or the entire Board of Directors (Proposal No. 5); and

 

  (iv)

remove the various provisions applicable only to special purpose acquisition corporations (such as the obligation to dissolve and liquidate if a business combination is not consummated within a certain period of time) and make certain other changes that the Northern Star board deems appropriate for a public operating company (Proposal No. 6).

A copy of Northern Star’s proposed second amended and restated certificate of incorporation effectuating the foregoing amendments is attached to this proxy statement/prospectus as Annex B. You are encouraged to read the second amended and restated certificate of incorporation in its entirety. See the section entitled “The Charter Proposals.”

The Director Election Proposal (Proposal No. 7)

The stockholders of Northern Star will vote to elect seven directors who, upon the closing of the Business Combination, will be the directors of Northern Star. If the nominees identified in this proxy statement/prospectus are elected, Jon Ledecky, Henrik Werdelin and Betsy McLaughlin will be Class A directors serving until Northern Star’s 2022 annual meeting of stockholders; Joanna Coles and Matt Meeker will be Class B directors serving until Northern Star’s 2023 annual meeting of stockholders; and Manish Joneja and Jim McGinty, will be Class C directors serving until Northern Star’s 2024 annual meeting of stockholders, and in each case, until their successors are elected and qualified. See the section entitled “The Director Election Proposal.”

The Incentive Plan Proposal (Proposal No. 8)

The stockholders of Northern Star will vote on a proposal to approve the 2021 Plan. The 2021 Plan will initially reserve up to 16,890,245 shares of New BARK common stock, subject to certain adjustments and a customary evergreen provision. Additionally, to the extent that BARK’s currently outstanding awards granted under its 2011 Stock Incentive Plan (covering 3,361,752 shares of BARK’s common stock) are forfeited after the Merger, the underlying shares would be made available for future issuance in accordance with the 2021 Plan’s terms. The maximum number of additional shares that would become available under the 2021 Plan if all awards were forfeited would equal 3,361,752 multiplied by the Exchange Ratio. These additional shares are included in the aggregate merger consideration provided for under the Merger Agreement. The purpose of the 2021 Plan is to provide New BARK’s and its subsidiaries’ officers, directors, employees and consultants who, by their position, ability and diligence are able to make important contributions to New BARK’s growth and profitability, with an incentive to assist New BARK in achieving its long-term corporate objectives, to attract and retain directors, executive officers and other employees of outstanding competence, to provide such persons with an opportunity to acquire an equity interest in New BARK and to further align the interests of such persons with the interests of New BARK’s stockholders. The 2021 Plan is attached to this proxy statement/prospectus as Annex C. You are encouraged to read the proposed 2021 Plan in its entirety. See the section entitled “The Incentive Plan Proposal.”

The ESPP Proposal (Proposal No. 9)

The stockholders of Northern Star will vote on a proposal to approve the ESPP. The ESPP will initially reserve up to 3,378,049 shares of New BARK common stock for future issuance in accordance with the ESPP’s terms, subject to certain adjustments and a customary evergreen provision. The purpose of the ESPP is to provide employees of the combined company and its designated subsidiaries and affiliates (whether now existing or



 

19


Table of Contents

subsequently established) with the ability to acquire shares of New BARK common stock at a discount to the market price and to pay for such purchases through payroll deductions or other approved contributions. New BARK believes that the ESPP will be important in helping to attract and retain employees. The ESPP is attached to this proxy statement/prospectus as Annex D. You are encouraged to read the proposed ESPP in its entirety. See the section entitled “The Incentive Plan Proposal.”

The Adjournment Proposal (Proposal No. 10)

The stockholders of Northern Star may vote on a proposal to adjourn the annual meeting to a later date or dates if it is determined by the officer presiding over the annual meeting that more time is necessary for Northern Star to consummate the Merger and the other transactions contemplated by the Merger Agreement. See the section entitled “The Adjournment Proposal.”

Northern Star Sponsor and Officers and Directors

As of the record date for the Northern Star annual meeting, the Sponsor and Northern Star’s officers and directors beneficially owned and were entitled to vote an aggregate of 6,358,750 shares of Northern Star’s Class B common stock, which we refer to in this proxy statement/prospectus as “founder shares.” The founder shares currently constitute 20% of the outstanding Northern Star common stock. In connection with the Business Combination, each outstanding share of Northern Star’s Class B common stock will convert into one share of Northern Star’s Class A common stock at the closing, the Class B common stock will cease to exist and Northern Star will thereafter have a single class of common stock. The Sponsor also purchased an aggregate of 4,558,000 private warrants simultaneously with the consummation of Northern Star’s initial public offering.

These holders have agreed to vote their shares in favor of the business combination proposal and the other proposals being presented at the meeting and in favor of the election of the seven nominees identified in this proxy statement/prospectus to serve as directors of Northern Star.

In connection with the Merger, Northern Star has agreed to cause its initial stockholders to amend the existing lock-up restrictions applicable to them and enter into agreements substantially identical to the Lock-Up Agreement executed or to be executed by certain of BARK’s stockholders, so that the lock-up restrictions with respect to the initial stockholders’ Northern Star common stock will be identical to the lock-up restrictions applicable to such stockholders of BARK. The agreement provides that the founder shares will be subject to a 12-month lock-up period, during which, subject to certain exceptions, the holders of such shares will not, directly or indirectly, sell, transfer or otherwise dispose of such shares, which period may be earlier terminated if the reported closing sale price of the Northern Star common stock equals or exceeds $15.00 per share (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations or other similar transactions) for a period of 20 trading days during any 30-trading-day period commencing at least 150 days following the consummation of the Merger. Furthermore, pursuant to a letter agreement executed in connection with Northern Star’s initial public offering, the private warrants will not be transferable, assignable or salable by the Sponsor until 30 days after the completion of Northern Star’s initial business combination.

Date, Time and Place of Annual Meeting of Northern Star’s Stockholders

The annual meeting of stockholders of Northern Star will be held at                  eastern time, on             , 2021, to consider and vote upon the business combination proposal, the PIPE proposal, the charter proposals, the director election proposal, the incentive plan proposal, and the ESPP proposal, and/or on the adjournment proposal if Northern Star is not able to consummate the Merger for any reason. The annual meeting will be held solely over the Internet by means of a live audio webcast. You may attend and participate in the annual meeting by accessing the meeting web portal located at http://www.virtualshareholdermeeting.com/STIC2021.



 

20


Table of Contents

Voting Power; Record Date

Stockholders will be entitled to vote or direct votes to be cast at the annual meeting if they owned Northern Star common stock at the close of business on April 5, 2021, which is the record date for the annual meeting. Stockholders will have one vote for each share of Northern Star common stock owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly voted and counted. Northern Star warrants do not have voting rights. Northern Star’s Class A common stock and Class B common stock are entitled to vote together as a single class on all matters to be considered at the annual meeting. On the record date, there were 31,793,750 shares of Northern Star common stock entitled to vote at the annual meeting, of which 25,435,000 were public shares (which are Class A common stock) and 6,358,750 were founder shares (which are Class B common stock).

Quorum and Vote of Northern Star Stockholders

A quorum of Northern Star stockholders is necessary to hold a valid meeting. A quorum will be present at the Northern Star annual meeting if a majority of the outstanding shares entitled to vote at the annual meeting are represented by attendance through the meeting web portal or by proxy. Abstentions and broker non-votes will count as present for the purposes of establishing a quorum. The holders of founder shares hold 20% of the outstanding Northern Star common stock. Such shares will be voted in favor of the business combination proposal and the other proposals being presented at the meeting and in favor of the election of the seven nominees identified in this proxy statement/prospectus to serve as directors of Northern Star. The proposals presented at the annual meeting will require the following votes:

 

   

The approval of the business combination proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock present and entitled to vote at the annual meeting to approve the Business Combination. There are currently 25,435,000 shares of Class A common stock outstanding and 6,358,750 shares of Class B common stock outstanding. Assuming all outstanding shares are present at the annual meeting to approve the Business Combination, at least 15,896,876 shares of Northern Star common stock must be voted in favor of the business combination proposal in order to approve the proposal. The holders of founder shares own an aggregate of 6,358,750 shares of Class B common stock of Northern Star, representing 20% of the outstanding Northern Star common stock, and have agreed to vote in favor of the business combination proposal. As a result, only 9,538,126 public shares, or approximately 37.5% of the public shares, are required to be voted in favor of the business combination proposal in order for it to be approved (assuming all outstanding shares are present and entitled to vote).

 

   

The approval of the PIPE proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock present and entitled to vote at the annual meeting.

 

   

The approval of each of the charter proposals will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock on the record date.

 

   

The election of directors requires a plurality vote of the Northern Star common stock present and entitled to vote at the annual meeting. A plurality means that the individuals who receive the largest number of votes cast “FOR” are elected as directors.

 

   

The approval of the incentive plan proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock present and entitled to vote at the annual meeting.

 

   

The approval of the ESPP proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock present and entitled to vote at the annual meeting.



 

21


Table of Contents
   

The approval of the adjournment proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock present and entitled to vote at the annual meeting.

Abstentions will have the same effect as a vote “against” the business combination proposal, the PIPE proposal, the charter proposals, the incentive plan proposal, the ESPP proposal and the adjournment proposal, if presented. Broker non-votes will have no effect on the business combination proposal, and will have the same effect as a vote “against” the charter proposals, incentive plan proposal, the ESPP proposal and adjournment proposal, if presented. For the election of directors, any shares not voted “FOR” a particular nominee (whether as a result of an abstention, a broker non-vote or a direction to withhold authority) will not be counted in the nominee’s favor.

The closing of the Business Combination is conditioned on approval of the business combination proposal, the PIPE proposal, the charter proposals, the incentive plan proposal and the ESPP proposal and on the election of the seven nominees identified in this proxy statement/prospectus to serve as directors of Northern Star. If any of the proposals is not approved or the seven nominees identified in this proxy statement/prospectus to serve as directors of Northern Star after the closing of the Business Combination are not elected, and the applicable closing condition in the Merger Agreement is not waived, the remaining proposals will not be presented to stockholders for a vote.

Conversion Rights

Pursuant to Northern Star’s amended and restated certificate of incorporation, a holder of public shares may demand that Northern Star convert such shares into cash if the Business Combination is consummated. Holders of public shares will be entitled to receive cash for these shares only if they deliver their stock to Northern Star’s transfer agent no later than two (2) business days prior to the annual meeting. Holders of public shares do not need to affirmatively vote for or against the business combination proposal or vote at all, or be a holder of such public shares as of the record date to exercise conversion rights. If the Business Combination is not completed, no shares will be converted to cash. If a holder of public shares properly demands conversion, Northern Star will convert each such public share into a pro rata portion of the trust account, calculated as of two business days prior to the anticipated consummation of the Business Combination, including interest earned on the trust account and not previously released to Northern Star to pay its tax obligations. As of April 5, 2021, the record date, this would amount to approximately $10.00 per share. If a holder of public shares exercises its conversion rights, then it will be exchanging its shares of Northern Star common stock for cash and will no longer own the shares. See the section entitled “Annual Meeting of Northern Star Stockholders—Conversion Rights” for a detailed description of the procedures to be followed if you wish to exercise conversion rights.

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking conversion rights with respect to 20% or more of the public shares. Accordingly, all public shares in excess of 20% held by a public stockholder will not be converted to cash.

Under Northern Star’s amended and restated certificate of incorporation, the Business Combination may not be consummated if Northern Star has net tangible assets of less than $5,000,001 either immediately prior to or upon consummation of the Business Combination, after taking into account the conversion into cash of all public shares properly demanded to be converted by holders of public shares, the completion of the Business Combination and the completion of the PIPE Transaction. Because the net tangible assets of the combined company will exceed this threshold as a result of the PIPE Transaction, all of the public shares may be converted and Northern Star can still consummate the Business Combination. However, the combined company must meet certain distribution criteria, including having a minimum of 1,100,000 publicly held shares, in order to be listed on the NYSE, which is a condition to closing the Business Combination.



 

22


Table of Contents

Holders of Northern Star warrants will not have conversion rights with respect to such securities.

Appraisal Rights

Neither stockholders of Northern Star nor holders of units or warrants of Northern Star have appraisal rights in connection with the Merger under Delaware law.

Proxy Solicitation

Proxies may be solicited by mail, telephone or in person. Northern Star has engaged D.F. King & Co., Inc. to assist in the solicitation of proxies. If a stockholder of record grants a proxy, it may still change its vote by sending a later-dated, signed proxy card to Northern Star’s transfer agent so that it is received prior to the vote at the annual meeting, or by submitting a ballot through the meeting web portal during the annual meeting webcast. A stockholder of record also may revoke its proxy by sending a notice of revocation to Northern Star’s transfer agent, which must be received prior to the vote at the annual meeting. If you hold your shares in “street name,” you should contact your broker, bank or nominee to change your instructions on how to vote. See the section entitled “Annual Meeting of Northern Star Stockholders—Revoking Your Proxy.”

Interests of the Sponsor and Northern Star’s Directors and Officers in the Business Combination

When you consider the recommendation of Northern Star’s board of directors in favor of approval of the business combination proposal and the other proposals, you should keep in mind that the Sponsor (which is affiliated with certain of Northern Star’s officers and directors) and Northern Star’s directors and officers have interests in such proposal that may be different from, or in addition to, your interests as a stockholder or warrantholder. These interests include, among other things:

 

   

If the Business Combination with BARK or another business combination is not consummated by November 13, 2022 (or such later date as may be approved by Northern Star’s stockholders), Northern Star will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares for cash and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, the 6,358,750 founder shares held by the Sponsor and Northern Star’s directors and officers, which were acquired for an aggregate purchase price of $25,000 prior to Northern Star’s initial public offering, would be worthless because the holders are not entitled to participate in any redemption or distribution with respect to such shares. On the other hand, if the Merger is consummated, each outstanding founder share will convert into one share of Northern Star common stock at the closing. Such shares had an aggregate market value of $72,616,925 based upon the closing price of $11.42 per share on the NYSE on April 5, 2021.

 

   

The Sponsor, which is affiliated with certain of Northern Star’s directors and officers, purchased an aggregate of 4,558,000 private warrants from Northern Star for an aggregate purchase price of approximately $6.837 million (or $1.50 per warrant). These purchases took place on a private placement basis simultaneously with the consummation of Northern Star’s initial public offering. All of the proceeds Northern Star received from these purchases were placed in the trust account. Such warrants had an aggregate market value of $14,950,240 based upon the closing price of $3.28 per warrant on the NYSE on April 5, 2021. The private warrants will become worthless if Northern Star does not consummate a business combination by November 13, 2022 (or such later date as may be approved by Northern Star stockholders in an amendment to its amended and restated certificate of incorporation).

 

   

If Northern Star is unable to complete a business combination within the required time period, the Sponsor will be personally liable under certain circumstances described herein to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or



 

23


Table of Contents
 

other entities that are owed money by Northern Star for services rendered or contracted for or products sold to Northern Star. If Northern Star consummates a business combination, on the other hand, Northern Star will be liable for all such claims.

 

   

The Sponsor and Northern Star’s officers and directors and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on Northern Star’s behalf, such as identifying and investigating possible business targets and business combinations. However, if Northern Star fails to consummate an initial business combination within the required period, they will not have any claim against the trust account for reimbursement. Accordingly, Northern Star may not be able to reimburse these expenses if the Business Combination with BARK or another business combination is not completed by November 13, 2022 (or such later date as may be approved by Northern Star stockholders in an amendment to its amended and restated certificate of incorporation). As of April 5, 2021, the Sponsor and Northern Star’s officers and directors and their affiliates had incurred approximately $25,000 of unpaid reimbursable expenses.

 

   

It is currently contemplated that Jonathan J. Ledecky and Joanna Coles will be directors of Northern Star after the closing of the Business Combination (assuming that the seven nominees identified in this proxy statement/prospectus to serve as directors of Northern Star after the closing of the Business Combination are elected). As such, in the future, each will receive any cash fees, stock options or stock awards that the Northern Star board of directors determines to pay to its non-executive directors.

 

   

The Merger Agreement provides for the continued indemnification of Northern Star’s current directors and officers and the purchase of directors and officers liability insurance covering Northern Star’s current directors and officers.

 

   

Northern Star’s officers and directors (or their affiliates) may make loans from time to time to Northern Star to fund certain capital requirements. As of the date of this proxy statement/prospectus, no such loans have been made, but loans may be made after the date of this proxy statement/prospectus. If the Business Combination is not consummated, the loans will not be repaid and will be forgiven except to the extent there are funds available to Northern Star outside of the trust account.

The existence of financial and personal interests of the Sponsor and Northern Star’s directors and officers may result in a conflict of interest on the part of the directors and officers between what they may believe is in the best interests of Northern Star and its stockholders and what they may believe is best for themselves in determining to recommend that stockholders vote for the proposals and in making other determinations in connection with the Business Combination. Northern Star stockholders should take these interests into account in deciding whether to approve the Business Combination.

At any time prior to the annual meeting, during a period when they are not in possession of any material nonpublic information regarding Northern Star or its securities, the Sponsor, Northern Star’s officers and directors, BARK or BARK’s stockholders and/or their respective affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the business combination proposal, or who elect to convert, or indicate an intention to convert, their public shares into a pro rata portion of the trust account, or they may execute agreements to purchase shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire shares of Northern Star common stock, to vote their shares in favor of the business combination proposal or to refrain from exercising their conversion rights. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirement that the holders of a majority of the shares entitled to vote at the annual meeting to approve the business combination proposal vote in its favor and that the conditions to the closing of the Business Combination (such as the condition that the Northern Star common stock be listed on the NYSE) otherwise will be met, where it appears that such requirements would otherwise not be met. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus,



 

24


Table of Contents

they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and the transfer to such investors or holders of shares or warrants owned by the Northern Star initial stockholders for nominal value.

Entering into any such arrangements may have a depressive effect on Northern Star common stock. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than the then-current market price and may therefore be more likely to sell the shares he, she or it owns, either prior to or immediately after the annual meeting.

If such transactions are effected, the consequence could be to cause the Business Combination to be approved in circumstances where such approval could not otherwise be obtained. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the business combination proposal and the other proposals to be presented at the annual meeting and would likely increase the chances that such proposals would be approved. Moreover, any such purchases may make it more likely that the conditions to the closing of the Business Combination (such as the condition that the Northern Star common stock be listed on the NYSE) would be met.

No agreements dealing with the above arrangements or purchases have been entered into as of the date of this proxy statement/prospectus. Northern Star will file a Current Report on Form 8-K to disclose any arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the business combination proposal or the satisfaction of any closing conditions. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

Interests of BARK Directors and Officers

In considering whether to adopt the Merger Agreement and Business Combination by executing and delivering a written consent, BARK stockholders should be aware that aside from their interests as stockholders, BARK’s officers and the members of the BARK board of directors have interests in the Business Combination that are different from, or in addition to, those of other BARK stockholders generally. BARK stockholders should take these interests into account in deciding whether to approve the Business Combination.

In addition to the compensation arrangements, including employment, termination of employment, and change in control arrangements and indemnification arrangements, discussed in the sections titled “Executive Compensation” and “Certain Relationships and Related Person Transactions—BARK Related Person Transactions” and the registration rights described in the section titled “The Business Combination Proposal—Related Agreements—Registration Rights Agreement,” these interests include, among other things, the fact that:

 

   

The following executive officers of BARK are expected to be appointed as executive officers of New BARK following the consummation of the Business Combination: Matt Meeker, Manish Joneja and John Toth;

 

   

The following members of the BARK board of directors are expected to be appointed as directors of New BARK following the consummation of the Business Combination: Manish Joneja, Jim McGinty, Elizabeth McLaughlin, Matt Meeker and Henrik Werdelin; and

 

   

The executive officers of BARK and members of the BARK board of directors are holders of, or affiliated with entities that are holders of, BARK equity interests and in such capacity will be entitled to receive the consideration payable in the Business Combination to all holders of such equity interests.

Recommendation to Stockholders

Northern Star’s board of directors believes that the business combination proposal and the other proposals to be presented at the annual meeting are fair to and in the best interest of Northern Star’s stockholders and



 

25


Table of Contents

unanimously recommends that its stockholders vote “FOR” the business combination proposal, “FOR” the PIPE proposal, “FOR” each of the charter proposals, “FOR” the election of the seven director nominees identified in this proxy statement/prospectus, “FOR” the incentive plan proposal, “FOR” the ESPP proposal and “FOR” the adjournment proposal, if presented.

Conditions to the Closing of the Business Combination

General Conditions

Consummation of the Business Combination is conditioned on approval of the proposals by Northern Star’s stockholders, including the business combination proposal. In addition, the consummation of the Merger is conditioned upon, among other things:

 

   

Northern Star having, either immediately prior to or upon the closing of the Business Combination, at least $5,000,001 of net tangible assets following the exercise by holders of Northern Star’s public shares of their right to convert their public shares into their pro rata share of the trust account;

 

   

all specified waiting periods under the HSR Act having expired;

 

   

no statute, rule, regulation, executive order, decree, injunction or other order being in effect or enforced by any governmental entity and which has the effect of making the Merger illegal or otherwise prohibiting consummation of the Merger;

 

   

the registration statement of which this proxy statement/prospectus forms a part having become effective in accordance with the provisions of the Securities Act, no stop order having been issued by the SEC which remains in effect with respect to the registration statement, and no proceeding seeking such a stop order having been threatened or initiated by the SEC which remains pending;

 

   

approval of the Business Combination by BARK’s stockholders;

 

   

the approval for listing on the NYSE of Northern Star’s common stock comprising the Merger Consideration to be issued; and

 

   

the PIPE Transaction having been completed or completed concurrently with the closing of the Business Combination.

BARK’s Conditions to Closing

The obligations of BARK to consummate the Merger are also conditioned upon, among other things:

 

   

the accuracy of the representations and warranties of Northern Star and Merger Sub (subject to certain bring-down standards);

 

   

performance of the agreements and covenants of Northern Star and Merger Sub required by the Merger Agreement to be performed on or prior to the closing of the Merger in all material respects;

 

   

no action, suit or proceeding being pending or threatened by any governmental entity which is reasonably likely to prevent consummation of the transactions contemplated by the Merger Agreement or cause any of the transactions contemplated by the Merger Agreement to be rescinded following consummation, or to materially and adversely affect the title of the shares of Northern Star common stock to be issued in connection with the Merger, and no order, judgment, decree, stipulation or injunction to such effect being in effect;

 

   

no Material Adverse Effect (as defined in the Merger Agreement) with respect to Northern Star having occurred since date of the Merger Agreement which is continuing as of the closing of the Business Combination;



 

26


Table of Contents
   

Northern Star executing the Registration Rights Agreement;

 

   

the filing of Northern Star’s amended and restated certificate of incorporation with the Secretary of State of the State of Delaware and the adoption of the amended and restated bylaws;

 

   

the resignation of all persons employed by Northern Star, except for those specified in the Merger Agreement or the schedules thereto;

 

   

the termination of the existing registration rights agreement, among Northern Star and the former Northern Star stockholders thereto; and

 

   

the execution of the Lock-Up Agreement by Sponsor and certain other Class B Common stockholders of Northern Star.

Northern Star’s and Merger Sub’s Conditions to Closing

The obligations of Northern Star and Merger Sub to consummate the Merger are also conditioned upon, among other things:

 

   

the accuracy of the representations and warranties of BARK (subject to certain bring-down standards);

 

   

performance of the agreements and covenants of BARK and its subsidiaries required by the Merger Agreement to be performed on or prior to the closing of the Merger in all material respects;

 

   

no action, suit or proceeding being pending or threatened by any governmental entity which is reasonably likely to prevent consummation of the transactions contemplated by the Merger Agreement or cause any of the transactions contemplated by the Merger Agreement to be rescinded following consummation, or to materially and adversely affect the right of the surviving corporation to own, operate or control any of the assets of BARK following the Merger, and no order, judgment, decree, stipulation or injunction to such effect being in effect;

 

   

no Material Adverse Effect (as defined in the Merger Agreement) with respect to BARK having occurred since date of the Merger Agreement which is continuing as of the closing of the Business Combination;

 

   

delivery of updated financial statements of BARK and its subsidiaries to Northern Star;

 

   

execution and delivery of the Lock-Up Agreement by BARK’s stockholders specified in the Merger Agreement or the schedules thereto;

 

   

termination of certain Company agreements, including BARK’s existing stockholders’ agreement, specified in the Merger Agreement or the schedules thereto;

 

   

the delivery by BARK to Northern Star of a certificate that meets the requirements of Treasury Regulations Section 1.1445-2(c)(3) and states that shares of BARK are not “ U.S. real property interests” within the meaning of Section 897 of the Code, together with a written authorization for Northern Star to deliver such certification to the IRS on behalf of BARK after the closing of the Business Combination and a notice to the IRS in accordance with the provisions of Treasury Regulations Section 1.897-2(h)(2).

Waiver

If permitted under applicable law, Northern Star or BARK may waive in writing any inaccuracies in the representations and warranties made to such party contained in the Merger Agreement and waive compliance with any agreements or conditions for the benefit of itself or such party contained in the Merger Agreement. However, the condition requiring that Northern Star have at least $5,000,001 of net tangible assets as described above may not be waived.



 

27


Table of Contents

Termination

The Merger Agreement may be terminated at any time, but not later than the closing of the Business Combination, as follows:

 

   

by mutual written consent of Northern Star and BARK;

 

   

by either Northern Star or BARK if the Business Combination is not consummated on or before June 30, 2021 (the “Outside Date”), provided that the right to terminate the Merger Agreement will not be available to any party whose action or failure to act has been a principal cause of or primarily resulted in the failure of the Merger to occur on or before such date and such action or failure to act constitutes a breach of the Merger Agreement;

 

   

by either Northern Star or BARK if a governmental entity shall have issued an order, decree or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger, which order, decree, judgment, ruling or other action is final and non-appealable;

 

   

by either Northern Star or BARK if the other party has breached any of its representations, warranties, covenants or agreements in any material respect or any has become untrue such that the conditions to the Merger Agreement would not be satisfied as of the time of such breach and such breach is incapable of being cured or is not cured by the Outside Date, provided that the terminating party is itself not in material breach;

 

   

by Northern Star if BARK shall have failed to deliver Support Agreements within five (5) Business Days following the execution of the Merger Agreement;

 

   

by Northern Star if BARK fails to obtain the requisite approval of its stockholders to the Merger Agreement and the Merger by written consent within ten (10) business days following the approval of this proxy statement/prospectus by the SEC;

 

   

by either Northern Star or BARK if, at the special meeting of stockholders, the proposals to stockholders, including the business combination proposal, shall fail to be approved by the required vote (subject to any adjournment or recess of the meeting); or

 

   

by either Northern Star or BARK if, immediately prior to or upon the closing, following consummation of the Merger, Northern Star will have less than $5,000,001 of net tangible assets following the exercise by the holders of shares of Northern Star common stock issued in Northern Star’s initial public offering of their conversion rights into cash.

Lock-Up Agreement

Certain of BARK’s stockholders have entered or will enter into the Lock-Up Agreement, which provides that shares of Northern Star common stock to be issued to them in the Merger will be subject to a 12-month lock-up period, during which, subject to certain exceptions, they will not, directly or indirectly, sell, transfer or otherwise dispose of their shares to be issued in the Merger, which period may be earlier terminated if the reported closing sale price of the Northern Star common stock equals or exceeds $15.00 per share (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations or other similar transactions) for a period of 20 trading days during any 30-trading-day period commencing at least 150 days following the consummation of the Merger. In addition, Northern Star has agreed to cause its initial stockholders to amend the existing lock-up restrictions applicable to them and enter into agreements substantially identical to the Lock-Up Agreement, so that the lock-up restrictions with respect to the initial stockholders’ Northern Star common stock will be identical to the lock-up restrictions applicable to BARK’s stockholders who have entered, or will enter, into the Lock-Up Agreement. Furthermore, pursuant to a letter agreement executed in connection with Northern Star’s initial



 

28


Table of Contents

public offering, the private warrants will not be transferable, assignable or salable by the Sponsor until 30 days after the completion of Northern Star’s initial business combination.

Subscription Agreements for PIPE Transaction

On December 16, 2020, Northern Star entered into subscription agreements with the PIPE Investors pursuant to which such PIPE Investors have agreed to purchase, and Northern Star agreed to sell to the PIPE Investors, an aggregate of 20,000,000 shares of Northern Star common stock in a private placement at a price of $10.00 per share for an aggregate commitment of $200,000,000. The subscription agreements are subject to certain customary conditions, including, among other things, the closing of the Business Combination. The subscription agreements provide for certain registration rights. The subscription agreements will terminate with no further force and effect upon the earliest to occur of: (a) such date and time as the Merger Agreement is terminated in accordance with its terms, (b) June 30, 2021, and (c) upon the mutual written agreement of the parties to such subscription agreement.

Registration Rights Agreement

Certain stockholders of BARK and Northern Star will enter into the Registration Rights Agreement, pursuant to which they will be granted certain rights to have registered, in certain circumstances, the resale under the Securities Act of certain shares of Northern Star common stock held by them, subject to certain conditions set forth therein. Northern Star has agreed to use reasonable best efforts to terminate its existing registration rights agreement and shall offer to the Northern Star stockholders who are parties to the existing registration rights agreement the opportunity to enter into the Registration Rights Agreement.

BARK Support Agreements

In connection with the execution of the Merger Agreement, the Supporting Holders, comprised of certain of BARK’s officers, directors, founders and their family members and 5% or greater holders of BARK’s stock, who collectively hold approximately 77.5% of the issued and outstanding shares of BARK’s common stock on an as-converted basis as of April 5, 2021, the record date, have entered into Support Agreements with Northern Star pursuant to which the Supporting Holders have agreed, among other things, to vote all of their respective shares of BARK’s stock in favor of the Merger at a meeting called to approve the Merger by BARK’s stockholders (or in an action by written consent approving the Merger).

Tax Consequences of the Business Combination

For a description of the material U.S. federal income tax consequences of the Merger and the exercise of conversion rights, please see the information set forth in “The Business Combination Proposal—Material U.S. Federal Income Tax Consequences of the Merger.”

Anticipated Accounting Treatment

The Merger will be accounted for as a reverse merger in accordance with U.S. GAAP. Under this method of accounting, Northern Star will be treated as the “acquired” company for financial reporting purposes. This determination was primarily based on BARK comprising the ongoing operations of the combined company, BARK senior management comprising the senior management of the combined company, and the former owners and management of BARK having control of the board of directors of the combined company after the Merger. In accordance with guidance applicable to these circumstances, the Merger will be considered to be a capital transaction in substance. Accordingly, for accounting purposes, the Merger will be treated as the equivalent of BARK issuing shares for the net assets of Northern Star, accompanied by a recapitalization. The net assets of Northern Star will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the closing of the Merger will be those of BARK.



 

29


Table of Contents

Regulatory Matters

The Merger is not subject to any additional federal or state regulatory requirement or approval, except for the filings with the State of Delaware necessary to effectuate the Merger and the filing of required notifications and the expiration or termination of the required waiting periods under the HSR Act. On February 16, 2021, the parties filed with the Federal Trade Commission (the “FTC”) the notice required under the HSR Act and requested early termination of the waiting period under the HSR Act. On March 18, 2021, the waiting period under the HSR Act expired.

Risk Factors and Risk Factor Summary

In evaluating the proposals to be presented at the annual meeting, a stockholder should carefully read this proxy statement/prospectus and especially consider the factors discussed in the sections entitled “Forward-Looking Statements” and “Risk Factors.”

Set forth below is only a summary of principal risks associated with BARK, Northern Star and New BARK.

 

   

the ability to complete the Merger or a delay in the closing of the Business Combination or the PIPE Transaction;

 

   

the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;

 

   

the ability to maintain the listing of New BARK’s securities on the New York Stock Exchange or an alternative national securities exchange following the Business Combination;

 

   

the potential liquidity and trading of New BARK’s public securities;

 

   

the inability to recognize the anticipated benefits of the proposed Business Combination, which may be affected by, among other things, the amount of cash available following any redemption of public shares by Northern Star stockholders;

 

   

BARK’s financial and business performance following the Business Combination, including financial projections and business metrics;

 

   

changes in BARK’s strategy, future operations, expansion plans and opportunities, financial position, estimated revenues and losses, projected costs, prospects and plans, capital requirements and sources and uses of cash;

 

   

the implementation, market acceptance and success of BARK’s business model and its ability to scale in a cost-effective manner;

 

   

BARK’s significant reliance on revenue from customers purchasing subscription-based products, such as BarkBox and Super Chewer, and its ability to successfully expand its offerings;

 

   

BARK’s short history operating at its current scale in a rapidly evolving industry;

 

   

the effectiveness and efficiency of BARK’s marketing and cross-selling efforts;

 

   

BARK’s ability to compete in the highly competitive dog products and services retail industry;

 

   

BARK’s ability to maintain and grow its strong brand and reputation;

 

   

adverse changes in BARK’s shipping arrangements or any interruptions in shipping;

 

   

the ability to maintain effective controls over disclosure and financial reporting that enable BARK to comply with regulations and produce accurate financial statements;

 

   

potential failure to comply with privacy and information security regulations;



 

30


Table of Contents
   

the ability to comply with the anti-corruption laws of the United States and various international jurisdictions;

 

   

potential impairment charges related to identified intangible assets and fixed assets;

 

   

the effects of economic downturns and other macroeconomic conditions or trends on BARK’s business and consumer spending;

 

   

the effects of the COVID-19 pandemic on BARK’s business and the actions BARK may take in response thereto;

 

   

potential litigation, product liability claims, regulatory proceedings and/or adverse publicity involving New BARK or BARK;

 

   

expectations regarding BARK’s ability to obtain and maintain intellectual property protection and not infringe on the rights of others;

 

   

costs related to the Business Combination;

 

   

in accordance with recent statements from the SEC on accounting treatment of the warrants, Northern Star management determined that its outstanding warrants should be accounted for as liabilities rather than as equity and such requirement resulted in a restatement of Northern Star’s previously issued financial statements, which has resulted in unanticipated costs and diversion of management resources and has subjected us to additional risks and uncertainties, including an increased possibility of legal proceedings and a potential loss of investor confidence;

 

   

expectations regarding the time during which New BARK will be an “emerging growth company” under the JOBS Act; and

 

   

other risks and uncertainties indicated in this proxy statement/prospectus, including those set forth under the section entitled “Risk Factors.”



