UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________

FORM 10-K

__________________________

(Mark One)

☒x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 31, ~~2017~~2018

☐¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-37662

__________________________

NAKED BRAND GROUP INC.

(Exact name of registrant as specified in its charter)

__________________________

Nevada	99-0369814
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

~~10th~~180 ~~Floor~~Madison –Avenue, 95Suite ~~Madison Avenue~~505, New York, New York 10016

(Address of principal executive offices and Zip Code)

(~~212~~646) ~~851~~653-~~8050~~7710

(Registrant’s telephone number, including area code)

__________________________

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

Common Stock, $0.001 par value	The NASDAQ Capital Market
(Title of each class)	(Name of each exchange on which registered)

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

None

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ ¨ No ☒ x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ ¨ No ☒ x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (Exchange Act) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x ☒ No ☐ ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x ☒ No ☐ ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐ ¨

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~~definition ~~definitions~~ of “large accelerated filer,” “accelerated filer,”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐¨ Accelerated filer ☐¨ Non-accelerated filer ☐¨ (Do not check if a smaller reporting company) Smaller reporting company ☒x Emerging growth company ☐¨

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ ¨ No ☒ x

The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant as of July 31, ~~2016~~2017, the last business day of the registrant’s most recently completed second fiscal quarter, was $812,~~340~~102,~~691~~985 based upon the closing price reported for such date.

On ~~April~~May 261, ~~2017~~2018, the registrant had 10,342,191 shares of common stock outstanding.

NAKED BRAND GROUP INC.

TABLE OF CONTENTS

PART I	3
Item 1. Business	3
Item 1A. Risk Factors	9
Item 1B. Unresolved Staff Comments	2430
Item 2. Properties	2430
Item 3. Legal Proceedings	2430
Item 4. Mine Safety Disclosures	2430
PART II	2531
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	2531
Item 6. Selected Financial Data	2632
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2632
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	3644
Item 8. Financial Statements and Supplementary Data	3745
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	3746
Item 9A. Controls and Procedures	3746
Item 9B. Other Information	3746
PART III	3847
Item 10. Directors, Executive Officers, and Corporate Governance	3847
Item 11. Executive Compensation	4453
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	4857
Item 13. Certain Relationship and Related Transactions, and Director Independence	5059
Item 14. Principal Accounting Fees and Services	5261
PART IV	5362
Item 15. Exhibits, Financial Statement Schedules.	5362
Item 16. Form 10-K Summary	5665

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (~~the~~this “Form 10-K”) contains forward-looking statements within the meaning of the Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange act of 1934, as amended. Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other comparable terminology and include statements regarding: our product line; our business plan; the enforceability of our intellectual property rights; projections of market prices and costs; supply and demand for our products; future capital expenditures; ~~and our collaboration with Dwyane Wade~~; relationships with retailers, wholesalers and other business partners; ability to add new customer accounts; and future borrowings under the Joint Factoring Agreement with Wells Fargo, statements relating to the structure, timing and completion of the proposed business combination (the “~~Merger~~Business Combination”) with Bendon Limited (“Bendon”) and aBendon ~~to-be-formed~~Group ~~Australian~~Holdings ~~holding~~Limited ~~company~~ (“~~NewCo~~HoldCo”); our continued listing on the ~~NASDAQ~~ Nasdaq Capital Market until closing of the proposed ~~Merger~~Business Combination; our continued compliance with the ~~minimum~~listing ~~shareholders’ equity~~ requirements at ~~the time~~ of ~~our next periodic report~~Nasdaq; ~~NewCo~~HoldCo’s anticipated listing of its ordinary shares on the ~~NASDAQ~~Nasdaq Capital Market in connection with the closing of the proposed ~~Merger;~~Business Combination; expectations regarding the capitalization, resources and ownership structure of the combined company under ~~NewCo~~HoldCo; the adequacy of the combined company’s capital to support its future operations; our and Bendon’s plans, objectives, expectations and intentions; the nature, strategy and focus of the combined company; the executive and board structure of the combined company; and expectations regarding voting by our stockholders. Naked and/or Bendon may not actually achieve the plans, carry out the intentions or meet the expectations disclosed in the forward-looking statements and you should not place undue reliance on these forward-looking statements. Such statements are based on management’s current expectations and involve risks and uncertainties. Actual results and performance could differ materially from those projected in the forward-looking statements as a result of many factors, including, without limitation, risks and uncertainties associated with stockholder approval of and the ability to consummate the proposed Business ~~Merger~~Combination through the process being conducted by ~~NewCo~~HoldCo, Bendon and us, the ability of ~~NewCo~~HoldCo, Bendon and us to ~~enter into a definitive agreement and~~ consummate the proposed ~~Merger~~Business Combination, the risk that one or more of the conditions to closing of the proposed ~~Merger~~Business Combination may not be satisfied, including, without limitation, the ~~effectiveness of the registration statement to be filed by NewCo with the Securities and Exchange Commission or the~~ listing of ~~NewCo~~HoldCo’s ordinary shares on the ~~NASDAQ~~Nasdaq Capital Market, the lack of a public market for ordinary shares of ~~NewCo~~HoldCo and the possibility that a market for such shares may not develop, the ability to project future cash utilization and reserves needed for contingent future liabilities and business operations, the availability of sufficient resources of the combined company to meet its business objectives and operational requirements, the ability to realize the expected synergies or savings from the proposed ~~Merger~~Business Combination in the amounts or in the timeframe anticipated, the risk that competing offers or acquisition proposals will be made, the ability to integrate our business with Bendon’s businesses in a timely and cost-efficient manner, the inherent uncertainty associated with financial projections, and the potential impact of the announcement or closing of the proposed ~~Merger~~Business Combination on customer, supplier, employee and other relationships. The material assumptions supporting these forward-looking statements include, among other things: our ability to obtain any necessary financing on acceptable terms; timing and amount of capital expenditures; the enforcement of our intellectual property rights; our ability to launch new product lines; retention of skilled personnel; continuation of current tax and regulatory regimes; current exchange rates and interest rates; and general economic and financial market conditions. Management believes ~~that~~ that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described under “Risk Factors” and elsewhere in this report and those described from time to time in our future reports filed with the Securities and Exchange Commission.

CERTAIN TERMS USED IN THIS FORM 10-K

Unless expressly indicated or the context requires otherwise, the terms “Naked,” the “Company,” “we,” “us,” and “our” in this document refer to Naked Brand Group Inc., a Nevada corporation, and, where appropriate, its wholly owned subsidiary.

Our fiscal year ends on January 31. References to “fiscal ~~2017~~2018” and “fiscal ~~2016~~2017” represent the fiscal years ended January 31, ~~2017~~2018 and ~~2016~~2017, respectively. References to “fiscal ~~2018~~2019” represent the fiscal year ending January 31, ~~2018~~2019. References to “2018” ~~and “2017”~~ represent the calendar ~~years~~year ending December 31, 2018 ~~and 2017~~, ~~respectively,~~ and references to “~~2016~~2017” and “2016” represent the calendar ~~year~~years ended December 31, 2017 and 2016, respectively.

PART I

Item 1.

Business

Our Business

We are an apparel and lifestyle brand company that is currently focused on innerwear products for women and men. Under our flagship brand name and registered trademark “Naked®”, we design, manufacture and sell men’s and women’s underwear, intimate apparel, loungewear and sleepwear through retail partners and direct to consumer through our online retail store www.wearnaked.com. We have a growing retail footprint for our innerwear products in premium department and specialty stores and internet retailers in North America, including accounts such as Nordstrom Dropship, Dillard’s, Bloomingdale’s, Amazon.com, ~~Soma.com~~Chico’s, SaksFifthAvenue.com, ~~barenecessities.com~~ and others.

The Naked brand was founded on one basic desire: to create a new standard for how products worn close to the skin fit, feel and function. Our core brand philosophy for Naked is “the freedom to be you” and we endeavor to provide products that help people feel confident, attractive and empowered while being as comfortable as wearing nothing at all. The Naked brand was founded in Vancouver, Canada in 2010, as a men’s underwear manufacturer. In 2014 we relocated our headquarters to New York City, expanded our men’s collections and developed women’s intimate apparel, sleepwear and loungewear collections. Our first women’s sleep and loungewear collections became available for retail sale online at www.wearnaked.com in September 2015 and at retail locations and other online retailers in February 2016. Also, in February 2016, we launched our women’s intimate apparel products. In ~~September 2016, we launched our first collections of Wade X Naked, a signature collection of men’s innerwear developed in collaboration with NBA Champion Dwyane Wade. In~~ the future, we intend to expand the Naked brand through existing channels and through licensing partnerships into other apparel and product categories that exemplify the mission of our brand, such as athleisure apparel, swimwear, sportswear, hosiery, bedding and home products and others.

Our expansion into the women’s sleepwear and intimate apparel in fiscal 2017 is a key part of our growth strategy given that these market segments represent $17.8 billion, or over 77% of the overall innerwear market according to data from the NPD Group. Daywear products that address consumer demand for versatile “athleisure” apparel have been the fastest growing segment of the women’s market. Our ability to attract women customers for the Naked brand is also very important to our effort to penetrate the men’s $4.3 billion U.S. innerwear market since a number of consumer research reports show that women purchase as much as 50% of men’s underwear for their husbands, boyfriends or sons.

We have a collaboration and endorsement agreement with NBA Champion Dwyane Wade, whereby Mr. Wade has agreed to act as a spokesperson for our brand. Mr. Wade also sits on our corporate Advisory Board. Further, he acts as Creative Director for our Wade X Naked signature collection of men’s innerwear, which became available for retail purchase in the third quarter of fiscal 2017. This collection encompasses primarily underwear as well as undershirts and loungewear for men.

Our products currently target men and women who are fashion and performance conscious, care about innovation and contemporary design, and desire comfort, quality and fit in their innerwear and apparel. We aim to provide an affordable luxury product for the successful and aspirational customer that enjoys the qualities of a premium garment at a price they feel delivers value. With growing awareness of our brand among these consumers and a broadening array of products, we expect to continue to expand our retail distribution through department stores, boutiques, online retail channels, hotels, spas, and other retailing channels over the next two years and beyond. We plan to also grow our direct to consumer business primarily through our online retail store, www.wearnaked.com, through which we will continue to commercially introduce new products as well as feature certain products, collections and styles exclusively.

Potential Business Combination with Bendon Limited

On ~~December~~May 1925, ~~2016~~2017, we we entered into aan ~~letter~~Agreement and Plan of ~~intent~~Reorganization (as amended, the “~~LOI~~Merger Agreement”), ~~with~~by and among Bendon Limited, a anNew ~~intimate~~Zealand ~~apparel~~limited company ~~based in New Zealand~~ (“Bendon”), ~~for~~Bendon aGroup ~~proposed~~Holdings ~~business~~Limited, ~~combination~~an ofAustralia ~~the~~limited ~~companies~~company (“Holdco”), Naked Merger Sub Inc., ~~The~~a ~~LOI~~Nevada ~~became~~corporation ~~binding~~and ona uswholly onowned ~~January~~subsidiary 12of Holdco (“Merger Sub”), ~~2017~~and, solely for ~~upon~~the ~~entry~~purposes ~~into~~of aSections ~~Securities~~2.28 ~~Purchase~~and 5.18(b) of the Merger Agreement, ~~dated~~Bendon ~~January~~Investments 12Ltd., ~~2017,~~a byNew Zealand company and ~~among~~the usowner of ~~and~~a ~~certain~~majority ~~investors.~~of ~~The~~the ~~business~~outstanding ~~combination is~~shares ~~subject~~of toBendon (the ~~parties~~“Principal ~~entering~~Shareholder”), ~~into~~pursuant ato ~~definitive~~which ~~agreement~~Merger ~~governing~~Sub ~~such~~will be ~~transaction~~merged with and ~~the~~into ~~satisfaction~~Naked of(the ~~various~~“Merger”) ~~closing conditions~~with ~~that~~Naked ~~will~~as bethe ~~contained~~surviving ~~therein~~corporation. ~~There~~The isMerger noAgreement ~~assurance~~was ~~that~~amended as ~~the~~of ~~parties~~July ~~will~~26, ~~enter~~2017, ~~into~~February ~~the~~21, ~~definitive~~2018, ~~agreement~~March or19, ~~that the~~2018 ~~transaction~~and ~~will~~April be23, ~~consummated~~2018.