 

31


Table of Contents

SUMMARY HISTORICAL FINANCIAL INFORMATION OF NORTHERN STAR

Northern Star is providing the following selected historical financial information to assist you in your analysis of the financial aspects of the merger.

The historical financial statements of Northern Star have been prepared in accordance with U.S. GAAP.

Northern Star’s consolidated balance sheet data as of December 31, 2020 and consolidated statement of operations data for the period from July 8, 2020 (inception) through December 31, 2020 are derived from Northern Star’s unaudited restated financial statements included elsewhere in this proxy statement/prospectus. The restatement is more fully described in Note 2 of the notes to Northern Star’s financial statements included herein.

The information is only a summary and should be read in conjunction with Northern Star’s consolidated financial statements and related notes and “Other Information Related to Northern Star — Northern Star’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere herein. The historical results included below and elsewhere in this proxy statement/prospectus are not indicative of the future performance of Northern Star. All amounts are in US dollars.

This summary historical financial information has been amended and restated to give effect to the restatement of our financial statements, as more fully described in Note 2 to our financial statements entitled “Restatement of Previously Issued Financial Statements”.

 

     Period from
July 8, 2020
(inception) to
December 31, 2020
 
     (unaudited)  
     (in thousands,
except for share
data)
 

Statement of Operation Data:

  

Formation and operating costs

   $ (1,041

Other expense, net

     (33,587

Net Loss

     (34,628

Weighted average shares outstanding, basic and diluted

     6,992,903  
     As of
December 31,

2020
 
     (unaudited)  
     (in thousands)  

Balance Sheet Data:

  

Total Assets

   $ 255,533  

Total Liabilities

     56,786  

Temporary Equity

   $ 193,747  

Stockholders’ Equity

     5,000  


 

32


Table of Contents

SUMMARY HISTORICAL FINANCIAL INFORMATION OF BARK

The following table sets forth summary historical financial information of BARK for the periods and as of the dates indicated. The summary historical financial information of BARK as of and for the years ended March 31, 2020 and 2019 was derived from the audited historical financial statements of BARK included elsewhere in this proxy statement/prospectus. The summary historical interim financial information of BARK as of December 31, 2020, and for the nine months ended December 31, 2020 and 2019 was derived from the unaudited condensed consolidated financial statements of BARK included elsewhere in this proxy statement/prospectus and has been prepared on a consistent basis as the audited consolidated financial statements. In the opinion of BARK’s management, the interim financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the financial information in those statements.

The following summary historical financial information should be read together with BARK’s consolidated financial statements and accompanying notes and “BARK’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this proxy statement/ prospectus. The summary historical financial information in this section is not intended to replace BARK’s financial statements and the related notes. BARK’s historical results are not necessarily indicative of the results that may be expected in the future, and BARK’s results as of and for the nine months ended December 31, 2020, are not necessarily indicative of the results that may be expected for the year ending March 31, 2021, or any other period.

 

     Nine Months Ended
December 31,
    Year Ended March 31,  
     2020     2019     2020     2019  
     (in thousands, except for
share and per share data)
    (in thousands, except for
share and per share data)
 

Consolidated Statement of Operation Data:

        

Revenue

   $ 266,396     $ 161,664     $ 224,335     $ 191,441  

Cost of revenue

     108,421       65,058       88,921       84,326  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     157,975       96,606       135,414       107,115  

Operating expenses:

        

Selling, general and administrative

     123,882       84,606       115,893       104,146  

Advertising and marketing

     50,782       35,904       46,147       37,664  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     174,664       120,510       162,040       141,810  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (16,689     (23,904     (26,626     (34,695

Interest expense

     (8,381     (3,834     (5,421     (2,595

Other income, net

     736       495       679       208  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss before income taxes

     (24,334     (27,243     (31,368     (37,082

Provision for income tax

     —           —           —           —      
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss and comprehensive loss

   $ (24,334   $ (27,243   $ (31,368   $ (37,082
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per common share attributable to common stockholders—basic and diluted

   $ (4.64   $ (5.29   $ (6.08   $ (7.56
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares used to compute net loss per share attributable to common stockholders—basic and diluted

     5,246,530       5,148,584       5,159,893       4,905,972  
  

 

 

   

 

 

   

 

 

   

 

 

 


 

33


Table of Contents
     As of December 31,      As of March 31,  
     2020      2020      2019  

Consolidated Balance Sheet Data:

        

Cash

   $ 51,896      $ 9,676    $ 11,341

Total assets

     151,865        64,689      46,545

Total liabilities

     246,693        140,089      92,550

Total redeemable convertible preferred stock

     59,987        59,987      59,987

Total stockholders’ deficit

     (154,815      (135,387      (105,992


 

34


Table of Contents

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following selected unaudited pro forma condensed combined financial data is derived from the unaudited pro forma condensed combined balance sheet and unaudited pro forma condensed combined statements of operations included elsewhere in this proxy statement/prospectus.

The unaudited pro forma condensed combined financial statements are based on Northern Star’s historical restated financial statements and BARK’s historical consolidated financial statements as adjusted to give effect to the Business Combination and the PIPE Transaction. The restatement of Northern Star’s financial statements is more fully described in Note 2 of the notes to Northern Star’s financial statements included herein. The unaudited pro forma condensed combined balance sheet gives pro forma effect to the Business Combination, treated as a reverse recapitalization for accounting purposes, and the PIPE Transaction as if they had been consummated on December 31, 2020. The unaudited pro forma condensed combined statements of operations for the nine months ended December 31, 2020 and for the year ended March 31, 2020, give effect to the Business Combination and the PIPE Transaction as if they had occurred on April 1, 2019, the beginning of the earliest period presented. The unaudited pro forma condensed combined statements of operations for the year ended March 31, 2020 do not include Northern Star’s historical financial statements since Northern Star was not in existence during such period.

The unaudited pro forma condensed combined financial statements were prepared in accordance with Article 11 of SEC Regulation S-X, as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). Northern Star has elected not to present Management’s Adjustments and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information. The adjustments presented in the unaudited pro forma condensed combined financial statements have been identified and presented to provide relevant information necessary for an understanding of the combined company upon consummation of the Business Combination and the PIPE Transaction.

The unaudited pro forma condensed combined financial information is for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined company will experience. Northern Star and BARK have not had any historical relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

This information should be read together with Northern Star and BARK’s historical financial statements and related notes, “Unaudited Pro Forma Condensed Combined Financial Information,” “Northern Star’s Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “BARK’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial statements of Northern Star and BARK included elsewhere in this proxy statement/prospectus.

The selected unaudited pro forma condensed combined financial data below presents two redemption scenarios as follows:

 

   

Assuming No Redemptions: This presentation assumes that no Northern Star public stockholders exercise their right to have their Northern Star Public Shares converted into their pro rata share of the trust account; and



 

35


Table of Contents
   

Assuming Maximum Redemptions: This presentation assumes that 19,374,702 shares of Northern Star common stock, the maximum redemption of the outstanding Northern Star common stock, are redeemed, resulting in an aggregate payment of $193.7 million out of the trust account, which is derived from the number of shares that could be redeemed in connection with the Business Combination at an assumed redemption price of $10.00 per share based on the trust account balance as of December 31, 2020 in order for the amount of Northern Star Cash to satisfy the minimum amount of net tangible assets required to consummate the Business Combination of at least $5,000,001 after giving effect to the PIPE Transaction and settlement of the Northern Star Transaction Costs.

 

     Pro Forma  
     Nine Months Ended
December 31, 2020
    Year Ended
March 31, 2020
 
     Scenario 1
(Assuming No
Redemptions)
    Scenario 2
(Assuming
Maximum
Redemptions)
    Scenario 1
(Assuming No
Redemptions)
    Scenario 2
(Assuming
Maximum
Redemptions)
 
     (in thousands)  

Combined Statement of Operations data:

        

Revenue

   $ 266,396     $ 266,396     $ 224,335     $ 224,335  

Total gross profit

     157,975       157,975       135,414       135,414  

Loss from operations

     (17,730     (17,730     (41,180     (41,180

Net loss

     (55,421     (55,421     (43,474     (43,474

 

     Pro Forma  
     As of December 31,
2020
 
     Scenario 1
(Assuming No
Redemptions)
     Scenario 2
(Assuming
Maximum
Redemptions)
 
     (in thousands)  

Combined Balance Sheet data:

     

Total assets

   $ 575,341      $ 381,594  

Total long-term debt

     76,181        76,181  

Total liabilities

     298,861        298,861  

Total shareholders’ equity

     276,480        82,733  


 

36


Table of Contents

COMPARATIVE PER SHARE DATA

The unaudited pro forma condensed combined balance sheet as of December 31, 2020, the unaudited pro forma condensed combined statement of operations for the nine months ended December 31, 2020 and the unaudited pro forma condensed statement of operations for the year ended March 31, 2020 have been prepared using two different assumptions regarding the number of public shares as to which the Northern Star public stockholders exercise their conversion rights, as follows:

 

   

Assuming No Redemptions: This presentation assumes that no Northern Star public stockholders exercise their right to have their Northern Star Public Shares converted into their pro rata share of the trust account; and

 

   

Assuming Maximum Redemptions: This presentation assumes that 19,374,702 shares of Northern Star common stock, the maximum redemption of the outstanding Northern Star common stock, are redeemed, resulting in an aggregate payment of $193.7 million out of the trust account, which is derived from the number of shares that could be redeemed in connection with the Business Combination at an assumed redemption price of $10.00 per share based on the trust account balance as of December 31, 2020 providing for a minimum net tangible asset of $5.0 million upon a consummation of the Business Combination and the PIPE Transaction on December 31, 2020.

The unaudited pro forma condensed combined financial statements were prepared in accordance with Article 11 of SEC Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). Northern Star has elected not to present Management’s Adjustments and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information. The adjustments presented in the unaudited pro forma condensed combined financial statements have been identified and presented to provide relevant information necessary for an accurate understanding of the combined company upon consummation of the transactions.

The historical financial statements of Northern Star and BARK have been prepared in accordance with U.S. GAAP.

The historical financial information of Northern Star was derived from the unaudited restated condensed financial statements of Northern Star for the period from July 8, 2020 (inception) to December 31, 2020, which are included elsewhere in this proxy statement. The historical financial information of BARK was derived from the unaudited condensed consolidated financial statements of BARK for the nine months ended December 31, 2020 and the audited consolidated financial statements of BARK for the year ended March 31, 2020, included elsewhere in this proxy statement. This information should be read together with Northern Star’s and BARK’s financial statements and related notes, “Other Information Related to Northern Star—Northern Star’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “BARK’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included elsewhere in this proxy statement.



 

37


Table of Contents

The unaudited pro forma condensed combined financial information is presented for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined company will experience.

 

    Nine Months Ended December 31, 2020  
    Northern Star     BARK     Pro Forma
Combined
(No Redemptions) (1)
    Pro Forma
Combined
(Maximum
Redemptions) (1)
 
    (in thousands, except share and per share data)  

Net loss attributable to common stockholders

  $ (34,628   $ (24,334   $ (55,421   $ (55,421

Stockholders’ equity (deficit)

  $ 5,000     $ (154,815   $ 276,480     $ 82,733  

Shares subject to redemption

    19,374,702       —         —         —    

Ending shares

    12,419,048       5,311,452       162,112,882       142,738,180  

Weighted average common shares outstanding, basic

    6,992,903       5,246,530       162,112,882       142,738,180  

Weighted average common shares outstanding, diluted

    6,992,903       5,246,530       162,112,882       142,738,180  

Book value per share (2)

  $ 0.16     $ (29.15   $ 1.71     $ 0.58  

Basic net loss per common share (3)

  $ (4.95   $ (4.64   $ (0.34   $ (0.39

Diluted net loss per common share (3)

  $ (4.95   $ (4.64   $ (0.34   $ (0.39

Cash dividends per share

    NA       NA       NA       NA  
          Year Ended March 31, 2020  
          BARK     Pro Forma
Combined
(No Redemptions) (1)
    Pro Forma
Combined
(Maximum
Redemptions) (1)
 
          (in thousands, except share and per share data)  

Net loss attributable to common stockholders

 

  $ (31,368   $ (43,474   $ (43,474

Ending shares

 

    5,196,711       162,787,331       143,412,629  

Weighted average common shares outstanding

 

    5,159,893       162,787,331       143,412,629  

Basic net loss per common share (3)

 

  $ (6.08   $ (0.27   $ (0.30

Diluted net loss per common share (3)

 

  $ (6.08   $ (0.27   $ (0.30

Cash dividends per share

 

    NA       NA       NA  

(1) Refer to Unaudited Pro Forma Condensed Combined Financial Statements beginning on page 118.

(2) Calculated based on total stockholders’ equity

(3) Calculated based on weighted-average shares outstanding



 

38


Table of Contents

RISK FACTORS

Stockholders should carefully consider the following risk factors, together with all of the other information included elsewhere in this proxy statement/prospectus, before they decide whether to vote or instruct their vote to be cast to approve the proposals described in this proxy statement/prospectus.

Risks Related to New BARK’s Business Following the Business Combination

The value of your investment in New BARK following consummation of the Business Combination will be subject to the significant risks affecting BARK and inherent to the industry in which it operates. You should carefully consider the risks and uncertainties described below and other information included elsewhere in this proxy statement/prospectus. If any of the events described below occur, the post-acquisition business and financial results could be adversely affected in a material way. This could cause the trading price of its common stock to decline, perhaps significantly, and you therefore may lose all or part of your investment. Unless the context otherwise requires, all references in this section to the “Company,” “we,” “us” or “our” refer to the business of BARK prior to the consummation of the Business Combination, which will be the business of New BARK following the consummation of the Business Combination. Accordingly, the risks described below relating to BARK could also materially and adversely affect the combined company after the consummation of the Business Combination.

BARK relies significantly on revenue from subscribers purchasing subscription-based products, such as BarkBox and Super Chewer, and may not be successful in expanding its subscription-based offerings.

To date the vast majority of BARK’s revenue has been derived from subscribers who purchase subscription-based offerings. In BARK’s subscription arrangements, subscribers select a duration over which they wish to receive product shipments. BARK significantly relies, and expects to continue to significantly rely, on these subscribers for a substantial majority of BARK’s revenue. The introduction of competitors’ offerings with lower prices for consumers, fluctuations in prices, a lack of subscriber satisfaction with BARK’s monthly themes or products, changes in consumer purchasing habits, including an increase in the use of competitors’ products or offerings and other factors could result in declines in BARK’s subscriptions and in BARK’s revenue, which would have an adverse effect on its business, financial condition and results of operations. Because BARK derives a vast majority of its revenue from subscribers who purchase these subscription-based products, any material decline in demand for these offerings could have an adverse impact on BARK’s future revenue and results of operations. In addition, if BARK is unable to successfully introduce new subscription-based offerings, such as its BARK Eats personalized food blend subscription, which it expects to launch in nine Midwest markets in fiscal 2022, BARK’s revenue growth may decline, which could have a material adverse effect on BARK’s business, financial condition, and results of operations.

BARK has a short operating history at its current scale in a rapidly evolving industry and, as a result, its past results may not be indicative of future operating performance.

BARK has a short history operating at its current scale in a rapidly evolving industry that may not develop in a manner favorable to BARK’s business. This relatively short operating history makes it difficult to assess BARK’s future performance with certainty. You should consider BARK’s business and prospects in light of the risks and difficulties BARK may encounter.

BARK’s future success will depend in large part upon its ability to, among other things:

 

   

cost-effectively acquire new subscribers and customers and engage with and retain existing subscribers and customers;

 

   

withstand the impacts of the COVID-19 pandemic;

 

   

increase its market share;

 

 

39


Table of Contents
   

market its products, including its ability to adapt to changes in search engine algorithms or change in policies or procedures of third parties through which BARK markets or sells its products;

 

   

increase consumer awareness of its brand and maintain its reputation;

 

   

anticipate and respond to macroeconomic changes;

 

   

expand its offerings and geographic reach, including with respect to newly launched offerings such as BARK Eats;

 

   

anticipate and effectively respond to changing trends and consumer preferences;

 

   

manage its inventory effectively;

 

   

compete effectively;

 

   

avoid interruptions in its business from information technology downtime, cybersecurity breaches, or labor stoppages;

 

   

effectively manage its growth;

 

   

hire, integrate, and retain talented people at all levels of its organization;

 

   

maintain the quality of its technology infrastructure; and

 

   

retain its existing suppliers and attract new suppliers and scale its supply chain.

If BARK fails to address the risks and difficulties that BARK faces, including those associated with the challenges listed above as well as those described elsewhere in this “Risk Factors” section, BARK’s business and BARK’s operating results will be adversely affected.

BARK’s quarterly results of operations, as well as its key metrics, may fluctuate, which may result in BARK failing to meet the expectations of industry and securities analysts or its investors.

BARK’s results of operations have in the past and could in the future vary significantly from quarter-to-quarter and may fail to match the expectations of securities analysts because of a variety of factors, many of which are outside of BARK’s control and, as a result, should not be relied upon as an indicator of future performance. Factors that may contribute to the variability of BARK’s results of operations include:

 

   

timing and success of new product offerings, particularly BARK Eats;

 

   

its ability to attract and retain subscribers and customers;

 

   

changes in its pricing policies and those of its competitors;

 

   

its ability to maintain relationships with partners, and suppliers;

 

   

its ability to adapt to changes in search engine algorithms or change in policies or procedures of third parties through which BARK markets or sells its products;

 

   

changes in marketing effectiveness, marketing costs and timing of marketing campaigns;

 

   

fluctuations in the key performance indicators that BARK utilizes in its operations or discloses to investors and analysts;

 

   

the amount and timing of operating costs and capital expenditures related to the expansion of its business;

 

   

announcements by competitors or other third parties of significant new products or acquisitions or entrance into its markets;

 

   

instability in the financial markets;

 

 

40


Table of Contents
   

global economic conditions;

 

   

the duration, extent, and effects of the COVID-19 pandemic; and

 

   

political, economic and social instability, including terrorist activities, and any disruption these events may cause to the global economy.

The impact of one or more of the foregoing and other factors may cause its results of operations to vary significantly. As such, BARK believes that quarter-to-quarter comparisons of its results of operations may not be meaningful and should not be relied upon as an indication of future performance.

BARK has experienced significant revenue growth in recent periods, including increased subscriptions during the COVID-19 pandemic. This rate of growth may not be sustainable or indicative of its future rate of growth.

BARK has experienced significant growth in recent periods. For example, BARK’s revenues increased from $161.7 million in the nine months ended December 31, 2019 to $266.4 million in the nine months ended December 31, 2020, an increase of approximately 64.8%. BARK believes that its continued growth in revenue will depend upon, among other factors, BARK’s ability to:

 

   

acquire new subscribers who purchase subscriptions from BARK at the same or better rates as its existing subscriber base;

 

   

retain its subscribers and have them continue to purchase subscription-based products from BARK at the same or better rates;

 

   

increase the amount or categories of products subscribers purchase from BARK, such as through its Add-to-Box, or ATB, offerings;

 

   

attract new suppliers to provide quality products that BARK can offer to its subscribers and customers at attractive prices;

 

   

retain its existing suppliers and have them provide additional quality products that BARK can offer to its subscribers and customers at attractive prices;

 

   

expand its product offerings, including the launch of new brands, including BARK Eats, and expansion into new offerings;

 

   

increase the awareness of its brand;

 

   

provide dogs and dog parents with a superior experience;

 

   

develop new features to enhance the consumer experience;

 

   

respond to changes in consumer access to and use of the Internet and mobile devices;

 

   

react to challenges from existing and new competitors;

 

   

develop a scalable, high-performance technology and fulfillment infrastructure that can efficiently and reliably handle increased demand, as well as the deployment of new features and the sale of new products and services;

 

   

fulfill and deliver orders in a timely manner and in accordance with subscriber and customer expectations, which may change over time;

 

   

respond to macroeconomic trends and their impact on consumer spending patterns;

 

   

hire, integrate and retain talented personnel;

 

   

invest in the infrastructure underlying its website and other operational systems; and

 

   

BARK’s ability to expand to and successfully operate in international markets in the future.

 

 

41


Table of Contents

BARK’s ability to improve margins and achieve profitability will also depend on the factors described above. BARK cannot provide assurance that BARK will be able to successfully manage any of the foregoing challenges. Any of these factors could cause its revenue growth to decline and may adversely affect its margins and profitability. Failure to continue BARK’s revenue growth or improve margins could have a material adverse effect on BARK’s business, financial condition, and results of operations. You should not rely on BARK’s historical rate of revenue growth as an indication of its future performance.

If BARK fails to acquire and retain new subscribers and customers, or fails to do so in a cost-effective manner, BARK may be unable to increase net sales, improve margins and achieve profitability.

BARK’s success depends on its ability to acquire and retain new subscribers and customers and to do so in a cost-effective manner. In order to expand BARK’s subscriber base, BARK must appeal to, and acquire, subscribers who have historically purchased their dog products from other retailers such as traditional brick and mortar retailers, the websites of its competitors, or others. BARK has made significant investments related to subscriber and customer acquisition and expects to continue to spend significant amounts to acquire additional subscribers. BARK cannot assure you that the sales from the new subscribers and customers BARK acquires will ultimately exceed the cost of acquiring those subscribers. If BARK fails to deliver a quality shopping experience, or if dog parents do not perceive the subscriptions or products BARK offers to be of high value and quality, BARK may be unable to acquire or retain subscribers and customers. If BARK is unable to acquire or retain subscribers and customers who purchase products in volumes sufficient to grow its business, BARK may be unable to generate the scale necessary to achieve operational efficiency.

BARK believes that many of its new subscribers originate from word-of-mouth and other non-paid referrals from BARK’s subscribers. Therefore, BARK must ensure that its subscribers remain loyal to BARK in order to continue receiving those referrals. If BARK’s efforts to satisfy its subscribers are not successful, BARK may be unable to acquire new subscribers in sufficient numbers to continue to grow its business, and BARK may be required to incur significantly higher marketing expenses in order to acquire new subscribers.

BARK also uses paid and non-paid advertising. BARK’s paid advertising includes search engine marketing; display, print, radio and podcast advertising, paid social media, affiliate and influencer marketing programs, product placement, and direct mail. BARK’s advertising efforts also include search engine optimization, social media and e-mail marketing. BARK derives a significant amount of traffic to its websites via search engines, social media and other e-commerce channels. Search engines, social media platforms frequently update and change the logic that determines the placement and display of results of a user’s search, such that the purchased or algorithmic placement of links to its website can be negatively affected. Moreover, a search engine or social media platform could, for competitive or other purposes, alter its search algorithms or results, causing BARK’s website to place lower in search query results. As social networking and e-commerce channels continue to rapidly evolve, BARK may be unable to develop or maintain a presence within these channels. Search engines, social networks, and other third parties typically require compliance with their policies and procedures, which may be subject to change or new interpretation with limited ability to negotiate, which could negatively impact BARK’s marketing and sales capabilities. If BARK is unable to cost-effectively drive traffic to its website, BARK’s ability to acquire new subscribers and customers and its financial condition would be materially and adversely affected.

BARK may be unable to maintain a high level of engagement with its subscribers and increase their spending with BARK, which could harm its business, financial condition, or operating results.

A high proportion of BARK’s revenue is recurring revenue that comes from subscribers, especially those subscribers who are highly engaged and purchase additional merchandise from BARK’s ATB offerings. Beginning in the first quarter of fiscal 2021, BARK saw an increase in the rate of BarkBox and Super Chewer subscriptions partially as a result of an increase in dog adoptions and purchases arising from more subscribers working remotely during the COVID-19 pandemic. However, if the COVID-19 pandemic and related economic

 

42


Table of Contents

impact continues or gets worse, BarkBox and Super Chewer cancellations may increase, negatively impacting its business. Conversely, if the COVID-19 pandemic or remote work conditions end, BARK’s subscribers may elect to purchase fewer products for their dogs or to purchase dog products from traditional brick and mortar stores rather than from BARK, which could materially and adversely affect BARK’s business and results of operations.

If existing subscribers no longer find BARK’s products appealing or appropriately priced, they may make fewer purchases and may cancel their subscriptions or stop purchasing products. Even if BARK’s existing subscribers continue to find its offerings appealing, they may decide to reduce their subscription and purchase less merchandise over time as their demand for new dog products declines. A decrease in the number of subscribers, a decrease in subscriber spending on the products BARK offers, or its inability to attract high-quality subscribers could negatively affect BARK’s operating results.

The growth of BARK’s business depends on its ability to accurately predict consumer trends, successfully introduce new products, improve existing products, and expand into new offerings.

BARK’s growth depends, in part, on its ability to successfully introduce new products to its existing BarkBox and Super Chewer subscriptions and to introduce new product lines, including BARK Home (everyday products), BARK Bright (dental, health and wellness), and BARK Eats (personalized food blend), and improve and reposition BARK’s existing products to meet the requirements of its subscribers and customers and the needs of their dogs. It also depends on BARK’s ability to expand its offerings and services. This, in turn, depends on BARK’s ability to accurately predict and respond to evolving consumer trends, demands and preferences, including its ability to predict monthly themes for its BarkBox and Super Chewer subscriptions that will resonate with subscribers as timely and clever. The development and introduction of new products and expansion into new offerings involves considerable costs. In addition, it may be difficult to establish new supplier relationships and determine appropriate product selection when developing a new product or offering. Any new product or offering may not generate sufficient subscriber or customer interest and sales to become a profitable product or to cover the costs of its development and promotion and, as a result, may result in a decrease in subscriber retention and reduction in customer purchases and reduce BARK’s operating income. In addition, any such unsuccessful effort may adversely affect its brand and reputation. If BARK is unable to anticipate, identify, develop or market products, or any new offering, that respond to changes in requirements and preferences, or if its new product introductions, repositioned products, or new offerings fail to gain consumer acceptance, BARK may be unable to grow its business as anticipated, BARK’s sales may decline and its margins and profitability may decline or not improve. As a result, BARK’s business, financial condition, and results of operations may be materially and adversely affected.

BARK’s future growth and profitability will depend in large part upon the effectiveness and efficiency of its marketing.

BARK’s future growth and profitability will depend in large part upon the effectiveness and efficiency of its marketing, including BARK’s ability to:

 

   

appropriately and efficiently allocate its marketing for multiple products;

 

   

accurately identify, target and reach its audience of potential subscribers and customers with its marketing messages;

 

   

select the right marketplace, media and specific media vehicle in which to advertise;

 

   

adapt quickly to changes in the algorithmic logic, privacy policies, and other procedures used by search engines, social media platforms and other third party platforms on which BARK advertises or derives subscribers and customers;

 

   

identify the most effective and efficient level of spending in each marketplace, media and specific media vehicle;

 

 

43


Table of Contents
   

determine the appropriate creative message and media mix for advertising, marketing and promotional expenditures;

 

   

effectively manage marketing costs, including creative and media expenses, in order to maintain acceptable subscriber and customer acquisition costs;

 

   

differentiate its products as compared to other products;

 

   

create greater brand awareness; and

 

   

drive traffic to its website, and websites of its retail partners.

BARK’s planned marketing may not result in increased revenue or generate sufficient levels of product and brand name awareness, and BARK may not be able to increase its net sales at the same rate as BARK increases its advertising expenditures. As e-commerce, search, and social networking evolve, BARK must continue to evolve its marketing tactics accordingly and, if BARK is unable to do so, its business could be adversely affected.

BARK’s business depends on a strong brand and BARK may not be able to maintain its brand and reputation.

BARK believes that maintaining the BARK brand and reputation, and the brand and reputation of BARK’s product offerings, is critical to driving subscriber engagement and attracting subscribers and customers. Building BARK’s brand will depend largely on its ability to continue to provide its subscribers with an engaging and personalized subscriber experience, including valued services, high-quality merchandise, and appropriate price points, which BARK may not do successfully. Subscriber complaints or negative reviews or publicity about BARK’s products, services, merchandise, monthly themes, delivery times, or customer support, especially on social media platforms, could harm its reputation and diminish subscriber use of its services, the trust that its subscribers place in BARK, and vendor confidence in it.

BARK’s brand and subscriber retention depends in part on effective customer support. Failure to manage or train its customer support representatives properly or inability to handle customer complaints effectively could negatively affect its brand, reputation, and operating results.

If BARK fails to cost-effectively promote and maintain BARK’s brand and the brands of its offerings, BARK’s business, financial condition, and operating results may be adversely affected.

Certain of BARK’s key performance indicators are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm BARK’s reputation and negatively affect its business.

BARK tracks certain key performance indicators, including metrics such as active subscriptions, average monthly subscription churn, new subscriptions and customer acquisition costs, with internal systems and tools and which may differ from estimates or similar metrics published by third parties due to differences in sources, methodologies, or the assumptions on which BARK relies. For example, BARK relies on third-party marketing analytics systems to identify marketing spend by channel, which data BARK then reconciles across a number of systems. In addition, BARK relies on third-party warehouse and fulfillment providers to communicate receiving and shipping information which drives active customer count and related data. BARK’s internal systems and tools have a number of limitations, and its methodologies for tracking these metrics may change over time, which could result in unexpected changes to its key performance indicators, including the metrics BARK publicly discloses, or its estimates. For example, as the number of active subscriptions increases, the timely processing of information will require BARK to expand and upgrade its information technology platform. If the internal systems and tools BARK uses to track these metrics undercount or overcount performance or contain algorithmic or other technical errors, the data BARK reports may not be accurate. While these numbers are based on what BARK believes to be reasonable estimates of its subscriber base for the applicable period of measurement, there are inherent challenges in measuring subscriptions for its products across large online and mobile populations.

 

44


Table of Contents

Some of these challenges include manual reconciliation of information provided by different input systems, which could result an error not being detected. If BARK’s key performance indicators are not accurate representations of its business, or if investors do not perceive its operating metrics to be accurate, or if BARK discovers material inaccuracies with respect to these figures, BARK’s reputation may be significantly harmed, and its operating and financial results could be adversely affected.

BARK has a history of losses and expects to generate operating losses as BARK continues to expand its business.

BARK has a history of losses and expects its operating losses to continue in the near-term as BARK increases investment in its business. As of March 31, 2020, BARK had an accumulated deficit of $148.6 million. Furthermore, it is difficult for BARK to predict its future results of operations with certainty. As a result, BARK’s losses may be larger than anticipated and BARK may never achieve profitability. BARK expects its operating expenses to increase over the next several years as BARK increases its advertising, expands into new markets, expands its offerings, hires additional personnel, incurs additional expenses related to being a public company and continues to develop features on its website and mobile application. In particular, BARK intends to continue to invest substantial resources to grow and diversify its product offerings and in marketing to acquire new subscribers and customers. Its operating expenses may also be adversely impacted by increased costs and delays in launching new markets and fulfillment centers and expanding fulfillment center capacity as a result of the COVID-19 pandemic. If BARK’s future growth and operating performance fail to meet investor or analyst expectations, its financial condition and stock price could be materially and adversely affected.

BARK relies on consumer discretionary spending and has been, and may in the future be, adversely affected by economic downturns and other macroeconomic conditions or trends.

BARK’s business and operating results are subject to global economic conditions and their impact on consumer discretionary spending. Some of the factors that may negatively influence consumer spending include high levels of unemployment; higher consumer debt levels; reductions in net worth, declines in asset values, and related market uncertainty; home foreclosures and reductions in home values; fluctuating interest rates and credit availability; global pandemics, including the COVID-19 pandemic; fluctuating fuel and other energy costs; fluctuating commodity prices; and general uncertainty regarding the overall future political and economic environment. Furthermore, any increases in consumer discretionary spending during times of crisis may be temporary, such as those related to government stimulus programs or remote-work environments, and consumer spending may decrease again if the government does not continue such stimulus programs or businesses terminate the ability to work remotely. Economic conditions in certain regions may also be affected by natural disasters, such as hurricanes, tropical storms, earthquakes, and wildfires; other public health crises; and other major unforeseen events. Consumer purchases of discretionary items, including the merchandise that BARK offers, generally decline during recessionary periods or periods of economic uncertainty, when disposable income is reduced or when there is a reduction in consumer confidence.

Adverse economic changes could reduce consumer confidence, and could thereby negatively affect BARK’s operating results. In challenging and uncertain economic environments, BARK cannot predict when macroeconomic uncertainty may arise, whether or when such circumstances may improve or worsen or what impact such circumstances could have on its business.

BARK may be unable to manage the complexities created by its omni channel operations, which may have a material adverse effect on its business, financial condition, operating results and prospects.

BARK’s omnichannel operations, such as offering its products through its website, on third party websites and in traditional brick and mortar stores, create additional complexities in its ability to manage inventory levels, as well as certain operational issues, including timely shipping and refunds. Accordingly, BARK’s success depends to a large degree on continually evolving the processes and technology that enable BARK to plan and manage

 

45


Table of Contents

inventory levels and fulfill orders, address any related operational issues and further align channels to optimize its omnichannel operations. If BARK is unable to successfully manage these complexities, it may have a material adverse effect on BARK’s business, financial condition, operating results and prospects.

BARK relies on third parties to sell and distribute BARK’s products, and BARK relies on their information to manage its business. Disruption of BARK’s relationship with these channel partners, changes in or issues with their business practices, their failure to provide timely and accurate information, changes in distribution partners, practices or models or conflicts among its channels of distribution could adversely affect its business, results of operations, operating cash flows and financial condition.

BARK sells some of its products to a network of retailers and e-tailers (together with BARK’s direct sales channel). BARK is dependent on those indirect sales channel partners to distribute and sell its products to dog parents. The sales and business practices of all such sales channel partners, their compliance with laws and regulations, and their reputations, of which BARK may or may not be aware, may affect BARK’s business and its reputation.

While BARK’s overall distribution relationships are diverse, its products are available through Amazon.com as well as 23,000 retail locations including Target, Petco, PetSmart, Costco, Bed Bath & Beyond and CVS, among many others. While BARK believes that BARK has good relationships with these sales channels, any adverse change in those relationships could have an adverse impact on BARK’s results of operations and financial condition.