On February 9, 2017, we entered into Amendment No. 1 (the “First Amendment”) to the LOI with Bendon. The First Amendment (i) extended the date, from February 10, 2017 to March 10, 2017, by which the parties shall have entered a definitive agreement regarding the business combination before certain penalties may be incurred; (ii) adjusted the Net Asset Amount (as defined in the Amendment) to $1.359 million, which amount would be adjusted as a result of any additional capital transactions as agreed to between us and Bendon, and is used to determine, in part, the extent to which the number of shares of our common stock proposed to be issued to Bendon in the business combination would be adjusted; and (iii) amended certain other terms and conditions of the LOI.3

OnThe ~~March~~Merger ~~9, 2017, we~~Agreement ~~entered~~provides ~~into~~for ~~Amendment~~Bendon ~~No.~~and 2Naked ~~(the “Second Amendment”)~~ to ~~the~~enter ~~LOI~~a ~~with Bendon. The Second Amendment, among other things, revised the proposed structure of the~~ business combination ~~with~~transaction ~~Bendon. As contemplated~~ by ~~the~~means ~~Second Amendment, we will now merge with and into a subsidiary~~ of awhich ~~newly formed Australian holding company~~ (~~“NewCo”~~i) ~~which~~Bendon ~~will~~and beHoldco ~~the~~will ~~ultimate parent~~undertake ~~company~~a ofreorganization ~~Bendon and us~~ (the “~~Merger~~Reorganization”). ~~The~~and ~~Second~~together ~~Amendment~~with ~~contemplates that, upon consummation of~~ the Merger, ~~NewCo would~~the ~~issue~~“Transactions”) pursuant to ~~the~~which all ~~current holders~~ of the ~~outstanding~~shareholders ~~capital stock~~ of Bendon anwill ~~aggregate~~exchange ofall ~~118,812,163~~the outstanding ordinary shares of ~~NewCo~~ Bendon (the “Bendon Ordinary Shares”) for ~~and issue to us a number of~~ ordinary shares of ~~NewCo~~Holdco ~~equal to the number of shares of outstanding common stock of Naked~~ (~~the~~ “~~Naked~~Holdco Ordinary Shares”) ~~immediately prior to the Merger~~, and as(ii) ofimmediately ~~the~~thereafter, ~~effective time of the~~ Merger~~, no~~ ~~other~~Sub ~~shares of NewCo~~ will bemerge ~~outstanding. Shares issued to Bendon would be subject to adjustment based on us having Net Assets~~with ~~(as~~and ~~defined~~into ~~in the Amendment) of $786~~Naked,~~246,~~ ~~which~~with ~~amount~~Naked ~~will~~surviving ~~be adjusted~~ as a ~~result~~wholly ofowned ~~any~~subsidiary ~~subsequent~~of ~~capital~~Holdco ~~transactions agreed to by us~~ and ~~Bendon. In connection with~~ the ~~closing~~Naked ofstockholders ~~the~~receiving ~~Merger,~~Holdco ~~NewCo’s shares must be approved for listing on the NASDAQ~~Ordinary ~~Capital Market~~Shares.

~~Further,~~In inthe ~~connection~~Reorganization, ~~with~~ the ~~LOI~~shareholders ~~and~~of ~~the~~Bendon ~~Second~~will ~~Amendment,~~exchange weall ~~(i)~~the ~~appointed~~outstanding ~~two~~Bendon ~~new~~Ordinary ~~directors~~Shares tofor ~~our~~22,680,527 ~~board~~Holdco ofOrdinary ~~directors~~Shares, ~~Mr. Edward Hanson and Mr.~~subject ~~Justin~~to ~~Davis-Rice;~~adjustment ~~(ii)~~based weon ~~agreed~~Naked’s toNet ~~adhere~~Assets toand aBendon’s ~~no-shop~~Net ~~provision~~Debt ~~until~~as ~~the earlier~~ of the closing date of the ~~Merger~~Transactions. ~~Agreement~~Using ~~(as defined~~Naked’s ~~below)~~Net isAssets ~~executed or the LOI is terminated,~~ and ~~(iii)~~Bendon’s ~~agreed~~Net toDebt ~~issue~~as ~~2.5~~of ~~million~~February ~~shares~~28, of2018 ~~common~~and ~~stock~~assuming to Bendon inhas ~~the~~refinanced ~~event the~~certain ~~Merger~~of ~~Agreement~~its isindebtedness ~~not~~and has ~~executed~~completed bycertain ~~April~~capital ~~10,~~raising ~~2017~~transactions, aswe ~~such~~estimate ~~date~~that ~~may be extended, or~~ the ~~Merger~~shareholders isof ~~not~~Bendon ~~consummated~~will ~~within~~receive ~~six months~~approximately ~~thereafter (each a “Merger Milestone”); provided~~22, ~~however~~680,527 Holdco ~~that~~Ordinary weShares ~~shall~~in ~~not~~the beReorganization. ~~required~~See tothe ~~issue~~section ~~Bendon~~entitled ~~such shares~~“The ifMerger ~~Bendon’s~~Proposal ~~action(s)~~— orStructure ~~lack~~of ~~thereof~~the ~~has~~Transactions” for ~~been~~more ~~the~~information, ~~principal~~including ~~cause~~descriptions of ~~or resulted in~~ the ~~failure~~definition of ~~the~~“Net ~~parties~~Assets” ~~to achieve~~and a“Net ~~Merger Milestone~~Debt.”

OnIn ~~April~~the 10Merger, ~~2017,~~each weoutstanding ~~entered~~share ~~into~~of ~~Amendment~~common ~~No.~~stock 3of ~~(the~~Naked ~~“Third~~shall ~~Amendment”)~~be tocancelled ~~the~~and ~~LOI~~shall ~~with~~be ~~Bendon.~~automatically ~~The~~converted ~~Third~~into ~~Amendment (i) extends~~ the ~~date~~ byright ~~which~~to ~~the~~receive ~~parties~~0.2 Holdco ~~shall~~Ordinary ~~have~~Shares ~~entered into~~ (the ~~Merger~~“Per ~~Agreement~~Share ~~from April 10~~Consideration”), ~~2017~~with ~~to May 26, 2017; (ii) revises~~ the ~~Net Asset~~shares ~~Amount~~issued to ~~$5.8~~the ~~million,~~Naked ~~which~~stockholders ~~amount~~representing in ~~will~~the beaggregate ~~adjusted~~approximately asnine apercent ~~result~~ of ~~any subsequent capital transactions agreed upon between~~ the ~~parties;~~Holdco ~~and~~Ordinary ~~(iii)~~Shares ~~amends~~outstanding ~~certain~~immediately ~~other~~after ~~terms~~completion of the ~~LOI,~~Transactions. Naked’s ~~including~~outstanding ~~increasing~~options ~~the~~and ~~number~~warrants ~~of shares of NewCo~~ to bepurchase ~~issued~~shares ~~to the holders~~ of ~~the~~its ~~outstanding capital stock of Bendon to 146,311,063~~common.

~~Except~~The ascompletion ~~amended~~of bythe Merger is subject to the ~~First~~satisfaction ~~Amendment,~~or ~~Second~~waiver ~~Amendment~~of certain customary conditions, including, among others: (i) the accuracy of the other party’s representations and ~~Third~~warranties; ~~Amendment,~~(ii) performance in all material respects by the other ~~material~~party ~~terms~~of its obligations under the Merger Agreement; (iii) the listing of Holdco Ordinary Shares on the ~~LOI~~Nasdaq ~~remain~~Capital Market or the New York Stock Exchange (“NYSE”), subject to official notice of issuance; (iv) the declaration of effectiveness by the SEC of the registration statement on Form F-4 filed by Holdco in ~~full~~connection ~~force~~with the transactions (the “Registration Statement”); (v) Naked stockholder’s approving the Merger Agreement and ~~effect~~the transactions contemplated thereby at a meeting called for such purposes (the “Stockholder Meeting”); and (vi) other conditions as further described in the Merger Agreement. The Registration Statement was declared effective by the SEC on April 26, 2018 and includes a definitive proxy statement of Naked and a prospectus of Holdco.

~~Completion~~The Merger Agreement also contains specified termination rights, including the right to terminate the Merger Agreement (i) by mutual agreement of the parties to terminate; (ii) by either party if (1) the Merger has not been consummated by if the transactions contemplated by the ~~remains~~Merger Agreement are not consummated on or before the Outside Date (which is June 1, 2018), subject to certain conditions as set forth below , (2) any law or order permanently prohibits consummation of the ~~negotiation~~Merger, or (3) Naked stockholder approval is not obtained by the Outside Date; (iii) by either party if the other party has breached or failed to perform in any material respect any of its representations and warranties or covenants under the Merger Agreement such that a ~~definitive~~closing ~~merger~~condition ~~agreement~~is not satisfied (subject to notice and cure and other customary exceptions); and (iv) by Naked if (1) Bendon substantially changes its business as conducted as of the “date of the Merger Agreement”, or (2) Naked accepts a Superior Proposal (as defined in the Merger Agreement). However, the ~~satisfaction~~right ofto terminate due to the ~~conditions~~Outside Date passing will not be available to any party whose material breach of their obligations ~~negotiated~~under ~~therein~~the ~~and~~Merger ~~approval~~Agreement resulted in the failure of the Merger byto occur on or before the ~~Company’s~~Outside ~~stockholders~~Date. ~~Accordingly~~Notwithstanding the foregoing, on ~~there~~or ~~can~~before beMay no22, ~~assurance~~2018, ~~that~~Bendon will provide written notice to Naked of any known material breach by Naked of its obligations aunder the Merger Agreement ~~will~~which could reasonably be ~~entered~~expected ~~into~~to orresult ~~that~~in the ~~proposed~~failure of the Merger ~~will~~to beoccur ~~consummated~~on or before the Outside Date. ~~Those~~Naked ~~portions~~will have no more than ten days to cure any such breach from the date of such notice and the ~~LOI,~~Outside asDate ~~amended~~will be extended by the number of days (although not more than ten days in each instance) used by Naked to cure such breach, which date ~~that~~shall ~~describe~~be the ~~proposed~~new ~~Merger~~Outside Date. In any event, ~~including~~under no circumstances will the ~~consideration~~Outside toDate be ~~issued~~extended ~~therein,~~beyond ~~are~~June ~~non-binding~~11, 2018.

Following the Merger, all Naked common stock will be de-listed from the Nasdaq Capital Market and de-registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Principal Products

Historically, we were strictly a men’s innerwear manufacturer and retailer and our men’s collections ~~represents~~represented substantially all of our revenues until the third quarter of fiscal 2016. Our Fall 2015 women’s sleep and loungewear collection became available for retail sale online at www.wearnaked.com in September 2015 and at retail locations and other online retailers in February 2016. Also, in February 2016, we launched our women’s intimate apparel products online and at select retailers. ~~Our~~Since then, our women’s collections have seen strong growth and ~~represents~~represented approximately ~~half~~68.6% of our revenues for fiscal ~~2017~~2018.

Men’s Collections

We currently offer a variety of innerwear products for men including boxer briefs, trunks, briefs, undershirts, t-shirts, lounge pants, lounge shorts and robes. Our three primary men’s collections are: Luxury, Active and Essential. Our men’s Luxury collection utilizes MicroModal fabric, which is a lightweight, highly soft fabric that has breathable moisture-wicking qualities and made using a carbon-neutral, eco-friendly process. Our Active collection is based on a high-performance Microfiber fabric, a nylon-based textile that is smooth and resilient while providing moisture-wicking properties. We have been producing our full line of men’s underwear using these fabrics since the inception of our business. Our Essential collection is made of Cotton Stretch fabric for a light, comfortable everyday fit. Underwear and undershirts in this collection are sold in 2-packs to access a broader customer base.

We also offer men’s products in other fabrics including Microfiber with X-Static® Silver, French Terry, Modal Cotton and Tencel. All of the fabrics we use are readily available in many countries. Additionally, we produce boxer briefs and V-neck t-shirts with microfiber using X-Static® Silver, a high-performance fabric, which helps regulate body temperature and provides anti-odor and antimicrobial protection. X-Static® Silver fabric contains 99.9% pure silver woven into the garment’s nylon threads, which naturally deters odor-causing bacteria, wicks away moisture, is anti-chaffing and naturally cooling.

During fiscal 2017, we expanded our Essentials collection to include loungewear in Peruvian Pima Cotton, a superior cotton that is prized for its softness and breathability. We also introduced a new product called the Naked Shield™ which incorporates special fabric featuring Circuitex technology that provides wireless shielding and antimicrobial/anti-odor properties.

In addition to our existing men’s collections, we also produce the Wade X Naked collection for men which includes two groups of underwear, undershirts, lounge pants and shorts, and robes. Like our core men’s collection, these groups utilize high performance fabrics and innovative design and construction to create exceptional product look, feel and comfort.

Women’s Collections

Our women’s loungewear and sleepwear collections are based on two of the same fabrics used in our collections for men: Luxury ~~Micromodal~~MicroModal and Essential Cotton Stretch. Our three primary women’s collections are: Luxury, Everyday, and Essential. These women’s collections include a range of products such as boyshorts, hipsters, lounge pants, camisoles, tank tops, pajamas, chemises and sleepshirts. We also make French terry robes, Alpaca throws, as well as Double Gauze woven cotton sleepwear. True to our brand mission, we believe these designs deliver superior fit, feel and function with timeless looks and at premium affordable prices that make them appealing to a broad consumer market.

Our Everyday collection consists of three core groups of daily essentials including wire-free bralettes and thong, modern brief and hipster style panties meant for everyday use for a range of different occasions. Everyday Naked, is constructed from Peruvian Pima cotton stretch fabric that is designed to be ultra-light, soft and breathable. Naked Luxury intimates, is made from soft MicroModal fabric with 360-degree stretch that is designed to naturally wick away moisture and be cool to the touch. We have designed our intimate apparel collection according to our mission to deliver the highest standard of fit, feel, function and look for the modern active woman.

Our ~~Essential~~Everyday collection consists of ~~pajamas,~~three ~~sleepshirts~~core groups of daily essentials including wire-free bralettes and thong, ~~robes~~modern brief and hipster style panties meant for everyday use for a range of different occasions. Everyday Naked, ~~loungewear~~is constructed from Peruvian Pima cotton stretch fabric that is designed to be ultra-light, ~~yogawear~~soft and ~~chemises~~breathable. Naked Luxury intimates, is made from ~~Peruvian~~soft ~~Pima~~MicroModal ~~Cotton~~fabric ~~for~~with ~~everyday~~360-degree stretch ~~comfort~~that is designed to naturally wick away moisture and be cool to the touch. We have designed our intimate apparel collection according to our mission to deliver the highest standard of fit, feel, function, and ~~style~~look for the modern active woman.

Our Essential collection consists of pajamas, sleepshirts, robes, loungewear, yoga wear and chemises made from Peruvian Pima Cotton for everyday comfort and style.

Distribution

We sell our products through wholesale relationships and through direct to consumer channels. The wholesale channel is currently our largest channel and consists of department stores as well as boutique apparel stores and undergarment stores. Our two largest distribution partners are Nordstrom, which carries our products in ~~select stores in North America and~~ its online store, Nordstrom.com, and Bloomingdales, which carries our product at select stores in the U.S. We also sell our products through Dillard’s, Soma.com, SaksFifthAvenue.com and a growing number of boutiques and specialty stores. We are targeting additional key retail store partners in the U.S. in ~~2017~~ 2018 for our men’s and women’s products. In addition to selling in key department stores in North America, Naked also sells through online stores such as Amazon.com, barenecessities.com, hackberry.com, hisroom.com and freshpair.com.

We also sell all of our products direct-to-consumer through our internet retail store, www.wearnaked.com. Our internet retail store is optimized for use on all online platforms and provides our customers with a premium online shopping experience and access to our entire product line. Our direct-to-consumer channel has become an increasingly significant part of our business and we expect it will continue to do so as our brand awareness increases in North America and internationally. We believe that the availability of online sales is convenient for our customers and enhances the image of our brand, making our brand and products more accessible in more markets than in brick and mortar stores alone. We plan to commercially introduce new products at www.wearnaked.com as well as feature certain products, collections, and styles exclusively.

Production

We utilize manufacturing partners outside of the United States to produce our products. Currently, our primary production is in China although we have limited production in India, Peru, Bangladesh, and ~~Peru~~Thailand and may expand into other territories in ~~2017~~2018.

We believe we have developed good relationships with a number of our vendors and we seek to ensure that they share our commitment to quality and ethics. We do not have any long-term agreements requiring us to use any manufacturer. Our primary production partner during fiscal ~~2017~~2018 has been TMS Fashion, a wholly owned subsidiary of LuenThai Holdings Limited, a Hong Kong Stock Exchange-listed company. We began working with TMS and LuenThai in 2014 in an effort to streamline and scale up our production capabilities by leveraging a large, established manufacturing resource. We believe this partnership allows us access to “best-in-class” fabrics, materials and manufacturing techniques while reducing our need for fixed overhead. Further, until August 2017, we sublet our principal office location in New York City from Tellas, Inc., another wholly-owned subsidiary of LuenThai operating in the U.S. We have additional ~~manufacturing~~ manufacturing relationships for our women’s intimate apparel collections and expect to work with additional manufacturers as we expand our product offering.

Sources and Availability of Raw Materials

Raw materials, which include fabric and accessories, are sourced from all over the world, including Italy, Turkey, China, Peru, India and Bangladesh. We believe these fabrics and raw materials are readily available from multiple sources. Currently, we work closely with TMS Fashion and LuenThai, who are responsible for all of the sourcing of our raw materials for our men’s and women’s collections. We have additional sourcing relationships for our women’s intimate apparel collections and we expect to work with additional sourcing partners as we expand our product offering.

Key Customers

In fiscal 2017, sales were concentrated with Bloomingdales and Nordstrom, which accounted for 14% and 12%, respectively of our net sales. During fiscal 2016, Nordstrom accounted for 41% of our net sales. The decline in percentage of sales to Nordstrom during fiscal 2017 is partly due to a reduction by Nordstrom in replenishment orders due to the elimination by them of in-store inventory, but more significantly is due to the addition of other key departments store and specialty store accounts, and the corresponding increase in overall net sales. Nordstrom and Bloomingdales are currently of key importance to our business and our results of operations, which would be materially adversely affected if these relationships ceased to exist or are significantly reduced. These customers do not have ongoing purchase commitments with us nor do any of our other customers. Therefore, we cannot guarantee that the volume of sales will remain consistent going forward. We typically enter into agreements with department store and larger retail customers which cover the material terms and conditions of purchase orders such as shipping terms, pricing policies, payment terms and cancellation policies. We are targeting additional department store and retail customers to become additional key accounts of our business in fiscal 2018 and beyond.

Key Customers

In fiscal 2018, sales were concentrated with Bloomingdales, Nordstrom.com, and Dillards which accounted for 8.9%, 11%, and 8.2% respectively of our net sales. During fiscal 2017, Nordstrom accounted for 12.4%, Bloomingdales accounted for 13.7%, and Dillards accounted for 3.3% of our net sales. The decline in percentage of sales to Nordstrom and Bloomingdales during fiscal 2018 is largely due to an increase in sales across all channels leading to a decrease in sales concentrations to key customers. Nordstrom.com, Bloomingdales, and Dillard’s are currently of key importance to our business and our results of operations, which would be materially adversely affected if these relationships ceased to exist or are significantly reduced. These customers do not have ongoing purchase commitments with us nor do any of our other customers. Therefore, we cannot guarantee that the volume of sales will remain consistent going forward. We typically enter into agreements with department store and larger retail customers which cover the material terms and conditions of purchase orders such as shipping terms, pricing policies, payment terms and cancellation policies. We are targeting additional department store and retail customers to become additional key accounts of our business in fiscal 2019 and beyond.

Marketing

Our marketing strategy is primarily focused on digital and social media marketing aimed at increasing brand awareness and helping drive sales growth cost-efficiently. We have engaged consultants, where necessary, to provide marketing advisory and execution services to our company, including assistance with brand management, public relations, celebrity alignment, strategic retail placement, manufacturing strategy, and strategic and creative development and assistance. We intend to continue to grow our investment in marketing and brand awareness-building activities, including internet and media marketing to consumers and retailers, attendance at apparel trade shows and exploration of other strategic marketing opportunities.

Competition

Men’s and women’s innerwear is a very competitive market with many high -profile undergarment manufacturers such as, Calvin Klein, Polo Ralph Lauren, 2(x)ist, Hugo Boss, Tommy John, Saxx Giorgio Armani, Tommy Hilfiger, Michael Kors, DKNY, Natori, Free People, Hanky Panky, Commando, Cosabella, MeUndies, Bread&Boxers, Frigo and others. We believe there are currently over 100 potential competitors in our market sector for men’s and women’s undergarments, lounge and sleepwear, and intimate apparel. The market includes increasing competition from established companies who are expanding their production and marketing of undergarments, as well as frequent new entrants. We are in direct competition with such companies. Competition is principally on the basis of brand image and recognition, as well as product quality, innovation, style, distribution and price. We believe that we have the potential to perform well against competition as a result of the quality, fit and performance of our products, our brand and brand strategy and positioning, our planned marketing and consumer engagement initiatives, and through brand endorsement and strategic collaboration agreements~~, such as our partnership with Wade~~. The products we have introduced to market and the products we plan to introduce are targeted at a premium consumer value point, which means retailing a high -quality product at a competitive price to comparable products, which we believe gives us the opportunity to penetrate the market successfully.

We believe our competitive advantages include promoting that our products are as comfortable as wearing nothing at all, which leverages our brand name, and retailing high quality products at a competitive price with superior fit, feel, function and look. We also believe our brand name and brand mission and philosophy will be an important competitive differentiator as we expand our marketing and brand awareness initiatives. However, many of our competitors have significant competitive advantages, including longer operating histories, larger and broader customer bases, more established relationships with a broader set of suppliers, greater brand recognition and greater financial, research and development, marketing, distribution and other resources than we do. Our competitors may be able to achieve and maintain brand awareness and market share more quickly and effectively than we can.

Seasonality of Business

The apparel industry is generally subject to seasonality of buying which can affect revenue and cash flows. For men, there are generally two distinct buying seasons in the apparel industry: Fall/Winter season, which occurs in the third to fourth quarters of our fiscal year and Spring/Summer season, which occurs in the first to second quarters of our fiscal year, with some potential shipments at the last quarter. The women’s apparel buying markets are more frequent than men’s, although we may elect to focus only on two main buying markets as we do for men’s products in order to optimize design and production cycles. In fiscal 2017, the largest revenues were reported in our third and fourth fiscal quarters, arising from seasonal products and sales, and the launch of new collections (as described in this Form 10-K under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”). As a result of growth and changes to our business with the introduction of new product lines during the fiscal year, the natural seasonality of our business had a reduced effect. Furthermore, with limited operating history it is difficult to anticipate the effects of seasonality moving forward. Thus, historical quarterly operating trends may not be indicative of future performance because of new product launches and continued early stage sales growth.

Seasonality of Business

The apparel industry is generally subject to seasonality of buying which can affect revenue and cash flows. For men, there are generally two distinct buying seasons in the apparel industry: Fall/Winter season, which occurs in the third to fourth quarters of our fiscal year and Spring/Summer season, which occurs in the first to second quarters of our fiscal year, with some potential shipments at the last quarter. The women’s apparel buying markets are more frequent than men’s, although we may elect to focus only on two main buying markets as we do for men’s products in order to optimize design and production cycles. In fiscal 2018, the largest revenues were reported in our second and fourth fiscal quarter, arising from seasonal products and sales, as well as due to $441,453 in sales recorded for the fourth quarter relating to the consignment agreement with Bendon, dated October 4, 2017. As a result of growth and changes to our business with the introduction of new product lines during the fiscal year, the natural seasonality of our business had a reduced effect. Furthermore, with limited operating history it is difficult to anticipate the effects of seasonality moving forward. Thus, historical quarterly operating trends may not be indicative of future performance because of new product launches and continued early stage sales growth.

Intellectual Property

The “Naked” trademark is a critical component of the value of our business and we rely on the strength of our brand to differentiate ourselves in the marketing and sale of our products. To protect the Naked brand, we have secured trademark registrations in the United States, the European Union and Canada. We also own applications and registrations in the United States, Canada and other jurisdictions for additional Naked-related trademarks. We take steps to enforce and police our Naked trademark and expect to continue to incur expenses for enforcement-related work and for the filing of trademark and other types of intellectual property applications in the U.S. and key international markets in fiscal ~~2018~~2019.

Dwyane Wade Licensing & Endorsement Agreement

In June 2015, we entered into a collaboration and endorsement agreement with NBA champion Dwyane Wade through his commercial entity Wade Enterprises, LLC, which is wholly-owned and controlled by him. Under the agreement with Wade, we will pay Wade royalties in a range of up to ten percent of net wholesale sales of Wade products, subject to certain minimum royalty payments. We also granted Wade and his designee warrants to purchase up to an aggregate of 365,688 shares of common stock (the “Wade Grant”) and granted to Wade an additional warrant to purchase up to 36,569 shares of our common stock (the “Protection Warrant”). Both the Wade Grant and Protection Warrant are exercisable for a period of seven years at an exercise price of $4.80 per share. The Wade Grant will vest and become exercisable in three annual installments and will vest in full upon a change of control of our company. The Protection Warrant will become exercisable in the event that, as a result of certain subsequent issuances of our securities, the shares of common stock underlying the Wade Grant represent less than 2% of our fully-diluted equity. The number of shares of common stock for which the Protection Warrant will become exercisable will be equal to the number of shares necessary to ensure that both the Wade Grant and Protection Warrant represent, together, at least 2% of our fully-diluted equity. Further, in the event that we propose to issue any capital stock or securities convertible into or exchangeable for capital stock, then, subject to certain exceptions, Wade will have the right to purchase such securities on the same terms and conditions in order to maintain his ownership percentage in our company.

Employees

We currently employ ~~fourteen~~six full-time employees, of which ~~are~~five ~~thirteen~~ are employed in the United States and one is employed in Canada. None of our employees are currently covered by a collective bargaining agreement. We have had no labor-related work stoppages and we believe our relations with our employees ~~are~~ are excellent.

Corporate Information

We were incorporated in the State of Nevada on May 17, 2005 under the name of Search By Headlines.com Corp. Immediately prior to the transaction with Naked Inc. described below, we were a public reporting “shell company,” as defined in Rule 12b-2 under the Exchange Act.

On July 30, 2012, we completed a reverse acquisition of Naked Inc., whereby we acquired all of the issued and outstanding common shares of Naked Inc. in exchange for the issuance of 337,500 shares of common stock in the capital of our company to the Naked Inc. stockholders on a pro-rata basis, representing 50% of the capital stock of our company at the time. As a result of this reverse acquisition transaction, Naked Inc. became a wholly-owned subsidiary of our company and our business became the manufacture and sale of direct and wholesale men’s innerwear and intimate apparel products in Canada and the United States to consumers and retailers.

Effective August 29, 2012, we changed our name from “Search By Headlines.com Corp.” to “Naked Brand Group Inc.” This change in our corporate name was effectuated by merging a wholly owned subsidiary of our company, which was formed solely to effect the name change, with and into our company.