The impact of economic conditions, labor issues, natural disasters, regional or global pandemics, evolving consumer preferences, and purchasing patterns on BARK’s distribution partners, or competition between its sales channels, could result in sales channel disruption. For example, if sales at large retail stores are displaced as a result of bankruptcy, competition from Internet sales channels or otherwise, its product sales could be adversely affected and BARK’s product mix could change, which could adversely affect its operating costs and gross margins. COVID-19 has also underscored the risk of disruption in BARK’s sales channel at certain indirect sales partners. Any loss of a major partner or distribution channel or other channel disruption could make BARK more dependent on alternate channels, increase pricing and promotional pressures from other partners and distribution channels, increase BARK’s marketing costs, or adversely impact buying and inventory patterns, payment terms or other contractual terms, sell-through or delivery of its products to dog parents, its reputation and brand equity, or its market share.

BARK’s sales channel partners also sell products offered by its competitors and, in the case of retailer house brands, may also be BARK’s competitors. If product competitors offer BARK’s sales channel partners more favorable terms, have more products available to meet their needs, or utilize the leverage of broader product lines sold through the channel, or if its sales channel partners show preference for their own house brands, BARK’s sales channel partners may de-emphasize or decline to carry BARK’s products. In addition, certain of BARK’s sales channel partners could decide to de-emphasize the product categories that BARK offers in exchange for other product categories that they believe provide them with higher returns, and certain of BARK’s third-party e-commerce partners could change their algorithmic logic, policies or procedures in a way that makes BARK’s products harder for customers to find or removes them from the partners’ e-commerce sites altogether. If BARK is unable to maintain successful relationships with these sales channel partners or to maintain its distribution channels or effectively adapt to changes in algorithmic logic, policies or procedures, BARK’s business will suffer.

As BARK expands into new product categories and markets, BARK will have to build relationships with new channel partners and adapt to new distribution and marketing models. These new partners, practices and models may require significant management attention and operational resources and may affect BARK’s accounting, including revenue recognition, gross margins, and the ability to make comparisons from period to period. Entrenched and more experienced competitors will make these transitions difficult. If BARK is unable to build

 

46


Table of Contents

successful sales channels, or successfully market BARK’s products in these new product categories, BARK may not be able to take advantage of the growth opportunities, and BARK’s business and its ability to grow its business could be adversely affected.

BARK’s actual results may be significantly different from its projections, estimates, targets or forecasts.

The projections, estimates, targets and forecasts 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, estimates, targets and forecasts are necessarily speculative, BARK believes that the preparation of prospective financial information involves increasingly higher levels of uncertainty the further out the projection, estimate, target or forecast extends from the date of preparation. The assumptions and estimates underlying the projected, expected or target results are inherently uncertain and are subject to a wide variety of significant business, economic, regulatory and competitive risks and uncertainties that could cause actual results to differ materially from those contained in such projections, estimates, targets and forecasts. BARK’s projections, estimates, targets and forecast should not be regarded as an indication that BARK, or its representatives, considered or consider the financial projections, estimates, targets to be a reliable prediction of future events.

BARK may be unable to accurately forecast net sales and appropriately plan BARK’s expenses in the future.

Net sales and results of operations are difficult to forecast with certainty because they depend on a number of factors, some of which are outside of BARK’s control, including the volume, timing, and type of orders BARK receives and increased third party costs or transportation and freight costs. Many of these factors are uncertain and are likely to fluctuate significantly from period to period. BARK bases its expense levels and investment plans on its estimates of net sales and gross margins, and many of BARK’s expenses, such as office leases, manufacturing costs and personnel costs, will be relatively fixed in the short term and will increase as BARK continues to make investments in its business and hire additional personnel. BARK cannot be sure the same growth rates, trends, and other key performance metrics are meaningful predictors of future growth. If BARK’s assumptions prove to be wrong, BARK may spend more than it anticipates acquiring and retaining subscribers, maintaining or increasing customer purchases or may generate lower net sales per active subscription than anticipated, either of which could have a negative impact on its business, financial condition, and results of operations.

BARK’s estimate of the size of its addressable market may prove to be inaccurate.

Data for retail sales of dog products is collected for most, but not all channels, and as a result, it is difficult to accurately estimate the size of the market and predict with certainty the rate at which the market for BARK’s products will grow, if at all. While BARK’s market size estimate was made in good faith and is based on assumptions and estimates it believes to be reasonable, this estimate may not be accurate. If BARK’s estimates of the size of its addressable market are not accurate, its potential for future growth may be less than BARK currently anticipates, which could have a material adverse effect on its business, financial condition, and results of operations.

Competition in the dog products and services retail industry, especially Internet-based competition, is strong and presents an ongoing threat to the success of BARK’s business.

The dog products and services retail industry is very competitive. BARK competes with pet product retail stores, supermarkets, warehouse clubs and other mass and general retail and online merchandisers, many of which are larger than BARK and have significantly greater capital resources than BARK does. BARK also competes with a number of specialty dog supply stores and independent dog stores, catalog retailers and other specialty e-tailers.

 

 

47


Table of Contents

Many of BARK’s current competitors have, and potential competitors may have, longer operating histories, greater brand recognition, larger fulfillment infrastructures, greater technical capabilities, significantly greater financial, marketing and other resources and larger customer bases than BARK does. These factors may allow BARK’s competitors to derive greater net sales and profits from their existing customer base, acquire customers at lower costs or respond more quickly than BARK can to new or emerging technologies and changes in consumer preferences or habits. These competitors may engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive pricing policies (including but not limited to predatory pricing policies and the provision of substantial discounts), which may allow them to build larger customer bases or generate net sales from their customer bases more effectively than BARK does. Current and future competitors may also make strategic acquisitions or establish cooperative relationships among themselves or with others. By doing so, these competitors may increase their ability to meet the needs of BARK’s current or potential subscribers and customers and adversely affect BARK’s business, financial condition, and results of operations.

If changes in consumer preferences decrease the competitive advantage attributable to these factors, or if BARK fails to otherwise positively differentiate BARK’s product offering or subscriber or customer experience from its competitors, its business, financial condition, and results of operations could be materially and adversely affected.

As BARK expands its offerings, such as its BARK Eats line, BARK will face additional competition. For example, in the dog food category, there are numerous brands and products that compete for shelf space and sales, with competition based primarily upon brand recognition and loyalty, product packaging, quality and innovation, taste, nutrition, breadth of product line, price and convenience. Competitors in new markets may have broader product lines, substantially greater financial and other resources and/or lower fixed costs than BARK. BARK may not compete successfully with these other companies or maintain or grow the distribution of its new products.

In order to effectively compete in the future, BARK may be required to offer promotions and other incentives, which may result in lower operating margins and in turn adversely affect its results of operations. BARK also faces a significant challenge from its competitors forming alliances with each other. These relationships may enable both their retail and online stores to negotiate better pricing and better terms from suppliers by aggregating the demand for products and negotiating volume discounts, which could be a competitive disadvantage to us.

BARK expects competition in the dog products and services retail industry, in particular Internet-based competition, generally to continue to increase. If BARK fails to compete successfully, its business, financial condition, and results of operations could be materially and adversely affected.

As part of BARK’s strategy, BARK seeks to obtain licenses enabling BARK to develop and market products based on popular entertainment, sports, and other branded properties owned by third parties. If products developed based on these licenses are not successful or BARK is unable to maintain, renew and extend solid relationships with its key partners its business, financial condition, and results of operations may be adversely affected.

BARK currently has in-licenses to several entertainment properties, including SCOOB!, HOME ALONE and PEANUTS, as well as certain sports and other well-known branded properties. These licenses typically have multi-year terms and provide BARK with the right to market and sell designated classes of products. If BARK fails to meet its contractual commitments and/or any of these licenses were to terminate and not be maintained, renewed or extended, or the popularity of any of these licensed properties was to significantly decline, its business would be damaged and BARK would need to successfully develop and market other products to replace the products previously offered under license.

 

 

48


Table of Contents

The success of third-party properties for which BARK has a license, and the ability of BARK to successfully market and sell related products, can significantly affect its revenues and profitability. For example, if BARK produces a line of products based on a movie or television series, the success of the movie or series has a critical impact on the level of consumer interest in the associated products BARK is offering. In addition, competition in BARK’s industry for access to third-party properties can lessen its ability to secure, maintain, and renew popular licenses to third-party products on beneficial terms, if at all, and to attract and retain the talented employees necessary to design, develop and market successful products based on these properties.

The license agreements BARK enters into to obtain these rights usually require BARK to pay minimum royalty guarantees.    While historically these guarantees have not been material, in the future such minimum guarantees may be substantial, and in some cases may be greater than what BARK is ultimately able to recoup from actual sales, which could result in write-offs of significant amounts which, in turn, would harm its results of operations. Acquiring or renewing licenses may require the payment of minimum guaranteed royalties that BARK considers to be too high to be profitable, which may result in losing licenses that BARK currently holds when they become available for renewal, or missing business opportunities for new licenses. Additionally, as a licensee of entertainment-based properties, BARK cannot guarantee that a particular property or brand will translate into successful products, and underperformance of any such products may result in reduced revenues and operating profit for us.

Furthermore, BARK cannot assure you that a successful brand will continue to be successful or maintain a high level of sales in the future, as new entertainment properties and competitive products are continually being introduced to the market. In the event that BARK is not able to acquire, maintain, renew or extend successful entertainment licenses on advantageous terms, its revenues and profits may be harmed.

BARK relies on a limited number of suppliers, contract manufacturers, and logistics partners for its products. A loss of any of these partners could negatively affect our business.

BARK relies on a limited number of contract manufacturers, suppliers and logistics providers to manufacture and transport its products. BARK’s reliance on a limited number of contract manufacturers for its products increases BARK’s risks, since it does not currently have alternative or replacement contract manufacturers beyond these key parties. BARK generally does not maintain long-term supply contracts with any of BARK’s suppliers, contract manufacturers, and logistics partners. In the event of interruption from any of its contract manufacturers or suppliers, BARK may not be able to increase capacity from other sources or develop alternate or secondary sources without incurring material additional costs and substantial delays. Furthermore, BARK’s contract manufacturers’ primary facilities are located in Asia. Thus, BARK’s business could be adversely affected if one or more of its suppliers, manufacturers or logistics partners are impacted by a natural disaster, an epidemic such as the current COVID-19 outbreak, or other interruption at a particular location. In particular, the current COVID-19 outbreak has caused, and will likely continue to cause, interruptions in the development, manufacturing, and shipment of BARK’s products, which could adversely impact BARK’s revenue, gross margins, and operating results. Such interruptions may be due to, among other things, temporary closures of the facilities BARK’s contract manufacturers, and other vendors in its supply chain; restrictions on travel or the import/export of goods and services from certain ports that BARK uses; and local quarantines.

If BARK experiences a significant increase in demand for its products that cannot be satisfied adequately through its existing supply channels, or if BARK needs to replace an existing supplier or partner, BARK may be unable to supplement or replace them on terms that are acceptable to BARK, which may undermine its ability to deliver products to its subscribers and customers in a timely manner and cost effective manner. An inability of BARK’s existing suppliers to provide products in a timely or cost-effective manner could impair its growth and materially and adversely affect its business, financial condition, and results of operations. For example, if BARK requires additional manufacturing support, it may take a significant amount of time to identify a manufacturer that has the capability and resources to manufacture BARK’s products to its specifications in sufficient volume. Identifying suitable suppliers, manufacturers, and logistics partners is an extensive process that requires BARK to become

 

49


Table of Contents

satisfied with their quality control, technical capabilities, responsiveness and service, financial stability, regulatory compliance, and labor and other ethical practices. Accordingly, a loss of any of BARK’s significant suppliers, contract manufacturers, or logistics partners could have an adverse effect on BARK’s business, financial condition and operating results.

In addition, BARK has achieved significant cost savings through its centralization of product purchases. However, as a result, BARK is exposed to the credit and other risks of a group of key suppliers. While BARK makes every effort to evaluate its counterparties prior to entering into significant procurement contracts, BARK cannot predict with certainty the impact on its suppliers of the current economic environment, the COVID-19 pandemic and other developments in their respective businesses. Insolvency, financial difficulties, supply chain delays or other factors may result in BARK’s suppliers not being able to fulfill the terms of their agreements with BARK. Further, such factors may render suppliers unwilling to extend contracts that provide favorable terms to BARK, or may force them to seek to renegotiate existing contracts with BARK. In addition, BARK’s business has signed a number of contracts whose performance depends upon third party suppliers delivering products on schedule to meet its contract commitments. Failure of the suppliers to meet their delivery commitments could result in us delaying shipment of our products and losing subscriptions from subscribers. Although we believe we have alternative sources of supply for BARK’s products, concentration in the number of our suppliers could lead to delays in the delivery of products or components, and possible resultant breaches of contracts that BARK has entered into with its subscribers and customers; increases in the prices BARK must pay for products; problems with product quality; and other concerns.

BARK has limited control over its suppliers, contract manufacturers, and logistics partners, which may subject BARK to significant risks, including the potential inability to produce or obtain quality products and services on a timely basis or in sufficient quantity.

BARK has limited control over its suppliers, contract manufacturers, and logistics partners, which subjects BARK to the following risks, many of which have materialized due to the COVID-19 pandemic:

 

   

inability to satisfy demand for its products;

 

   

reduced control over delivery timing and product reliability;

 

   

reduced ability to monitor the manufacturing process and components used in its products;

 

   

limited ability to develop comprehensive manufacturing specifications that take into account any materials shortages or substitutions;

 

   

variance in the manufacturing capability of its third-party manufacturers;

 

   

price increases;

 

   

failure of a significant supplier, manufacturer, or logistics partner to perform its obligations to BARK for technical, market, or other reasons;

 

   

difficulties in establishing additional supplier, manufacturer, or logistics partner relationships if BARK experiences difficulties with its existing suppliers, manufacturers, or logistics partners;

 

   

shortages of materials or components;

 

   

misappropriation of its intellectual property;

 

   

exposure to natural catastrophes, political unrest, terrorism, labor disputes, and economic instability resulting in the disruption of trade from foreign countries in which its products are manufactured or the components thereof are sourced;

 

   

changes in local economic conditions in the jurisdictions where its suppliers, manufacturers, and logistics partners are located;

 

 

50


Table of Contents
   

the imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, imports, duties, tariffs, taxes, and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds; and insufficient warranties and indemnities on components supplied to its manufacturers or performance by its partners.

Shipping is a critical part of BARK’s business and any changes in its shipping arrangements or any interruptions in shipping could adversely affect its operating results.

BARK currently relies on third-party national, regional and local logistics providers to deliver the products BARK offers. If BARK is not able to negotiate acceptable pricing and other terms with these providers, or if these providers experience performance problems or other difficulties in processing its orders or delivering its products to subscribers and customers, it could negatively impact its results of operations and its subscribers’ and customers’ experience. For example, changes to the terms of BARK’s shipping arrangements may adversely impact its margins and profitability. In addition, BARK’s ability to receive inbound inventory efficiently and ship merchandise to subscribers and customers may be negatively affected by factors beyond its and these providers’ control, including inclement weather, natural disasters, fire, flood, power loss, earthquakes, pandemics, acts of war or terrorism or other events specifically impacting its or other shipping partners, such as labor disputes, financial difficulties, system failures and other disruptions to the operations of the shipping companies on which BARK relies. For example, in November 2020, a typhoon caused a significant delay in a product shipment from China which resulted in increased costs and delay in providing products to BARK’s subscribers and customers. BARK is also subject to risks of damage or loss during delivery by its shipping vendors. If the products ordered by BARK’s subscribers or customers are not delivered in a timely fashion or are damaged or lost during the delivery process, its subscribers or customers could become dissatisfied and cease buying products through BARK’s website and mobile application, which would adversely affect its business, financial condition, and results of operations. Further, due to the continuing spread of COVID-19 and related governmental work and travel restrictions, there may be disruptions and delays in national, regional and local shipping, which may negatively impact BARK’s subscribers’ and customers’ experience and its results or operations.

The recent outbreak of the COVID-19 global pandemic and related government, private sector and individual consumer responsive actions may adversely affect BARK’s business operations, employee availability, financial performance, liquidity and cash flow for an unknown period of time.

The COVID-19 pandemic has disrupted the global supply chain and may cause disruptions to BARK’s operations. Additional federal or state mandates ordering the shutdown of non-essential businesses could also impact its ability to take or fulfill its subscribers’ or customers’ orders and operate its business.

As a result of COVID-19, many of BARK’s personnel are working remotely and it is possible that this could have a negative impact on the execution of its business plans and operations. If a natural disaster, power outage, connectivity issue, or other event occurred that impacted its employees ability to work remotely, it may be difficult or, in certain cases, impossible, for BARK to continue its business for a substantial period of time. The increase in remote working may also result in consumer privacy, IT security and fraud concerns as well as increase BARK’s exposure to potential wage and hour issues.

Further, as a result of COVID-19, the operations of BARK’s fulfillment centers may be substantially disrupted by additional federal or state mandates ordering shutdowns of non-essential services or by the inability of BARK’s employees to travel to work. BARK’s plans to open new fulfillment centers or to expand the capacity of its existing fulfillment centers over the next few years may also be delayed or more costly by the continuing spread of COVID-19. Disruptions to the operations of BARK’s fulfillment centers and delays or increased costs in the expansion of its fulfillment center capacity may negatively impact BARK’s financial performance and slow its future growth.

 

51


Table of Contents

The uncertainty around the duration of business disruptions and the extent of the spread of the virus in the United States and to other areas of the world will likely continue to adversely impact the national or global economy and negatively impact consumer spending. Any of these outcomes could have a material adverse impact on BARK’s business, financial condition, operating results and ability to execute and capitalize on its strategies. The full extent of COVID-19’s impact on BARK’s operations and financial performance depends on future developments that are uncertain and unpredictable, including the duration and spread of the pandemic, its impact on capital and financial markets and any new information that may emerge concerning the severity of the virus, its spread to other regions as well as the actions taken to contain it, among others.

If BARK does not successfully optimize, operate and manage the expansion of the capacity of its fulfillment centers and shipping services, its business, financial condition, and results of operations could be harmed.

If BARK does not optimize and operate its fulfillment centers and shipping services successfully and efficiently, it could result in excess or insufficient fulfillment capacity, an increase in costs or impairment charges or harm its business in other ways. In addition, if BARK does not have sufficient fulfillment or shipping capacity or experience a problem fulfilling or shipping orders in a timely manner, its subscribers or customers may experience delays in receiving their purchases, which could harm its reputation and BARK’s relationship with its subscribers or customers. As a result of the COVID-19 pandemic, BARK may experience disruptions to the operations of BARK’s fulfillment centers and shipping services, which may negatively impact its ability to fulfill orders in a timely manner, which could harm its reputation, relationship with subscribers and customers and results of operations.

BARK anticipates the need to add additional fulfillment center and shipping capacity as its business continues to grow. BARK cannot assure you that BARK will be able to locate suitable facilities or services on commercially acceptable terms in accordance with its expansion plans, nor can BARK assure you that BARK will be able to recruit qualified managerial and operational personnel to support its expansion plans. If BARK is unable to secure new facilities for the expansion of its fulfillment and shipping operations, recruit qualified personnel to support any such facilities, or effectively control expansion-related expenses, BARK’s business, financial condition, and results of operations could be materially and adversely affected.

BARK is subject to risks related to online payment methods.

BARK currently accepts payments using a variety of methods, including credit card, debit card, PayPal and gift cards. As BARK offers new payment options to subscribers, BARK may be subject to additional regulations, compliance requirements, fraud and other risks. For certain payment methods, BARK pays interchange and other fees, which may increase over time and raise its operating costs and lower profitability. BARK is also subject to payment card association operating rules and certification requirements, including the Payment Card Industry Data Security Standard and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for BARK to comply.

Furthermore, as BARK’s business changes, BARK may be subject to different rules under existing standards, which may require new assessments that involve costs above what BARK currently pay for compliance. In the future, as BARK offers new payment options to subscribers, including by way of integrating emerging mobile and other payment methods, BARK may be subject to additional regulations, compliance requirements and fraud. If BARK fails to comply with the rules or requirements of any provider of a payment method BARK accept, if the volume of fraud in its transactions limits or terminates its rights to use payment methods BARK currently accepts, or if a data breach occurs relating to its payment systems, BARK may, among other things, be subject to fines or higher transaction fees and may lose, or face restrictions placed upon, its ability to accept credit card payments from subscribers or facilitate other types of online payments. If any of these events were to occur, its business, financial condition, and results of operations could be materially and adversely affected.

 

52


Table of Contents

BARK’s reliance on software-as-a-service (“SaaS”) technologies from third parties may adversely affect its business and results of operations.

BARK relies on SaaS technologies from third parties in order to operate critical functions of its business, including financial management services, credit card processing, customer relationship management services, supply chain services and data storage services. If these services become unavailable due to extended outages or interruptions or because they are no longer available on commercially reasonable terms or prices, or for any other reason, its expenses could increase, BARK’s ability to manage its finances could be interrupted, BARK’s processes for managing sales of its offerings and supporting its subscribers and customers could be impaired, BARK’s ability to communicate with its suppliers could be weakened and its ability to access or save data stored to the cloud may be impaired until equivalent services, if available, are identified, obtained and implemented, all of which could harm its business, financial condition, and results of operations.

In addition, BARK is subject to certain standard terms and conditions with these providers. These providers have broad discretion to change their terms of service and other policies with respect to BARK, and those changes may be unfavorable to BARK. Therefore, BARK believes that maintaining successful partnerships with these providers is critical to its success.

BARK is subject to risks related to its reliance on third-party processing partners to perform its payment processing services.

BARK depends on its third-party processing partners to perform payment processing services. BARK’s processing partners may go out of business or otherwise be unable or unwilling to continue providing such services, which could significantly and materially reduce its payments revenue and disrupt its business. A number of its processing contracts require BARK to assume liability for any losses its processing partners may suffer as a result of losses caused by its subscribers or customers, including losses caused by chargebacks and subscriber or customer fraud. BARK has in the past and may in the future incur losses caused by chargebacks and fraud. In the event of a significant loss by its processing partners, BARK may be required to remit a large amount of cash following such event and, if BARK does not have sufficient cash on hand, may be deemed in breach of such contracts. In addition, its subscribers or customers may be subject to quality issues related to products or services provided by its third-party processing partners or BARK may become involved in contractual disputes with its processing partners, both of which could impact its reputation and adversely impact its revenue. Certain contracts may expire or be terminated, and BARK may not be able to replicate the associated revenue through a new processing partner relationship for a considerable period of time.

BARK has initiated and expects to continue to initiate new third-party payment relationships or migrate to other third-party payment partners in the future. The initiation of these relationships and the transition from one relationship to another could require significant time and resources. Due to non-solicitation obligations under its existing contracts, establishing these new relationships may be challenging. Further, any new third-party payment processing relationships may not be as effective, efficient or well received by its subscribers and customers, nor is there any assurance that BARK will be able to reach an agreement with such processing partners. BARK’s contracts with such processing partners may be less lucrative. For instance, BARK may be required to pay more for payment processing or receive a less favorable revenue arrangement from its payment processing partners. BARK may also experience the termination of revenue streams due to such migrations or be subject to claims relating to any disputes that could arise as a result of migrations.

BARK’s business depends on network and mobile infrastructure, its third-party data center hosting facilities, other third-party providers, and its ability to maintain and scale its technology. Any significant interruptions or delays in service on BARK’s website or mobile application or any undetected errors or design faults could result in limited capacity, reduced demand, processing delays, and loss of subscribers, customers or suppliers.

BARK’s reputation and ability to acquire, retain and serve its subscribers and customers are dependent upon the reliable performance of its website and mobile application and the underlying network infrastructure. As

 

53


Table of Contents

BARK’s subscriber base and the amount of information shared on its website and mobile application continue to grow, BARK will need an increasing amount of network capacity and computing power. The operation of these systems is complex and could result in operational failures. Interruptions or delays in these systems, whether due to system failures, computer viruses, physical or electronic break-ins, undetected errors, design faults or other unexpected events or causes, could affect the security or availability of BARK’s website and mobile application and prevent its subscribers and customers from accessing its website and mobile application. If sustained or repeated, these performance issues could reduce the attractiveness of its products and services. In addition, the costs and complexities involved in expanding and upgrading BARK’s systems may prevent BARK from doing so in a timely manner and may prevent BARK from adequately meeting the demand placed on its systems. Any web or mobile platform interruption or inadequacy that causes performance issues or interruptions in the availability of its website or mobile application could reduce consumer satisfaction and result in a reduction in the number of subscribers and customers using BARK’s products and services.

BARK depends on the development and maintenance of the Internet and mobile infrastructure. This includes maintenance of reliable Internet and mobile infrastructure with the necessary speed, data capacity and security, as well as timely development of complementary products, for providing reliable Internet and mobile access. BARK also uses and relies on services from other third parties, such as its telecommunications services and credit card processors, and those services may be subject to outages and interruptions that are not within BARK’s control. Failures by BARK’s telecommunications providers may interrupt its ability to provide phone support to its subscribers and customers and Distributed denial-of-service (“DDoS”) attacks directed at BARK’s telecommunication service providers could prevent subscribers and customers from accessing its website. In addition, BARK has in the past and may in the future experience down periods where BARK’s third-party credit card processors are unable to process the online payments of its subscribers or customers, disrupting its ability to receive subscribers or customer orders, its business, financial condition and results of operations could be materially and adversely affected if for any reason the reliability of its Internet, telecommunications, payment systems and mobile infrastructure is compromised.

BARK currently relies upon third-party data storage providers. Nearly all of BARK’s data storage and analytics are conducted on, and the data and content BARK creates associated with sales on its website and mobile application are processed through, servers hosted by these providers. BARK also relies on e-mail service providers, bandwidth providers, Internet service providers and mobile networks to deliver e-mail and “push” communications to subscribers and customers and to allow subscribers to access its and its retail partners’ websites. BARK is subject to certain standard terms and conditions with these providers. These providers have broad discretion to change their terms of service and other policies with respect to BARK, and those changes may be unfavorable to BARK. Therefore, BARK believes that maintaining successful partnerships with these providers is critical to its success.

Any damage to, or failure of, BARK’s systems or the systems of its third-party data centers or its other third-party network or mobile providers could result in interruptions to the availability or functionality of BARK’s website and mobile application. As a result, BARK could lose subscriber and customer data and miss order fulfillment deadlines, which could result in decreased sales, increased overhead costs, excess inventory and product shortages. If for any reason its arrangements with its data centers or third-party providers are terminated or interrupted, such termination or interruption could adversely affect its business, financial condition, and results of operations. BARK exercises little control over these providers, which increases its vulnerability to problems with the services they provide. BARK could experience additional expense in arranging for new facilities, technology, services and support. In addition, the failure of its third-party data centers or any other third-party providers to meet its capacity requirements could result in interruption in the availability or functionality of its website and mobile application.

The occurrence of a natural disaster, power loss, telecommunications failure, data loss, computer virus, an act of terrorism, cyberattack, vandalism or sabotage, act of war or any similar event, or a decision to close its third-party data centers on which BARK normally operates or the facilities of any other third-party provider without adequate notice or other unanticipated problems at these facilities could result in lengthy interruptions in the

 

54


Table of Contents

availability of its website and mobile application. Cloud computing, in particular, is dependent upon having access to an Internet connection in order to retrieve data. If a natural disaster, pandemic (such as the COVID-19 pandemic), blackout or other unforeseen event were to occur that disrupted the ability to obtain an Internet connection, BARK may experience a slowdown or delay in its operations. While BARK has some limited disaster recovery arrangements in place, its preparations may not be adequate to account for disasters or similar events that may occur in the future and may not effectively permit BARK to continue operating in the event of any problems with respect to its systems or those of BARK’s third-party data centers or any other third-party facilities. BARK’s disaster recovery and data redundancy plans may be inadequate, and its business interruption insurance may not be sufficient to compensate BARK for the losses that could occur. If any such event were to occur to its business, its operations could be impaired and its business, financial condition, and results of operations may be materially and adversely affected.

BARK’s reputation and business may be harmed if it or its partners’ computer network security or any of the databases containing subscriber, customer, employee, or other personal information maintained by BARK or its third-party providers is compromised, which could materially adversely affect BARK’s results of operations.

In the ordinary course of BARK’s business, BARK and its vendors collect, process, and store certain personal information and other data relating to individuals, such as its subscribers, customers and employees, including subscriber and customer payment card information. BARK relies substantially on commercially available systems, software, tools, and monitoring to provide security for BARK’s processing, transmission, and storage of personal information and other confidential information. There can be no assurance, however, that BARK or its vendors will not suffer a data compromise, that hackers or other unauthorized parties will not gain access to personal information or other data, including payment card data or confidential business information, or that any such data compromise or unauthorized access will be discovered in a timely fashion. In addition, cyber-attacks such as ransomware attacks could lock BARK out of its information systems and disrupt its operations. The techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not identified until they are launched against a target, and BARK and its vendors may be unable to anticipate these techniques or to implement adequate preventative measures. BARK may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of cyber-attacks. As BARK has significantly increased the number of employees and contractors working remotely due to the COVID-19 pandemic, and as its business partners move to remote work as well, BARK and its partners may be more vulnerable to cyber-attacks. In addition, BARK’s employees, contractors, vendors, or other third parties with whom BARK does business may attempt to circumvent security measures in order to misappropriate such personal information, confidential information, or other data, or may inadvertently release or compromise such data.

Compromise of BARK’s data security or of third parties with whom BARK does business, failure to prevent or mitigate the loss of personal or business information, and delays in detecting or providing prompt notice of any such compromise or loss could disrupt its operations, damage its reputation, and subject BARK to litigation, government action, or other additional costs and liabilities that could adversely affect its business, financial condition, and operating results.

Failure to comply with federal and state and foreign laws and regulations relating to privacy, data protection, advertising and consumer protection, or the expansion of current or the enactment of new laws or regulations relating to privacy, data protection, advertising and consumer protection, could adversely affect BARK’s business, financial condition, and results of operations.

BARK rely on a variety of marketing techniques, including email and social media marketing and postal mailings, and BARK is subject to various laws and regulations that govern such marketing and advertising practices. A variety of federal and state laws and regulations govern the collection, use, retention, sharing and security of consumer data, particularly in the context of online advertising which BARK relies upon to attract new subscribers and customers.

 

55


Table of Contents

Laws and regulations relating to privacy, data protection, marketing and advertising, and consumer protection are evolving and subject to potentially differing interpretations. These requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another or may conflict with other rules or BARK’s practices and procedures. BARK has implemented and is implementing practices and procedures to comply with applicable privacy, data protection, marketing and advertising, and consumer protection laws and regulations, but such measures may not always be effective, particularly as the legal landscape continues to evolve. Some of BARK’s internal processes are manual, which can result in employee error and internal compliance failures. Any failure, or perceived failure, by BARK to comply with its posted privacy policies or with any federal or state privacy or consumer protection-related laws, regulations, industry self-regulatory principles, industry standards or codes of conduct, regulatory guidance, orders to which BARK may be subject or other legal obligations relating to privacy or consumer protection could adversely affect BARK’s reputation, brand and business, and may result in claims, liabilities, proceedings or actions against BARK by governmental entities, subscribers, customers, suppliers or others, or may require BARK to change its operations and/or cease using certain data sets. Any such claims, proceedings or actions could hurt BARK’s reputation, brand and business, force BARK to incur significant expenses in defense of such proceedings or actions, distract its management, increase its costs of doing business, result in a loss of subscribers, customers and suppliers and result in the imposition of monetary penalties. BARK may also be contractually required to indemnify and hold harmless third parties from the costs or consequences of non-compliance with any laws, regulations or other legal obligations relating to privacy or consumer protection or any inadvertent or unauthorized use or disclosure of data that BARK store or handle as part of operating its business.

In addition, third party vendors and business partners receive access to certain information that BARK collects. These vendors and business partners may not prevent data security breaches with respect to the information BARK provides them or fully enforce BARK’s policies, contractual obligations and disclosures regarding the collection, use, storage, transfer and retention of personal data. A data security breach suffered by one of BARK’s vendors or business partners could cause reputational and financial harm to them and BARK, negatively impact BARK’s ability to offer its products and services, and could result in legal liability, costly remedial measures, governmental and regulatory investigations, harm BARK’s profitability, reputation and brand, and cause BARK’s business, financial condition, and results of operations to be adversely affected.

Federal and state governmental authorities continue to evaluate the privacy implications inherent in the use of third-party “cookies” and other methods of online tracking for behavioral advertising and other purposes. The U.S. government has enacted, has considered or is considering legislation or regulations that could significantly restrict the ability of companies and individuals to engage in these activities, such as by regulating the level of consumer notice and consent required before a company can employ cookies or other electronic tracking tools or the use of data gathered with such tools. Additionally, some providers of consumer devices and web browsers have implemented, or announced plans to implement, means to make it easier for Internet users to prevent the placement of cookies or to block other tracking technologies, which could if widely adopted result in the use of third-party cookies and other methods of online tracking becoming significantly less effective. The regulation of the use of these cookies and other current online tracking and advertising practices or a loss in its ability to make effective use of services that employ such technologies could increase its costs of operations and limit BARK’s ability to acquire new subscribers and customers on cost-effective terms and consequently, materially and adversely affect its business, financial condition, and results of operations.

In addition, various federal and state legislative and regulatory bodies, or self-regulatory organizations, may expand current laws or regulations, enact new laws or regulations or issue revised rules or guidance regarding privacy, data protection, consumer protection, and advertising. For example, in June 2018, the State of California enacted the California Consumer Privacy Act of 2018 (the “CCPA”), which became effective on January 1, 2020. The CCPA requires companies that process information on California residents to make new disclosures to subscribers and customers about their data collection, use and sharing practices, and allows subscribers and customers to opt out of certain data sharing with third parties and provides a new cause of action for data breaches. Additionally, the Federal Trade Commission and many state attorneys general are interpreting federal

 

56


Table of Contents

and state consumer protection laws to impose standards for the online collection, use, dissemination and security of data. Each of these privacy, security, and data protection laws and regulations, and any other such changes or new laws or regulations, could impose significant limitations, require changes to BARK’s business, impose fines and other penalties or restrict its use or storage of personal information, which may increase BARK’s compliance expenses and make its business more costly or less efficient to conduct. Any such changes could compromise BARK’s ability to develop an adequate marketing strategy and pursue its growth strategy effectively, which, in turn, could adversely affect its business, financial condition, and results of operations.