Naked Inc., our wholly owned subsidiary, was originally incorporated under the federal laws of Canada on May 21, 2009 as “In Search of Solutions Inc.” Naked changed its corporate name to “Naked Boxer Brief Clothing Inc.” on May 17, 2010 and to “Naked Inc.” on February 20, 2013. Naked Inc. ~~converted~~continued from the federal jurisdiction of Canada to the jurisdiction of the State of Nevada on July 27, 2012. As part of the continuation, all classes of shares of Naked, including Class C, D, E and F common shares, were converted into one class of common stock of the continuing corporation.

Our principal executive offices are located at 95180 Madison Avenue, ~~10th~~Suite ~~Floor~~505, New York, New York, USA 10016. Our telephone number is (~~212~~646) ~~851~~653-~~8050~~7710.

Available Information

Our corporate website address is www.nakedbrands.com and our online store is www.wearnaked.com. Our Annual ~~Report~~Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), are filed with the U.S. Securities and Exchange Commission (the “SEC”). We are subject to the informational requirements of the Exchange Act and file or furnish reports, proxy statements, and other information with the SEC. Such reports and other information filed by the Company with the SEC are available free of charge on our website at ir.nakedbrands.com when such reports are available on the SEC’s website.

The public may read and copy any materials filed by Naked with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.

The contents of the websites referred to above are not incorporated into this filing. Further, our references to the URLs for these websites are intended to be inactive textual references only.

Item 1A.

Risk Factors

Certain factors may have a material adverse effect on our business, financial condition, and results of operations. You should consider carefully the risks and uncertainties described below, in addition to other information contained in this Form 10-K, including our consolidated financial statements and related notes. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. If any of the following risks actually occurs, our business, financial condition, results of operations, and future prospects could be materially and adversely affected. In that event, the trading price of our common stock could decline, and you could lose part or all of your investment.

Risks Related to Our Business

We have a limited operating history, which makes it difficult to evaluate our company or future operations.

We are still ~~in the~~evolving ~~initial stages of~~ our business plan as a growing company. As a result, we have no way to evaluate the likelihood that we will be able to operate ~~the~~ the business successfully. For the years ended January 31, ~~2017~~2018 and ~~2016~~2017, our net revenues were $12,~~842~~859,~~065~~884 and $1,~~389~~842,~~414~~065, respectively. Naked commenced operations in 2010 and, since beginning operations, we have generated limited total revenues. As a relatively new company, we are subject to many risks associated with the initial organization, financing, expenditures, and impediments inherent in a new business and there is limited history upon which to base any assumption as to the likelihood that we will prove successful.

We have a history of operating losses and negative cash flow that may continue into the foreseeable future. If we fail to execute our strategy to achieve and maintain profitability in the future, investors could lose confidence in the value of our common stock, which could cause our stock price to decline and adversely affect our ability to raise additional capital. Investors should evaluate an investment in our company in light of the obstacles that may be encountered by a start-up company in a competitive market.

If we are unable to obtain additional financing on acceptable terms, we may have to curtail our growth or cease our development plans and operations.

The operation of our business and our growth efforts will require significant cash outlays. We are largely dependent on outside capital to implement our business plan and support our operations. We anticipate for the foreseeable future that cash on hand and cash generated from operations will not be sufficient to meet our cash requirements, and that we will need to raise additional capital through investments to fund our operations and growth. We cannot assure you that we will be able to raise additional working capital as needed on terms acceptable to us, if at all. If we are unable to raise capital as needed, we may be required to reduce the scope of our growth efforts, which could harm our business plans, financial condition and operating results, or cease our operations entirely, in which case, you may lose all your investment. Financings, including future equity investments, if obtained, may be on terms that are dilutive to our stockholders, and the prices at which new investors would be willing to purchase our securities may be lower than the price at which you purchase your shares. Furthermore, the terms of securities issued in a financing, if obtained, may be more favorable for new investors.

Investors should be aware that the value of an investment in our company may go down as well as up. In addition, there can be no certainty that the market value of an investment in our company will fully reflect its underlying value.

Our auditors’ report on our January 31, ~~2017~~2018 consolidated financial statements included an explanatory paragraph regarding there being substantial doubt about our ability to continue as a going concern.

For the ~~year~~years ended January 31, 2018 and 2017, we incurred a net loss of $5,789,805 and $10,798,503, respectively. We anticipate generating losses for at least the next 12 months. Therefore, there is substantial doubt about our ability to continue operations in the future as a going concern, as noted by our auditors with respect to the consolidated financial statements for the year ended January 31, ~~2017~~ 2018. Although our consolidated financial statements raise substantial doubt about our ability to continue as a going concern, they do not reflect any adjustments that might result if we are unable to continue our business. If we cannot continue as a viable entity, our stockholders may lose some or all of their investment in our company.

We have a concentration of sales to key customers and any substantial reduction in sales to these customers would have a material adverse effect on our business.

During the year ended January 31, ~~2017~~2018, sales were concentrated with Bloomingdales, Nordstrom.com, and ~~Nordstrom~~Dillard’s, which accounted for 148.9%, 11%, and 128.2%, respectively, of our net sales. InDuring fiscal ~~2016~~2017, Nordstrom accounted for 4112.4%, Bloomingdales accounted for 13.7%, and Dillards accounted for 3.3% of our net sales. The decline in percentage of sales to Nordstrom and Bloomingdales during fiscal 2018 ~~2017~~ is ~~partly~~largely due to aan ~~reduction~~increase byin ~~Nordstrom~~sales inacross ~~replenishment~~all ~~due~~channels leading to ~~the~~a ~~elimination~~decrease of in~~-store~~ ~~inventory,~~sales ~~but~~concentrations ~~more significantly is due~~ to ~~the addition of other~~ key ~~departments store and specialty store accounts, and the corresponding increase in overall net~~customers. ~~sales~~Nordstrom.com, ~~Nordstrom~~Bloomingdales, and ~~Bloomingdales~~Dillard’s are currently of key importance to our business and our results of operations would be materially adversely affected if these relationships ceased. Although we have diversified our customers and continue to receive increasing sales orders from existing customers, these customers do not have any ongoing purchase commitment agreement with us; therefore, we cannot guarantee that the volume of sales will remain consistent going forward. Any substantial change in purchasing decisions by these customers, whether due to actions by our competitors, industry factors or otherwise, could have a material adverse effect on our business and our financial condition.

We operate in a highly competitive market and the size and resources of some of our competitors may allow them to compete more effectively than we can, resulting in a loss of our market share and a decrease in our net revenue and profitability.

The market for innerwear products is highly competitive. Competition may result in pricing pressures, reduced profit margins or lost market share or a failure to grow our market share, any of which could substantially harm our business and results of operations. We compete directly against wholesalers and direct retailers of innerwear products, including large, diversified companies with substantial market share and strong worldwide brand recognition, such as Calvin Klein, Polo Ralph Lauren, 2(x)ist, Hugo Boss, Tommy John, Saxx Giorgio Armani, Tommy Hilfiger, Michael Kors, DKNY, Natori, Free People, Hanky Panky, Commando, Cosabella, MeUndies, Bread&Boxers, Frigo and others. Many of our competitors have significant competitive advantages, including longer operating histories, larger and broader customer bases, more established relationships with a broader set of suppliers, greater brand recognition and greater financial, research and development, marketing, distribution and other resources than we do. Our competitors may be able to achieve and maintain brand awareness and market share more quickly and effectively than we can. Many of our competitors promote their brands through traditional forms of advertising, such as print media and television commercials, and through celebrity endorsements, and have greater and substantial resources to devote to such efforts. Our competitors may also create and maintain brand awareness using traditional forms of advertising more quickly than we can. Our competitors may also be able to increase sales in their new and existing markets faster than we can by emphasizing different distribution channels than we do, such as catalog sales or an extensive franchise network, as opposed to distribution through retail stores, wholesale or internet, and many of our competitors have substantial resources to devote toward increasing sales in such ways.

If we are unable to anticipate consumer preferences and successfully develop and introduce new, innovative and updated products, we may not be able to maintain or increase our sales and profitability.

Our success depends on our ability to identify and originate product trends as well as to anticipate and react to changing consumer demands in a timely manner. All of our products are subject to changing consumer preferences that cannot be predicted with certainty. We may be unable to introduce new products in a timely manner. Our customers may not accept our new products including our recently launched women’s products, or our competitors may introduce similar products in a more timely fashion. Failure to anticipate and respond in a timely manner to changing consumer preferences could lead to, among other things, lower sales and excess inventory levels. Even if we are successful in anticipating consumer preferences, our ability to adequately react to and address those preferences will in part depend upon our continued ability to develop and introduce innovative, high-quality products. Our failure to effectively introduce new products that are accepted by consumers could have a material adverse effect on our financial condition.

If we are unable to obtain or maintain our endorsements by professional athletes and celebrities, our ability to market and sell our products may be harmed.

An important element of our marketing strategy is to obtain endorsements from prominent athletes and celebrities, which may contribute to the image of our brands. To date, we have entered into one celebrity endorsement agreement with Dwyane Wade, an NBA basketball player. Weof which was terminated in the fourth quarter of fiscal 2018 We believe that this strategy ~~is and~~ will continue to be an effective means of gaining brand exposure worldwide and creating broad appeal for our products. We cannot assure you that we will be able to ~~maintain our existing relationships with Dwyane Wade and other individuals in the future or that we will be able to~~ attract new athletes and celebrities to endorse our products. We also are subject to risks related to the selection of athletes and celebrities whom we choose to endorse our products. We may select athletes who are unable to perform at expected levels or who are not sufficiently marketable. In addition, negative publicity concerning any of our athletes and celebrities could harm our brand and adversely impact our business. If we are unable in the future to secure prominent athletes and celebrities and arrange endorsements of our products on terms we deem to be reasonable, we may be required to modify our marketing platform and to rely more heavily on other forms of marketing and promotion, which may not prove to be effective. In any event, our inability to obtain endorsements from professional athletes and celebrities could adversely affect our ability to market and sell our products, resulting in loss of revenues ~~and a loss of profitability~~.

An economic downturn or economic uncertainty in our key markets may adversely affect consumer discretionary spending and demand for our products.

Many of our products may be considered discretionary items for consumers. Factors affecting the level of consumer spending for such discretionary items include general economic conditions, particularly those in the United States, and other factors such as consumer confidence in future economic conditions, fears of recession, the availability of consumer credit, levels of unemployment, tax rates and the cost of consumer credit. As global economic conditions continue to be volatile or economic uncertainty remains, trends in consumer discretionary spending also remain unpredictable and subject to reductions due to credit constraints and uncertainties about the future. The current volatility in the United States economy in particular has resulted in an overall slowing in growth in the retail sector because of decreased consumer spending, which may remain depressed for the foreseeable future. These unfavorable economic conditions may lead consumers to delay or reduce purchase of our products. Consumer demand for our products may not reach our sales targets, or may decline, when there is an economic downturn or economic uncertainty in our key markets, particularly in North America. Our sensitivity to economic cycles and any related fluctuation in consumer demand may have a material adverse effect on our financial condition.

Our sales and profitability may decline as a result of increasing product costs and decreasing selling prices.

Our business is subject to significant pressure on pricing and costs caused by many factors, including intense competition, constrained sourcing capacity and related inflationary pressure, pressure from consumers to reduce the prices we charge for our products and changes in consumer demand. These factors may cause us to experience increased costs, reduce our sales prices to consumers or experience reduced sales in response to increased prices, any of which could have a material adverse effect on our financial conditions, operating results and cash flows.

Our results of operations could be materially harmed if we are unable to accurately forecast customer demand for our products.

To ensure adequate inventory supply, we must forecast inventory needs and place orders with our manufacturers based on our estimates of future demand for particular products. Our ability to accurately forecast demand for our products could be affected by many factors, including an increase or decrease in customer demand for our products or for products of our competitors, our failure to accurately forecast customer acceptance of new products, product introductions by competitors, unanticipated changes in general market conditions, and weakening of economic conditions or consumer confidence in future economic conditions. If we fail to accurately forecast customer demand, we may experience excess inventory levels or a shortage of products available for sale in our stores or for delivery to customers. Inventory levels in excess of customer demand may result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would adversely affect our results of operations and could impair the strength and exclusivity of our brand. Conversely, if we underestimate customer demand for our products, our manufacturers may not be able to deliver products to meet our requirements, and this could result in damage to our reputation and customer relationships.

We rely on third-party suppliers and manufacturers to provide fabrics for and to produce our products, and we have limited control over them and may not be able to obtain quality products on a timely basis or in sufficient quantity.