Outside of the United States, there are many countries with data protection laws, and new countries are adopting data protection legislation with increasing frequency. Many of these laws may require consent from customers for the use of data for various purposes, including marketing, which may reduce BARK’s ability to market its products. There is no harmonized approach to these laws and regulations globally. Consequently, BARK increases its risk of non-compliance with applicable foreign data protection laws and regulations if it expands internationally. BARK may need to change and limit the way it uses personal information in operating its business and may have difficulty maintaining a single operating model that is compliant. Compliance with such laws and regulations will result in additional costs and may necessitate changes to BARK’s business practices and divergent operating models, limit the effectiveness of its marketing activities, adversely affect BARK’s business and financial condition, and subject it to additional liabilities.

Any failure by BARK or its vendors to comply with product safety, labor, or other laws, or BARK’s standard vendor terms and conditions, or to provide safe factory conditions for BARK’s or their workers, may damage BARK’s reputation and brand, and harm its business.

The products BARK sells to its subscribers and customers is subject to regulation by the Federal Consumer Product Safety Commission, the Federal Trade Commission, and similar state and international regulatory authorities. As a result, such merchandise could in the future be subject to recalls and other remedial actions. Product safety, labeling, and licensing concerns may result in BARK voluntarily removing selected merchandise from its inventory. Such recalls or voluntary removal of products can result in, among other things, lost sales, diverted resources, potential harm to BARK’s reputation, and increased customer service costs and legal expenses, which could have a material adverse effect on its operating results.

Some of the merchandise BARK sells may expose BARK to product liability claims and litigation or regulatory action relating to personal injury or environmental or property damage. Although BARK maintains liability insurance, BARK cannot be certain that its coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to BARK on economically reasonable terms or at all. In addition, some of BARK’s agreements with its vendors may not indemnify BARK from product liability for a particular vendor’s merchandise or its vendors may not have sufficient resources or insurance to satisfy their indemnity and defense obligations.

BARK purchases its merchandise from numerous domestic and international vendors. BARK’s standard vendor terms and conditions require vendors to comply with applicable laws. BARK has hired independent firms that conduct audits of the working conditions at the factories producing its products. If an audit reveals potential problems, BARK requires that the vendor institute corrective action plans to bring the factory into compliance with its standards, or BARK may discontinue its relationship with the vendor. The loss of a vendor due to failure to comply with BARK’s standards could cause inventory delays, impact its subscribers’ and customers’ experiences, and otherwise harm its operating results. In addition, failure of BARK’s vendors to comply with applicable laws and regulations and contractual requirements could lead to litigation against us, resulting in increased legal expenses and costs. Furthermore, the failure of any such vendors to provide safe and humane factory conditions and oversight at their facilities could damage its reputation with subscribers or customers or result in legal claims against us.

In addition, BARK’s international relationships require BARK to overcome logistical and other challenges based on differing languages, cultures, legal and regulatory schemes and time zones. In addition, foreign labor laws,

 

57


Table of Contents

standards and customs may vary greatly from those in the U.S. and from jurisdiction to jurisdiction. Failure to comply with international employment and related laws and regulations could result in penalties or costs may materially and adversely affect BARK’s business, financial condition, and results of operations. The U.S. or foreign countries could enact legislation or impose regulations, including unfavorable labor regulations, tax policies or economic sanctions that could have an adverse effect on BARK’s ability to conduct business in the countries in which it has relationships. Allegations that BARK is violating or has violated any such laws or regulations could damage its reputation or lead to adversarial proceedings, penalties, fines, damages, or other sanctions which may materially and adversely affect BARK’s business, financial condition, and results of operations.

Risks associated with BARK’s suppliers could materially and adversely affect its business, financial condition, and results of operations

BARK depends on a number of suppliers and outsourcing partners to provide its subscribers and customers with a wide range of products in a timely and efficient manner. If BARK is unable to maintain its relationships with BARK’s existing outsourcing partners or cannot identify or enter into relationships with new outsourcing partners to meet the manufacturing and assembly needs of its business, BARK’s business may be disrupted and its business, financial condition, and results of operations may be materially and adversely affected. In addition, political and economic instability, the financial stability of BARK’s suppliers and outsourcing partners, their ability to meet its standards, labor problems, the availability and prices of raw materials, merchandise quality issues, currency exchange rates, transport availability and cost, transport security, inflation, natural disasters and epidemics, among other factors, are beyond BARK’s control and may materially and adversely affect its suppliers and outsourcing partners and, in turn, its business, financial condition, and results of operations.

BARK is subject to extensive governmental regulation and BARK may incur material liabilities under, or costs in order to comply with, existing or future laws and regulation, and its failure to comply may result in enforcements, recalls, and other adverse actions.

BARK is subject to a broad range of federal, state, local, and foreign laws and regulations intended to protect public and worker health and safety, natural resources and the environment. its operations, including BARK’s outsourced manufacturing partners, are subject to regulation by the Occupational Safety and Health Administration (“OSHA”), the Food and Drug Administration (the “FDA”), the Department of Agriculture (the “USDA”) and by various other federal, state, local and foreign authorities regarding the processing, packaging, storage, distribution, advertising, labeling and export of its products, including food safety standards. In addition, BARK and its outsourced manufacturing partners are subject to additional regulatory requirements, including environmental, health and safety laws and regulations administered by the U.S. Environmental Protection Agency, state, local and foreign environmental, health and safety legislative and regulatory authorities and the National Labor Relations Board, covering such areas as discharges and emissions to air and water, the use, management, disposal and remediation of, and human exposure to, hazardous materials and wastes, and public and worker health and safety. Violations of or liability under any of these laws and regulations may result in administrative, civil or criminal fines, penalties or sanctions against us, revocation or modification of applicable permits, licenses or authorizations, environmental, health and safety investigations or remedial activities, voluntary or involuntary product recalls, warning or untitled letters or cease and desist orders against operations that are not in compliance, among other things. Such laws and regulations generally have become more stringent over time and may become more so in the future, and BARK may incur (directly, or indirectly through its outsourced manufacturing partners) material costs to comply with current or future laws and regulations or in any required product recalls. Liabilities under, and/or costs of compliance, and the impacts on BARK of any non-compliance, with any such laws and regulations could materially and adversely affect its business, financial condition, and results of operations. In addition, changes in the laws and regulations to which BARK is subject could impose significant limitations and require changes to its business, which may increase BARK’s compliance expenses, make its business more costly and less efficient to conduct, and compromise its growth strategy.

Among other regulatory requirements, the FDA reviews the inclusion of specific claims in pet food labeling. For example, pet food products that are labeled or marketed with claims that may suggest that they are intended to

 

58


Table of Contents

treat or prevent disease in pets would potentially meet the statutory definitions of both a food and a drug. The FDA has issued guidance containing a list of specific factors it will consider in determining whether to initiate enforcement action against such products if they do not comply with the regulatory requirements applicable to drugs. These factors include, among other things, whether the product is only made available through or under the direction of a veterinarian and does not present a known safety risk when used as labeled. While BARK believes that BARK market its products in compliance with the policy articulated in FDA’s guidance and in other claim-specific guidance, the FDA may disagree or may classify some of its products differently than BARK do, and may impose more stringent regulations which could lead to alleged regulatory violations, enforcement actions and product recalls. In addition, BARK may produce new products in the future that may be subject to FDA pre-market review before BARK can market and sell such products.

Currently, many states in the U.S. have adopted the Association of American Feed Control Officials definition of the term “natural” with respect to the pet food industry, which means no synthetic additives or synthetic processing except vitamins, minerals or certain trace nutrients, and only ingredients that are derived solely from plant, animal or mined sources. Certain of its pet food products use the term “natural” in their labelling or marketing materials. As a result, BARK may incur material costs to comply with any new labeling requirements relating to the term “natural” and could be subject to liabilities if BARK fails to timely comply with such requirements, which could have a material adverse effect on its business, financial condition, and results of operations.

These developments, depending on the outcome, could have a material adverse effect on BARK’s reputation, business, financial condition, and results of operations.

Government regulation of the Internet and e-commerce is evolving, and unfavorable changes or failure by BARK to comply with these regulations could substantially harm its business, financial condition, and results of operations.

BARK is subject to general business regulations and laws as well as regulations and laws specifically governing the Internet and e-commerce. Existing and future regulations and laws could impede the growth of the Internet, e-commerce or mobile commerce, which could in turn adversely affect BARK’s growth. These regulations and laws may involve taxes, tariffs, privacy and data security, anti-spam, content protection, electronic contracts and communications, consumer protection and Internet neutrality. It is not clear how existing laws governing issues such as sales and other taxes and consumer privacy apply to the Internet as the vast majority of these laws were adopted prior to the advent of the Internet and do not contemplate or address the unique issues raised by the Internet or e-commerce. It is possible that general business regulations and laws, or those specifically governing the Internet or e-commerce, may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or its practices. BARK cannot be sure that its practices have complied, comply or will comply fully with all such laws and regulations. Any failure, or perceived failure, by BARK to comply with any of these laws or regulations could result in damage to its reputation, a loss in business and proceedings or actions against BARK by governmental entities, subscribers, customers, suppliers or others. Any such proceeding or action could hurt its reputation, force BARK to spend significant amounts in defense of these proceedings, distract its management, increase BARK’s costs of doing business, decrease the use of its website and mobile application by subscribers, customers and suppliers and may result in the imposition of monetary liabilities. BARK may also be contractually liable to indemnify and hold harmless third parties from the costs or consequences of non-compliance with any such laws or regulations. As a result, adverse developments with respect to these laws and regulations could substantially harm BARK’s business, financial condition, and results of operations.

 

59


Table of Contents

If the use of “cookie” tracking technologies is further restricted, regulated, or blocked, or if changes in technology cause cookies to become less reliable or acceptable as a means of tracking consumer behavior, the amount or accuracy of internet user information BARK collects would decrease, which could harm its business and operating results.

Cookies are small data files that are sent by websites and stored locally on an internet user’s computer or mobile device. We, and third parties who work on its behalf, collect data via cookies that is used to track the behavior of visitors to BARK’s sites, to provide a more personal and interactive experience, and to increase the effectiveness of its marketing. However, internet users can easily disable, delete, and block cookies directly through browser settings or through other software, browser extensions, or hardware platforms that physically block cookies from being created and stored.

Privacy regulations restrict how BARK deploys its cookies and this could potentially increase the number of internet users that choose to proactively disable cookies on their systems. In the EU, the Directive on Privacy and Electronic Communications requires users to give their consent before cookie data can be stored on their local computer or mobile device. Users can decide to opt out of nearly all cookie data creation, which could negatively impact its operating results. BARK may have to develop alternative systems to determine its subscribers’ and customers’ behavior, customize their online experience, or efficiently market to them if subscribers and customers block cookies or regulations introduce additional barriers to collecting cookie data.

Some of BARK’s software and systems contain open source software, which may pose particular risks to its proprietary applications.

BARK use open source software in the applications BARK has developed to operate its business and will use open source software in the future. BARK may face claims from third parties demanding the release or license of the open source software or derivative works that BARK developed from such software (which could include its proprietary source code) or otherwise seeking to enforce the terms of the applicable open source license. These claims could result in litigation and could require BARK to purchase a costly license, publicly release the affected portions of BARK’s source code, or cease offering the implicated solutions unless and until BARK can re-engineer them to avoid infringement. In addition, BARK’s use of open source software may present additional security risks because the source code for open source software is publicly available, which may make it easier for hackers and other third parties to determine how to breach BARK’s website and systems that rely on open source software. Any of these risks could be difficult to eliminate or manage and, if not addressed, could have an adverse effect on its business and operating results.

BARK has identified material weaknesses in its internal control over financial reporting and if its remediation of such material weaknesses is not effective, or if BARK fails to develop and maintain an effective system of disclosure controls and internal control over financial reporting, its ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. In the course of preparing BARK’s financial statements for fiscal 2019 and 2020, management identified material weaknesses in its internal control over financial reporting. The material weaknesses identified relate to (i) the lack of timely preparation and review of key account reconciliations, (ii) the lack of controls around inventory vendor management, and (iii) BARK’s internal controls over financial reporting were not formalized as it relates to processes over inventory management. The material weaknesses are currently in remediation.

To address its material weaknesses, BARK has added personnel as well as implemented new financial systems and continued formalizing its processes. BARK intends to continue to take steps to remediate the material weaknesses described above through hiring additional qualified accounting and financial reporting personnel, and further evolving our accounting processes. BARK will not be able to fully remediate these material weaknesses until these steps have been completed and have been operating effectively for a sufficient period of time.

 

60


Table of Contents

Furthermore, BARK cannot assure you that the measures it has taken to date, and actions BARK may take in the future, will be sufficient to remediate the control deficiencies that led to the material weaknesses in its internal control over financial reporting or that BARK will prevent or avoid potential future material weaknesses. BARK’s current controls and any new controls that it develops may become inadequate because of changes in conditions in BARK’s business. Further, weaknesses in BARK’s disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm BARK’s operating results or cause BARK to fail to meet its reporting obligations and may result in a restatement of its financial statements for prior periods.

BARK’s independent registered public accounting firm is not required to formally attest to the effectiveness of BARK’s internal control over financial reporting until after it is no longer an “emerging growth company” as defined in the JOBS Act. At such time, BARK’s independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which BARK’s internal control over financial reporting is documented, designed, or operating. Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of BARK’s internal control over financial reporting that it will eventually be required to include in its periodic reports that are filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in BARK’s reported financial and other information, which would likely have a negative effect on the trading price of its common stock. In addition, if BARK’s is unable to continue to meet these requirements, it may not be able to remain listed on the New York Stock Exchange.

If BARK’s internal control over financial reporting or its disclosure controls and procedures are not effective, BARK may be unable to accurately report its financial results, prevent fraud or file its periodic reports in a timely manner, which may cause investors to lose confidence in BARK’s reported financial information and may lead to a decline in BARK’s stock price.

BARK has not previously been subject to the internal control and financial reporting requirements that are required of a publicly-traded company. BARK is required to comply with the requirements of The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), following the date BARK is deemed to be an “accelerated filer” or a “large accelerated filer,” each as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which could be as early as its next fiscal year. The Sarbanes-Oxley Act requires that BARK maintain effective internal control over financial reporting and disclosure controls and procedures. In particular, BARK must perform system and process evaluation, document its controls and perform testing of its key controls over financial reporting to allow management to assess, and, when required, and its independent public accounting firm to report, on the effectiveness of BARK’s internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. Its testing, or the subsequent testing by BARK’s independent public accounting firm, may reveal deficiencies in its internal control over financial reporting that are deemed to be material weaknesses. If BARK is not able to comply with the requirements of Section 404 in a timely manner, or if BARK or its accounting firm identify deficiencies in BARK’s internal control over financial reporting that are deemed to be material weaknesses, the market price of its stock would likely decline and BARK could be subject to lawsuits, sanctions or investigations by regulatory authorities, which would require additional financial and management resources.

If BARK’s estimates or judgments relating to its critical accounting policies prove to be incorrect or financial reporting standards or interpretations change, BARK’s operating results could be adversely affected.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. BARK bases its estimates on historical experience and on various other assumptions that BARK believes to be reasonable under the circumstances, as provided in “BARK’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The results of these estimates form the basis for

 

61


Table of Contents

making judgments about the carrying values of assets, liabilities, and equity as of the date of the financial statements, and the amount of revenue and expenses, during the periods presented, that are not readily apparent from other sources. Significant assumptions and estimates used in preparing BARK’s consolidated financial statements include those related to determination of fair value of BARK’s common stock and common stock warrants, stock-based compensation and the valuation of embedded derivatives. BARK’s operating results may be adversely affected if its assumptions change or if actual circumstances differ from those in BARK’s assumptions, which could cause its operating results to fall below the expectations of industry or financial analysts and investors, resulting in a decline in the trading price of BARK’s common stock.

The requirements of being a public company may strain BARK’s resources, divert management’s attention and affect its ability to attract and retain qualified board members.

After the completion of the Business Combination, BARK will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and any rules promulgated thereunder, as well as the rules of NYSE. The requirements of these rules and regulations increase its legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on its systems and resources. The Sarbanes-Oxley Act requires, among other things, that BARK maintain effective disclosure controls and procedures and internal controls for financial reporting. In order to maintain and, if required, improve its disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight are required, and, as a result, management’s attention may be diverted from other business concerns. These rules and regulations can also make it more difficult for BARK to attract and retain qualified independent members of BARK’s board of directors. Additionally, these rules and regulations make it more difficult and more expensive for BARK to obtain director and officer liability insurance. BARK may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. The increased costs of compliance with public company reporting requirements and its potential failure to satisfy these requirements can have a material adverse effect on BARK’s operations, business, financial condition or results of operations.

If BARK is unable to implement appropriate systems, procedures and controls, BARK may not be able to successfully offer its products, grow its business and account for transactions in an appropriate and timely manner.

BARK’s ability to successfully offer its products, grow its business and account for transactions in an appropriate and timely manner requires an effective planning and management process and certain other automated management and accounting systems. BARK currently does not have an integrated enterprise resource planning system and certain other automated management and accounting systems. BARK periodically updates its operations and financial systems, procedures and controls; however; its current procedures that may not scale proportionately with its business growth or with becoming a public company. BARK’s systems will continue to require automation, modifications and improvements to respond to current and future changes in its business. Failure to implement in a timely manner appropriate internal systems, procedures and controls could materially and adversely affect BARK’s business, financial condition and results of operations.

Changes in tax treatment of companies engaged in e-commerce may adversely affect the commercial use of BARK’s website and mobile application and its financial results.

Historically, BARK has not collected state or local sales, use, or other similar taxes in certain jurisdictions in which it has a physical presence, in reliance on applicable exemptions. The decision of the U.S. Supreme Court in South Dakota v. Wayfair, Inc., permits state and local jurisdictions, in certain circumstances, to impose sales and use tax collection obligation on remote vendors, and a number of states have already begun imposing such obligations on Internet vendors and online marketplaces. While BARK now collects, remits, and reports sales tax in states that impose a sales tax, it is still possible that one or more jurisdictions may assert that BARK has liability for previous periods for which it did not collect sales, use, or other similar taxes. In addition, due to the global nature of the Internet, if BARK chooses to expand internationally in the future, foreign countries might

 

62


Table of Contents

attempt to impose additional or new regulation on BARK’s business or levy additional or new sales, income or other taxes relating to our activities. Tax authorities at the international, federal, state and local levels are currently reviewing the appropriate treatment of companies engaged in e-commerce. New or revised international, federal, state or local tax regulations may subject BARK or its subscribers and customers to additional sales, income and other taxes. New or revised taxes and, in particular, sales taxes, value-added taxes and similar taxes are likely to increase costs to its subscribers and customers and increase the cost of doing business online (including the cost of compliance processes necessary to capture data and collect and remit taxes), and such taxes may decrease the attractiveness of purchasing products over the Internet. Any of these events could materially adversely affect BARK’s business, financial condition and operating results.

BARK may experience fluctuations in its tax obligations and effective tax rate, which could materially and adversely affect its results of operations.

BARK is subject to U.S. federal and state income taxes. Tax laws, regulations and administrative practices in various jurisdictions may be subject to significant change, with or without advance notice, due to economic, political and other conditions, and significant judgment is required in evaluating and estimating BARK’s provision and accruals for these taxes. There are many transactions that occur during the ordinary course of business for which the ultimate tax determination is uncertain. its effective tax rates could be affected by numerous factors, such as changes in tax, accounting and other laws, regulations, administrative practices, principles and interpretations, the mix and level of earnings in a given taxing jurisdiction or its ownership or capital structures.

Further, the U.S. federal income tax legislation enacted in Public Law No. 115-97 (the “Tax Cuts and Jobs Act”) is highly complex, subject to interpretation, and contains significant changes to U.S. tax law, including, but not limited to, a reduction in the corporate tax rate, significant additional limitations on the deductibility of interest, substantial revisions to the taxation of international operations, and limitations on the use of net operating losses generated in tax years beginning after December 31, 2017. The presentation of its financial condition and results of operations is based upon BARK’s current interpretation of the provisions contained in the Tax Cuts and Jobs Act. In the future, the Treasury Department and the U.S. Internal Revenue Service (“IRS”) are expected to release regulations and interpretive guidance relating to the legislation contained in the Tax Cuts and Jobs Act. Any significant variance of BARK’s current interpretation of such legislation from any future regulations or interpretive guidance could result in a change to the presentation of its financial condition and results of operations and could materially and adversely affect its business, financial condition, and results of operations.

BARK’s ability to utilize net operating loss carryforwards may be subject to certain limitations.

BARK’s ability to use its federal and state net operating losses to offset potential future taxable income and related income taxes that would otherwise be due is dependent upon its generation of future taxable income before the expiration dates of the net operating losses, and BARK cannot predict with certainty when, or whether, BARK will generate sufficient taxable income to use all of its net operating losses. In addition, Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), contains rules that impose an annual limitation on the ability of a company with net operating loss carryforwards that undergoes an ownership change, which is generally any change in ownership of more than 50% of its stock (by value) over a three-year period, to utilize its net operating loss carryforwards in years after the ownership change. These rules generally operate by focusing on ownership changes among holders owning directly or indirectly 5% or more of the shares of stock of a company or any change in ownership arising from a new issuance of shares of stock by such company. If a company’s income in any year is less than the annual limitation prescribed by Section 382 of the Code, the unused portion of such limitation amount may be carried forward to increase the limitation (and net operating loss carryforward utilization) in subsequent tax years.

BARK has experienced a prior ownership change that will result in an annual limitation under Section 382 of the Code, but BARK does not expect such limitation to have a material adverse effect on its ability to utilize net operating losses. In addition, if BARK were to undergo a further ownership change as a result of future

 

63


Table of Contents

transactions involving its common stock, including a follow-on offering of BARK’s common stock or purchases or sales of common stock between 5% holders, BARK’s ability to use its net operating loss carryforwards may be subject to additional limitation under Section 382 of the Code. As a result, a portion of BARK’s net operating loss carryforwards may expire before BARK is able to use them. If BARK is unable to utilize its net operating loss carryforwards, there may be a negative impact on BARK’s financial position and results of operations.

In addition to the aforementioned federal income tax implications pursuant to Section 382 of the Code, most states follow the general provisions of Section 382 of the Code, either explicitly or implicitly resulting in separate state net operating loss limitations.

BARK may be unable to adequately protect its intellectual property rights. Additionally, BARK may be subject to intellectual property infringement claims or other allegations, which could result in substantial damages and diversion of management’s efforts and attention.

BARK regards its brand, subscriber and customer lists, trademarks, trade dress, domain names, trade secrets, proprietary technology and similar intellectual property as critical to its success. BARK rely on trademark, copyright and patent law, trade secret protection, agreements and other methods with its employees and others to protect its proprietary rights. Effective intellectual property protection may not be available in every country in which its products are, or may be made, available. The protection of BARK’s intellectual property rights may require the expenditure of significant financial, managerial and operational resources. Moreover, the steps BARK takes to protect its intellectual property may not adequately protect BARK’s rights or prevent third parties from infringing or misappropriating its proprietary rights, and BARK may be unable to broadly enforce all of BARK’s intellectual property rights. Any of BARK’s intellectual property rights may be challenged by others or invalidated through administrative process or litigation. BARK’s patent and trademark applications may never be granted. Additionally, the process of obtaining patent protection is expensive and time-consuming, and BARK may be unable to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. Even if issued, there can be no assurance that these patents will adequately protect its intellectual property, as the legal standards relating to the validity, enforceability and scope of protection of patent and other intellectual property rights are uncertain. BARK also cannot be certain that others will not independently develop or otherwise acquire equivalent or superior technology or intellectual property rights. Furthermore, its confidentiality agreements may not effectively prevent disclosure of BARK’s proprietary information, technologies and processes and may not provide an adequate remedy in the event of unauthorized disclosure of such information.

BARK might be required to spend significant resources to monitor and protect its intellectual property rights. For example, BARK may initiate claims or litigation against others for infringement, misappropriation or violation of its intellectual property rights or other proprietary rights or to establish the validity of such rights. However, BARK may be unable to discover or determine the extent of any infringement, misappropriation or other violation of its intellectual property rights and other proprietary rights. Despite BARK’s efforts, BARK may be unable to prevent third parties from infringing upon, misappropriating or otherwise violating its intellectual property rights and other proprietary rights. Any litigation, whether or not it is resolved in BARK’s favor, could result in significant expense to BARK and divert the efforts of its technical and management personnel, which may materially and adversely affect its business, financial condition, and results of operations.

Third parties have from time to time claimed, and may claim in the future, that BARK has infringed their intellectual property rights. These claims, whether meritorious or not, could be time-consuming, result in considerable litigation costs, result in injunctions against BARK or the payment of damages by us, require significant amounts of management time or result in the diversion of significant operational resources and expensive changes to its business model, result in the payment of substantial damages or injunctions against us, or require BARK to enter into costly royalty or licensing agreements, if available. In addition, BARK may be unable to obtain or utilize on terms that are favorable to us, or at all, licenses or other rights with respect to intellectual property BARK does not own. These risks have been amplified by the increase in third parties whose sole or primary business is to assert such claims. Any payments BARK is required to make and any injunctions

 

64


Table of Contents

BARK is required to comply with as a result of these claims could materially and adversely affect its business, financial condition, and results of operations.

BARK’s success depends on the continuing efforts of its key employees and its ability to attract and retain highly skilled personnel and senior management.

BARK’s ability to maintain its competitive position is largely dependent on the services of its senior management and other key personnel. In addition, BARK’s future success depends on its continuing ability to attract, develop, motivate and retain highly qualified and skilled employees. The market for such positions is competitive. Qualified individuals are in high demand and BARK may incur significant costs to attract them. In addition, the loss of any of its senior management or other key employees or BARK’s inability to recruit and develop mid-level managers could materially and adversely affect its ability to execute BARK’s business plan and BARK may be unable to find adequate replacements. All of its employees are at-will employees, meaning that they may terminate their employment relationship with BARK at any time, and their knowledge of its business and industry would be extremely difficult to replace. If BARK fails to retain talented senior management and other key personnel, or if BARK does not succeed in attracting well-qualified employees or retaining and motivating existing employees, its business, financial condition, and results of operations may be materially and adversely affected.

Future litigation could have a material adverse effect on BARK’s business and results of operations.

Lawsuits and other administrative, regulatory, or legal proceedings that may arise in the course of BARK’s operations can involve substantial costs, including the costs associated with investigation, litigation and possible settlement, judgment, penalty or fine. In addition, lawsuits and other legal proceedings may be time consuming and may require a commitment of management and personnel resources that will be diverted from its normal business operations. Although BARK generally maintains insurance to mitigate certain costs, there can be no assurance that costs associated with lawsuits or other legal proceedings will not exceed the limits of insurance policies. Moreover, BARK may be unable to continue to maintain its existing insurance at a reasonable cost, if at all, or to secure additional coverage, which may result in costs associated with lawsuits and other legal proceedings being uninsured. BARK’s business, financial condition and results of operations could be adversely affected if a judgment, penalty or fine is not fully covered by insurance.

Significant merchandise refunds could harm BARK’s business.

BARK allows its subscribers and customers to seek refunds, subject to its refunds policy, and may in the future allow its subscribers or customers to return products. If merchandise returns or refunds are significant or higher than anticipated and forecasted, BARK’s business, financial condition, and results of operations could be adversely affected. Further, BARK modifies its policies relating to returns or refunds from time to time, and may do so in the future, which may result in subscribers or customer dissatisfaction and harm to its reputation or brand, or an increase in the number of product returns or the amount of refunds BARK makes.

BARK may seek to grow its business through acquisitions of, or investments in, new or complementary businesses, facilities, technologies or products, or through strategic alliances, and the failure to manage these acquisitions, investments or alliances, or to integrate them with its existing business, could have a material adverse effect on us.

From time to time BARK may consider opportunities to acquire or make investments in new or complementary businesses, facilities, technologies, offerings, or products, or enter into strategic alliances, that may enhance its capabilities, expand BARK’s outsourcing and supplier network, complement BARK’s current products or expand the breadth of its markets. Acquisitions, investments and other strategic alliances involve numerous risks, including:

 

   

problems integrating the acquired business, facilities, technologies, subscribers, customers, partners or products, including issues maintaining uniform standards, procedures, controls and policies;

 

65


Table of Contents
   

unanticipated costs associated with acquisitions, investments or strategic alliances;

 

   

diversion of management’s attention from its existing business;

 

   

adverse effects on existing business relationships with suppliers, outsourced manufacturing partners, retail partners and distribution customers;

 

   

risks associated with entering new markets in which BARK may have limited or no experience;

 

   

potential loss of key employees of acquired businesses; and

 

   

increased legal and accounting compliance costs.

If BARK is unable to integrate any acquired businesses, facilities, technologies and products effectively, its business, financial condition, and results of operations could be materially and adversely affected.

Restrictions in BARK’s credit facilities or other debt instruments could adversely affect its operating flexibility.

BARK’s revolving credit facility and indenture governing its 2025 Notes both limit BARK’s ability to, among other things:

 

   

incur or guarantee additional debt;

 

   

make certain investments and acquisitions;

 

   

incur certain liens or permit them to exist;

 

   

enter into certain types of transactions with affiliates;

 

   

merge or consolidate with another company; and

 

   

transfer, sell or otherwise dispose of assets.

BARK’s revolving credit facility also contains covenants requiring BARK to satisfy certain financial covenants. The provisions of BARK’s revolving credit facility may affect its ability to obtain future financing and to pursue attractive business opportunities and BARK’s flexibility in planning for, and reacting to, changes in business conditions. As a result, restrictions in BARK’s revolving credit facility could adversely affect its business, financial condition, and results of operations. In addition, a failure to comply with the provisions of BARK’s revolving credit facility could result in a default or an event of default that could enable its lenders to declare the outstanding principal of that debt, together with accrued and unpaid interest, to be immediately due and payable. If the payment of outstanding amounts under BARK’s revolving credit facility is accelerated, its assets may be insufficient to repay such amounts in full, and its stockholders could experience a partial or total loss of their investment. Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Liquidity and Capital Resources.”

In addition, the 2025 Notes mature on December 1, 2025. Following the Business Combination, there are no assurances New BARK will have sufficient funds available to satisfy the notes at maturity, or that the holders will elect to convert the notes into shares of New BARK common stock. Each of these 2025 Notes are secured by an amount of New BARK’s assets sufficient to satisfy the obligations under the note. If New BARK were to default under the repayment of the notes, the noteholders could seek to foreclose on a portion of its assets which would materially adversely impact its business as it is currently conducted. Further, any additional financing that New BARK secures may require the granting of rights, preferences or privileges senior to those of its common stock and which result in additional dilution of the existing ownership of its common shareholders.

BARK’s ability to raise capital in the future may be limited and its failure to raise capital when needed could prevent BARK from growing.

In the future, BARK could be required to raise capital through public or private financing or other arrangements. Such financing may not be available on acceptable terms, or at all, and its failure to raise capital when needed

 

66


Table of Contents

could harm its business. BARK may sell common stock, convertible securities and other equity securities in one or more transactions at prices and in a manner as BARK may determine from time to time. If BARK sells any such securities in subsequent transactions, investors in its common stock may be materially diluted. New investors in such subsequent transactions could gain rights, preferences and privileges senior to those of holders of BARK’s common stock. Debt financing, if available, may involve restrictive covenants and could reduce its operational flexibility or profitability. If BARK cannot raise funds on acceptable terms, BARK may be forced to raise funds on undesirable terms, or BARK’s business may contract or BARK may be unable to grow its business or respond to competitive pressures, any of which could have a material adverse effect on its business, financial condition, and results of operations.

Risks Relating to Ownership of New BARK’s Common Stock

New BARK’s stock price may be volatile and may decline regardless of its operating performance.

The market price of New BARK common stock may fluctuate significantly in response to numerous factors and may continue to fluctuate for these and other reasons, many of which are beyond New BARK’s control, including:

 

   

actual or anticipated fluctuations in its revenue and results of operations;

 

   

the financial projections New BARK may provide to the public, any changes in these projections or its failure to meet these projections;

 

   

failure of securities analysts to maintain coverage of its company, changes in financial estimates or ratings by any securities analysts who follow its company or its failure to meet these estimates or the expectations of investors;

 

   

announcements by New BARK or its competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, results of operations or capital commitments;

 

   

changes in operating performance and stock market valuations of other retail or technology companies generally, or those in its industry in particular;

 

   

price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;

 

   

trading volume of its common stock;

 

   

the inclusion, exclusion or removal of its common stock from any indices;

 

   

changes in New BARK’s board of directors or management;

 

   

transactions in its common stock by directors, officers, affiliates and other major investors;

 

   

lawsuits threatened or filed against us;

 

   

changes in laws or regulations applicable to its business;

 

   

changes in New BARK’s capital structure, such as future issuances of debt or equity securities;

 

   

short sales, hedging and other derivative transactions involving New BARK’s capital stock;

 

   

general economic conditions in the U.S.;

 

   

other events or factors, including those resulting from war, incidents of terrorism or responses to these events; and

 

   

the other factors described in this “Risk Factors” section.

The stock market has recently experienced extreme price and volume fluctuations. The market prices of securities of companies have experienced fluctuations that often have been unrelated or disproportionate to their operating results. In the past, stockholders have sometimes instituted securities class action litigation against

 

67


Table of Contents

companies following periods of volatility in the market price of their securities. Any similar litigation against New BARK could result in substantial costs, divert management’s attention and resources, and harm its business, financial condition, and results of operations.

An active trading market for New BARK common stock may not be sustained.

New BARK common stock is expected to be listed on the NYSE under the symbol “BARK” and to trade on that market and others. New BARK cannot assure you that an active trading market for its common stock will be sustained. Accordingly, New BARK cannot assure you of the liquidity of any trading market, your ability to sell your shares of its common stock when desired or the prices that you may obtain for your shares.

BARK has convertible debt that may be converted into shares of New BARK common stock in the future, which would cause immediate and substantial dilution to its stockholders.