We do not manufacture our products or the raw materials for them and rely instead on third-party suppliers and manufacturers. Many of the specialty fabrics used in our products are technically advanced textile products developed and manufactured by third parties and may be available, in the short-term, from only one or a very limited number of sources. We may experience a significant disruption in the supply of fabrics or raw materials from current sources or, in the event of a disruption, we may be unable to locate alternative materials suppliers of comparable quality at an acceptable price, or at all. In addition, if we experience significant increased demand, or if we need to replace an existing supplier manufacturer, we may be unable to locate additional suppliers of fabrics or raw materials or additional manufacturing capacity on terms that are acceptable to us, or at all, or we may be unable to locate any supplier or manufacturer with sufficient capacity to meet our requirements or to fill our orders in a timely manner. Identifying a suitable supplier is an involved process that requires us to become satisfied with their quality control, responsiveness and service, financial stability and labor and other ethical practices. Even if we are able to expand existing or find new manufacturing or fabric sources, we may encounter delays in production and added costs as a result of the time it takes to train our suppliers and manufacturers in our methods, products and quality control standards. Delays related to supplier changes could also arise due to an increase in shipping times if new suppliers are located farther away from other participants in our supply chain. Any delays, interruption or increased costs in the supply of fabric or manufacture of our products could have an adverse effect on our ability to meet customer demand for our products and result in lower net revenue and income from operations both in the short and long term. We have occasionally received, and may in the future continue to receive, shipments of products that fail to comply with our technical specifications or that fail to conform to our quality control standards. In that event, unless we are able to obtain replacement products in a timely manner, we risk the loss of net revenue resulting from the inability to sell those products and related increased administrative and shipping costs. If defects in the manufacture of our products are not discovered until after our customers purchase such products, our customers could lose confidence in the technical attributes of our products and our results of operations could suffer and our business could be harmed.

The fluctuating cost of raw materials could increase our cost of goods sold and cause our results of operations and financial condition to suffer.

The fabrics used by our suppliers and manufacturers include synthetic fabrics whose raw materials include petroleum-based products. Our products also include natural fibers, including cotton. Our costs for raw materials are affected by, among other things, weather, consumer demand, speculation on the commodities market, the relative valuations and fluctuations of the currencies of producer versus consumer countries and other factors that are generally unpredictable and beyond our control. Increases in the cost of raw materials could have a material adverse effect on our cost of goods sold, results of operations, financial condition and cash flows.

Our ability to source our merchandise profitably or at all could be hurt if new trade restrictions are imposed or existing trade restrictions become more burdensome.

The United States and the countries in which our products are produced or sold internationally have imposed and may impose additional quotas, duties, tariffs, or other restrictions or regulations, or may adversely adjust prevailing quota, duty or tariff levels. Countries impose, modify and remove tariffs and other trade restrictions in response to a diverse array of factors, including global and national economic and political conditions, which make it impossible for us to predict future developments regarding tariffs and other trade restrictions. Trade restrictions, including tariffs, quotas, embargoes, safeguards and customs restrictions, could increase the cost or reduce the supply of products available to us or may require us to modify our supply chain organization or other current business.

Our operating results are subject to seasonal and quarterly variations in our net revenue from operations, which could cause the price of our common stock to decline.

We have experienced, and expect to continue to experience, significant seasonal variations in our net revenue from operations. Seasonal variations in our net revenue are primarily related to increased sales of our products during our fiscal fourth quarter, reflecting our historical strength in sales during the holiday season.

Our quarterly results of operations may also fluctuate significantly as a result of a variety of other factors, including, among other things, net revenue and profits contributed by new retailers; increases or decreases in comparable sales; changes in our product mix; and the timing of new advertising and new product introductions.

As a result of these seasonal and quarterly fluctuations, we believe that comparisons of our operating results between different quarters within a single fiscal year are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of our future performance.

WeAs ~~began~~a ~~selling~~result of growth and changes to our business with the introduction of new product lines during the 2018 and 2017 fiscal years, the natural seasonality ~~products~~of inour ~~Canada~~business inhas ~~January~~had ~~2010~~a reduced effect. ~~Our~~However, ~~limited~~our operating history and nature as a developing company make it difficult to ~~assess~~ assess the impact of seasonal factors on our business or whether or not our business is susceptible to cyclical fluctuations in the economy in the markets in which we operate. Likewise, our growth may have obscured the effect of any seasonal or cyclical factors on our business to date. Seasonal or cyclical variations in our business may become more pronounced over time and may harm our ~~results~~ results of operations in the future. Any future seasonal or quarterly fluctuations in our results of operations may not match the expectations of market analysts and investors. Disappointing quarterly results could cause the price of our common stock to decline. Seasonal or quarterly factors in our business and results of operations may also make it more difficult for market analysts and investors to assess the longer-term strength of our business at any particular point, which could lead to increased volatility in our stock price. Increased volatility could cause our stock price to suffer in comparison to less volatile investments.

Any future seasonal or quarterly fluctuations in our results of operations may not match the expectations of market analysts and investors. Disappointing quarterly results could cause the price of our common stock to decline. Seasonal or quarterly factors in our business and results of operations may also make it more difficult for market analysts and investors to assess the longer-term strength of our business at any particular point, which could lead to increased volatility in our stock price. Increased volatility could cause our stock price to suffer in comparison to less volatile investments.

If we are unable to adequately demonstrate that our independent manufacturers use ethical business practices and comply with applicable laws and regulations, our brand image could be harmed due to negative publicity.

Our core values, which include developing the highest quality products while operating with integrity, are an important component of our brand image, which makes our reputation particularly sensitive to allegations of unethical business practices. While our internal and vendor operating guidelines promote ethical business practices such as environmental responsibility, fair wage practices, and compliance with child labor laws, among others, and we, along with a third party that we retain for this purpose, monitor compliance with those guidelines, we do not control our independent manufacturers or their business practices. Accordingly, we cannot guarantee their compliance with our guidelines. A lack of demonstrated compliance could lead us to seek alternative suppliers, which could increase our costs and result in delayed delivery of our products, product shortages or other disruptions of our operations. Violation of labor or other laws by our independent manufacturers or the divergence of an independent manufacturer’s labor or other practices from those generally accepted as ethical in the United States, Canada or other markets in which we do business could also attract negative publicity for us and our brand. This could diminish the value of our brand image and reduce demand for our merchandise if, as a result of such violation, we were to attract negative publicity. Other apparel manufacturers have encountered significant problems in this regard, and these problems have resulted in organized boycotts of their products and significant adverse publicity. If we, or other manufacturers in our industry, encounter similar problems in the future, it could harm our brand image, stock price and results of operations.

Our ~~limited~~ operating experience and limited brand recognition in new international markets may limit our expansion strategy and cause our business and growth to suffer.

Our future growth depends, to an extent, on our international expansion efforts. We have limited experience with regulatory environments and market practices internationally, and we may not be able to penetrate or successfully operate in any new market. We may also encounter difficulty expanding into new international markets because of limited brand recognition leading to delayed acceptance of our products by customers in these new international markets. Our failure to develop new international markets or disappointing growth outside of existing markets will harm our business and results of operations.

Our current operations in international markets and our efforts to expand into additional international markets, and any earnings in those markets, may be affected by legal and regulatory risks.

We are subject to the U.S. Foreign Corrupt Practices Act, in addition to the anti-corruption laws of the foreign countries in which we operate and manufacture our products. Although we implement policies and procedures designed to promote compliance with these laws, our employees, contractors and agents, as well as those companies to which we outsource certain of our business operations, may take actions in violation of our policies. Any such violation could result in sanctions or other penalties and have an adverse effect on our business, reputation and operating results.

Our success depends on our ability to maintain the value and reputation of our brand.

Our success depends on the value and reputation of the Naked brand. The Naked name is integral to our business as well as to the implementation of our strategies for expanding our business. Maintaining, promoting, and positioning our brand will depend largely on the success of our marketing and merchandising efforts and our ability to provide a consistent, high quality customer experience. We rely on social media as one of our marketing strategies to have a positive impact on both our brand value and reputation. Our brand could be adversely affected if we fail to achieve these objectives or if our public image or reputation were to be tarnished by negative publicity. Negative publicity regarding the production methods of any of our suppliers or manufacturers could adversely affect our reputation and sales and force us to locate alternative suppliers or manufacturing sources. Additionally, while we devote considerable efforts and resources to protecting our intellectual property, if these efforts are not successful the value of our brand may be harmed, which could have a material adverse effect on our financial condition.

Any material disruption of our information systems could disrupt our business and reduce our sales.

We rely on information systems to operate our e-commerce website, process transactions, respond to customer inquiries, manage inventory, purchase, sell and ship goods on a timely basis and maintain cost-efficient operations. Any material disruption or slowdown of our systems, including a disruption or slowdown caused by our failure to successfully upgrade our systems, system failures, viruses, cyber-attack or other causes, could cause information, including data related to customer orders, to be lost or delayed which could result in delays in the delivery of merchandise to our customers or lost sales, which could reduce demand for our merchandise and cause our sales to decline. If changes in technology cause our information systems to become obsolete, or if our information systems are inadequate to handle our growth, we could lose customers. If our systems are damaged, fail to function properly or become obsolete, we may have to make monetary investments to repair or replace the systems, and we could endure delays in our operations.

~~If we are unable to safeguard against security breaches with respect to our information systems our business may be adversely affected.~~14

If we are unable to safeguard against security breaches with respect to our information systems, our business may be adversely affected.

In the course of our business, we gather, transmit and retain confidential information, including personal information about our customers, and process payment transactions through our information systems. Although we endeavor to protect confidential information and payment information through the implementation of security technologies, processes and procedures, it is possible that an individual or group could defeat security measures and access sensitive information about our customers, employees and other third parties. Any misappropriation, loss or other unauthorized disclosure of confidential or personally identifiable information gathered, stored or used by us could have a material impact on the operation of our business, including damaging our reputation with our customers, employees, third parties and investors. We could also incur significant costs implementing additional security measures to comply with applicable federal, state or international laws and regulations governing the unauthorized disclosure of confidential or personally identifiable information as well as increased costs such as organizational changes, implementing additional protection technologies, training employees or engaging consultants. In addition, we could incur lost revenues and face increased litigation as a result of any potential cyber-security breach. We are not aware of that we have experienced any material misappropriation, loss or other unauthorized disclosure of confidential or personally identifiable information as a result of a cyber-security breach or other act, however, a cyber-security breach or other act and/or disruption to our information technology systems could have a material adverse effect on our business, prospects, financial condition or results of operations.

Our fabrics and manufacturing technology are not patented and can be imitated by our competitors.

The intellectual property rights in the technology, fabrics and processes used to manufacture our products are owned or controlled by our suppliers and are generally not unique to us. Our ability to obtain intellectual property protection for our products is therefore limited and we currently own no patents or exclusive intellectual property rights in the technology, fabrics or processes underlying our products. As a result, our current and future competitors are able to manufacture and sell products with performance characteristics, fabrics and styling similar to our products. Because many of our competitors have significantly greater financial, distribution, marketing, and other resources than we do, they may be able to manufacture and sell products based on our fabrics and manufacturing technology at lower prices than we can. If our competitors do sell similar products to ours at lower prices, our net revenue and profitability could suffer.

Our failure or inability to protect our intellectual property rights could diminish the value of our brand and weaken our competitive position.

We currently rely on trademarks, as well as confidentiality procedures, to establish and protect our intellectual property rights. We cannot assure you that the steps taken by us to protect our intellectual property rights will be adequate to prevent infringement of such rights by others, including imitation of our products and misappropriation of our brand. In addition, intellectual property protection may be unavailable or limited in some foreign countries where laws or law enforcement practices may not protect our intellectual property rights as fully as in the United States, Canada or the European Union, and it may be more difficult for us to successfully challenge the use of our intellectual property rights by other parties in these countries. If we fail to protect and maintain our intellectual property rights, the value of our brand could be diminished, and our competitive position may suffer.

Our future success is substantially dependent on the continued service of our senior management.

Our future success is substantially dependent on the continued service of our senior management and other key employees, particularly our Chief Executive Officer and Chief Creative Officer, Carole Hochman. The loss of the services of our senior management or other key employees could make it more difficult to successfully operate our business and achieve our business goals. We also may be unable to retain existing personnel that are critical to our success, which could result in harm to our customer and employee relationships, loss of key information, expertise or know-how and unanticipated recruitment and training costs.

Because a portion of our sales may be generated in foreign countries, fluctuations in foreign currency exchange rates may negatively affect our results of operations.

The reporting currency for our consolidated financial statements is the US dollar. In the future, we expect to continue to derive a significant portion of our net revenue in foreign countries, and changes in exchange rates between the currencies for those countries and the US dollar may have a significant, and potentially adverse, effect on our results of operations. Our primary risk of loss regarding foreign currency exchange rate risk is caused by fluctuations in the exchange rates between the US dollar and the currencies for those countries. We have not historically engaged in hedging transactions and do not currently contemplate engaging in hedging transactions to mitigate foreign exchange risks. As we continue to recognize gains and losses in foreign currency transactions, depending upon changes in future currency rates, such gains or losses could have a significant, and potentially adverse, effect on our results of operations.

Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.

Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board, the American Institute of Certified Public Accountants, the SEC and the Public Company Accounting Oversight Board and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of a change.

Risk Related to Our Common Stock and Public Reporting Requirements

Although as of March 17, 2017 we regained compliance with NASDAQ’s listing rules relating to minimum stockholders’ equity requirements, our common stock may be delisted from the NASDAQ Capital Market if we cannot satisfy NASDAQ’s continued listing requirements in the future.

On September 23, 2016, we received written notice from the Listing Qualifications Staff of NASDAQ (the “Staff”) notifying us that we were not at that time in compliance with NASDAQ Listing Rule 5550(b)(1) due to our failure to maintain a minimum of $2,500,000 in stockholders’ equity (the “Minimum Stockholders’ Equity Requirement”) or any alternatives to such requirement. On March 17, 2017, we received written notice from the Staff informing us that the Staff has determined that we have regained compliance with the Minimum Stockholders’ Equity Requirement. As provided in the notice, if we fail to evidence compliance with the Minimum Stockholders’ Equity Requirement upon filing of our periodic report for the quarter ending April 30, 2017, our common stock may be subject to delisting from NASDAQ. If our common stock is delisted, trading in our common stock could be more difficult for investors, potentially leading to declines in our share price and liquidity. Without a NASDAQ listing, stockholders may have a difficult time getting a quote for the sale or purchase of our stock, the sale or purchase of our stock would likely be made more difficult and the trading volume and liquidity of our stock could decline. Delisting from NASDAQ could also result in negative publicity and could also make it more difficult for us to raise additional capital. Further, if we are delisted, we would also incur additional costs under state blue sky laws in connection with any sales of our securities. These requirements could severely limit the market liquidity of our common stock and the ability of our stockholders to sell our common stock in the secondary market. If our common stock is delisted by NASDAQ, our common stock may be eligible to trade on an over-the-counter quotation system, such as the OTCQB market, where an investor may find it more difficult to sell our stock or obtain accurate quotations as to the market value of our common stock. We cannot assure you that our common stock, if delisted from NASDAQ, will be listed on another national securities exchange or quoted on an over-the counter quotation system.

While we believe we have taken the steps necessary to improve the effectiveness of our internal control over financial reporting, we can give no assurance that any material weaknesses will not arise in the future.

Any material weakness or other deficiencies in our disclosure controls and procedures and internal control over financial reporting may affect our ability to report our financial results on a timely and accurate basis and to comply with disclosure obligations or cause our consolidated financial statements to contain material misstatements, which could negatively affect the market price and trading liquidity of our common stock or cause investors to lose confidence in our reported financial information. Investors relying upon our consolidated financial statements may make a misinformed investment decision.

Risk Related to Our Common Stock and Public Reporting Requirements

On February 1, 2018 we received writing notice from Nasdaq that we were not in compliance with Nasdaq’s continued listing requirements due to our failure to hold an annual meeting of stockholders for the fiscal year ended January 31, 2017. Our common stock may be delisted from the Nasdaq Capital Market if we cannot satisfy Nasdaq’s continued listing requirements.

On February 1, 2018, Naked Brand Group Inc. (the “Company”) received written notice from the Listing Qualifications Staff of The Nasdaq Stock Market (“Nasdaq”) notifying the Company that it no longer complies with Nasdaq Listing Rule 5620(a) due to the Company’s failure to hold an annual meeting of stockholders within twelve months of the end of the Company’s fiscal year ended January 31, 2017 (the “Annual Meeting Requirement”). The Company delayed holding its 2017 annual meeting of stockholders because of the contemplated business combination with Bendon Limited and Bendon Group Holdings Limited that would be submitted to the Company’s stockholders for a vote at a meeting.

Nasdaq’s notice has no immediate effect on the listing of the Company’s common stock on The Nasdaq Capital Market. Under Nasdaq Listing Rule 5810(c)(2)(G), the Company has 45 calendar days from February 1, 2018 to submit to Nasdaq a plan to regain compliance with the Annual Meeting Requirement. If Nasdaq accepts the Company’s plan, Nasdaq may grant an extension of up to 180 calendar days from the end of the fiscal year ended January 31, 2017, or until July 30, 2018, to regain compliance.

On March 19, 2018, the Company provided Nasdaq with a plan to regain compliance with the Annual Meeting Requirement, which, among other things, explained the reasons for the Company’s delay in holding its 2017 annual meeting of stockholders and stated the Company’s intention to hold an annual meeting of stockholders on or before July 30, 2018.

On March 27, 2018, the Company received written notice from Nasdaq granting the Company an extension until July 30, 2018 to regain compliance with the Annual Meeting Requirement by holding an annual meeting of stockholders at which, among other things, the stockholders shall elect directors to the Board of Directors of the Company. The notice further provides that in the event the Company does not satisfy such terms, Nasdaq will provide written notification that the Company’s securities will be delisted.

There can be no assurance that the Company will be able to regain compliance with the Annual Meeting Requirement or maintain compliance with any other Nasdaq requirement in the future.

Because we can issue additional shares of common stock, holders of our common stock may experience dilution in the future.

We are authorized to issue up to 18,000,000 shares of common stock, of which 10,342,191 shares are issued and outstanding as of ~~April~~May 261, ~~2017~~2018. Our ~~board~~ board of directors has the authority to cause us to issue additional shares of common stock without consent of any of our stockholders. Consequently, our stockholders may experience more dilution in their ownership of our stock in the future.

The stock price of our common stock may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.

Our common stock is currently listed on the ~~NASDAQ~~Nasdaq Capital Market. Historically trading in our stock has been thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. Although we believe that the listing of our common stock on the ~~NASDAQ~~Nasdaq Capital Market has improved the liquidity of our common stock, our stock has been historically characterized by large volatility. Accordingly, stockholders may have difficulty reselling shares of our common stock.

A decline in the price of our common stock could affect our ability to raise further working capital, may adversely impact our ability to continue operations and we may go out of business.

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because we may attempt to acquire a significant portion of the funds we need in order to conduct our planned operations through the sale of equity securities, a decline in the price of our common stock could be detrimental to our liquidity and our operations because the decline may cause investors to not choose to invest in our stock. If we are unable to raise the funds we require for all our planned operations, we may be forced to reallocate funds from other planned uses and may suffer a significant negative effect on our business plan and operations, including our ability to develop new products and continue our current operations. As a result, our business may suffer, and not be successful and we may go out of business. We also might not be able to meet our financial obligations if we cannot raise enough funds through the sale of our common stock and we may be forced to go out of business.

Because we do not intend to pay any cash dividends on our shares of common stock in the near future, our stockholders will not be able to receive a return on their shares unless they sell them.

We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the near future. The declaration, payment and amount of any future dividends will be made at the discretion of the board of directors, and will depend upon, among other things, the results of operations, cash flows and financial condition, operating and capital requirements, and such other factors as the board of directors considers relevant. There is no assurance that future dividends will be paid, and if dividends are paid, there is no assurance with respect to the amount of any such dividend. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them.

Future sales of shares by existing stockholders could cause our stock price to decline and investors in this offering may experience dilution by exercises of outstanding options and warrants.

Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares of common stock intend to sell shares, could reduce the market price of our common stock.

As of January 31, ~~2017~~2018, we had outstanding options to purchase an aggregate of 23,~~287~~472,399 shares of our common stock at a weighted average exercise price of $43.7885 per share and warrants to purchase an aggregate of 1,~~627~~212,~~010~~302 shares of our common stock at a weighted average exercise price of $5.2940 per share. The exercise of such outstanding options and warrants will result in further dilution of your investment. If our existing stockholders sell substantial amounts of our common stock in the public market, or if the public perceives that such sales could occur, this could have an adverse impact on the market price of our common stock, even if there is no relationship between such sales and the performance of our business.

The Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may also limit a stockholder’s ability to buy and sell our common stock.

FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low -priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low -priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.

We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.

Prior to our acquisition of Naked Inc. in June 2012, we were a public reporting “shell company,” as defined in Rule 12b-2 under the Exchange Act. Although we are no longer a “shell company,” we are subject to certain restrictions under the Securities Act of 1933, as amended, for the resale of securities issued by issuers that have been at any time previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if we have filed all reports and other materials required to be filed by Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding twelve months, other than current reports on Form 8-K, at the time of the proposed sale, regardless of whether the restricted securities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities” within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not former shell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for non-affiliate reliance on Rule 144.

Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any other purpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder for us to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding through the sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Our prior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to pay for any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.

Further, as current and former shell companies and reverse acquisition transactions have been, and remain to some degree, subject to additional scrutiny by the SEC, FINRA and the national securities exchanges, our prior shell company status and the reverse acquisition transaction that terminated it may result in delays in the completion of any offering and our attempt to qualify for and list on a national securities exchange. Specifically, as a former shell company and subject of a reverse acquisition transaction, we may need to demonstrate the ability to maintain a threshold per share market price for an extended trading period in order to qualify for listing on a national securities exchange.

If we are unable to obtain additional financing on acceptable terms, we may have to curtail our growth or cease our development plans and operations.

The operation of our business and our growth efforts will require significant cash outlays. We are largely dependent on outside capital to implement our business plan and support our operations. We anticipate for the foreseeable future that cash on hand and cash generated from operations will not be sufficient to meet our cash requirements, and that we will need to raise additional capital through investments to fund our operations and growth. We cannot assure you that we will be able to raise additional working capital as needed on terms acceptable to us, if at all. If we are unable to raise capital as needed, we may be required to reduce the scope of our growth efforts, which could harm our business plans, financial condition, and operating results, or cease our operations entirely, in ~~which~~ which case, you may lose all your investment. Financings, including future equity investments, if obtained, may be on terms that ~~are~~ are dilutive to our stockholders, and the prices at which new investors would be willing to purchase our securities may be lower ~~than~~ than the price at which you purchase your shares.

As of January 31, ~~2017~~2018, the Company had cash totaling $~~879~~1,~~014~~414,871. ~~Subsequent~~The tolatest ~~January~~amendment ~~31,~~to ~~2017,~~ the ~~Company~~Merger ~~raised~~Agreement ~~gross~~requires ~~proceeds~~Bendon ~~of $5,499,722 through the issuance of stock pursuant~~ to anfund Atall ~~The~~operating ~~Market Offering Agreement as previously disclosed in our Current Report on Form 8-K~~losses ~~filed~~until ~~with~~closing. ~~the~~Due ~~SEC~~to onthis ~~February 10~~requirement, ~~2017~~we ~~and~~believe ~~March~~we ~~30, 2017. However, the Company believes that it does not~~ have sufficient working capital to ~~fund~~implement ~~its~~our ~~operations~~proposed ~~through~~business plan over the ~~year~~next ~~ending~~12 ~~January 31, 2018~~months.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will depend in part upon the research and reports that securities or industry analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of our company, the trading price for our common stock would be negatively impacted. If we obtain securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our common stock price would likely decline. If one or more of these analysts ceases coverage or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our common stock price and trading volume to decline.

Risks Related to the Proposed Merger and the Combined Company

~~Currently, there is no public market for NewCo~~Holdco’s ~~ordinary~~ shares. ~~Our~~may ~~stockholders~~not ~~cannot~~ be listed ~~sure~~on ~~that~~a ansecurities ~~active~~exchange. ~~trading~~Even ~~market~~if ~~will~~listed, ~~develop~~Holdco ~~for~~may orbe ofunable ~~the~~to ~~market price~~maintain of the ~~shares~~listing of ~~NewCo~~its ~~ordinary~~securities ~~shares~~in ~~they will receive or that~~ the ~~combined company will successfully obtain authorization for listing on the NASDAQ Capital Market or a national securities exchange~~future.

Holdco has applied for listing, to be effective at the time of the consummation of the Transactions, of the Holdco Ordinary Shares on Nasdaq. However, Holdco will be required to meet the initial listing requirements of such exchange in order to be listed. Holdco may not be able to meet those initial listing requirements. The initial listing requirements for new issuers are stringent and, although Holdco may explore various actions to meet the requirements, there is no guarantee that any such actions will be successful in bringing it into compliance with the requirements. For example, Nasdaq has indicated that it will not approve Holdco's application unless Holdco counteracts the conditions that cast substantial doubt about its ability to continue as a going concern. While Holdco has a plan to counteract these conditions, there can be no assurance it will be successful in implementing this plan. For this reason, there can be no assurance that Nasdaq will approve Holdco’s application. It is a condition of the consummation of the Transactions that Holdco receive confirmation from Nasdaq or the NYSE that the Holdco Ordinary Shares have been approved for listing. This condition cannot be waived. Accordingly, if Nasdaq does not approve Holdco’s application for listing of the Holdco Ordinary Shares, the Transactions will not be completed.

Even if the Holdco Ordinary Shares are so listed and the Transactions are completed, Holdco may be unable to meet the continued listing requirements in the future and accordingly may be unable to maintain the listing of its securities.