In November 2020, BARK issued the 2025 Notes in the aggregate principal of $75.0 million, with an option for the lead noteholder to purchase an additional $25.0 million of 2025 Notes for a period of one year. Following the closing of the proposed Business Combination, the 2025 Notes will be convertible into shares of New BARK common stock at a conversion price of $10.00 per share. The issuance of shares of New BARK common stock upon any conversion of the 2025 Notes will result in dilution to the interests of other shareholders.

Future sales of shares by existing stockholders could cause New BARK’s stock price to decline.

If New BARK’s existing stockholders sell or indicate an intention to sell substantial amounts of its common stock in the public market, the trading price of New BARK’s common stock could decline. In addition, shares underlying any outstanding options and restricted stock units will become eligible for sale if exercised or settled, as applicable, and to the extent permitted by the provisions of various vesting agreements and Rule 144 of the Securities Act. All the shares of common stock subject to stock options outstanding and reserved for issuance under its equity incentive plans are expected to be registered on Form S-8 under the Securities Act and such shares are eligible for sale in the public markets, subject to Rule 144 limitations applicable to affiliates. If these additional shares are sold, or if it is perceived that they will be sold in the public market, the trading price of its common stock could decline.

Although the Sponsor, the Northern Star initial stockholders and certain BARK stockholders will be subject to certain restrictions regarding the transfer of New BARK common stock following the Business Combination, these shares may be sold after the expiration of the respective applicable lock-ups. New BARK intends to file one or more registration statements prior to or shortly after the closing of the Business Combination to provide for the resale of such shares from time to time. As restrictions on resale end and the registration statements are available for use, the market price of New BARK common stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.

If securities or industry analysts either do not publish research about New BARK or publish inaccurate or unfavorable research about us, New BARK’s business, or its market, or if they change their recommendations regarding New BARK’s common stock adversely, the trading price or trading volume of its common stock could decline.

The trading market for New BARK’s common stock is influenced in part by the research and reports that securities or industry analysts may publish about us, its business, New BARK’s market, or its competitors. If one or more of the analysts initiate research with an unfavorable rating or downgrade New BARK’s common stock, provide a more favorable recommendation about BARK’s competitors, or publish inaccurate or unfavorable research about its business, New BARK’s common stock price would likely decline. In addition, New BARK currently expects that securities research analysts will establish and publish their own periodic projections for its business. These projections may vary widely and may not accurately predict the results New BARK actually

 

68


Table of Contents

achieves. Its stock price may decline if its actual results do not match the projections of these securities research analysts. While New BARK expects research analyst coverage, if no analysts commence coverage of it, the trading price and volume for New BARK common stock could be adversely affected. If any analyst who may cover New BARK were to cease coverage of New BARK or fail to regularly publish reports on us, New BARK could lose visibility in the financial markets, which in turn could cause the trading price or trading volume of its common stock to decline.

New BARK’s amended and restated certificate of incorporation will retain the provision renouncing New BARK’s interest and expectancy in certain corporate opportunities that is currently contained in Northern Star’s certificate of incorporation, which may prevent New BARK from receiving the benefit of certain corporate opportunities.

The “corporate opportunity” doctrine provides that corporate fiduciaries, as part of their duty of loyalty to the corporation and its stockholders, may not take for themselves an opportunity that in fairness should belong to the corporation. Section 122(17) of the DGCL, however, expressly permits a Delaware corporation to renounce in its certificate of incorporation any interest or expectancy of the corporation in, or in being offered an opportunity to participate in, specified business opportunities or specified classes or categories of business opportunities that are presented to the corporation or its officers, directors or stockholders. Similar to Article ELEVENTH of Northern Star’s certificate of incorporation, Article THIRTEENTH of New BARK’s amended and restated certificate of incorporation provides that doctrine of corporate opportunity shall not apply with respect to New BARK or any of its officers or directors, or any of their respective affiliates. As a result of this provision, New BARK may be not be offered certain corporate opportunities which could be beneficial to our company and our stockholders. While it is difficult at this time to predict how this provision may adversely impact New BARK’s stockholders, it is possible that New BARK would not be offered the opportunity to participate in a future transaction which might have resulted in a financial benefit to New BARK, which could, in turn, result in a material adverse effect on its business, financial condition, results of operations, or prospects.

Delaware law and provisions in New BARK’s amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the trading price of its common stock.

New BARK’s amended and restated certificate of incorporation and amended and restated bylaws will contain provisions that could depress the trading price of its common stock by acting to discourage, delay, or prevent a change of control of New BARK or changes in New BARK’s management that New BARK’s stockholders may deem advantageous. These provisions include the following:

 

   

a classified board of directors so that not all members of New BARK’s board of directors are elected at one time;

 

   

permit the board of directors to establish the number of directors and fill any vacancies and newly created directorships;

 

   

provide that directors may only be removed for cause and only by a super majority vote;

 

   

require super-majority voting to amend certain provisions of New BARK’s certificate of incorporation and any provision of its bylaws;

 

   

authorize the issuance of “blank check” preferred stock that New BARK’s board of directors could use to implement a stockholder rights plan;

 

   

New BARK’s board of directors ability to issue New BARK’s authorized but unissued common stock and preferred stock without stockholder approval;

 

   

eliminate the ability of New BARK’s stockholders to call special meetings of stockholders;

 

   

prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of New BARK’s stockholders;

 

69


Table of Contents
   

limitations on the liability of, and the provision of indemnification to, our director and officers;

 

   

provide that the board of directors is expressly authorized to make, alter, or repeal New BARK’s bylaws; and

 

   

establish advance notice requirements for nominations for election to New BARK’s board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.

In addition, New BARK will be subject to Section 203 of the DGCL. Section 203 prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder for a period of three years following the date such person becomes an interested stockholder, unless the business combination or the transaction in which such person becomes an interested stockholder is approved in a prescribed manner. Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. Generally, an “interested stockholder” is a person that, together with affiliates and associates, owns, or within three years prior to the determination of interested stockholder status did own, 15.0% or more of a corporation’s voting stock. The existence of this provision may have an anti-takeover effect with respect to transactions not approved in advance by the New BARK board of directors and the anti-takeover effect includes discouraging attempts that might result in a premium over the market price for the shares of New BARK common stock.

Any provision of New BARK’s amended and restated certificate of incorporation or amended and restated bylaws that has the effect of delaying or deterring a change in control could limit the opportunity for New BARK’s stockholders to receive a premium for their shares of New BARK’s common stock, and could also affect the price that some investors are willing to pay for New BARK’s common stock.

New BARK’s amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States will be the exclusive forum for substantially all disputes between New BARK and its stockholders, which could limit New BARK’s stockholders’ ability to obtain a favorable judicial forum for disputes with New BARK or its directors, officers or employees.

New BARK’s amended and restated certificate of incorporation will provide that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on New BARK’s behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against New BARK arising pursuant to the Delaware General Corporation Law, New BARK’s certificate of incorporation or its bylaws or any action asserting a claim against New BARK that is governed by the internal affairs doctrine. These choices of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with New BARK or its directors, officers or other employees and may discourage these types of lawsuits. This provision would not apply to claims brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. New BARK’s amended and restated certificate of incorporation provides further that, to the fullest extent permitted by law, the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. However, Section 22 of the Securities Act provides that federal and state courts have concurrent jurisdiction over lawsuits brought the Securities Act or the rules and regulations thereunder. To the extent the exclusive forum provision restricts the courts in which claims arising under the Securities Act may be brought, there is uncertainty as to whether a court would enforce such a provision. We note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Furthermore, the enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable. While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive-forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions. If a court were to find the exclusive-forum provision contained in

 

70


Table of Contents

New BARK’s amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, New BARK may incur additional costs associated with resolving such action in other jurisdictions, which could harm its business.

New BARK does not intend to pay dividends for the foreseeable future.

New BARK currently intends to retain any future earnings to finance the operation and expansion of its business and New BARK does not expect to declare or pay any dividends in the foreseeable future. Moreover, the terms of New BARK’s revolving credit facility may restrict its ability to pay dividends, and any additional debt New BARK may incur in the future may include similar restrictions. As a result, stockholders must rely on sales of their common stock after price appreciation as the only way to realize any future gains on their investment.

Concentration of ownership among BARK’s existing executive officers, directors and their respective affiliates may prevent new investors from influencing significant corporate decisions.

Upon completion of the Business Combination, BARK’s existing executive officers, directors and their respective affiliates as a group are expected to beneficially own approximately 33.65% of the outstanding New BARK common stock, assuming no conversions of Northern Star’s public shares. As a result, these stockholders will be able to exercise a significant level of control over all matters requiring stockholder approval, including the election of directors, amendment of New BARK’s certificate of incorporation and approval of significant corporate transactions. This control could have the effect of delaying or preventing a change of control of New BARK or changes in management and will make the approval of certain transactions difficult or impossible without the support of these stockholders.

New BARK may issue additional shares of common stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of New BARK common stock.

Upon the closing of the Business Combination, New BARK will have options and warrants outstanding to purchase up to an aggregate of 44,574,242 shares of New BARK common stock, including public warrants to purchase 8,478,333 shares, private warrants to purchase 4,558,000 shares, and options and warrants of BARK assumed by New BARK to purchase 31,537,909 shares. In addition, the 2025 Notes of BARK assumed by New BARK will be convertible into 7,673,021 shares (based on the outstanding principal balance and accrued interest as of April 27, 2021). New BARK will also have the ability to initially issue up to 16,890,245 shares of New BARK common stock under the 2021 Plan and up to 3,378,049 shares of New BARK common stock under the ESPP (assuming they are approved by stockholders at the meeting). Additionally, to the extent that BARK’s currently outstanding awards granted under its 2011 Stock Incentive Plan are forfeited after the Merger, the underlying shares would be made available for future issuance in accordance with the 2021 Plan’s terms. These additional shares are included in the aggregate merger consideration provided for under the Merger Agreement.

In addition, if New BARK’s Sponsor, officers, directors or their affiliates make any working capital loans prior to the closing of the Business Combination, they may convert up to $1,500,000 of those loans into up to an additional 1,000,000 private warrants, at the price of $1.50 per warrant. The number of warrants that may be issued in such a circumstance cannot be determined at this time. New BARK may issue additional shares of common stock or other equity securities of equal or senior rank in the future in connection with, among other things, future acquisitions or repayment of outstanding indebtedness, without stockholder approval, in a number of circumstances.

New BARK’s issuance of additional shares of common stock or other equity securities of equal or senior rank would have the following effects:

 

   

New BARK’s existing stockholders’ proportionate ownership interest in New BARK will decrease;

 

   

the amount of cash available per share, including for payment of dividends (if any) in the future, may decrease;

 

71


Table of Contents
   

the relative voting strength of each previously outstanding share of common stock may be diminished; and

 

   

the market price of New BARK’s shares of common stock may decline.

New BARK’s securities may not be listed on a national securities exchange after the Business Combination, which could limit investors’ ability to make transactions in New BARK’s securities and subject New BARK to additional trading restrictions.

New BARK has applied to have its common stock and warrants listed on the NYSE after consummation of the Business Combination. New BARK will be required to meet the initial listing requirements of the NYSE to be listed. New BARK may not be able to meet those initial listing requirements (and the related closing condition, which requires the shares of New BARK common stock to be issued in the Merger be approved for listing on the NYSE, may be waived by the parties). Even if New BARK’s securities are so listed, New BARK may be unable to maintain the listing of its securities in the future.

If New BARK fails to meet the initial listing requirements and the NYSE does not list its securities (and the related closing condition is waived by the parties), or if its securities are subsequently delisted, New BARK could face significant material adverse consequences, including:

 

   

a limited availability of market quotations for its securities;

 

   

a limited amount of news and analyst coverage for New BARK; and

 

   

a decreased ability to issue additional securities or obtain additional financing in the future.

Northern Star’s warrants are accounted for as liabilities and the changes in value of the warrants could have a material effect on the combined company’s financial results.

On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Statement”). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement governing Northern Star’s warrants. As a result of the SEC Statement, Northern Star reevaluated the accounting treatment of its 8,478,333 public warrants and 4,558,000 private placement warrants, and determined to classify the warrants as derivative liabilities.

As a result, included on Northern Star’s consolidated balance sheet as of December 31, 2020 contained elsewhere in this proxy statement/prospectus are derivative liabilities related to embedded features contained within its warrants. Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, the combined company’s consolidated financial statements and results of operations may in the future fluctuate on a quarterly basis, based on factors, which are outside of its control, and the amount of such gains or losses could be material.

Risks Related to the Business Combination

New BARK will not have any right to make damage claims against BARK or BARK’s stockholders for the breach of any representation, warranty or covenant made by BARK in the Merger Agreement.

The Merger Agreement provides that all of the representations, warranties and covenants of the parties contained therein shall not survive the closing of the Merger, except for those covenants that by their terms apply or are to

 

72


Table of Contents

be performed in whole or in part after the closing, and then only with respect to breaches occurring after closing. Accordingly, there are no remedies available to the parties with respect to any breach of the representations, warranties, covenants or agreements of the parties to the Merger Agreement after the closing of the Merger, except for covenants to be performed in whole or in part after the closing. As a result, New BARK will have no remedy available to it if the Merger is consummated and it is later revealed that there was a breach of any of the representations, warranties and covenants made by BARK at the time of the Merger.

If Northern Star’s stockholders fail to properly demand conversion rights, they will not be entitled to have their common stock of Northern Star converted into a pro rata portion of the trust account.

Northern Star stockholders holding public shares may demand that Northern Star convert their shares into their respective pro rata portion of the trust account, calculated as of two (2) business days prior to the anticipated consummation of the Business Combination, including interest earned on the trust account and not previously released to Northern Star to pay its tax obligations. The per-share amount we will distribute to investors who properly convert their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters of Northern Star’s initial public offering. Northern Star stockholders who seek to exercise this conversion right must deliver their shares (either physically or electronically) to Northern Star’s transfer agent two (2) business days prior to the annual meeting. Any Northern Star stockholder who fails to properly deliver their shares will not be entitled to have his or her shares converted. See the section entitled “Annual Meeting of Northern Star Stockholders—Conversion Rights” for the procedures to be followed if you wish to have your shares redeemed for cash.

Public stockholders, together with any affiliates of theirs or any other person with whom they are acting in concert or as a “group,” will be restricted from seeking conversion rights with respect to more than 20% of the public shares.

A public stockholder, together with any affiliate or any other person with whom such stockholder is acting in concert or as a “group,” will be restricted from seeking conversion rights with respect to more than 20% of the public shares. Accordingly, if you hold more than 20% of the public shares and the business combination proposal is approved, you will not be able to seek conversion rights with respect to the full amount of your shares and may be forced to hold the shares in excess of 20% or sell them in the after-market. Northern Star cannot assure you that the value of such excess shares will appreciate over time following the Business Combination or that the market price of Northern Star common stock after the Business Combination will exceed the per-share conversion price.

The Sponsor and Northern Star’s officers and directors own common stock and warrants that will be worthless and have incurred reimbursable expenses that may not be reimbursed or repaid if the Business Combination is not approved. Such interests may have influenced their decision to approve the Business Combination with BARK.

The Sponsor and Northern Star’s officers and directors and/or their affiliates beneficially own or have a pecuniary interest in founder shares and private warrants that they purchased prior to, or simultaneously with, Northern Star’s initial public offering. The holders have no redemption rights with respect to these securities in the event a business combination is not effected in the required time period. Therefore, if the Business Combination with BARK or another business combination is not approved within the required time period, such securities held by such persons will be worthless. Such securities had an aggregate market value of $87,567,165 based upon the closing prices of the shares and warrants on the NYSE on April 5, 2021, the record date. Furthermore, the Sponsor and Northern Star’s officers and directors and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on Northern Star’s behalf, such as identifying and investigating possible business targets and business combinations. These expenses will be repaid upon completion of the Business Combination. However, if Northern Star fails to consummate the Business Combination, Northern Star’s Sponsor and its directors and officers will not have any

 

73


Table of Contents

claim against the trust account for reimbursement. Accordingly, Northern Star may not be able to reimburse these amounts if the Business Combination is not completed. In addition, Northern Star’s Sponsor, officers, directors or their affiliates make working capital loans prior to the closing of the Business Combination, which may not be repaid if the Business Combination is not completed. See the section entitled “The Business Combination Proposal—Interests of the Sponsor and Northern Star’s Directors and Officers in the Business Combination.”

These financial interests may have influenced the decision of Northern Star’s directors to approve the Business Combination with BARK and to continue to pursue such Business Combination. In considering the recommendations of Northern Star’s board of directors to vote for the business combination proposal and other proposals, its stockholders should consider these interests.

The Sponsor, which is ultimately controlled by Jonathan J. Ledecky and Joanna Coles, is liable under certain circumstances to ensure that proceeds of the trust are not reduced by vendor claims in the event the Business Combination is not consummated. Such liability may have influenced the decision of Mr. Ledecky and Ms. Coles to approve the Business Combination with BARK.

If the Business Combination with BARK or another business combination is not consummated by Northern Star within the required time period, the Sponsor will be personally liable under certain circumstances described herein to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Northern Star for services rendered or contracted for or products sold to Northern Star. If Northern Star consummates a business combination, on the other hand, Northern Star will be liable for all such claims. See the section entitled “Other Information Related to Northern Star—Financial Condition and Liquidity” for further information.

These personal obligations of the Sponsor may have influenced Northern Star’s board of directors’ decision to approve the Business Combination with BARK and to continue to pursue such Business Combination. In considering the recommendations of Northern Star’s board of directors to vote for the business combination proposal and the other proposals, Northern Star’s stockholders should consider these interests.

The exercise of Northern Star’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in the best interests of Northern Star’s stockholders.

In the period leading up to the closing of the Business Combination, events may occur that, pursuant to the Merger Agreement, would require Northern Star to agree to amend the Merger Agreement, to consent to certain actions taken by BARK or to waive rights that Northern Star is entitled to under the Merger Agreement. Such events could arise because of changes in the course of BARK’s business, a request by BARK to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on BARK’s business and would entitle Northern Star to terminate the Merger Agreement. In any of such circumstances, it would be at Northern Star’s discretion, acting through its board of directors, to grant its consent or waive those rights. The existence of the financial and personal interests of the directors described in the preceding risk factors may result in a conflict of interest on the part of one or more of the directors between what he or they may believe is best for Northern Star and what he or they may believe is best for himself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, Northern Star does not believe there will be any material changes or waivers that Northern Star’s directors and officers would be likely to make after the mailing of this proxy statement/prospectus. Northern Star will circulate a supplemental or amended proxy statement/prospectus if changes to the terms of the Merger that would have a material impact on its stockholders are required prior to the vote on the business combination proposal.

 

74


Table of Contents

If Northern Star is unable to complete the Business Combination with BARK or another business combination by November 13, 2022 (or such later date as may be approved by Northern Star’s stockholders), Northern Star will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, third parties may bring claims against Northern Star and, as a result, the proceeds held in the trust account could be reduced and the per-share liquidation price received by stockholders could be less than $10.00 per share.

Under the terms of Northern Star’s amended and restated certificate of incorporation, Northern Star must complete the Business Combination with BARK or another business combination by November 13, 2022 (or such later date as may be approved by Northern Star stockholders in an amendment to its amended and restated certificate of incorporation), or Northern Star must cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, third parties may bring claims against Northern Star. Although Northern Star has obtained waiver agreements from certain vendors and service providers it has engaged and owes money to, and the prospective target businesses it has negotiated with, whereby such parties have waived any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, there is no guarantee that they or other vendors who did not execute such waivers will not seek recourse against the trust account notwithstanding such agreements. Furthermore, there is no guarantee that a court will uphold the validity of such agreements. Accordingly, the proceeds held in the trust account could be subject to claims which could take priority over those of Northern Star’s public stockholders. If Northern Star is unable to complete a business combination within the required time period, the Sponsor has agreed that it will be liable under certain circumstances described herein to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Northern Star for services rendered or contracted for or products sold to Northern Star. However, the Sponsor may not be able to meet such obligation as its only assets are securities of Northern Star. Therefore, the per-share distribution from the trust account in such a situation may be less than $10.00 due to such claims.

Additionally, if Northern Star is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, or if Northern Star otherwise enters compulsory or court supervised liquidation, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in its bankruptcy estate and subject to the claims of third parties with priority over the claims of its stockholders. To the extent any bankruptcy claims deplete the trust account, Northern Star may not be able to return to its public stockholders at least $10.00.

Northern Star’s board of directors did not obtain a fairness opinion in determining whether or not to proceed with the Business Combination and, as a result, the terms may not be fair from a financial point of view to the public stockholders.

Northern Star’s board of directors did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. Accordingly, investors will be relying solely on the judgment of Northern Star’s board of directors in valuing BARK and assuming the risk that the Northern Star board may not have properly valued the business. However, Northern Star’s officers and directors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and have substantial experience with mergers and acquisitions. Furthermore, in analyzing the Business Combination, Northern Star’s board of directors conducted significant due diligence on BARK. As a result, Northern Star’s board of directors concluded that its members’ experience and backgrounds, together with the experience and sector expertise of Northern Star’s advisors, enabled them to make the necessary analyses and determinations regarding the Business Combination, including that the Business Combination was fair from a financial perspective to its stockholders and that BARK’s fair market value was at least 80% of the assets held in the trust account (net of amounts previously disbursed to management for tax obligations and working capital purposes and excluding approximately $8.9 million of deferred underwriting discounts held in trust) at the time

 

75


Table of Contents

of the agreement to enter into the Business Combination. There can be no assurance, however, that Northern Star’s board of directors was correct in its assessment of the Business Combination. For a complete discussion of the factors utilized by Northern Star’s board of directors in approving the Business Combination, see the section entitled “The Business Combination Proposal.”

Northern Star’s stockholders may be held liable for claims by third parties against Northern Star to the extent of distributions received by them.

If Northern Star is unable to complete the Business Combination with BARK or another business combination within the required time period, Northern Star will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the trust account and not previously released to Northern Star (less up to $100,000 of interest to pay liquidation expenses and which interest shall be net of taxes payable), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of its remaining stockholders and its board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii), to Northern Star’s obligations under Delaware law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. Northern Star cannot assure you that it will properly assess all claims that may potentially be brought against Northern Star. As such, Northern Star’s stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of its stockholders may extend well beyond the third anniversary of the date of distribution. Accordingly, Northern Star cannot assure you that third parties will not seek to recover from its stockholders amounts owed to them by Northern Star.

If Northern Star is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor, creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by Northern Star’s stockholders. Furthermore, because Northern Star intends to distribute the proceeds held in the trust account to its public stockholders promptly after the expiration of the time period to complete a business combination, this may be viewed or interpreted as giving preference to its public stockholders over any potential creditors with respect to access to or distributions from its assets. Furthermore, Northern Star’s board of directors may be viewed as having breached its fiduciary duties to its creditors and/or may have acted in bad faith, thereby exposing itself and BARK to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. Northern Star cannot assure you that claims will not be brought against it for these reasons.

Activities taken by existing Northern Star stockholders to increase the likelihood of approval of the business combination proposal and the other proposals could have a depressive effect on Northern Star’s shares.

At any time prior to the annual meeting, during a period when they are not then aware of any material nonpublic information regarding Northern Star or its securities, the Sponsor, Northern Star’s officers, directors and stockholders from prior to Northern Star’s initial public offering, BARK or BARK’s stockholders and/or their respective affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the business combination proposal, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire common stock of Northern Star or vote their shares in favor of the business combination proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements to consummate the Business Combination where it appears that such requirements would otherwise not be met. Entering into any such arrangements may have a depressive effect on Northern Star common stock. For example, as a result of these arrangements, an investor or holder may have the

 

76


Table of Contents

ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he owns, either prior to or immediately after the annual meeting.

Northern Star has identified a material weakness in its internal control over financial reporting as of December 31, 2020. If Northern Star and New BARK are unable to develop and maintain an effective system of internal control over financial reporting, the combined company may not be able to accurately report its financial results in a timely manner, which may adversely affect investor confidence in the combined company and materially and adversely affect its business and operating results.

Following the issuance of the SEC Statement, on April 28, 2021, Northern Star’s management and its audit committee concluded that, in light of the SEC Statement, it was appropriate to restate Northern Star’s previously issued audited financial statements as of and for the period ended December 31, 2020 (the “Restatement”). See “—Northern Star’s warrants are accounted for as liabilities and the changes in value of the warrants could have a material effect on the combined company’s financial results.” As part of the Restatement process, Northern Star identified a material weakness in its internal controls over financial reporting related to the accounting for its warrants.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented, or detected and corrected on a timely basis.

Effective internal controls are necessary for Northern Star and New BARK to provide reliable financial reports and prevent fraud. Northern Star continues to evaluate steps to remediate the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.

If Northern Star or New BARK identify any new material weaknesses in the future, any such newly identified material weakness could limit the combined company’s ability to prevent or detect a misstatement of its accounts or disclosures that could result in a material misstatement of its annual or interim financial statements. In such case, the combined company may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in its financial reporting and its stock price may decline as a result. Northern Star and New BARK cannot assure you that the measures Northern Star has taken to date, or any measures it may take in the future, will be sufficient to avoid potential future material weaknesses.

Northern Star and New Bark may face litigation and other risks as a result of the Restatement and the material weakness in Northern Star’s internal control over financial reporting.

Following the issuance of the SEC Statement, after consultation with Northern Star’s independent registered public accounting firm, Northern Star’s management and its audit committee concluded that it was appropriate to restate our previously issued audited financial statements as of December 31, 2020, for the three months ended December 31, 2020, and for the period from July 8, 2020 (inception) through December 31, 2020. See “—Northern Star’s warrants are accounted for as liabilities and the changes in value of the warrants could have a material effect on the combined company’s financial results.”

As a result of such material weakness, the Restatement, the change in accounting for the warrants, and other matters raised or that may in the future be raised by the SEC, Northern Star and New BARK face the potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the Restatement and material weaknesses in its internal control over financial reporting and the preparation of our financial statements. Northern Star and New BARK can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on the combined company’s business, results of operations and financial condition or its ability to complete the Business Combination.

 

77


Table of Contents

If the adjournment proposal is not approved, and an insufficient number of votes have been obtained to authorize the consummation of the Business Combination, Northern Star’s board of directors will not have the ability to adjourn the annual meeting to a later date in order to solicit further votes, and, therefore, the Business Combination will not be approved.

Northern Star’s board of directors is seeking approval to adjourn the annual meeting to a later date or dates if it is determined by the officer presiding over the annual meeting that more time is necessary for Northern Star to consummate the Merger and the other transactions contemplated by the Merger Agreement. The presiding officer may present the adjournment proposal if, at the annual meeting, Northern Star is unable to consummate the Business Combination for any reason. If the adjournment proposal is not approved, Northern Star’s board will not have the ability to adjourn the annual meeting to a later date and, therefore, the Business Combination would not be completed. However, in addition to an adjournment of the annual meeting upon approval of an adjournment proposal, Northern Star’s board of directors is empowered under Delaware law to postpone the meeting at any time prior to the meeting being called to order.

 

78


Table of Contents

ANNUAL MEETING OF NORTHERN STAR STOCKHOLDERS

General

Northern Star is furnishing this proxy statement/prospectus to Northern Star’s stockholders as part of the solicitation of proxies by Northern Star’s board of directors for use at the annual meeting of Northern Star’s stockholders. This proxy statement/prospectus provides Northern Star’s stockholders with the information they need to know to be able to vote or instruct their vote to be cast at the annual meeting.

Date, Time and Place

The annual meeting of stockholders will be held on                     , 2021, at                      eastern time, solely over the Internet by means of a live audio webcast. You may attend and participate in the annual meeting webcast by accessing the meeting web portal located at http://www.virtualshareholdermeeting.com/STIC2021. Stockholders participating in the annual meeting will be able to listen only and will not be able to speak during the annual meeting webcast. To participate in the virtual meeting, a stockholder of record will need the 16-digit control number included on their proxy card or instructions that accompanied their proxy materials, if applicable, or will need to obtain a proxy form from their broker, bank or other nomine. Stockholders are encouraged to access the annual meeting prior to the start time. If you encounter any difficulties accessing the virtual meeting or during the meeting time, please call the technical support number that will be posted on the virtual meeting login page.

Purpose of the Northern Star Annual Meeting

At the annual meeting, Northern Star is asking holders of Northern Star common stock to:

 

   

consider and vote upon a proposal to approve and adopt the Merger Agreement and the Business Combination, including the Merger of Merger Sub with and into BARK, with BARK surviving as a wholly owned subsidiary of Northern Star, and the issuance of Northern Star common stock to BARK’s stockholders in the Merger (the business combination proposal);

 

   

consider and vote upon a proposal to approve the issuance of an aggregate of 20,000,000 shares of Northern Star common stock in the PIPE Transaction, the closing of which is subject to certain conditions, including, among other things, the closing of the Business Combination (the PIPE proposal);

 

   

consider and vote upon separate proposals to approve amendments to Northern Star’s current amended and restated certificate of incorporation to: (i) change the name of Northern Star to “The Original BARK Company”, as opposed to the current name of “Northern Star Acquisition Corp.”; (ii) increase the number of shares of common stock Northern Star is authorized to issue to 500,000,000 shares, as opposed to the current number of 150,000,000 shares, and remove the provisions for Northern Star’s current Class B common stock (the shares of which will all convert into shares of Class A common stock in connection with the Business Combination) so that the Class B common stock will cease to exist and Northern Star will have a single class of common stock; (iii) add supermajority voting provisions requiring the affirmative vote of the holders of 66 2/3% of the voting power of all of the then outstanding shares of the capital stock of New BARK to amend certain provisions of the second amended and restated certificate of incorporation, to adopt, amend or repeal any provision of the bylaws, or to remove any director, or the entire Board of Directors; and (iv) remove the various provisions applicable only to special purpose acquisition corporations (such as the obligation to dissolve and liquidate if a business combination is not consummated within a certain period of time) and make certain other immaterial changes that the Northern Star board deems appropriate (the charter proposals);

 

   

elect seven directors who, upon the closing of the Business Combination, will be the directors of Northern Star (the director election proposal);

 

   

consider and vote upon a proposal to approve the 2021 Plan, which is an incentive compensation plan for employees and other service providers of Northern Star and its subsidiaries, including, after the Merger, BARK and its subsidiaries (the incentive plan proposal);

 

79


Table of Contents
   

consider and vote upon a proposal to approve the ESPP, which provides for employees and other service providers of Northern Star and its subsidiaries, including, after the Merger, BARK and its subsidiaries, to purchase shares of Northern Star common stock (the ESPP proposal); and

 

   

consider and vote upon a proposal to adjourn the annual meeting to a later date or dates if it is determined by the officer presiding over the annual meeting that more time is necessary for Northern Star to consummate the Merger and the other transactions contemplated by the Merger Agreement (the adjournment proposal).

Recommendation of Northern Star Board of Directors

Northern Star’s board of directors has unanimously determined that the business combination proposal is fair to and in the best interests of Northern Star and its stockholders and approved the business combination proposal. Northern Star’s board of directors unanimously recommends that stockholders vote “FOR” the business combination proposal, “FOR” the PIPE proposal, “FOR” each of the charter proposals, “FOR” the election of the seven director nominees identified in this proxy statement/prospectus, “FOR” the incentive plan proposal, “FOR” the ESPP proposal and “FOR” the adjournment proposal, if presented at the meeting.

Record Date; Persons Entitled to Vote

Northern Star has fixed the close of business on April 5, 2021 as the “record date” for determining Northern Star stockholders entitled to notice of, and to attend and vote at, the annual meeting. As of the close of business on April 5, 2021, there were 25,435,000 shares of Class A common stock outstanding and 6,358,750 shares of Class B common stock outstanding and entitled to vote. Northern Star’s Class A common stock and Class B common stock are entitled to vote together as a single class on all matters to be considered at the annual meeting. Each share of Northern Star common stock is entitled to one vote at the annual meeting.

Pursuant to agreements with Northern Star and BARK, the 6,358,750 founder shares held by the Sponsor and Northern Star’s officers and directors, and any common stock acquired by them in the aftermarket, will be voted in favor of the business combination proposal and the other proposals being presented at the meeting and in favor of the election of the seven nominees identified in this proxy statement/prospectus to serve as directors of Northern Star.

Quorum

The presence, either by attendance through the meeting web portal or by proxy, of a majority of all the outstanding shares of common stock entitled to vote constitutes a quorum at the annual meeting.

Vote Required

The business combination proposal. The approval of the business combination proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock present and entitled to vote at the annual meeting to approve the Business Combination.

The PIPE proposal. The approval of the PIPE proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock present and entitled to vote at the annual meeting.

The charter proposals. The approval of each of the charter proposals will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock on the record date.

The director election proposal. The election of directors requires a plurality vote of the Northern Star common stock present and entitled to vote at the annual meeting. A plurality means that the individuals who receive the largest number of votes cast “FOR” are elected as directors.

 

80


Table of Contents

The incentive plan proposal. The approval of the incentive plan proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock present and entitled to vote at the annual meeting.

The ESPP proposal. The approval of the ESPP proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock present and entitled to vote at the annual meeting.

The adjournment proposal. The approval of the adjournment proposal, if presented, will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock present and entitled to vote at the annual meeting.

Abstentions and Broker Non-Votes

Abstentions are considered present for purposes of establishing a quorum but will have the same effect as a vote “against” the business combination proposal, the PIPE proposal, the charter proposals, the incentive plan proposal, the ESPP proposal and the adjournment proposal, if presented. Broker non-votes will have no effect on the business combination proposal, and will have the same effect as a vote “against” the charter proposals, the PIPE proposal, the charter proposals, the incentive plan proposal, the ESPP proposal and the adjournment proposal, if presented.

For the election of directors, any shares not voted “FOR” a particular nominee (whether as a result of an abstention, a direction to withhold authority or a broker non-vote) will not be counted in the nominee’s favor.

If a beneficial holder of Northern Star common stock does not give its broker voting instructions, under applicable self-regulatory organization rules, the broker may not vote its shares on “non-routine” proposals, which is referred to as a “broker non-vote.” Because all of the proposals included in this proxy statement/prospectus are deemed “non-routine” in accordance with applicable NYSE rules and interpretations, brokers are not permitted to vote on any of the proposals to be considered at the annual meeting absent such voting instructions.

Voting Your Shares

Each share of Northern Star common stock that you own in your name entitles you to one vote. If you are a stockholder of record, your proxy card shows the number of shares of Northern Star common stock that you own. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

If you are a stockholder of record, there are two ways to vote your shares of Northern Star common stock at the annual meeting:

 

   

You Can Vote by Signing and Returning the Enclosed Proxy Card. If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted as recommended by Northern Star’s board of directors “FOR” the business combination proposal, each of the charter proposals, each of the seven nominees for director identified in this proxy statement/prospectus, the incentive plan proposal, the ESPP proposal and the adjournment proposal, if presented. Votes received after a matter has been voted upon at the annual meeting will not be counted.

 

   

You Can Attend the Virtual Annual Meeting and Vote Online. Due to health concerns stemming from the COVID-19 pandemic, and to support the health and well-being of our stockholders, the annual meeting will be a virtual meeting. You may vote by attending the annual meeting as described above and submitting a ballot via the annual meeting web portal.

 

81


Table of Contents

If you hold your shares in “street name” you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares by returning a completed, signed and dated voter instruction card, or attend the annual meeting as described above and submit a ballot via the meeting web portal.

Revoking Your Proxy

If you are a stockholder of record and you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

 

   

you may send another proxy card with a later date;

 

   

you may notify Northern Star’s transfer agent in writing before the annual meeting that you have revoked your proxy; or

 

   

you may attend the virtual annual meeting and submit a ballot through the annual meeting web portal during the annual meeting webcast, as indicated above.

If you hold your shares in “street name,” you should contact your broker, bank or nominee to change your instructions on how to vote.

Who Can Answer Your Questions About Voting Your Shares

If you are a stockholder and have any questions about how to vote or direct a vote in respect of your Northern Star common stock, you may call D.F. King & Co., Inc., Northern Star’s proxy solicitor, at (866) 406-2284, or Joanna Coles, Northern Star’s chief executive officer, at (212) 818-8800.

Conversion Rights

Any holder of public shares may seek to convert their shares into cash in connection with the Business Combination. Holders of public shares are not required to affirmatively vote on the business combination proposal or be holders of public shares on the record date in order to exercise conversion rights with respect to such public shares. Any stockholder holding public shares may exercise conversion rights which will result in them converting their shares into a full pro rata portion of the trust account, calculated as of two business days prior to the anticipated consummation of the Business Combination, including interest earned on the trust account and not previously released to Northern Star to pay its tax obligations, which, for illustrative purposes, was $10.00 per share as of April 5, 2021, the record date. If a holder seeks conversion of their shares as described in this section and the Business Combination is consummated, Northern Star will convert these shares into a pro rata portion of funds deposited in the trust account and the holder will no longer own these shares following the Business Combination.

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking conversion rights with respect to 20% or more of the public shares. Accordingly, all public shares in excess of 20% held by a public stockholder will not be converted.

The Sponsor and Northern Star’s officers and directors will not have conversion rights with respect to any shares of Northern Star common stock owned by them, directly or indirectly.

Northern Star stockholders who seek to have their public shares converted must deliver their shares, either physically or electronically using The Depository Trust Company’s DWAC System, to Northern Star’s transfer agent no later than two (2) business days prior to the annual meeting. If you hold the shares in street name, you will have to coordinate with your broker to have your shares certificated or delivered electronically. Certificates

 

82


Table of Contents

that have not been tendered (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $45 and it would be up to the broker whether or not to pass this cost on to the redeeming stockholder. In the event the proposed Business Combination is not consummated, this may result in an additional cost to stockholders for the return of their shares.

Any request to have such shares converted, once made, may be withdrawn at any time prior to the vote on the business combination proposal. Furthermore, if a holder of a public share delivered its certificate in connection with an election of its conversion and subsequently decides prior to the applicable date not to elect to exercise such rights, it may simply request that the transfer agent return the certificate (physically or electronically).

If the Business Combination is not approved or completed for any reason, then Northern Star’s public stockholders who elected to exercise their conversion rights will not be entitled to have their shares converted. In such case, Northern Star will promptly return any shares delivered by public stockholders.

The closing price of the Northern Star Class A common stock on April 5, 2021, the record date, was $11.42. The cash held in the trust account on such date less taxes payable was approximately $254,384,000 ($10.00 per public share). Prior to exercising conversion rights, stockholders should verify the market price of Northern Star Class A common stock as they may receive higher proceeds from the sale of their common stock in the public market than from exercising their conversion rights if the market price per share is higher than the redemption price. Northern Star cannot assure its stockholders that they will be able to sell their common stock in the after-market, even if the market price per share is higher than the conversion price stated above, as there may not be sufficient liquidity in its securities when its stockholders wish to sell their shares.

If a holder of public shares exercises its conversion rights, then it will be exchanging its shares of Northern Star common stock for cash and will no longer own those shares.

Appraisal Rights

None of Northern Star’s stockholders, unitholders or warrant holders have appraisal rights in connection with the Business Combination under Delaware law.

Proxy Solicitation Costs

Northern Star is soliciting proxies on behalf of its board of directors. This solicitation is being made by mail but also may be made by telephone or in person. Northern Star and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. Northern Star will bear the cost of the solicitation.

Northern Star has hired D.F. King & Co., Inc. to assist in the proxy solicitation process. Northern Star will pay that firm a fee of $25,000 plus disbursements. Such payment will be made from non-trust account funds.

Northern Star will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. Northern Star will reimburse them for their reasonable expenses.

Northern Star Sponsor and Officers and Directors

As of April 5, 2021, the record date for the Northern Star annual meeting, the Sponsor and Northern Star’s officers and directors beneficially owned and were entitled to vote an aggregate of 6,358,750 shares of Class B common stock, which we refer to in this proxy statement/prospectus as founder shares. These individuals and

 

83


Table of Contents

entities also purchased an aggregate of 4,558,000 private warrants simultaneously with the consummation of Northern Star’s initial public offering. These founder shares currently constitute 20% of Northern Star’s outstanding common stock. If the Merger is consummated, each outstanding share of Class B common stock will convert into one share of Northern Star’s Class A common stock in connection with the closing, the Class B common stock will cease to exist and thereafter Northern Star will have a single class of common stock.

In connection with Northern Star’s initial public offering, each of the Sponsor and Northern Star’s officers and directors have agreed to vote their founder shares, as well as any common stock acquired in the aftermarket, in favor of the business combination proposal and the other proposals being presented at the meeting and in favor of the election of the seven nominees identified in this proxy statement/prospectus to serve as directors of Northern Star. There are no redemption rights with respect to the founder shares in the event a business combination is not effected in the required time period and Northern Star is forced to redeem all of the public shares. Accordingly, the founder shares will be worthless if no business combination is consummated by Northern Star.

In connection with the Merger, Northern Star has agreed to cause its initial stockholders, including the holders of the founder shares and private warrants, to amend the existing lock-up restrictions applicable to them and enter into agreements substantially identical to the Lock-Up Agreement executed or to be executed by certain of BARK’s stockholders, so that the lock-up restrictions with respect to the initial stockholders’ Northern Star common stock will be identical to the lock-up restrictions applicable to such stockholders of BARK. The agreement provides that the founder shares will be subject to a 12-month lock-up period, during which, subject to certain exceptions, the holders of such shares will not, directly or indirectly, sell, transfer or otherwise dispose of such shares, which period may be earlier terminated if the reported closing sale price of the Northern Star common stock equals or exceeds $15.00 per share (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations or other similar transactions) for a period of 20 trading days during any 30-trading-day period commencing at least 150 days following the consummation of the Merger. Furthermore, pursuant to a letter agreement executed in connection with Northern Star’s initial public offering, the private warrants will not be transferable, assignable or salable by the Sponsor until 30 days after the completion of Northern Star’s initial business combination.

At any time prior to the annual meeting, during a period when they are not in possession of any material nonpublic information regarding Northern Star or its securities, the Sponsor, Northern Star’s officers and directors, BARK or BARK’s stockholders and/or their respective affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the business combination proposal, or who elect to convert, or indicate an intention to convert, their public shares into a pro rata portion of the trust account, or they may execute agreements to purchase shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire shares of Northern Star common stock, to vote their shares in favor of the business combination proposal or to refrain from exercising their conversion rights. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirement that the holders of a majority of the shares entitled to vote at the annual meeting to approve the business combination proposal vote in its favor and that the conditions to the closing of the Business Combination (such as the condition that the Northern Star common stock be listed on the NYSE) otherwise will be met, where it appears that such requirement would otherwise not be met. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and the transfer to such investors or holders of shares or warrants owned by the Northern Star initial stockholders for nominal value.

Entering into any such arrangements may have a depressive effect on Northern Star common stock. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than the then-current market price and may therefore be more likely to sell the shares he, she or it owns, either prior to or immediately after the annual meeting.

 

84


Table of Contents

If such transactions are effected, the consequence could be to cause the Business Combination to be approved in circumstances where such approval could not otherwise be obtained. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the business combination proposal and the other proposals to be presented at the annual meeting and would likely increase the chances that such proposals would be approved. Moreover, any such purchases may make it more likely that the conditions to the closing of the Business Combination (such as the condition that the Northern Star common stock be listed on the NYSE) would be met.

No agreements dealing with the above arrangements or purchases have been entered into as of the date of this proxy statement/prospectus. Northern Star will file a Current Report on Form 8-K to disclose any arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the business combination proposal or the satisfaction of any closing conditions. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

 

85


Table of Contents

THE BUSINESS COMBINATION PROPOSAL

The discussion in this proxy statement/prospectus of the Business Combination and the principal terms of the Merger Agreement is subject to, and is qualified in its entirety by reference to, the Merger Agreement. A copy of the Merger Agreement is attached as Annex A to this proxy statement/prospectus.

Structure of the Merger

The Merger Agreement provides, among other things, for Merger Sub to merge with and into BARK, with BARK surviving as a wholly owned subsidiary of Northern Star and the securityholders of BARK becoming securityholders of Northern Star. Northern Star is expected to subsequently change its name to The Original Bark Company and change its stock ticker on the New York Stock Exchange to BARK.

Consideration to BARK Securityholders

Under the Merger Agreement, each share of BARK’s common and preferred stock issued and outstanding immediately prior to the effective time of the Merger (including each share of BARK’s common stock issued as a result of the conversion of certain of Bark’s convertible promissory notes issued in 2019 and 2020, as more fully described below) will be automatically converted into the right to receive a number of shares of Northern Star common stock equal to the Exchange Ratio. As of April 5, 2021, there were 5,505,724 shares of Bark’s common stock outstanding and 7,752,515 shares of BARK’s preferred stock outstanding.

The Exchange Ratio is the quotient obtained by dividing 150,000,000 by the fully-diluted number of shares of BARK’s common stock outstanding immediately prior to the effective time of the Merger. The 150,000,000 value represents 150,000,000 shares of Northern Star common stock, valued at $10.00 per share, reflecting an equity value for BARK of $1.5 billion that was determined by negotiation between the parties. See “Background of the Merger.” Pursuant to the Merger Agreement, the fully-diluted number of shares outstanding includes the sum of (x) the number of issued and outstanding shares of BARK’s common stock immediately prior to the effective time (including all shares of Bark’s common stock issued as a result of the conversion of BARK’s convertible promissory notes issued in 2019 and 2020 as more fully described below) plus (y) the number of shares of BARK’s common stock issuable upon the exercise, conversion or other exchange of BARK’s options, warrants and convertible promissory notes which are not converted, exchanged or exercised prior to the effective time and are assumed by Northern Star (including all shares treated as issuable upon conversion of BARK’s convertible promissory notes, as more fully described below). For the purposes of calculating the fully-diluted number of shares outstanding, the number of shares underlying BARK’s options are warrants shall be calculated as if such options and warrants were exercised on a net exercise basis using a reference price of $10.00 multiplied by the Exchange Ratio. Northern Star presently estimates that the Exchange Ratio will be approximately [8.7479]. The exact Exchange Ratio will not be known until the closing of the Business Combination, and accordingly will not be known at the time of the annual meeting.

Each option to purchase shares of BARK’s common stock, whether or not exercisable and whether or not vested, outstanding immediately prior to the effective time of the Merger, in accordance with its terms, will be assumed by Northern Star and converted into an option to purchase a number of shares of Northern Star common stock equal to the product of (x) the number of shares of BARK’s common stock subject to such option immediately prior to the effective time and (y) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such option immediately prior to the effective time divided by (B) the Exchange Ratio. BARK has agreed in the Merger Agreement to take all actions necessary effectuate the foregoing treatment of the options. As of April 5, 2021, BARK had outstanding options to purchase 3,361,752 shares of BARK’s common stock.

Each warrant to purchase shares of BARK’s stock outstanding immediately prior to the effective time of the Merger, in accordance with its terms, will be automatically assumed by Northern Star and converted into a

 

86


Table of Contents

warrant to purchase, on the same terms and conditions as were applicable under each such warrant, a number of shares of Northern Star common stock equal to the product of (x) the number of shares of BARK’s stock subject to such warrant immediately prior to the effective time (or the number of shares of common stock issuable upon conversion of the preferred stock subject to such warrant) as adjusted pursuant to the terms of such warrant and (y) the Exchange Ratio, at an exercise price equal to (A) the exercise price of such warrant immediately prior to the effective time as adjusted pursuant to the terms of such warrant divided by (B) the Exchange Ratio. BARK has agreed in the Merger Agreement to take all actions necessary effectuate the foregoing treatment of the warrants. As of April 5, 2021, BARK had outstanding warrants to purchase 243,449 shares of BARK’s common stock (including the shares of BARK’s common stock into which the preferred stock subject to certain such warrants is convertible).

BARK’s outstanding convertible promissory notes issued in 2019 and 2020, in accordance with their terms, will be converted into shares of BARK’s common stock immediately prior to the effective time of the Merger, at a conversion price equal to either 60%, 70% or 80% (depending on the tranche of convertible promissory notes) of $10.00 multiplied by the Exchange Ratio. All shares of BARK’s common stock issued upon such conversion will be entitled to receive shares of Northern Star common stock in the Merger as described above. As of April 5, 2021, BARK had $7,166,663.00 in aggregate principal amount of convertible promissory notes issued in 2019 and 2020 outstanding, with approximately $709,300 of interest accrued thereon, and the weighted average conversion price would have been approximately $61.13.

BARK’s 2025 Notes will be assumed by Northern Star at the effective time and, in accordance with their terms, will become convertible at the election of the holders into shares of Northern Star common stock at a conversion price of $10.00 per share of Northern Star common stock. As of April 5, 2021, BARK had $75,000,000.00 in aggregate principal amount of the 2025 Notes outstanding, with approximately $1,730,208 of interest accrued thereon.

PIPE Transaction

In connection with the execution of the Merger Agreement, Northern Star entered into subscription agreements with the PIPE Investors, pursuant to which such PIPE Investors have agreed to purchase an aggregate of 20,000,000 shares of Northern Star’s Class A common stock in the PIPE Transaction at a price of $10.00 per share for an aggregate commitment of $200,000,000. The closing of the private placement is expected to take place concurrently with the closing of the Business Combination. The subscription agreements are subject to certain conditions, including, among other things, the closing of the Business Combination.

Pro Forma Ownership of New BARK Upon Closing

Assuming that none of BARK’s options or warrants are exercised or forfeited and no additional options, warrants or other derivative securities are granted by BARK prior to the closing of the Business Combination, and based on interest accrued on BARK’s convertible promissory notes through April 27, 2021, an estimated 117,108,696 shares of Northern Star common stock will be issued to BARK’s former stockholders and approximately 39,210,930 shares of Northern Star common stock will be reserved for issuance upon exercise of BARK’s options and warrants and conversion of BARK’s 2025 Notes assumed by Northern Star. The actual number of shares of Northern Star common stock to be issued in the Merger will depend on the exercise, forfeiture or issuance of BARK’s options, warrants and other derivative securities prior to closing.

Based on the assumptions in the preceding paragraph, and further assuming that no holder of New BARK’s public shares exercises conversion rights as described in this proxy statement/prospectus, immediately after the closing of the Business Combination, BARK’s former stockholders will hold approximately 69.3% of the issued and outstanding New BARK common stock, the PIPE Investors will hold approximately 11.8% of the issued and outstanding New BARK common stock, and the current stockholders of Northern Star will hold approximately 18.8% of the issued and outstanding New BARK common stock.

 

87


Table of Contents

Headquarters; Trading Symbols

After completion of the transactions contemplated by the Merger Agreement:

 

   

the corporate headquarters and principal executive offices of New BARK will be located at 221 Canal Street, Floor 6, New York, New York 10013; and

 

   

the New BARK common stock and warrants are expected to be traded on the NYSE under the symbols BARK and BARK WS, respectively. The warrants and 2025 Notes convertible promissory notes assumed by New BARK pursuant to the Merger Agreement will not be listed or traded on a national securities exchange and are not expected to be quoted or traded on the over-the-counter markets.

Sale Restrictions

Certain of BARK’s stockholders have entered or will enter into the Lock-Up Agreement, which provides that shares of Northern Star common stock to be issued to them in the Merger will be subject to a 12-month lock-up period, during which, subject to certain exceptions, they will not, directly or indirectly, sell, transfer or otherwise dispose of their shares to be issued in the Merger, which period may be earlier terminated if the reported closing sale price of the New BARK common stock equals or exceeds $15.00 per share (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations or other similar transactions) for a period of 20 trading days during any 30-trading-day period commencing at least 150 days following the consummation of the Merger.

In connection with the Merger, Northern Star has agreed to cause its initial stockholders, including the holders of the founder shares and private warrants, to amend the existing lock-up restrictions applicable to them and enter into agreements substantially identical to the Lock-Up Agreement, so that the lock-up restrictions with respect to the initial stockholders’ Northern Star common stock will be identical to the lock-up restrictions applicable to BARK’s stockholders who have entered, or will enter, into the Lock-Up Agreement. Furthermore, pursuant to a letter agreement executed in connection with Northern Star’s initial public offering, the private warrants will not be transferable, assignable or salable by the Sponsor until 30 days after the completion of Northern Star’s initial business combination.

Related Agreements

Subscription Agreements for PIPE Transaction

On December 16, 2020, Northern Star entered into subscription agreements with the PIPE Investors pursuant to which such PIPE Investors have agreed to purchase, and Northern Star agreed to sell to the PIPE Investors, an aggregate of 20,000,000 shares of Northern Star common stock in a private placement at a price of $10.00 per share for an aggregate commitment of $200,000,000. The subscription agreements are subject to certain customary conditions, including, among other things, the closing of the Business Combination. The purpose of the PIPE Transaction is to ensure that the combined company has a minimum amount of capital to operate its business following the transaction and for marketing of BARK’s current and expanded subscription and product offerings, increasing BARK’s employee headcount to support its growth and for working capital, capital expenditures and general corporate purposes.

The issuance of the shares of Northern Star common stock in connection with the subscription agreements has not been registered under the Securities Act, and such shares will be issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

The subscription agreements provide for certain registration rights. In particular, New BARK will, as soon as practicable within 15 business days following the closing date of the Merger, file with the SEC (at Northern Star’s sole cost and expense) a registration statement registering the resale of the shares issued to the PIPE Investors, and will use its commercially reasonable efforts to have such registration statement declared effective

 

88


Table of Contents

as soon as reasonably practicable after the filing thereof, but no later than the earlier of (i) the 60th calendar day following the actual filing date (or the 90th calendar day if the SEC notifies New BARK (orally or in writing) that it will “review” such registration statement) and (ii) the 5th business day after the date New BARK is notified (orally or in writing) by the SEC that such registration statement will not be “reviewed” or will not be subject to further review, subject to certain exceptions, such as a PIPE Investor’s failure to provide information requested by New BARK that is required to be provided in such registration statement.

The subscription agreements will terminate with no further force and effect upon the earliest to occur of: (a) such date and time as the Merger Agreement is terminated in accordance with its terms, (b) June 30, 2021, and (c) upon the mutual written agreement of the parties to such subscription agreement.

Registration Rights Agreement

Certain stockholders of BARK and Northern Star will enter into the Registration Rights Agreement, pursuant to which they will be granted certain rights to have registered, in certain circumstances, the resale under the Securities Act of certain shares of New BARK common stock held by them, subject to certain conditions set forth therein. Northern Star has agreed to use reasonable best efforts to terminate its existing registration rights agreement and shall offer to the Northern Star stockholders who are parties to the existing registration rights agreement the opportunity to enter into the Registration Rights Agreement.

BARK Support Agreements

In connection with the execution of the Merger Agreement, the Supporting Holders, comprised of certain of BARK’s officers, directors, founders and their family members and 5% or greater holders of BARK’s stock, who collectively hold approximately 77.5% of the issued and outstanding shares of BARK’s common stock on an as-converted basis as of April 5, 2021, have entered into Support Agreements with Northern Star pursuant to which the Supporting Holders have agreed, among other things, to vote all of their respective shares of BARK’s stock in favor of the Merger at a meeting called to approve the Merger by BARK’s stockholders (or in an action by written consent approving the Merger).

Background of the Merger

Northern Star is a blank check company incorporated on July 8, 2020 as a Delaware corporation and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. While Northern Star could pursue an initial business combination target in any industry or geographic location, Northern Star has focused on potential acquisition targets in the media, technology, beauty, e-commerce and online sectors.

The Business Combination with BARK is the result of an extensive search for a potential transaction utilizing the network, and investing and transaction experience of Northern Star’s management team and board of directors. The terms of the Merger Agreement are the result of arm’s-length negotiations between representatives of Northern Star and BARK. The following is a brief discussion of the background of these negotiations, the Merger Agreement and the Business Combination.

The following chronology summarizes the key meetings and events that led to the signing of the Merger Agreement, but it does not purport to catalogue every conversation among representatives of Northern Star, BARK and their respective advisors.

On November 13, 2020, Northern Star consummated its initial public offering of 25,000,000 units. Each unit consisted of one share of Class A common stock and one-third of one redeemable warrant to purchase one share of Class A common stock. The units were sold at an offering price of $10.00 per unit, generating gross proceeds of $250,000,000. Simultaneously with the consummation of the initial public offering, Northern Star

 

89


Table of Contents

consummated a private placement with the Sponsor pursuant to which Northern Star issued the Sponsor 4,500,000 private warrants at a price of $1.50 per warrant, generating total proceeds of $6,750,000. A total of $250,000,000 from the net proceeds from the initial public offering and the private placement were placed into the trust account. On November 24, 2020, Northern Star sold an additional 435,000 units for total gross proceeds of $4,350,000 in connection with the underwriters’ partial exercise of its over-allotment option. Simultaneously with the closing of the over-allotment option, we also consummated the sale of an additional 58,000 private warrants at $1.50 per warrant, generating total proceeds of $87,000. Following the initial public offering, including the partial exercise of the over-allotment option and the sale of the private warrants, a total of $254,350,000 was placed in the trust account. Prior to November 10, 2020, the effective date of the registration statement for its initial public offering, neither Northern Star, nor anyone on its behalf, contacted any prospective target businesses or had any substantive discussions, formal or otherwise, with respect to a transaction with Northern Star.

Following the effective date of the registration statement for Northern Star’s initial public offering through the signing of the Merger Agreement with BARK on December 16, 2020, representatives of Northern Star, including Joanna Coles, the chairperson and chief executive officer of Northern Star, and J. Jonathan Ledecky, the president and chief operating officer of Northern Star, commenced an active search for prospective acquisition targets. During this period, these representatives of Northern Star reviewed self-generated ideas, initiated contact and were contacted by a number of individuals and entities with respect to business combination opportunities. Northern Star’s officers and directors ultimately identified and evaluated over 50 potential target businesses from a wide range of industry segments during this period. In connection with such evaluation, representatives of Northern Star had discussions regarding potential transactions with members of management, sponsors and/or the boards of directors of certain potential acquisition targets. Following the effective date of the registration statement for the initial public offering through December 16, 2020, representatives of Northern Star met with and engaged in substantive discussions with a number of potential acquisition targets with respect to a potential business combination. The targets included consumer product companies in the beauty, health, personal care, food, pharmacy, home care, insurance and furniture fields, media companies, information companies and distribution companies. With certain targets, the discussions reached the stage of considering potential valuations and structures. However, none of these discussions resulted in an executed letter of intent.

The decision not to pursue any particular target business that Northern Star evaluated generally was the result of one or more of: (i) Northern Star’s determination that such business did not represent an attractive target due to a combination of business and growth prospects, strategic direction, management teams, structure and/or valuation; (ii) a difference in initial valuation expectations between Northern Star, on the one hand, and the target and/or its owners, on the other hand; (iii) a potential target’s unwillingness to engage in substantive discussions with Northern Star given the timing and uncertainty of closing due to the requirement for Northern Star to obtain stockholder approval as a condition to consummating any business combination; (iv) a potential target’s desire to remain a privately held company; or (v) a potential target’s unwillingness to engage in substantive discussions with Northern Star in light of conflicting business objectives on the target’s side. Because the management of Northern Star discovered BARK early in its process and continued throughout the process to believe that BARK was the most appealing target business, the management of Northern Star did not single out any alternative target for more advanced discussions in its pursuit of a business combination.

Northern Star decided to pursue a combination with BARK because it determined that BARK represented a compelling opportunity based upon, among other things: the fact that BARK was generating substantial revenue from a devoted customer base; BARK’s experienced management team in BARK’s industry; the favorable implied valuation of BARK in the Business Combination; BARK’s business and growth prospects, including the expectation that it would provide a platform for potential future acquisitions; and the retention by BARK’s equityholders of a substantial portion of their equity interests in the Business Combination. Compared to BARK, Northern Star and its advisors did not consider the other alternative combination targets to be as compelling when taking the foregoing into consideration.

Jonathan J. Ledecky, the Chief Operating Officer of Northern Star, was initially introduced to members of BARK management through one of his prior business acquaintances. On November 11, 2020, Ms. Coles, Mr. Ledecky, Matthew Meeker, BARK’s Executive Chairman, and Henrik Werdelin, BARK’s co-founder and a member of its board of directors, held introductory calls, during which they discussed BARK’s business objectives and whether a transaction with Northern Star would be in both companies’ best interests. The parties also discussed the potential terms of a transaction with Northern Star.

 

90


Table of Contents

On November 11, 2020, Mr. Ledecky sent a preliminary draft of a term sheet to the BARK board as a starting point for negotiations. The draft term sheet provided for an exchange ratio based on merger consideration of 150,000,000 shares of Northern Star common stock, valued at $10.00 per share, for an equity value of $1.5 billion, which was consistent with the exchange ratio ultimately reflected in the Merger Agreement.

The $1.5 billion equity value was agreed upon by the parties based on a review of the equity value and trading multiples of a number of public companies that were believed by the parties to be comparable to BARK, as well as BARK’s internal financial forecasts (which are presented elsewhere in this proxy statement/prospectus). The agreed upon equity value for BARK represented approximately 2.5 times its calendar 2022 estimated revenue.

With respect to comparable companies, the parties identified Chewy, Inc., Freshpet, Inc. and Trupanion, Inc. as the companies that most closely resembled BARK given that they were all businesses serving the market for dog parents that BARK serves.

Of these three companies, Northern Star initially centered its analysis around Chewy, given the e-commerce focus of both the Chewy and BARK businesses. Chewy traded at approximately 3.7 times analyst estimates for its calendar 2022 revenue. BARK and its representatives identified Freshpet and Trupanion, both of which traded at higher multiples of revenue than Chewy did. Freshpet and Trupanion traded at approximately 10.7 and 5.3 times analyst estimates for their calendar 2022 revenue, respectively.

Ultimately, the parties agreed that the transaction would need to be priced at a discount to the trading multiples of all the comparable companies, including Chewy as the company trading at the lowest multiple of revenue among the identified peer group.

The parties therefore settled on an equity value of $1.5 billion for BARK which represented a multiple of approximately 2.5 times BARK’s forecasted calendar 2022 revenue (or approximately 30% lower than Chewy’s trading multiple, 70% lower than Freshpet’s trading multiple, and 50% lower than Trupanion’s trading multiple).

Following discussions, the parties determined to forego a formal term sheet process and proceed directly to the drafting and negotiating a definitive agreement.

On November 15, 2020, Ms. Coles and Mr. Ledecky met with BARK’s board of directors. During the meeting, Ms. Coles, Mr. Ledecky, Mr. Meeker, Mr. Werdelin and the other members of BARK’s board of directors discussed market conditions, BARK’s business objectives, the timetable of a potential transaction, and whether a transaction with Northern Star would be in both companies’ best interests.

On November 24, 2020, representatives of Northern Star, including Ms. Coles and Mr. Ledecky, and BARK, including Mr. Meeker and Mr. Werdelin, met by teleconference to discuss the key workflows associated with a potential transaction and the specific timing of those workflows, including whether finalizing a definitive agreement was achievable by the end of the year.

On November 27, 2020, representatives of Northern Star, including Ms. Coles and Mr. Ledecky, and BARK, including Mr. Meeker and Mr. Werdelin, met in person. They reviewed the discussions between the parties to date, in particular the potential fit of Ms. Coles and Mr. Ledecky as prospective members of the BARK board of directors. They further discussed the status of the audit of BARK’s financial statements and the expected timeline for completing a PCAOB audit as required for a public company. At the conclusion of their conversation, they resolved to proceed with negotiating a definitive agreement for the transaction.

On December 1, 2020, Ms. Coles and Mr. Ledecky introduced representatives of BARK, including Mr. Meeker and Mr. Werdelin, to representatives of the public relations firm, Gasthalter & Co. They reviewed a potential public relations strategy for the transaction.

On December 2, 2020, Mr. Ledecky sent an initial draft of the merger agreement to the BARK management team. The initial draft had been prepared by Graubard Miller (“Graubard”), counsel to Northern Star.

On December 7, 2020, Mr. Ledecky, Mr. Meeker and other representatives of Northern Star and BARK met via teleconference to discuss further the proposed terms of a transaction. The parties agreed on, among other things, the transaction consideration of 150,000,000 shares of Northern Star common stock, the lock up restrictions to be

 

91


Table of Contents

applicable to the Northern Star initial shareholders and the BARK shareholders, the composition of the combined company board of directors and the size of a potential PIPE Transaction to be completed in conjunction with the business combination. On the same day, representatives of Graubard and Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden, Arps”), special counsel to BARK, had a telephone conversation to briefly discuss the proposed transaction and process moving forward.

From December 7 to December 9, 2020, Ms. Coles and Mr. Ledecky held several meetings with Mr. Meeker and Mr. Werdelin from BARK, along with representatives of Canaccord Genuity LLC (“Canaccord”), financial advisors to BARK. The meetings were used primarily to plan for investor meetings for the PIPE Transaction and prepare materials to market BARK and the transaction to such investors. The parties initially targeted an aggregate raise of $100 million in the PIPE Transaction.

On December 8, 2020, representatives of BARK sent a draft non-disclosure agreement to Northern Star in order to formalize the terms under which BARK would share due diligence materials with Northern Star to assist Northern Star in evaluating a potential transaction with BARK. Following review and revision by Graubard, Northern Star and BARK entered into such non-disclosure agreement. On the same day, BARK provided additional due diligence materials to Northern Star, including through an electronic data room. From that time and continuing through the signing of the Merger Agreement on December 16, 2020, representatives of Northern Star conducted due diligence of BARK through document review and numerous telephone conference calls with representatives of BARK and Canaccord. Northern Star’s diligence covered various areas, including, among others, financial results, non-financial operating metrics and performance indicators including those associated with quantifying the strength of BARK’s relationships with its customers, the customer experience, operations and logistics, legal compliance, litigation, auditing and financial controls, intellectual property, tax and general corporate matters. Based on the results of such diligence, and after internal discussions as well as feedback from its advisors, Northern Star continued in its pursuit of the transaction.

On December 8, 2020, Northern Star and Citigroup Global Markets Inc. (“Citigroup”) entered into a nondisclosure agreement regarding the proposed transaction and Northern Star provided Citigroup with various information on BARK. Citigroup had previously provided financial advisory services to Northern Star and the Sponsor from time to time, including as the underwriter in connection with Northern Star’s initial public offering, for which it was owed deferred underwriting compensation. Representatives of Northern Star and Citigroup discussed the PIPE Transaction contemplated by the Business Combination.

On December 9, 2020, Northern Star entered into an engagement letter with Citigroup, providing for Citigroup to act as placement agent for the PIPE Transaction. Northern Star selected Citigroup in light of Citigroup’s extensive experience in advising special purpose acquisition companies on private placements and because of Citigroup’s extensive knowledge of Northern Star as a result of their participation as an underwriter in Northern Star’s initial public offering.

On December 9, 2020, representatives of Skadden, Arps sent a revised draft of the merger agreement to Graubard Miller, along with initial drafts of the lock-up agreement and support agreements. In the revised draft, the thresholds in the non-solicitation provisions were raised so that only a sale of substantially all of the assets of BARK (as opposed to any material sale outside the ordinary course of business as originally proposed) and only a sale of more than 25% ownership interests in BARK (as opposed to any sale of ownership interests as originally proposed) would trigger the relevant prohibitions. In addition, the exchange ratio calculation was modified to provide that the shares underlying BARK’s employee stock options would count toward the fully-diluted shares outstanding based on the treasury stock method (rather than having each underlying share count as a full share outstanding). Furthermore, a provision for an $11 million cash retention pool was added, in order to ensure staff continuity through the completion of the Business Combination and thereafter, and the definition of material adverse effect was revised to exclude certain actions taken in response to COVID-19, in order to avoid a termination right arising in favor of Northern Star due to circumstances outside BARK’s control.

From December 9 to December 10, 2020, representatives of Skadden, Arps and Graubard Miller, along with Citigroup, prepared the PIPE subscription agreement and established “wall-crossing” procedures for investors, i.e., the procedures by which Citigroup would share confidential information with potential investors and such potential investors would agree not to disclose any such information to the public for a period of time. There were no changes to the price or other material terms of the PIPE subscription agreement during this process.

 

92


Table of Contents

On December 10, 2020, representatives of Northern Star, BARK, Cannacord, and Citigroup met by teleconference to review the marketing materials for the proposed PIPE Transaction.

On December 11, 2020, and again on December 15, 2020, Ms. Coles spoke with Ms. Carly Strife, co-founder of BARK, by telephone. Ms. Coles and Ms. Strife discussed Ms. Strife’s business background and operating experience, her role in BARK’s food business and the commercialization strategy for the BARK Eats brand.