~~Under~~If ~~the~~Holdco ~~LOI, as~~meets ~~amended, it is contemplated that, each share of our common stock will be converted into~~ the ~~right to receive the same~~ ~~number~~initial oflisting shares of NewCo ordinary shares. NewCo will be a newly formed company and prior to this transaction it has not issued any securities in the U.S. markets or elsewhere nor has there been extensive information about itrequirements, ~~its~~but ~~businesses~~is ~~or operations~~unable ~~publicly available. Bendon and NewCo have agreed~~ to ~~use~~meet ~~its commercially reasonable efforts to cause~~ the ~~shares~~continued ~~of NewCo ordinary shares to be issued in the Merger to be approved for~~ listing onrequirements ~~the NASDAQ Capital Market prior to the effective time of the Merger~~ and the ~~approval~~Holdco ofOrdinary ~~the~~Shares ~~listing~~are ~~on the NASDAQ Capital Market of the NewCo ordinary shares to be~~subsequently ~~issued~~delisted, inHoldco ~~the~~could ~~Merger~~face issignificant amaterial ~~condition~~adverse ~~to the closing of the Merger. However~~consequences, the listing of shares on the NASDAQ Capital Market does not assure that a market for the NewCo ordinary shares will develop or the price at which the shares will trade. No assurance can be provided as to the demand for or trading price of NewCo ordinary shares following the closing of the Merger and the NewCo shares may trade at a price less than the current market price of our ordinary shares. including:

~~Even~~· ~~if the combined company is successful in developing~~ a ~~public~~limited ~~market,~~availability ~~there may not be enough liquidity in such market to enable stockholders to sell their shares~~ of ~~ordinary shares. If a public~~ market ~~for~~quotations the combined company’s ordinary shares does not develop, investors may not be able to re-sell the shares of their ordinary shares, rendering their shares illiquid and possibly resulting in a complete loss of their investment. NewCo cannot predict the extent to which investor interest in the combined company will lead to the development of an active, liquid trading market. The trading price of and demand for ~~NewCo~~its ordinary shares following completion of the Merger and the development and continued existence of a market and favorable price for the NewCo ordinary shares will depend on a number of conditions, including the development of a market following, including by analysts and other investment professionals, the businesses, operations, results and prospects of NewCo, general market and economic conditions, governmental actions, regulatory considerations, legal proceedings and developments or other factors. These and other factors may impair the development of a liquid market and the ability of investors to sell shares at an attractive price. These factors also could cause the market price and demand for NewCo ordinary shares to fluctuate substantially, which may limit or prevent investors from readily selling their shares and may otherwise affect negatively the price and liquidity of NewCo ordinary shares. Many of these factors and conditions are beyond the control of NewCo or NewCo stockholders.securities;

~~Failure~~· toa ~~complete~~limited ~~the~~amount ~~proposed Merger~~of ~~could~~news ~~harm~~and ~~our~~analyst ~~future~~coverage ~~business~~for ~~and~~the ~~operations.~~company; and

If· ~~the~~a ~~proposed~~decreased ~~Merger is~~ability ~~not~~to ~~completed,~~issue weadditional ~~are~~securities ~~subject~~or toobtain ~~the~~additional ~~following~~financing ~~risks,~~in ~~among~~the ~~others:~~future.

–HoldCo, ~~costs~~the ~~related~~surviving tocorporation in the Merger, ~~such~~has asnever ~~legal~~previously ~~and~~been ~~accounting~~a ~~fees,~~US ~~must~~reporting ~~be paid even if the Merger is not completed;~~company.

–HoldCo, ifwhich will be the surviving corporation in the Merger, ~~Agreement~~has isnever ~~terminated~~previously been a reporting company in the United States subject to U.S. federal and state securities laws, including the reporting obligations of the Exchange Act and other requirements of the Sarbanes-Oxley Act. The combined company will be required to increase its compliance efforts and incur significant costs in connection with complying with public company requirements under ~~certain~~U.S. ~~circumstances~~federal and state securities laws. The attention of management may be diverted on a frequent basis in order to carry out public company reporting and related obligations, werather than directing their full time and attention to the operation and growth of the business. Employees and some members of the management team have had limited experience working for a US reporting company, increasing the risk of non-compliance. The combined company’s disclosure controls and procedures may not prevent or detect all errors or acts of fraud or misconduct by persons inside or outside the combined company. Similarly, if the combined company fails to maintain an effective system of internal control over financial reporting, the combined company may not be ~~required~~able to ~~issue~~accurately report its financial condition, results of operations or cash flows. Noncompliance with U.S. federal and state securities laws and other regulatory requirements could result in administrative or other penalties or civil or criminal judgments against the combined company or harm to ~~Bendon~~the 2combined company’s reputation.5 ~~million~~These ~~shares~~consequences could affect investor confidence in the combined company and cause the price of ~~common~~the stock; to decline, result in the delisting of the combined company’s shares from the Nasdaq Capital Market, require the payment of fines or other amounts, distract management’s time and attention to the business or result in the loss of customer or supplier relationships, thus reducing the value of the combined company’s ordinary shares.

–The ~~the~~unaudited ~~attention~~pro offorma ~~our~~financial information ~~management~~in ~~may~~the ~~have~~definitive ~~been~~proxy ~~diverted~~statement/prospectus toincluded in the ~~Merger~~Registration ~~rather~~Statement ~~than~~may tonot be indicative of what the combined company’s ~~operations~~actual ~~and~~financial ~~the~~position ~~pursuit~~or results of ~~other~~operations ~~opportunities~~would ~~that could~~ have been ~~beneficial to it;~~.

–The unaudited pro forma financial information in the ~~potential~~definitive ~~loss~~proxy statement/prospectus included in the Registration Statement is presented for illustrative purposes only, has been prepared based on a number of ~~key~~assumptions ~~personnel~~and ~~during~~is not necessarily indicative of what the ~~pendency~~combined company’s actual financial position or results of operations would have been had the ~~Merger~~business ascombination ~~employees~~been ~~may~~completed on ~~experience~~the ~~uncertainty~~dates ~~about~~indicated. ~~their~~The ~~future~~unaudited ~~roles~~pro ~~with~~forma condensed combined financial information does not reflect any cost savings, operating synergies or revenue enhancements that the combined companies may achieve as a result of the business combination or the costs to combine the operations of Naked and Bendon or the costs necessary to achieve these cost savings, operating synergies and revenue enhancements. Each of Bendon and Naked has an explanatory paragraph regarding there being substantial doubt about each company;’s continuing as a going concern.

–Holdco has no operating history. The unaudited pro-forma financial information and the ~~price~~historical ofcombined ~~our~~financial ~~stock~~information included in the definitive proxy statement/prospectus in the Registration Statement, may ~~decline~~not be representative of actual results as a combined company, and ~~remain~~accordingly, ~~volatile;~~you have limited financial information on which to evaluate the combined company and your investment decision.

–Bendon weand ~~may~~Naked behave no ~~subject~~prior tohistory ~~litigation~~as ~~related~~a combined entity and their operations have not previously been managed on a combined basis. As a result, the pro forma financial information for the combined company and the combined audited financial statements of Bendon and Naked giving effect to the Merger included elsewhere in definitive proxy statement/prospectus included in the Registration Statement as presented are not necessarily indicative of the financial position or ~~any~~results ~~failure~~of tooperations ~~complete~~of the combined company that would have actually occurred had the Merger been completed at or as of the dates indicated, nor are they indicative of the future operating or financial position of the combined company. The pro-forma financial information for the combined company does not consider potential impacts of current market conditions on revenues or expense efficiencies. The pro-forma financial information presented in the definitive proxy statement/prospectus included in the Registration Statement, is based in part on certain assumptions regarding the Merger that Bendon and Naked believe are reasonable under the circumstances. However, assumptions used in preparing such financial information may not prove to be accurate over time. Investors should not place any undue reliance on the pro forma financial information of the combined company.

~~The~~If ~~pendency~~the ofadjournment proposal ~~the~~is ~~Merger~~not ~~could materially~~approved, ~~adversely~~and ~~affect~~an ~~our~~insufficient ~~business~~number ~~and~~of ~~operations~~votes orhave ~~result~~been inobtained ato ~~loss~~approve the consummation of ~~its~~the ~~employees~~Transactions, Naked’s ~~which,~~board ~~consequently,~~of ~~could~~directors ~~materially adversely~~will ~~affect~~not have the ~~business~~ability ~~and~~to ~~operations~~adjourn ofthe special meeting to a later date in order to solicit further votes, and, therefore, the ~~combined~~Transactions ~~company~~will not be approved.

~~Uncertainty~~Naked’s ~~about the~~board ~~effect~~ of ~~the~~directors ~~Merger~~is onseeking ~~employees,~~approval ~~customers~~to ~~and~~adjourn ~~suppliers~~the ~~may~~special ~~have~~meeting anto ~~adverse~~a ~~effect~~later ondate ~~our~~or ~~business and~~dates, ~~consequently~~if, based on the ~~combined~~ ~~company.~~tabulated ~~These~~vote, ~~uncertainties~~Naked is ~~may~~unable ~~impair our ability~~ to ~~attract,~~consummate ~~retain and motivate employees until~~ the ~~completion~~Transactions ~~of the~~contemplated ~~Merger,~~by ~~which may have a material adverse effect on us if~~ the Merger ~~is not completed~~Agreement. If ~~employees~~the ~~depart~~adjournment ~~because~~proposal ofis ~~issues concerning employment security and difficulty of integration or a desire~~ not ~~to remain with the combined company~~approved, ~~NewCo~~Naked’s ~~future~~board ~~business~~will ~~could~~ be ~~adversely~~unable ~~affected.~~to ~~Similarly,~~adjourn ~~uncertainties about~~ the ~~effect~~special ofmeeting ~~the~~to ~~Merger~~a ~~could~~later ~~cause~~date ~~customers~~and, ~~suppliers and~~therefore, ~~others~~will ~~who~~not ~~deal~~have ~~with~~more ustime to ~~change~~solicit ~~their~~votes ~~existing business relationships, which could negatively affect our revenues, earnings~~to ~~and~~approve ~~cash flows, as well as~~ the ~~market~~consummation ~~price~~ of ~~our common stock, regardless of whether~~ the ~~Merger is completed~~Transactions. ~~The~~In ~~realization of~~such ~~any~~event, ~~of these risks may materially adversely affect~~ the ~~business~~Transactions ~~and~~would ~~financial~~not ~~results~~be ~~of the combined company~~completed.

Because the number of Holdco Ordinary Shares that are issuable to the shareholders of Bendon in the Reorganization is adjustable depending on the net debt of Bendon and the net assets of Naked, as finally determined in accordance with the Merger Agreement, Naked shareholders cannot be certain of the precise percentage ownership of Holdco that they will hold immediately following the closing of the Merger.

The number of Holdco Ordinary Shares that are issuable to the shareholders of Bendon in the Reorganization is adjustable depending on the net debt of Bendon and net assets of Naked, as finally determined in accordance with the Merger Agreement. If it is finally determined that Naked’s Net Assets (as defined in the Merger Agreement) at the Closing of the Transactions are less than the Net Asset Amount (as defined in the Merger Agreement) by at least $150,000, then the number of Holdco Ordinary Shares issuable to Bendon will be increased by the number equal to the product obtained by multiplying the difference in the asset amount by 2.327. If, however, the Naked’s Net Assets at the closing of the Transactions are greater than the Net Asset Amount by at least $150,000, then then the number of Holdco Ordinary Shares issuable to Bendon will be reduced by the same ratio. Notwithstanding the foregoing, so long as Naked does not incur any expenditures that in the aggregate exceed any line item in the Budget (as defined below) by more than 10%, unless otherwise agreed to by the Budget Committee, no adjustment will be made based on Naked's Net Assets. Additionally, if the Bendon’s Net Debt (as defined in the Merger Agreement) at the closing of the Transactions exceeds the Net Debt Amount (as defined in the Merger Agreement) by at least $1,000,000, then then the number of Holdco Ordinary Shares issuable to Bendon will be reduced by the number equal to the product obtained by multiplying the difference in the debt amount by 0.167. If, however, the Bendon’s Net Debt at the closing of the Transactions is less than the Net Debt Amount by at least $1,000,000, then then the number of Holdco Ordinary Shares issuable to Bendon will be increased by the same ratio. Since the Naked Closing Net Assets and Bendon Closing Net Debt will not be determined until the closing of the Merger, Naked stockholders cannot be certain of the exact percentage ownership of Holdco that they will hold immediately following the closing of the Merger.

Failure to complete the Merger could harm Naked’s future business and operations.

If the Merger is not completed, Naked is subject to the following risks, among others:

costs related to the Merger, such as legal and accounting fees, must be paid even if the Merger is not completed;

if the Merger Agreement is terminated under certain circumstances, Naked may be required to issue to Bendon 1,250,000 or 2,500,000 shares of Naked Common Stock (not subject to a registration statement), as adjusted for any stock splits, stock combinations, stock dividends or similar transactions affecting Naked Common Stock;

the attention of management of Naked may have been diverted to the Merger rather than to Naked’s operations and the pursuit of other opportunities that could have been beneficial to it;

the potential loss of key personnel during the pendency of the Merger as employees may experience uncertainty about their future roles with the combined company;

the price of Naked stock may decline and remain volatile;

Naked will have been subject to certain restrictions on the conduct of its business which may have prevented it from making certain acquisitions or dispositions or pursuing certain business opportunities while the Merger was pending; and

Naked may be subject to litigation related to the Merger or any failure to complete the Merger.

In addition, if the Merger Agreement is terminated and the board of directors of Holdco determines to seek another business combination, there can be no assurance that Naked will be able to find a partner willing to provide equivalent or more attractive consideration than the consideration to be provided by Holdco in the Merger.

Bendon and Naked will incur substantial transaction fees and costs in connection with the Merger.

Bendon and Naked expect to incur material non-recurring expenses in connection with the Merger and consummation of the Transactions. Additional unanticipated costs may be incurred in the course of the integration of the businesses of Bendon and Naked. The parties cannot be certain that the elimination of duplicative costs or the realization of other efficiencies related to the integration of the two businesses will offset the transaction and integration costs in the near term, or at all.