From December 11 to December 14, 2020, representatives of Graubard Miller, on one hand, and Skadden, Arps and Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP (“Gunderson”), counsel to BARK, on the other hand, exchanged additional revised drafts of the merger agreement. Northern Star agreed to the cash retention pool and the changes to the material adverse effect definition. However, the parties continued to negotiate over representations relating to potential COVID-19 impact on BARK’s business, the non-solicitation provisions and the treatment of the BARK employee options. BARK continued to seek higher thresholds for triggering the non-solicitation provisions in order to avoid inadvertently violating the provisions, and Northern Star continued to demand that each share underlying BARK’s employee stock options count as a full share outstanding in the exchange ratio calculation, in order to have firm maximum on the number of shares to be issued as merger consideration. During this time, the firms also exchanged drafts of the disclosure schedules to the agreement and the forms of lock-up agreement and support agreement. There were no material changes to the lock-up agreement during this process. BARK and its representatives sought removal from the support agreement of both the general release on the part of the Supporting Holders and the grant by the Supporting Holders of a proxy to vote their securities, to which Northern Star agreed.

On December 11 and 12, 2020, representatives of Northern Star and Citigroup held telephone conference calls to discuss timing and strategy for the proposed PIPE Transaction.

On December 12, 2020, representatives of Northern Star, BARK and Citigroup met by teleconference to discuss and revise the marketing materials for the proposed PIPE Transaction and to review standard due diligence requests from Citigroup relating to BARK’s financial performance.

On December 13, 2020, representatives of Northern Star, including Ms. Coles, and BARK, including John Toth, BARK’s Chief Financial Officer, participated in a meeting with Deloitte & Touche LLP (“Deloitte”), BARK’s outside independent audit firm, as part of Norther Star’s due diligence review of BARK’s financial information.

During the week of December 14, 2020, representatives of Northern Star, BARK and Citigroup also began to hold telephone conference calls to discuss the proposed PIPE Transaction with a certain selected group of wall-crossed investors who agreed to be subject to certain confidentiality and other restrictions in order to gain access to information related to the proposed PIPE Transaction. The PIPE subscription agreement was made available to interested investors. In light of strong demand by investors interested in participating in the PIPE Transaction, representatives of Northern Star, BARK and Citigroup agreed to increase the size of the PIPE Transaction to an aggregate amount of $200,000,000 from the originally anticipated size of $100,000,000.

On December 14, 2020, representatives of Skadden, Arps, Gunderson and Graubard Miller held a teleconference, to discuss the outstanding provisions of the merger agreement as described above.

From December 14 to December 16, 2020, the firms exchanged further drafts of the merger agreement, in which the thresholds triggering the non-solicitation provisions were restored to their original form, so that any material sale of assets of BARK outside the ordinary course of business and any sale of equity interests of BARK would be prohibited. It was further agreed that the BARK employee stock options would count towards the number of fully-diluted shares outstanding based on the treasury method. The parties reached this compromise, because certainty of close was paramount to Northern Star, while the substantial aggregate exercise price of the employee stock options justified the resulting increase in merger consideration. The forms of lock-up agreement and support agreement also were finalized without further substantial changes, along with the disclosure schedules of each party.

 

93


Table of Contents

On December 16, 2020, Northern Star’s board of directors met via video conference. The entire Northern Star board of directors was present at the meeting. Also participating by invitation were James Brady, the chief financial officer of Northern Star, and representatives of Graubard. At the meeting, with the entire board of directors present, Ms. Coles and Mr. Ledecky gave an extensive presentation about the proposed transaction, including potential risks relevant to BARK’s business, the implied valuation of BARK, the pro forma ownership of the post-closing combined company, the fairness to Northern Star and its stockholders of the consideration to be paid by Northern Star in the transaction and the value of BARK as a whole being at least equal to 80% of the amount held in Northern Star’s trust account (net of amounts previously disbursed to management for tax obligations and working capital purposes and excluding the amount of deferred underwriting discounts held in trust). The potential risks identified by Ms. Coles and Mr. Ledecky included, among others, the sustainability of the surge in demand for pet products triggered by the COVID-19 pandemic and BARK’s ability to adapt to the additional requirements of being a public company, including more comprehensive internal control requirements. Following such presentation, Northern Star’s board of directors engaged in considerable review and discussion of the transaction. Representatives of Graubard then provided an overview to Northern Star’s board of the directors with respect to their fiduciary duties under Delaware law and the terms of the Merger Agreement and the ancillary documents and responded to questions from the directors on the terms of the Merger Agreement and the ancillary documents.

On December 16, 2020, in consideration of all the factors discussed at various meetings and discussions, Northern Star’s board of directors unanimously declared the Merger Agreement, the Business Combination, the PIPE Transaction and the other transactions contemplated by the Merger Agreement were advisable and in the best interests of Northern Star and its stockholders, and approved the form, terms and provisions of, and the transactions contemplated by, including the matters to be submitted to votes of Northern Star’s stockholders, and authorized Northern Star to enter into the Merger Agreement and the related transaction documentation.

The Merger Agreement, the Subscription Agreements and other related transaction agreements were signed on December 16, 2020. Prior to the market open on December 17, 2020, Northern Star and BARK jointly issued a press release announcing the signing of the Merger Agreement, and Northern Star filed a Current Report on Form 8-K announcing the execution of the Merger Agreement and disclosing the material terms of the Merger Agreement in detail. The investor presentation, investor call script and press release announcing the signing of the Merger Agreement were furnished as exhibits to such Current Report on Form 8-K.

The parties have continued and expect to continue regular discussions in connection with, and to facilitate, the closing.

Northern Star’s Board of Directors’ Reasons for Approval of the Business Combination

In evaluating the Business Combination, Northern Star’s board of directors consulted with Northern Star’s management and advisors. Northern Star’s board of directors reviewed various industry and financial data in order to determine that the consideration to be paid was reasonable and that the Business Combination was in the best interests of Northern Star’s stockholders. The financial data reviewed included the historical and projected consolidated financial statements of BARK, comparable publicly traded company analyses prepared by management and an analysis of pro forma capital structure and trading multiples prepared by management and Northern Star’s advisors.

Northern Star’s management conducted a due diligence review of BARK that included an industry analysis, an analysis of the existing business model of BARK and historical and projected financial results. Northern Star’s management, including its directors and advisors, has many years of experience in both operational management and investment and financial management and analysis and, in the opinion of Northern Star’s board of directors, was suitably qualified to conduct the due diligence and other investigations and analyses required in connection with the search for a business combination partner. A detailed description of the experience of Northern Star’s executive officers and directors is included in the section of this proxy statement/prospectus entitled “Other Information Related to Northern Star—Directors and Executive Officers.”

 

94


Table of Contents

In reaching its unanimous resolution (i) that the terms and conditions of the Merger Agreement, including the proposed Business Combination, are advisable, fair to and in the best interests of Northern Star and its stockholders and (ii) to recommend that stockholders adopt and approve the Merger Agreement and approve the Merger contemplated therein, Northern Star’s board of directors considered a range of factors, including but not limited to, the factors discussed below. In light of the number and wide variety of factors, Northern Star’s board of directors did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors it considered in reaching its determination. Northern Star’s board of directors viewed its position as being based on all of the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors. This explanation of Northern Star’s reasons for the Business Combination and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the section of this proxy statement/prospectus entitled “Forward-Looking Statements.”

In considering the Business Combination, Northern Star’s board of directors gave considerable weight to the following factors:

 

   

Existing Subscribers and Customers. BARK’s large subscriber base and its customers, which it serves through BarkBox and Super Chewer subscriptions and broad retail distribution of its proprietary products;

 

   

BARK’s Momentum. BARK’s expected significant increases year over year in revenue from new product lines in fiscal year 2021;

 

   

Experienced Leadership Team with a Proven Track Record. BARK is led by an experienced management team in BARK’s industry;

 

   

Attractive Valuation. Northern Star’s board of directors believes BARK’s implied valuation following the Business Combination relative to the current valuations experienced by comparable publicly traded companies is favorable for Northern Star;

 

   

Commitment of Current Stockholders. Certain of BARK’s current securityholders holding an aggregate approximately 77.5% of BARK’s common stock on an as converted basis as of April 5, 2021, have agreed to enter into the Lock-up Agreement pursuant to which the shares of Northern Star common stock to be issued to them in the Merger will be subject to a 12-month lock-up period, subject to early termination of such restrictions under certain circumstances (see “The Business Combination Proposal—Sale Restrictions”), which the Northern Star board believed reflects BARK’s securityholders’ belief in and commitment to the continued growth prospects of the combined company;

 

   

Due Diligence. Northern Star’s due diligence examinations of BARK and discussions with BARK’s management and financial and legal advisors;

 

   

Other Alternatives. Northern Star’s board of directors believes, after a thorough review of other business combination opportunities reasonably available to Northern Star, that the Merger represents the best potential business combination for Northern Star and the most attractive opportunity for Northern Star based upon the process utilized to evaluate and assess other potential combination targets, and Northern Star’s board of directors’ belief that such process has not presented a better alternative; and

 

   

Negotiated Transaction. The financial and other terms of the Merger Agreement and the fact that such terms and conditions are reasonable and were the product of arm’s length negotiations between Northern Star and BARK.

 

95


Table of Contents

Northern Star’s board of directors also considered a variety of uncertainties and risks and other potentially negative factors concerning the Business Combination, including, but not limited to, the following:

 

   

Systems Update. The need to update BARK’s financial systems and operations necessary for a public company.

 

   

Competition. Competition in BARK’s industry is intense, which may cause reductions in the price BARK can charge for its products and services, thereby potentially lowering BARK’s profits;

 

   

Loss of Key Personnel. Attracting and retaining key personnel in BARK’s industry is vital and competition for such personnel is intense. The loss of any key personnel could be detrimental to BARK’s operations;

 

   

Macroeconomic Risks. Macroeconomic uncertainty and the effects it could have on the combined company’s revenues;

 

   

Benefits Not Achieved. The risk that the potential benefits of the Merger may not be fully achieved or may not be achieved within the expected timeframe;

 

   

Northern Star Stockholders Receiving Minority Position. The fact that existing Northern Star stockholders will hold a minority position in the combined company; and

 

   

Other Risks. Various other risks associated with BARK’s business, as described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus.

Northern Star’s board of directors concluded that the potential benefits that it expected Northern Star and its stockholders to achieve as a result of the Business Combination outweighed the potentially negative factors associated with the Business Combination. Accordingly, Northern Star’s board of directors unanimously determined that the Merger Agreement and the Merger contemplated therein were advisable, fair to and in the best interests of Northern Star and its stockholders.

Certain Forecasted Financial Information for BARK

BARK provided Northern Star with its internally prepared forecasts, as described below. These forecasts were prepared by BARK solely for internal use, including budgeting and other management purposes, are subjective in many respects and are therefore susceptible to varying interpretations and the need for periodic revision based on actual experience and business developments, and were not intended for third-party use, including by investors or holders. You are cautioned not to rely on the forecasts in making a decision regarding the Business Combination, as the forecasts may be materially different than actual results.

The forecasts are based on information provided to Northern Star’s board of directors prior to the meeting at which it approved the Merger Agreement and the Business Combination, and reflect numerous assumptions, including assumptions with respect to general business, economic, market, regulatory and financial conditions and various other factors, all of which are difficult to predict and many of which are beyond BARK’s control, such as the risks and uncertainties described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus. In developing the projected financial information, numerous significant assumptions were made, in addition to the assumptions described above, with respect to BARK’s business for the periods covered by the financial projections. Some of the significant assumptions on which BARK’s management based its forecasts include among other things BARK’s estimate of:

 

   

BARK’s addressable market, based upon, among other things, the number of households that own dogs (estimated to be 85 million in the U.S. and 400 million globally), the amount spent in different dog product categories and the growth potential in new and existing markets;

 

   

U.S. macroeconomic factors, such as the recent increase in remote work, the macro economic impact of COVID 19 and related stimulus efforts, and estimated growth of U.S. gross domestic product;

 

   

a baseline annual Average Monthly Subscription Churn of approximately 6%;

 

96


Table of Contents
   

international trade relations, particularly with China, including international exchange rates or new trade regulations resulting in increased tariffs;

 

   

consistency in customer acquisition costs (CAC), or how much investment is required for each new subscription, estimated based on BARK’s historic trends, expected media spend rates and revenue targets;

 

   

consistency in the cost of materials, as a percent of revenue, based on BARK’s historical margins, required to produce, store and distribute BARK’s products;

 

   

increases in capital expenditures, such as investment in technology platforms and expanded distribution operations to support growth, enhance operations, and support market expansion; and

 

   

investment in operating expenses, including software development through continued platform enhancements to increase customer engagement and general administrative functions through headcount expansion to support business growth.

Although the assumptions and estimates on which the forecasts for revenue and costs are based are believed by BARK’s management to be reasonable and based on the best then-currently available information, the financial forecasts 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 forecasts are necessarily speculative, BARK believes that the prospective financial information covering periods beyond twelve months from its date of preparation carries increasingly higher levels of uncertainty and should be read in that context. There will be differences between actual and forecasted results, and actual results may be materially greater or materially less than those contained in the forecasts. The inclusion of the forecasted financial information in this proxy statement/prospectus should not be regarded as an indication that BARK, Northern Star or their respective representatives considered or consider the forecasts to be a reliable prediction of future events, and reliance should not be placed on the forecasts.

The forecasts were requested by, and disclosed to, Northern Star for use as a component in its overall evaluation of BARK, and are included elsewhere in this proxy statement/prospectus on that account. BARK has not warranted the accuracy, reliability, appropriateness or completeness of the forecasts to anyone, including to Northern Star. Neither BARK’s management nor any of its representatives has made or makes any representation to any person regarding the ultimate performance of BARK compared to the information contained in the forecasts, and none of them intends to or undertakes any obligation to update or otherwise revise the forecasts to reflect circumstances existing after the date when made or to reflect the occurrence of future events in the event that any or all of the assumptions underlying the forecasts are shown to be in error. Accordingly, they should not be looked upon as “guidance” of any sort. BARK will not refer back to these forecasts in its future periodic reports filed under the Exchange Act.

BARK does not as a matter of course make public projections as to future sales, earnings or other results. However, BARK’s management has prepared the prospective financial information set forth below to present the key elements of the forecasts provided to Northern Star. The accompanying prospective financial information was not prepared with a view toward public disclosure or with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information, but, in the view of BARK’s management, was prepared on a reasonable basis, reflects the best currently available estimates and judgments, and presents, to the best of management’s knowledge and belief, the expected course of action and the expected future financial performance of BARK. However, this information does not reflect statements of fact and should not be relied upon as being necessarily indicative of future results, and readers of this proxy statement/prospectus are cautioned not to place undue reliance on the prospective financial information. Neither BARK’s independent auditors, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the projected financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the projected financial information.

 

97


Table of Contents

The key elements of the forecasts provided to Northern Star are summarized in the table below:

 

     Forecast  
     Year Ending March 31,  
     2021E     2022E     2023E  
     (in thousands)  

Total Revenue

   $ 369,232     $ 515,757     $ 706,044  

Gross Profit

     221,118       301,424       413,138  

Net Income

     (20,968     (41,432     (29,720

Adjusted EBITDA

     (8,385     (30,538     (16,405

BARK defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, change in fair value of warrants and derivatives and sales and use tax. Adjusted EBITDA, a non-U.S. GAAP measure, is an additional, and not a substitute for or superior to, measure of financial performance prepared in accordance with U.S. GAAP and should not be considered as an alternative to net income, operating income or any other performance measure derived in accordance with U.S. GAAP. BARK believes that this non-U.S. GAAP measure, viewed in addition to and not in lieu of U.S. GAAP measures, provides useful information to investors by providing a more focused measure of operating results.

This information should be read in conjunction with “BARK’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as the audited financial statements of BARK included elsewhere in this proxy statement/prospectus.

Satisfaction of 80% Test

It is a requirement under Northern Star’s current amended and restated certificate of incorporation that any business acquired by Northern Star have a fair market value equal to at least 80% of the balance of the funds in the trust account (net of amounts previously disbursed to management for tax obligations and working capital purposes and excluding the amount of deferred underwriting discounts held in trust) at the time of the execution of a definitive agreement for an initial business combination. The balance of the funds in Northern Star’s trust account (excluding deferred underwriting commissions and taxes payable) at the time of the execution of the Merger Agreement with BARK was approximately $254 million. In determining whether the 80% requirement was met, rather than relying on any one factor, Northern Star’s board of directors concluded that it was appropriate to base such valuation on a number of qualitative factors, such as management strength and depth, competitive positioning, and customer base, as well as quantitative factors, such as the anticipated implied enterprise value of the combined company being approximately $1.6 billion, Northern Star’s assessment that BARK’s valuation was attractive compared to its competitive peers, the historical performance of BARK and the potential for future growth in revenues and profits of BARK. Based on the qualitative and quantitative information used to approve the Business Combination described herein, Northern Star’s board of directors determined that the foregoing 80% fair market value requirement was met. Northern Star’s board of directors believes that the financial skills and background of its members qualify it to conclude that the acquisition met the 80% requirement.

Interests of the Sponsor and Northern Star’s Directors and Officers in the Business Combination

When you consider the recommendation of Northern Star’s board of directors in favor of approval of the business combination proposal and the other proposals, you should keep in mind that the Sponsor (which is affiliated with certain of Northern Star’s officers and directors) and Northern Star’s directors and officers have interests in such proposal that may be different from, or in addition to, your interests as a stockholder or warrantholder. These interests include, among other things:

 

   

If the Business Combination with BARK or another business combination is not consummated by November 13, 2022 (or such later date as may be approved by Northern Star’s stockholders), Northern Star will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding

 

98


Table of Contents
 

public shares for cash and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, the 6,358,750 founder shares held by the Sponsor and Northern Star’s directors and officers, which were acquired for an aggregate purchase price of $25,000 prior to Northern Star’s initial public offering, would be worthless because the holders are not entitled to participate in any redemption or distribution with respect to such shares. On the other hand, if the Merger is consummated, each outstanding founder share will convert into one share of Northern Star common stock at the closing. Such shares had an aggregate market value of $72,616,925 based upon the closing price of $11.42 per share on the NYSE on April 5, 2021.

 

   

The Sponsor, which is affiliated with certain of Northern Star’s directors and officers, purchased an aggregate of 4,558,000 private warrants from Northern Star for an aggregate purchase price of approximately $6.837 million (or $1.50 per warrant). These purchases took place on a private placement basis simultaneously with the consummation of Northern Star’s initial public offering. All of the proceeds Northern Star received from these purchases were placed in the trust account. Such warrants had an aggregate market value of $14,950,240 based upon the closing price of $3.28 per warrant on the NYSE on April 5, 2021. The private warrants will become worthless if Northern Star does not consummate a business combination by November 13, 2022 (or such later date as may be approved by Northern Star stockholders in an amendment to its amended and restated certificate of incorporation).

 

   

If Northern Star is unable to complete a business combination within the required time period, the Sponsor will be personally liable under certain circumstances described herein to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Northern Star for services rendered or contracted for or products sold to Northern Star. If Northern Star consummates a business combination, on the other hand, Northern Star will be liable for all such claims.

 

   

The Sponsor and Northern Star’s officers and directors and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on Northern Star’s behalf, such as identifying and investigating possible business targets and business combinations. However, if Northern Star fails to consummate an initial business combination within the required period, they will not have any claim against the trust account for reimbursement. Accordingly, Northern Star may not be able to reimburse these expenses if the Business Combination with BARK or another business combination is not completed by November 13, 2022 (or such later date as may be approved by Northern Star stockholders in an amendment to its amended and restated certificate of incorporation). As of April 5, 2021, the Sponsor and Northern Star’s officers and directors and their affiliates had incurred approximately $25,000 of unpaid reimbursable expenses.

 

   

It is currently contemplated that Jonathan J. Ledecky and Joanna Coles will be directors of Northern Star after the closing of the Business Combination (assuming that the seven nominees identified in this proxy statement/prospectus to serve as directors of Northern Star after the closing of the Business Combination are elected). As such, in the future, each will receive any cash fees, stock options or stock awards that the Northern Star board of directors determines to pay to its non-executive directors.

 

   

The Merger Agreement provides for the continued indemnification of Northern Star’s current directors and officers and the purchase of directors and officers liability insurance covering Northern Star’s current directors and officers.

 

   

Northern Star’s officers and directors (or their affiliates) may make loans from time to time to Northern Star to fund certain capital requirements. As of the date of this proxy statement/prospectus, no such loans have been made, but loans may be made after the date of this proxy statement/prospectus. If the Business Combination is not consummated, the loans will not be repaid and will be forgiven except to the extent there are funds available to Northern Star outside of the trust account.

Interests of BARK Directors and Officers

In considering whether to adopt the Merger Agreement and Business Combination by executing and delivering a written consent, BARK stockholders should be aware that aside from their interests as stockholders, BARK’s

 

99


Table of Contents

officers and the members of the BARK board of directors have interests in the Business Combination that are different from, or in addition to, those of other BARK stockholders generally. BARK stockholders should take these interests into account in deciding whether to approve the Business Combination.

In addition to the compensation arrangements, including employment, termination of employment, and change in control arrangements and indemnification arrangements, discussed in the sections titled “Executive Compensation” and “Certain Relationships and Related Person Transactions—BARK Related Person Transactions” and the registration rights described in the section titled “The Business Combination Proposal—Related Agreements—Registration Rights Agreement,” these interests include, among other things, the fact that:

 

   

The following executive officers of BARK are expected to be appointed as executive officers of New BARK following the consummation of the Business Combination: Matt Meeker, Manish Joneja and John Toth;

 

   

The following members of the BARK board of directors are expected to be appointed as directors of New BARK following the consummation of the Business Combination: Manish Joneja, Jim McGinty, Elizabeth McLaughlin, Matt Meeker and Henrik Werdelin; and

 

   

The executive officers of BARK and members of the BARK board of directors are holders of, or affiliated with entities that are holders of, BARK equity interests and in such capacity will be entitled to receive the consideration payable in the Business Combination to all holders of such equity interests.

Recommendation of Northern Star’s Board of Directors

After careful consideration of the matters described above, particularly BARK’s position in its industry, potential for growth and profitability, the experience of BARK’s management and BARK’s competitive positioning and customer base, Northern Star’s board determined unanimously that each of the business combination proposal and the other proposals to be presented at the annual meeting were fair to and in the best interest of Northern Star’s stockholders. Accordingly, Northern Star’s board of directors unanimously declared advisable and recommend that its stockholders vote “FOR” the business combination proposal, “FOR” the PIPE proposal, “FOR” each of the charter proposals, “FOR” the election of the seven director nominees identified in this proxy statement/prospectus, “FOR” the incentive plan proposal, “FOR” the ESPP proposal and “FOR” the adjournment proposal, if presented. The foregoing discussion of the information and factors considered by Northern Star’s board of directors is not meant to be exhaustive, but includes the material information and factors considered by Northern Star’s board of directors.

Material U.S. Federal Income Tax Consequences of the Merger

The following section is a summary of the material U.S. federal income tax consequences for (i) holders of Northern Star common stock and holders of warrants to acquire Northern Star common stock of the Business Combination and (ii) holders of BARK common stock. The discussion of the material U.S. federal income tax consequences contained in this proxy statement/prospectus is intended to provide only a general discussion and is not a complete analysis or description of all potential U.S. federal income tax consequences of the Business Combination.

This discussion addresses only those holders that hold their common stock or warrants as a capital asset within the meaning of Section 1221 of the Code and does not address all the U.S. federal income tax consequences that may be relevant to holders in light of their individual circumstances or to holders that are subject to special rules, such as:

 

   

insurance companies;

 

   

mutual funds, real estate investments trusts and regulated investment companies;

 

   

financial institutions;

 

   

investors in pass-through entities such as partnerships, S corporations and disregarded entities for federal income tax purposes;

 

100


Table of Contents
   

tax-exempt organizations;

 

   

dealers in securities or currencies;

 

   

traders in securities that elect to use a mark to market method of accounting;

 

   

persons that hold Northern Star common stock or BARK common stock, as the case may be, as part of a straddle, hedge, constructive sale or conversion transaction;

 

   

Non-U.S. holders (as defined below, and except as otherwise discussed below);

 

   

persons that own (or are treated as owning) 5% or more of Northern Star’s or BARK’s common stock;

 

   

persons who exercise redemption rights but continue to own, actually or constructively, Northern Star common stock following the Merger;

 

   

stockholders who are subject to the alternative minimum tax provisions of the Code;

 

   

persons who hold their shares as part of a hedge, wash sale, synthetic security, conversion transaction, or other integrated transaction;

 

   

persons that have a functional currency other than the U.S. dollar;

 

   

persons who hold shares of Northern Star or BARK common stock that may constitute “qualified small business stock” under Section 1202 of the Code or as “Section 1244 stock” for purposes of Section 1244 of the Code;

 

   

persons who acquired their shares of stock in a transaction subject to the gain rollover provisions of Section 1045 of the Code;

 

   

certain expatriates or former citizens or long term residents of the United States;

 

   

persons who hold or receive Northern Star or BARK common stock as compensation, through a tax-qualified retirement plan or through the exercise of a warrant or conversion rights under convertible instruments; and

 

   

persons who are making charitable contributions of Northern Star or BARK common stock in connection with the Merger.

Securityholders of Northern Star or BARK subject to special tax rules that are described above are urged to consult their own tax advisors regarding the consequences to them of the Merger.

If an entity that is treated as a partnership for U.S. federal income tax purposes holds Northern Star or BARK common stock, or warrants to acquire Northern Star common stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend upon the status of the partner, the activities of the partnership and certain determinations made at the partner level. Partners of partnerships or other pass-through entities holding shares of Northern Star or BARK common stock, or warrants to acquire Northern Star common stock, should consult their tax advisors regarding the tax consequences of the Merger.

The discussion is based upon the Code, applicable Treasury regulations thereunder, published rulings and court decisions, all as currently in effect as of the date hereof, and all of which are subject to change, possibly with retroactive effect. Tax considerations under state, local and foreign laws, or federal laws other than those pertaining to the income tax (including the impact of the Medicare contribution tax on net investment income and the U.S. federal estate tax and gift tax), or the U.S. federal alternative minimum tax provisions of the Code, are not addressed. Except as pertains to the treatment of a stockholder of Northern Star who exercises conversion rights and effects a complete termination of the stockholder’s interest in Northern Star, this discussion also does not discuss the tax consequences of transactions occurring prior to, concurrently with or after the Merger (whether or not such transactions are undertaken in connection with the Merger), including, without limitation, the exercise of stock options or warrants in anticipation of the Merger.

 

101


Table of Contents

The discussion is based upon the Code, applicable Treasury regulations thereunder, published rulings and court decisions, all as currently in effect as of the date hereof, and all of which are subject to change, possibly with retroactive effect. Tax considerations under state, local and foreign laws, or federal laws other than those pertaining to the income tax (including the impact of the Medicare contribution tax on net investment income and the U.S. federal estate tax and gift tax) or the U.S. federal alternative minimum tax provisions of the Code, are not addressed. Except as pertains to the treatment of a stockholder of Northern Star who exercises conversion rights and effects a complete termination of the stockholder’s interest in Northern Star, this discussion also does not discuss the tax consequences of transactions occurring prior to, concurrently with or after the Merger (whether or not such transactions are undertaken in connection with the Merger), including, without limitation, the exercise of stock options or warrants in anticipation of the Merger

Neither Northern Star nor BARK intends to request any ruling from the Internal Revenue Service as to the U.S. federal income tax consequences of the Merger and the stockholders of BARK should be aware that the IRS could adopt a position which could be sustained by a court contrary to that set forth in this discussion.

For purposes of this discussion, a U.S. holder is a beneficial owner of Northern Star common stock or warrants or BARK stock, as the case may be, who or which is any of the following for U.S. federal income tax purposes:

 

   

an individual who is a citizen or resident of the United States;

 

   

a corporation, including any entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

 

   

an estate if its income is subject to U.S. federal income taxation regardless of its source; or

 

   

a trust if (a) a U.S. court can exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions, or (b) it has in effect a valid election under applicable U.S. Treasury regulations to be treated as a U.S. person.

For purposes of this discussion, a “Non-U.S. holder” is a beneficial owner of Northern Star common stock or warrants or BARK stock, as the case may be, who is neither a U.S. holder nor an entity that is treated as a partnership for U.S. federal income tax purposes.

Tax Consequences of the Merger

Treatment of Holders of Northern Star Stock and Warrants

The following summary is the opinion of Graubard Miller, legal counsel to Northern Star, as to the material U.S. federal income tax consequences of the Business Combination for U.S. holders (as defined below) of Northern Star securities, insofar as it expresses conclusions as to the application of U.S. federal income tax law.

Pursuant to the Merger Agreement, Merger Sub will merge with and into BARK, with BARK surviving as a wholly owned subsidiary of Northern Star and the securityholders of BARK becoming securityholders of Northern Star.

No gain or loss will be recognized for U.S. federal income tax purposes by Northern Star or by the stockholders of Northern Star (whether such holders are U.S. holders or Non-U.S. holders) if their conversion rights are not exercised, as such holders are neither receiving merger consideration nor exchanging any shares. No gain or loss will be recognized for U.S. federal income tax purposes by holders of warrants to acquire Northern Star common stock (whether such holders are U.S. holders or Non-U.S. holders) solely as a result of the Merger, as such holders are neither receiving merger consideration nor exchanging any shares.

A stockholder of Northern Star that is a U.S. holder who exercises conversion rights and effects a complete termination of the stockholder’s interest in Northern Star is anticipated to be required to recognize gain or loss upon the exchange of that stockholder’s shares of common stock of Northern Star for cash. Such gain or loss will

 

102


Table of Contents

be measured by the difference between the amount of cash received and the tax basis of that stockholder’s shares of Northern Star common stock. This gain or loss will be long-term capital gain or loss if the holding period for the share of Northern Star common stock is more than one year. Gain and loss recognized on a conversion of Northern Star common stock for cash must generally be determined separately for each block of Northern Star shares (i.e., stock acquired at the same cost in a single transaction).

A stockholder of Northern Star that is a Non-U.S. holder who exercises conversion rights and effects a complete termination of the stockholder’s interest in Northern Star is generally expected to be treated in the same manner as a U.S. stockholder for U.S. federal income tax purposes except that (subject to the discussion of FATCA below) such Non-U.S. holder generally is not expected to be subject to U.S. federal income tax on the conversion unless (i) such holder is engaged in a trade or business within the United States and any gain recognized in the conversion is treated as effectively connected with such trade or business or (ii) such holder is an individual who is present in the United States for 183 days or more during the taxable year of the exchange and certain other requirements are met.

Gain described in clause (i) will generally be subject to U.S. federal income tax on a net income basis at the regular graduated rates. A Non-U.S. holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items. Gain described in clause (ii) will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S. source capital losses of the Non-U.S. holder, provided the Non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses.

Treatment of Holders of BARK Stock

If the Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, BARK stockholders generally will not recognize gain or loss upon the exchange of their BARK common stock for Northern Star common stock, except to the extent of cash received in lieu of a fractional share of Northern Star common stock as described below. BARK stockholders generally will obtain a basis in the Northern Star common stock they receive in the Merger equal to their basis in BARK common stock exchanged therefor, reduced by the amount of basis allocable to any fractional share of Northern Star common stock. The holding period of the shares of Northern Star common stock received by an BARK stockholder in the Merger will include the holding period of the shares of BARK common stock surrendered in exchange therefor.

No fractional shares of Northern Star capital stock will be issued in connection with the Merger. A U.S. holder who receives cash in lieu of a fractional share of Northern Star common stock will recognize capital gain or loss in an amount equal to the difference between the amount of cash received and the U.S. holder’s tax basis allocable to such fractional share. Such gain or loss will generally be long-term capital gain or loss if the U.S. holder’s holding period in BARK common stock surrendered in the Merger is greater than one year as of the date of the Closing. The deductibility of capital losses is subject to limitations.

If the Merger is not treated as a “reorganization” within the meaning of Section 368(a) of the Code, then each U.S. holder of BARK common stock generally will be treated as exchanging its BARK common stock in a fully taxable transaction in exchange for Northern Star common stock and any cash received in lieu of a fractional share. BARK stockholders will generally recognize capital gain or loss in such exchange equal to the difference between an BARK stockholder’s adjusted tax basis in the BARK common stock surrendered in the Merger and the fair market value of the Northern Star common stock and any cash in lieu of a fractional share received in exchange therefor. Any recognized capital gain or capital loss will be long-term capital gain or capital loss if the U.S. holder has held the shares of BARK common stock for more than one year. The deductibility of capital losses is subject to limitations.

 

103


Table of Contents

A stockholder of BARK that is a Non-U.S. holder who exchanges BARK common stock for Northern Star common stock is generally expected to be treated in the same manner as a U.S. stockholder for U.S. federal income tax purposes except that (subject to the discussion of FATCA below), such Non-U.S. holder generally is not expected to be subject to U.S. federal income tax on any gain recognized as a result of the Merger (i.e., with respect to cash received in lieu of fractional shares of Northern Star common stock or if the Merger does not qualify as a reorganization under Section 368(a) of the Code) unless: (i) such holder is engaged in a trade or business within the United States and any gain recognized in the Merger is treated as effectively connected with such trade or business or (ii) such holder is an individual who is present in the United States for 183 days or more during the taxable year of the exchange and certain other requirements are met.

Gain described in clause (i) will generally be subject to U.S. federal income tax on a net income basis at the regular graduated rates. A Non-U.S. holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items. Gain described in clause (ii) generally will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S. source capital losses of the Non-U.S. holder, provided the Non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses.

For purposes of the above discussion, BARK stockholders who acquired their BARK common stock at different times or for different prices should consult their tax advisors regarding the manner in which gain or loss should be determined in their specific circumstances.

Reporting Requirements

If the Merger is a “reorganization” within the meaning of Section 368(a) of the Code, each U.S. holder who receives shares of Northern Star common stock in the Merger is required to retain permanent records pertaining to the Merger, and make such records available to any authorized IRS officers and employees. Such records should specifically include information regarding the amount, basis, and fair market value of all transferred property, and relevant facts regarding any liabilities assumed or extinguished as part of such “reorganization.” Additionally, U.S. holders who owned immediately before the Merger at least one percent (by vote or value) of the total outstanding stock of BARK are required to attach a statement to their tax returns for the year in which the Merger is consummated that contains the information listed in Treasury Regulation Section 1.368-3(b). Such statement must include the U.S. holder’s tax basis in such holder’s BARK common stock surrendered in the Merger, the fair market value of such stock, the date of the Merger and the name and employer identification number of each of BARK and Northern Star. U.S. holders are urged to consult with their tax advisors to comply with these rules.

Information Reporting and Backup Withholding

Proceeds of the sale or other taxable disposition of Northern Star common stock to Non-U.S. holders who exercise conversion rights generally will not be subject to backup withholding or information reporting, provided that the relevant holder certifies its non-U.S. status, such as by furnishing a valid IRS Form W-8BEN, W-8BEN-E or W-8ECI, or otherwise establishing an exemption. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a Non-U.S. holder’s U.S. federal income tax liability, provided the required information is timely furnished to the Internal Revenue Service.

A U.S. holder of BARK common stock may be subject to information reporting and backup withholding for U.S. federal income tax purposes on cash paid in lieu of fractional shares in connection with the Merger, or in the event that the Merger does not qualify as a reorganization under Section 368(a) of the Code. Backup withholding will not apply, however, to a U.S. holder who (i) furnishes a correct taxpayer identification number and certifies the holder is not subject to backup withholding on IRS Form W-9 or a substantially similar form, or (ii) certifies

 

104


Table of Contents

the holder is otherwise exempt from backup withholding. If a U.S. holder does not provide a correct taxpayer identification number on IRS Form W-9 or other proper certification, the stockholder may be subject to penalties imposed by the IRS. Backup withholding is not an additional tax, and any amounts withheld under the backup withholding rules may be refunded or allowed as a credit against the federal income tax liability of a U.S. holder of BARK common stock, provided the required information is timely furnished to the IRS. U.S. holders of BARK common stock should consult their tax advisors regarding their qualification for an exemption from backup withholding, the procedures for obtaining such an exemption, and in the event backup withholding is applied, to determine if any tax credit, tax refund or other tax benefit may be obtained.

Additional Withholding Tax on Payments Made to Foreign Accounts

Withholding taxes may be imposed under sections 1471 to 1474 of the Code (such sections commonly referred to as the Foreign Account Tax Compliance Act, or “FATCA”) on certain types of payments made to non-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax may be imposed on (subject to the proposed Treasury Regulations discussed below) dividends in respect of, and gross proceeds from the sale or other disposition of, securities paid to a “foreign financial institution” or a “non-financial foreign entity” (each as defined in the Code), unless (1) the foreign financial institution undertakes certain diligence and reporting obligations, (2) the non-financial foreign entity either certifies it does not have any “substantial United States owners” (as defined in the Code) or furnishes identifying information regarding each substantial United States owner or (3) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in (1) above, it must enter into an agreement with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by certain “specified United States persons” or “United States owned foreign entities” (each as defined in the Code), annually report certain information about such accounts, and withhold 30% on certain payments to non-compliant foreign financial institutions and certain other account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules.

Under the applicable Treasury Regulations and administrative guidance, while withholding under FATCA would have applied to payments of gross proceeds from the sale or other disposition of securities on or after January 1, 2019, recently proposed Treasury Regulations eliminate FATCA withholding on payments of gross proceeds. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued.

This discussion in this section, “Material U.S. Federal Income Tax Consequences of the Merger,” is intended to provide only a summary of the material U.S. federal income tax consequences of the Merger. It does not address tax consequences that may vary with, or are contingent on, your individual circumstances. In addition, the discussion does not address any non-income tax or any foreign, state or local tax consequences of the Merger or exercise of conversion rights. Accordingly, you are strongly urged to consult with your tax advisor to determine the particular U.S. federal, state, local or foreign income or other tax consequences to you of the Merger and exercise of conversion rights.

Anticipated Accounting Treatment

The Merger will be accounted for as a reverse merger in accordance with U.S. GAAP. Under this method of accounting, Northern Star will be treated as the “acquired” company for financial reporting purposes. This determination was primarily based on BARK comprising the ongoing operations of the combined company, BARK senior management comprising the senior management of the combined company, and the former owners and management of BARK having control of the board of directors of the combined company after the Merger. In accordance with guidance applicable to these circumstances, the Merger will be considered to be a capital transaction in substance. Accordingly, for accounting purposes, the Merger will be treated as the equivalent of BARK issuing shares for the net assets of Northern Star, accompanied by a recapitalization. The net assets of Northern Star will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the closing of the Merger will be those of BARK.

 

105


Table of Contents

Regulatory Matters

The Merger is not subject to any additional federal or state regulatory requirement or approval, except for the filings with the State of Delaware necessary to effectuate the Merger and the filing of required notifications and the expiration or termination of the required waiting periods under the HSR Act. On February 16, 2021, the parties filed with the FTC the notice required under the HSR Act and requested early termination of the waiting period under the HSR Act. On March 18, 2021, the waiting period under the HSR Act expired.

NYSE Listing Requirements

NYSE Listing Rule 312.03(c) generally requires stockholder approval prior to the issuance of common stock, or of securities convertible into or exercisable for common stock, in any transaction or series of related transactions if such securities are not issued in a public offering for cash: (1) the common stock has, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of such stock or of securities convertible into or exercisable for common stock; or (2) the number of shares of common stock to be issued is, or will be upon issuance, equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the common stock or of securities convertible into or exercisable for common stock. However, such financing does not require stockholder approval if, among other things, it involves a sale of common stock, for cash, at a price at least as great as the lower of: (i) the official closing price on the NYSE immediately preceding the signing of the binding agreement; or (ii) the average official closing price for the five trading days immediately preceding the signing of the binding agreement. In addition, NYSE Listing Rule 312.03(d) generally requires stockholder approval prior to an issuance that will result in a change in control of the issuer. The securities to be as a result of the Business Combination will exceed 20% of the number of shares of Northern Star common stock outstanding immediately prior to the consummation of the Business Combination and the PIPE Transaction. Further, the shares of Northern Star common stock to be issued in connection with the Business Combination will not be issued for cash. In addition, the Business Combination will result in a change in control of Northern Star. Therefore, the Business Combination will require stockholder approval under NYSE Listing Rule 312.03.

Required Vote

The approval of the business combination proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Northern Star common stock present and entitled to vote at the annual meeting to approve the Business Combination.

Under Northern Star’s amended and restated certificate of incorporation, the Business Combination may not be consummated if Northern Star has net tangible assets of less than $5,000,001, after taking into account the conversion into cash of all public shares properly demanded to be converted by holders of public shares, the completion of the Business Combination and the completion of the PIPE Transaction. Because the net tangible assets of the combined company will exceed this threshold as a result of the PIPE Transaction, all of the public shares may be converted and Northern Star can still consummate the Business Combination. However, the combined company must meet certain distribution criteria, including having a minimum of 1,100,000 publicly held shares, in order to be listed on the NYSE, which is a condition to the closing of the Business Combination.

The approval of the business combination proposal is a condition to the consummation of the Business Combination. If the business combination proposal is not approved, the other proposals (except an adjournment proposal, as described below) will not be presented to the stockholders for a vote.

THE NORTHERN STAR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE NORTHERN STAR STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THE BUSINESS COMBINATION PROPOSAL.

 

106


Table of Contents

THE MERGER AGREEMENT

For a discussion of the structure of the transactions and consideration, see the section entitled “The Business Combination Proposal.” Such discussion and the following summary of other material provisions of the Merger Agreement is qualified by reference to the complete text of the Merger Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A. All stockholders are encouraged to read the Merger Agreement in its entirety for a more complete description of the terms and conditions of the transactions.

Closing and Effective Time of the Business Combination

The closing of the Business Combination will take place no later than the third (3rd) business day following the satisfaction or waiver of the conditions described below (other than those conditions that by their nature are to be satisfied at the closing of the Business Combination, but subject to the satisfaction thereof at the closing), under the subsection entitled “Conditions to the Closing of the Business Combination,” unless the parties to the Merger Agreement agree in writing to another time. The Business Combination is expected to be consummated as soon as practicable after the meeting of Northern Star’s stockholders described in this proxy statement/prospectus.

Representations and Warranties

The Merger Agreement contains representations and warranties of BARK relating, among other things, to proper organization and qualification; subsidiaries; capitalization; the authorization, performance and enforceability against BARK of the Merger Agreement; absence of conflicts; required filings, permits, consent, approval or authorization of governmental authorities; compliance with laws, organizational documents and material contracts; financial statements and internal controls; absence of undisclosed liabilities; absence of certain changes or events; litigation; benefit plans; labor matters; restrictions on business activities; assets and real property; tax matters; environmental matters; brokers’ fees and third-party expenses; intellectual property matters; material contracts; insurance; government actions and filings; interested party transactions; board approval and BARK stockholder approval; customers and suppliers; information disclosed in the proxy statement; and BARK’s independent investigation of Northern Star and Merger Sub and non-reliance.

The Merger Agreement contains representations and warranties of each of Northern Star and Merger Sub relating, among other things, to proper organization and qualification; subsidiaries; capitalization; the authorization, performance and enforceability against Northern Star and Merger Sub of the Merger Agreement; absence of conflicts; required filings, permits, consent, approval or authorization of governmental authorities; compliance with laws, organizational documents and material contracts; reports filed with the SEC, financial statements and internal controls, compliance under the Sarbanes-Oxley Act; absence of undisclosed liabilities; absence of certain changes or events; litigation; benefit plans; labor matters; restrictions on business activities; assets and real property; intellectual property matters; tax matters; environmental matters; brokers’ fees; material contracts; insurance; interested party transactions; NYSE listing; board approval; trust account; and documents related to the PIPE Transaction; and Northern Star’s and Merger Sub’s independent investigation of BARK and non-reliance.

Covenants

Northern Star and BARK have each agreed to take such actions as are necessary, proper or advisable to consummate the transactions set forth in the Merger Agreement. Each of them has also agreed to continue to operate their respective businesses in the ordinary course consistent with past practices prior to the closing of the Business Combination and not to take the following actions, among others, except as permitted by the Merger Agreement or the PIPE Documents or as required by applicable law, without the prior written consent of the other parties:

 

   

waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock

 

107


Table of Contents
 

plans or authorize cash payments in exchange for any options granted under any of such plans other than repurchases of BARK Common Stock from terminated service providers for cash in accordance with BARK’s equity plan as in effect on the date of the Merger Agreement;

 

   

grant any material severance or termination pay to officers or employees not in the ordinary course of business consistent with past practice, except pursuant to applicable law or existing agreements, policies or plans;

 

   

transfer or license to any person or otherwise extend, amend or modify any material rights to intellectual property or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices;

 

   

declare, set aside or pay dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock, or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock (other than such dividends or distributions of a subsidiary of BARK to BARK or another BARK subsidiary);

 

   

purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock or other equity securities or ownership interests of BARK or Northern Star, except in the case of BARK, pursuant to the terms of a BARK employee benefit plan or any derivative securities of BARK outstanding on the date of the Merger Agreement in accordance with the terms of the Merger Agreement;

 

   

issue, deliver, sell, authorize, pledge, amend, exchange, settle or otherwise encumber any shares of capital stock or other equity securities or ownership interests or any securities convertible into or exchangeable capital stock or other equity securities or ownership interests, or enter into other agreements obligating it to issue equity securities or convertible or exchangeable securities (except with respect to the exercise or settlement of any BARK stock options in effect as of the date of the Merger Agreement, or grants of any BARK stock options or other comparable securities convertible into or exchangeable for shares of BARK Common Stock in the ordinary course of business consistent with past practice (including increases to the equity reserve pool of any BARK equity plan to accommodate grants of BARK stock options or other comparable securities, provided any resulting Excess Shares would not exceed 10% of the total number of shares of Northern Star Common Stock to be issued and outstanding after the closing of the Business Combination) or the issuance of shares of BARK Common Stock (or other class of equity security of BARK) upon the conversion or exchange of any existing Company securities);

 

   

amend its certificate of incorporation or bylaws in any material respect or, in the case of Northern Star, amend any agreement or contract with the Sponsor;

 

   

acquire or agree to acquire, whether by merger, stock or asset acquisition, or other transaction any business, entity or division thereof, or otherwise acquire or agree to acquire outside the ordinary course of business any assets which are material, individually or in the aggregate, to the business of Northern Star or BARK and its subsidiaries, as applicable, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services;

 

   

sell, lease, license, encumber or otherwise dispose of any material properties or assets, except licenses or sales in the ordinary course of business consistent with past practice, the incurrence of permitted liens as specified in the Merger Agreement, pursuant to existing Company agreements made available to Northern Star and those that are not material, individually or in the aggregate, to the business of Northern Star or BARK;

 

   

except incurrences of indebtedness under BARK’s existing credit facilities and extensions of credit in the ordinary course with employees and among BARK and its subsidiaries, incur any indebtedness for borrowed money or guarantee any such indebtedness of another, issue or sell any debt securities or

 

108


Table of Contents
 

options, warrants, calls or other rights to acquire any debt securities of Northern Star or BARK and its subsidiaries, as applicable, enter into any “keep well” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing;

 

   

except as otherwise required by applicable law or pursuant to an existing plan, policy or agreement of BARK or its subsidiaries, or in the ordinary course of business consistent with past practice, (i) adopt or materially amend any employee benefit plan (including any plan that provides for severance), or enter into any employment contract or collective bargaining agreement (other than in each case in the ordinary course of business consistent with past practice), (ii) pay any special bonus or special remuneration to any director or employee or (iii) materially increase the salaries, wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;

 

   

pay, discharge, settle or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation other than in the ordinary course of business consistent with past practices or as previously disclosed in such party’s financial statements or (ii) waive the benefits of, agree to modify in any material manner, terminate, release any person from or knowingly fail to enforce any material confidentiality or similar agreement to which it is a party or beneficiary;

 

   

except, in each case, in the ordinary course of business consistent with past practices, modify in a manner materially adverse to BARK, Northern Star or Merger Sub, as applicable, or terminate (other than in accordance with its terms) certain material contracts, or waive, delay the exercise of, release or assign any material rights or claims thereunder;

 

   

except as required by law or U.S. GAAP, revalue any of its assets in any material manner or make any material change in accounting methods, principles or practices;

 

   

except in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $300,000 in any 12-month period;

 

   

settle any material litigation where the consideration given by the party is other than monetary or to which an officer, director or employee of such person is a party in his or her capacity as such;

 

   

make or rescind tax elections that would be reasonably likely to adversely affect in any material respect the tax liability or attributes of such party, settle or compromise any material income tax liability outside the ordinary course of business or, except as required by applicable law, change any material method of accounting for tax purposes or prepare or file any return in a manner materially inconsistent with past practice;

 

   

form or establish a subsidiary except in the ordinary course of business consistent with prior practice;

 

   

permit BARK, Northern Star, the Merger Sub or their respective subsidiaries, or administrator of any of their respective employee benefit plans, to exercise discretionary rights under any employee benefit plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans, except as permitted in the Merger Agreement;

 

   

enter into any material transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders, managers, members or other affiliates other than (i) the payment of salary and benefits and the advancement of expenses in the ordinary course of business consistent with prior practice or (ii) such distributions or advancements by a subsidiary of BARK to BARK or another such subsidiary; or

 

   

agree in writing or otherwise commit to take any of the foregoing actions.

Pursuant to the Merger Agreement, exceptions apply to certain of the foregoing actions by BARK and its subsidiaries in connection with the suspension of operations related to the coronavirus (COVID-19) pandemic as

 

109


Table of Contents

are reasonably necessary to (1) to protect the health and safety of their respective employees and other individuals with whom they have business dealings or (2) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic.

The Merger Agreement also contains additional covenants of the parties, including covenants providing that:

 

   

the parties will maintain confidentiality with respect to nonpublic information exchanged in connection with the Merger Agreement and the negotiations related thereto and provide access to any information concerning the business of a party and its subsidiaries, subject to certain exceptions;

 

   

the parties will not solicit or enter into discussions or transactions with, or encourage or provide any information to any third party, and to immediately cease all existing discussions or negotiations with any third party, regarding any merger, sale of ownership interests or assets;

 

   

BARK will provide periodic financial information to Northern Star through the closing date of the Merger and the unaudited consolidated financial statements of BARK and its subsidiaries for the nine months ending December 31, 2020 and 2019, which shall be prepared in accordance with U.S. GAAP applied on a consistent basis in accordance with past practice throughout the periods involved;

 

   

Northern Star will prepare, file and distribute the registration statement of which this proxy statement/prospectus forms a part;

 

   

Northern Star and BARK will give notice in accordance with Delaware Law and their respective charter documents seeking stockholder approval of the Merger;

 

   

Northern Star will take all actions necessary so that all directors and officers of Northern Star prior to the closing of the Merger resign, except those as set forth in the Merger Agreement, and increase the number of members of its board of directors to seven (7) and the parties will take all necessary action so that those persons specified in the Merger Agreement or the schedules thereto are appointed to the board of directors;

 

   

the parties will prepare and file any required notification pursuant to the HSR Act;

 

   

the parties will prepare and file Current Reports on Form 8-K and issue joint press releases announcing the execution of the Merger Agreement and closing of the Merger, respectively, and consult with each other before issuing any other press release or public statement with respect to the Business Combination;

 

   

the parties will provide all information necessary in order to prepare, update, amend or supplement, to the extent necessary, this proxy statement/prospectus, Current Reports on Form 8-K, press releases or any other filing, notice or application to governmental entities or third parties in connection with the Merger and the transactions contemplated thereby;

 

   

BARK and its affiliates shall not engage in any purchases or sales of Northern Star’s securities prior to the Business Combination without Northern Star’s consent;

 

   

BARK and its controlled affiliates will waive their rights to make claims against Northern Star to collect from the trust account any monies that may be owed to them by Northern Star;

 

   

Northern Star will use commercially reasonable efforts to remain listed as a publicly company on the NYSE and use reasonable best efforts to obtain approval for the listing for trading on the NYSE of its common stock issued in connection with the Business Combination;

 

   

Northern Star will maintain tail directors’ and officers’ liability insurance policies for a period of six years following the Business Combination and, if Northern Star does not have a directors’ and officers’ liability insurance policy in effect, Northern Star will obtain a tail directors’ and officers’ liability insurance policy;

 

   

the executive officers of BARK will repay any amounts owed by them to BARK and cause any guaranty made by BARK for the benefit of them to be terminated;

 

110


Table of Contents
   

Northern Star will be permitted to borrow, after consultation with BARK, funds from its directors, officers and/or stockholders to meet its reasonable capital requirements, with up to $1,500,000 of which borrowings may be convertible into private warrants;

 

   

Northern Star will cause the trust account to be distributed immediately upon consummation of the Business Combination and to pay all liabilities and obligations of Northern Star due or incurred at or prior to the date of closing, including (i) payment to the holders of public shares who elect to convert their shares into cash, (ii) payment of Northern Star’s income and other tax obligations, (iii) repayment of loans and reimbursement of expenses to directors and officers of Northern Star, (iv) payments of deferred underwriting commissions incurred in connection with Northern Star’s initial public offering and (v) payment of third-party transaction costs incurred by Northern Star;

 

   

certain stockholders of BARK as well as the Sponsor and certain holders of Northern Star Class B Common Stock will enter into the Lock-Up Agreements;

 

   

at or prior to the closing of the Business Combination, Northern Star will execute and deliver the Registration Rights Agreement and use reasonable best efforts to terminate the existing Northern Star registration rights agreement, among Northern Star and the former Northern Star stockholders thereto;

 

   

the parties shall take any action necessary to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code, including that BARK shall deliver tax representation letters to Northern Star’s legal counsel and cause counsel to deliver an opinion to such effect;

 

   

Northern Star shall adopt an equity incentive plan and employee stock purchase plan, each as specified in the Merger Agreement;

 

   

BARK may establish a cash retention pool in an aggregate amount of no more than $11,000,000 that may be granted to certain of its employees on the terms and at the discretion of BARK’s board of directors;

 

   

Northern Star shall use reasonable best efforts to arrange and consummate the PIPE Transaction, including delivering executed subscription agreements to BARK, satisfying any conditions pursuant to the subscription agreements, and taking any other actions necessary to consummate the PIPE Transaction;

 

   

BARK shall give notice to BARK’s stockholders of a special meeting of stockholders to consider the Merger Agreement, the Merger and the transactions contemplated thereby, send copies of this proxy statement/prospectus and other relevant information to BARK’s stockholders, and cause such stockholders to affirmatively vote “For” the Merger and in opposition to any other proposal that could reasonably be expected to delay or impair the consummation of the Merger and execute and deliver any related documentation in support of the Merger;

 

   

BARK will deliver to Northern Star its audited consolidated financial statements for the year ended March 31, 2020;

 

   

BARK shall give Northern Star prompt notice of any demands for appraisal received by BARK and any withdrawals of such demands and the opportunity to participate in all negotiations and proceedings with respect to such demands and shall not, except with the prior written consent of Northern Star, make any payment with respect to such demands or offer to settle or settle any such demands;

 

   

Northern Star will enter into the Support Agreements with certain of BARK’s stockholders;

 

   

BARK and Northern Star will provide each other, at least three (3) business days prior to the closing of the Merger, a written report of all third party fees and expenses incurred in connection with the Merger that remain unpaid as of the closing of the Merger; and

 

   

the parties will use commercially reasonable efforts to do all things necessary, proper or advisable to consummate and make effective the transactions contemplated by the Merger Agreement, including obtaining all necessary approvals from governmental agencies and other third parties.

 

111


Table of Contents

Conditions to Closing of the Business Combination

General Conditions

Consummation of the Business Combination is conditioned on approval of the proposals to Northern Star’s stockholders, including the business combination proposal. In addition, the consummation of the Merger is conditioned upon, among other things:

 

   

Northern Star having, either immediately prior to or upon the closing of the Business Combination, at least $5,000,001 of net tangible assets following the exercise by holders of Northern Star’s public shares of their right to convert their public shares into their pro rata share of the trust account;

 

   

all specified waiting periods under the HSR Act having expired;

 

   

no statute, rule, regulation, executive order, decree, injunction or other order being in effect or enforced by any governmental entity and which has the effect of making the Merger illegal or otherwise prohibiting consummation of the Merger;

 

   

the registration statement of which this proxy statement/prospectus forms a part having become effective in accordance with the provisions of the Securities Act, no stop order having been issued by the SEC which remains in effect with respect to the registration statement, and no proceeding seeking such a stop order having been threatened or initiated by the SEC which remains pending;

 

   

approval of the Business Combination by BARK’s stockholders;

 

   

the approval for listing on the NYSE of Northern Star’s common stock comprising the Merger Consideration to be issued; and

 

   

the PIPE Transaction having been completed or completed concurrently with the closing of the Business Combination.

Conditions to Closing of BARK

The obligations of BARK to consummate the Merger are also conditioned upon, among other things:

 

   

the accuracy of the representations and warranties of Northern Star and Merger Sub (subject to certain bring-down standards as described below);

 

   

performance of the agreements and covenants of Northern Star and Merger Sub required by the Merger Agreement to be performed on or prior to the closing of the Merger in all material respects;

 

   

no action, suit or proceeding being pending or threatened by any governmental entity which is reasonably likely to prevent consummation of the transactions contemplated by the Merger Agreement or cause any of the transactions contemplated by the Merger Agreement to be rescinded following consummation, or to materially and adversely affect the title of the shares of Northern Star common stock to be issued in connection with the Merger, and no order, judgment, decree, stipulation or injunction to such effect being in effect;

 

   

no Material Adverse Effect (as defined in the Merger Agreement) with respect to Northern Star having occurred since date of the Merger Agreement which is continuing as of the closing of the Business Combination;

 

   

Northern Star executing the Registration Rights Agreement;

 

   

the filing of Northern Star’s amended and restated certificate of incorporation with the Secretary of State of the State of Delaware and the adoption of the amended and restated bylaws;

 

   

the resignation of all persons employed by Northern Star, except for those specified in the Merger Agreement or the schedules thereto;

 

112


Table of Contents
   

the termination of the existing registration rights agreement, among Northern Star and the former Northern Star stockholders thereto; and

 

   

the execution of the Lock-Up Agreement by Sponsor and certain other Class B Common Stock holders of Northern Star.

With respect to the bring-down standard for measuring the accuracy of the representations and warranties, certain of the representations and warranties of Northern Star as to its capitalization (including those relating to authorized capital, outstanding and reserved shares, obligations to issue or acquire capital stock, acceleration or triggering of rights with respect to capital stock, and due authorization and valid issuance of the shares of Northern Star common stock in connection with the merger) and all the representations and warranties of Northern Star as to the authorization, performance and enforceability against Northern Star and Merger Sub of the Merger Agreement must be true and correct at the closing of the Merger (except to the extent they expressly relate to an earlier date, in which case they must be true and correct as of such date), except where the failure to be true and correct would not reasonably be expected to result in more than a de minimis additional cost, expense or liability to BARK, Northern Star, Merger Sub or their affiliates. The remaining representations and warranties of Northern Star must be true and correct (without reference to any limitation as to materiality or Material Adverse Effect (as defined in the Merger Agreement)) at the closing of the Merger (except to the extent they expressly relate to an earlier date, in which case they must be true and correct as of such date), except where the failure to be true and correct has not had and would not reasonably be expected to result in a Material Adverse Effect with respect to Northern Star.

Northern Star’s and Merger Sub’s Conditions to Closing

The obligations of Northern Star and Merger Sub to consummate the Merger are also conditioned upon, among other things:

 

   

the accuracy of the representations and warranties of BARK (subject to certain bring-down standards as described below);

 

   

performance of the agreements and covenants of BARK and its subsidiaries required by the Merger Agreement to be performed on or prior to the closing of the Merger in all material respects;

 

   

no action, suit or proceeding being pending or threatened by any governmental entity which is reasonably likely to prevent consummation of the transactions contemplated by the Merger Agreement or cause any of the transactions contemplated by the Merger Agreement to be rescinded following consummation, or to materially and adversely affect the right of the surviving corporation to own, operate or control any of the assets of BARK following the Merger, and no order, judgment, decree, stipulation or injunction to such effect being in effect;

 

   

no Material Adverse Effect (as defined in the Merger Agreement) with respect to BARK having occurred since date of the Merger Agreement which is continuing as of the closing of the Business Combination;

 

   

delivery of updated financial statements of BARK and its subsidiaries to Northern Star;

 

   

execution and delivery of the Lock-Up Agreement by BARK’s stockholders specified in the Merger Agreement or the schedules thereto;

 

   

termination of certain Company agreements, including BARK’s existing stockholders’ agreement, specified in the Merger Agreement or the schedules thereto;

 

   

the delivery by BARK to Northern Star of a certificate that meets the requirements of Treasury Regulations Section 1.1445-2(c)(3) and states that shares of BARK are not “ U.S. real property interests” within the meaning of Section 897 of the Code, together with a written authorization for Northern Star to deliver such certification to the IRS on behalf of BARK after the closing of the Business Combination and a notice to the IRS in accordance with the provisions of Treasury Regulations Section 1.897-2(h)(2).

 

113


Table of Contents

With respect to the bring-down standard for measuring the accuracy of the representations and warranties, certain of the representations and warranties of BARK as to its capitalization (including those relating to authorized capital, outstanding and reserved shares, obligations to issue or acquire capital stock and acceleration or triggering of rights with respect to capital stock, including anti-dilution rights) and all the representations and warranties of BARK as to the authorization, performance and enforceability against BARK of the Merger Agreement must be true and correct at the closing of the Merger (except to the extent they expressly relate to an earlier date, in which case they must be true and correct as of such date), except where the failure to be true and correct would not reasonably be expected to result in more than a de minimis additional cost, expense or liability to BARK, Northern Star, Merger Sub or their affiliates. The remaining representations and warranties of BARK must be true and correct (without reference to any limitation as to materiality or Material Adverse Effect (as defined in the Merger Agreement)) at the closing of the Merger (except to the extent they expressly relate to an earlier date, in which case they must be true and correct as of such date), except where the failure to be true and correct has not had and would not reasonably be expected to result in a Material Adverse Effect with respect to BARK.

Waiver

If permitted under applicable law, Northern Star or BARK may waive in writing any inaccuracies in the representations and warranties made to such party contained in the Merger Agreement and waive compliance with any agreements or conditions for the benefit of itself or such party contained in the Merger Agreement. However, the condition requiring that Northern Star have at least $5,000,001 of net tangible assets as described above may not be waived.

The existence of the financial and personal interests of Northern Star’s directors may result in a conflict of interest on the part of one or more of them between what he or she may believe is best for Northern Star and what he or she may believe is best for himself in determining whether or not to grant a waiver in a specific situation. See the section entitled “Risk Factors” for a fuller discussion of this and other risks.

Termination

The Merger Agreement may be terminated at any time, but not later than the closing of the Business Combination, as follows:

 

   

by mutual written consent of Northern Star and BARK;

 

   

by either Northern Star or BARK if the Business Combination is not consummated on or before June 30, 2021 (the “Outside Date”), provided that the right to terminate the Merger Agreement will not be available to any party whose action or failure to act has been a principal cause of or primarily resulted in the failure of the Merger to occur on or before such date and such action or failure to act constitutes a breach of the Merger Agreement;

 

   

by either Northern Star or BARK if a governmental entity shall have issued an order, decree or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger, which order, decree, judgment, ruling or other action is final and non-appealable;

 

   

by either Northern Star or BARK if the other party has breached any of its representations, warranties, covenants or agreements in any material respect or any has become untrue such that the conditions to the Merger Agreement would not be satisfied as of the time of such breach and such breach is incapable of being cured or is not cured by the Outside Date, provided that the terminating party is itself not in material breach;

 

   

by Northern Star if BARK shall have failed to deliver Support Agreements within five (5) Business Days following the execution of the Merger Agreement;

 

   

by Northern Star if BARK fails to obtain the requisite approval of its stockholders to the Merger Agreement and the Merger by written consent within ten (10) business days following the approval of this proxy statement/prospectus by the SEC;

 

114


Table of Contents
   

by either Northern Star or BARK if, at the special meeting of stockholders, the proposals to stockholders, including the business combination proposal, shall fail to be approved by the required vote (subject to any adjournment or recess of the meeting); or

 

   

by either Northern Star or BARK if, immediately prior to or upon the closing, following consummation of the Merger, Northern Star will have less than $5,000,001 of net tangible assets following the exercise by the holders of shares of Northern Star common stock issued in Northern Star’s initial public offering of their conversion rights into cash.

Effect of Termination

In the event of proper termination by any of the parties, the Merger Agreement will be of no further force or effect (other than with respect to certain surviving obligations specified in the Merger Agreement), without any liability on the part of any party thereto or its respective affiliates, officers, directors or stockholders, other than liability of any party thereto for any intentional and willful breach of the Merger Agreement by such party occurring prior to such termination. If the Merger Agreement is not properly terminated, it will remain in full force and effect, and each party will have the right to enforce the agreement in accordance with its terms, including by seeking specific performance. In the event the Merger Agreement is properly terminated, but a party has engaged in intentional and willful breach of the agreement prior to such termination, the other party will have the right to seek any and all remedies conferred under the agreement or available to it by law or in equity.

Fees and Expenses

Except as otherwise set forth in the Merger Agreement, all fees and expenses incurred in connection with the Merger Agreement and the transactions contemplated thereby will be paid by the party incurring such expenses whether or not the transactions are consummated.

Confidentiality; Access to Information

Each party to the Merger Agreement, subject to certain exceptions, will afford to the other parties and their financial advisors, accountants, counsel and other representatives reasonable access during normal business hours, upon reasonable notice, to all of their respective properties, books, records and personnel during the period prior to the closing to obtain all information concerning the business, including the status of business development efforts, properties, results of operations and personnel, as each party may reasonably request and which may be limited in light of the coronavirus (COVID-19) pandemic by orders issued by governmental entities or by a party to the extent such access would jeopardize the health and safety of any employee. The parties agree to maintain in confidence any non-public information received from the other party, and to use such non-public information only for purposes of consummating the transactions contemplated by the Merger Agreement.

Amendments

The Merger Agreement may be amended by the parties thereto at any time prior to the closing of the Business Combination by execution of an instrument in writing signed on behalf of each of the parties.

Governing Law; Consent to Jurisdiction

The Merger Agreement is governed by and construed in accordance with the law of the state of Delaware, regardless of the law that might otherwise govern under applicable principles of the conflicts of laws of Delaware. With respect to disputes related to the Merger Agreement, each party irrevocably consents to the exclusive jurisdiction and venue of the courts of the State of Delaware or the federal courts located in the State of Delaware.

 

115


Table of Contents

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Defined terms included below have the same meaning as terms defined and included elsewhere in this proxy statement/prospectus.

The following unaudited pro forma condensed combined financial information is provided to aid you in your analysis of the financial aspects of the Business Combination and the PIPE Transaction.

The following unaudited pro forma condensed combined balance sheet as of December 31, 2020 combines the unaudited restated historical condensed balance sheet of Northern Star as of December 31, 2020 with the unaudited historical condensed consolidated balance sheet of BARK as of December 31, 2020, giving further effect to the Business Combination and the PIPE Transaction, as if they had been consummated as of December 31, 2020. The restatement of Northern Star’s financial statements is more fully described in Note 2 of the notes to Northern Star’s financial statements included herein.

The following unaudited pro forma condensed combined statements of operations for the nine months ended December 31, 2020 combine the historical restated condensed statement of operations of Northern Star for the period from July 8, 2020 (inception) through December 31, 2020, and the historical condensed consolidated statement of operations of BARK for the nine months ended December 31, 2020, giving effect to the Business Combination and the PIPE Transaction as if they had been consummated on April 1, 2019, the beginning of the earliest period presented. The following unaudited pro forma condensed combined statement of operations for the year ended March 31, 2020 includes the historical consolidated statement of operations of BARK for the year ended March 31, 2020, giving effect to the Business Combination and the PIPE Transaction as if they had been consummated on April 1, 2019, the beginning of the earliest period presented. The unaudited pro forma condensed combined statements of operations for the year ended March 31, 2020 do not include Northern Star’s historical financial statements since Northern Star was not in existence during such period.

The unaudited pro forma c