The Merger may be completed even though material adverse changes may result from the announcement of the Merger, industry-wide changes and other causes.

In general, either Naked or Holdco can refuse to complete the Merger if there is a material adverse change affecting the other party between the signing date of the Merger Agreement, and the planned closing. However, certain types of changes do not permit either party to refuse to complete the Merger, even if such change could be said to have a material adverse effect on Naked or Holdco, including the following events (except, in some cases, where the change has a disproportionate effect on a party):

changes generally affecting the economy, financial or securities markets;

the announcement of the Merger and the transactions contemplated by the Merger Agreement, including the impact thereof on the relationships of a party with its employees, customers, suppliers, or partners;

the outbreak or escalation of war or any act of terrorism, civil unrest, or natural disasters;

changes (including changes in law) or general conditions in the industry in which the party operates;

changes in GAAP (or the authoritative interpretation of GAAP); or

compliance with the terms of, or the taking of any action required by the Merger Agreement.

If adverse changes occur and Naked and Holdco still complete the Merger, the combined company’s stock price may suffer. This in turn may reduce the value of the Merger to the stockholders of Naked.

The pendency of the Merger could materially adversely affect our business and operations or result in a loss of its employees, which, consequently, could materially adversely affect the business and operations of the combined company.

Uncertainty about the effect of the Merger on employees, customers and suppliers may have an adverse effect on our business and, consequently, on the combined company. These uncertainties may impair our ability to attract, retain and motivate employees until the completion of the Merger, which may have a material adverse effect on us if the Merger is not completed. If employees depart because of issues concerning employment security and difficulty of integration or a desire not to remain with the combined company, HoldCo’s future business could be adversely affected. Similarly, uncertainties about the effect of the Merger could cause customers, suppliers and others who deal with us to change their existing business relationships, which could negatively affect our revenues, earnings and cash flows, as well as the market price of our common stock, regardless of whether the Merger is completed. The realization of any of these risks may materially adversely affect the business and financial results of the combined company.

Current stockholders will have a reduced ownership and voting interest in the combined company after the Merger.

As a result of the Merger, ~~current~~Naked ~~Bendon~~ stockholders along with Bendon’s affiliates are expected to hold inapproximately ~~excess of 90~~8.35% of the combined company’s outstanding ordinary shares immediately following completion of the ~~Merger~~Transactions. ~~Our~~Holdco shareholders and our stockholders currently have the right to vote for their respective directors and on other matters affecting the applicable company. When the Merger occurs, ~~each~~ each of our stockholders that receives ordinary shares of the combined company’s ~~ordinary shares~~ will hold a percentage ownership of the combined company that will be significantly smaller than the stockholder’s current percentage ownership of ~~company~~Naked. The combined company will be controlled by Bendon’s ~~and its~~ affiliates, which are expected to ~~hold~~approximately ~~in excess of 90~~64.8% of all shares of the combined company on a fully diluted basis. As further discussed below, Bendon and its affiliates will be able to exercise significant influence over the combined company’s business policies and affairs due to its large ownership percentage. As a result of their reduced ownership percentages, our former stockholders will have less voting power in the combined company than they now have with respect to us.

The lack of a public market for Holdco’s ordinary shares makes it difficult to evaluate the fairness of the Merger, thus the stockholders of Naked may receive consideration in the Merger that is greater than or less than the fair market value of their Naked shares.

The ordinary shares of Holdco are not currently listed, and no public market currently exists for the Holdco Ordinary Shares. The lack of a public market makes it extremely difficult to determine the fair market value of Holdco. Because the percentage of Holdco Ordinary Shares to be issued to Naked stockholders was determined based on negotiations between the parties, it is possible that the value of the combined company ordinary shares to be issued in connection with the Merger may be less than expected.

Bendon and its affiliates will exercise significant influence over the combined company, and their interests in the combined company may be different than yours.

Following the completion of the Merger, Bendon’s ~~and its~~ affiliates ~~are~~will ~~expected to~~ beneficially own inapproximately ~~excess of 90~~64.8% of the outstanding ordinary shares of the combined company calculated on a fully diluted basis. Accordingly, Bendon’s ~~and its~~ affiliates will be able to exercise significant influence over the combined company’s business policies and affairs, including the composition of the combined company’s board of directors and any action requiring ~~the~~ ~~approval of~~ the ~~combined company’s stockholders, including the adoption of amendments to the articles of incorporation and the~~ approval of ~~a merger or sale of substantially all of~~ the combined company’s ~~assets~~shareholders. The interests of Bendon and its affiliates may conflict with your interests. For example, these ~~stockholders~~shareholders may support certain long-term strategies or objectives for the combined company which may not be accretive to ~~stockholders~~shareholders in the short term. The concentration of ownership may also delay, defer or even prevent a change in control of the combined company, even if such a change in control would benefit our other stockholders, and may make some transactions more difficult or impossible without the support of these parties. This significant concentration of share ownership may adversely affect the trading price for the combined company’s ordinary shares because investors often perceive disadvantages in owning stock in companies with ~~stockholders~~shareholders who own significant percentages of a company’s outstanding stock.

WeThe ~~will~~combined ~~incur~~company ~~substantial~~may ~~transaction~~not experience ~~fees~~the ~~and~~anticipated ~~costs~~strategic inbenefits ~~connection~~of ~~with~~ the Merger.

WeThe ~~expect~~respective tomanagement ~~incur~~of ~~material~~Naked ~~non-recurring~~and ~~expenses~~Bendon inbelieve ~~connection~~that ~~with~~ the Merger ~~and~~would ~~consummation~~provide ofcertain ~~the~~strategic ~~transactions~~benefits ~~contemplated~~that may not be realized by each of the companies ~~LOI,~~operating as ~~amended~~standalones. ~~Additional~~Specifically, ~~unanticipated~~we ~~costs~~believe ~~may~~the beMerger ~~incurred~~would inprovide ~~the~~certain ~~course~~strategic ofbenefits ~~the~~which ~~integration~~would enable each of ~~the~~Naked ~~businesses~~and ~~of NewCo,~~ Bendon ~~and~~to ~~Naked.~~accelerate Wetheir ~~cannot~~respective bebusiness ~~certain~~plans ~~that~~through ~~the~~an ~~elimination~~increased ofaccess ~~duplicative~~to ~~costs~~capital orin the ~~realization~~public ofequity ~~other~~markets, ~~efficiencies~~increased ~~related~~management strength and management expertise, access to a larger customer base for the ~~integration~~combined sales organization. There can be no assurance that these anticipated benefits of the ~~businesses~~Merger will ~~offset~~materialize ~~the~~or ~~transaction~~that ~~and~~if ~~integration~~they ~~costs~~materialize inwill ~~the~~result ~~near~~in ~~term,~~increased shareholder value or atrevenue ~~all~~stream to the combined company.

~~The~~Some ~~LOI,~~of asthe ~~amended,~~Bendon ~~limits our~~and ~~ability~~Naked toofficers ~~pursue~~and ~~alternatives~~directors tohave interests in the Merger, ~~which~~that ~~could~~are ~~discourage~~different ~~a potential acquirer~~ from ~~making~~yours anand ~~alternative transaction~~that ~~proposal~~may ~~and,~~influence inthem ~~certain~~to ~~circumstances,~~support ~~could~~or ~~require~~approve usthe toMerger ~~pay~~without regard to ~~NewCo~~your ~~a significant termination fee~~interests.

~~Under~~Certain ~~the~~officers ~~LOI, we are~~of ~~restricted,~~Bendon ~~subject~~and toNaked ~~limited~~participate ~~exceptions,~~in ~~from~~arrangements ~~pursuing~~that orprovide ~~entering~~them ~~into~~with ~~alternative~~interests ~~transactions~~ in ~~lieu of~~ the Merger. Inthat ~~general, unless and until the LOI is terminated, we~~ are ~~restricted~~different from yours, including, among ~~other things~~others, ~~soliciting,~~continued ~~initiating~~service oras ~~knowingly~~an ~~taking any~~executive ~~action~~officer ~~to facilitate~~ or ~~encourage~~director aof ~~competing~~the ~~acquisition~~combined ~~proposal.~~company ~~Termination~~and of the ~~LOI~~right orto ~~failure~~continued toindemnification for ~~enter~~directors, ~~into~~executive aofficers ~~merger agreement~~and ~~may~~former ~~result~~directors inand ~~the~~executive ~~issuance~~officers of ~~2.5~~Bendon ~~million~~and ~~shares~~Naked offollowing ~~our~~the ~~common~~completion ~~stock~~of ~~to Bendon~~the Merger.

21The Merger Agreement limits Naked’s ability to pursue alternatives to the Merger, which could discourage a potential acquirer of Naked from making an alternative transaction proposal and, in certain circumstances, could require Naked to issue to Bendon a substantial number of shares of Naked Common Stock.

Under the Merger Agreement, Naked is restricted, subject to limited exceptions, from pursuing or entering into alternative transactions in lieu of the Merger. In general, unless and until the Merger Agreement is terminated, Naked is restricted from, among other things, soliciting, initiating or knowingly taking any action to facilitate or encourage a competing acquisition proposal. The board of directors of Naked is limited in its ability to change its recommendation with respect to the Merger. Naked may terminate the Merger Agreement and enter into an agreement with respect to a superior offer only if specified conditions have been satisfied, including (i) compliance with the non-solicitation provisions of the Merger Agreement, (ii) the expiration of certain waiting periods during which Holdco may propose changes to the Merger Agreement so the superior offer is no longer a superior offer and (iii) the issuance to Bendon of 1,250,000 shares of Naked Common Stock (not subject to a registration statement), as adjusted for any stock splits, stock combinations, stock dividends or similar transactions affecting Naked Common Stock.

The fairness opinion rendered to the board of directors of Naked by Noble Capital Markets will not reflect changes in circumstances, including general market and economic conditions or the prospects of Naked or Holdco, between the signing the Merger Agreement and the completion of the Merger.

Noble has issued to the Naked board of directors a written opinion, subject to the terms, conditions and qualifications set forth therein, as of the date of execution of the Merger Agreement, the consideration to be received by the stockholders of Naked is fair to the stockholders of Naked from a financial point of view. Naked’s board of directors has not obtained an updated fairness opinion as of the date of this Form 10-K. Importantly, the Noble opinion does not reflect changes that may occur or may have occurred after the date of the opinion, including changes in the operations, performance and prospects of Naked or Holdco, general market and economic conditions and other factors that may be beyond the control of Naked or Holdco, and on which the fairness opinion was based, that may alter the value of Naked, Bendon or Holdco or the prices of shares of Naked common stock or Holdco Ordinary Shares by the time the Merger is completed. The Noble opinion does not speak as of the time the Merger will be completed or as of any date other than the date of execution of the Merger Agreement. Because Naked does not anticipate asking Noble to update its opinion, the opinion will not address the fairness of the terms the Merger consideration, from a financial point of view, at the time the Merger is completed.

Litigation may be instituted against us, members of our board of directors, Bendon and members of the Bendon board of directors challenging the Merger, and adverse judgments in these lawsuits may prevent the Merger from becoming effective within the expected timeframe or at all.

We, members of our board of directors, Bendon and members of the Bendon board of directors may be named as defendants in class action lawsuits or other proceedings that may be brought by our stockholders challenging the Merger. If the plaintiffs in any actions that may be brought are successful, these adverse judgments may prevent the parties from completing the Merger in the expected timeframe, if at all. Even if the plaintiffs in these potential actions are not successful, the costs of defending against such claims could adversely affect our financial condition or that of Bendon and such actions could adversely affect the reputations of the parties and members of their respective boards of directors or management.

~~The~~We ~~financial~~will ~~performance,~~be ~~and~~subject ~~price of~~to ~~the~~various ~~ordinary~~uncertainties ~~shares,~~and ofcontractual restrictions while the ~~combined~~Merger ~~company~~is ~~may~~pending bethat ~~affected~~could byadversely ~~factors~~affect ~~different~~the ~~from~~financial ~~those~~results ~~that~~of ~~historically~~Naked, ~~have~~Holdco ~~affected~~and/or the combined ~~Naked~~company.

~~Upon~~Uncertainty ~~completion~~about the effect of the Merger on employees, ~~holders~~suppliers ofand customers may have an adverse effect on us. These uncertainties may impair our ~~common~~ability ~~stock~~to ~~will~~attract, retain ~~become~~and ~~holders~~motivate ofkey ~~ordinary~~personnel ~~shares~~until the Merger is completed and for a period of ~~the~~time ~~combined~~thereafter, ~~company.~~and ~~The~~could cause customers, suppliers and others who deal with us to seek to change existing business relationships with us. Employee retention and ~~target~~recruitment ~~markets~~may ofbe ~~NewCo~~particularly ~~differ~~challenging ~~from~~prior ~~ours~~to completion of the Merger, as employees and ~~accordingly~~prospective employees may experience uncertainty about their future roles with the ~~results~~combined company. The pursuit of ~~operations~~the Merger and the ~~price~~preparation offor the ~~ordinary~~integration ~~shares~~ of the ~~combined~~two ~~company~~companies ~~will~~may beplace ~~affected~~a bysignificant ~~some~~burden ~~factors~~on ~~that~~our ~~are~~management ~~different~~and internal resources. Any significant diversion of management’s attention away from ~~those~~its ~~currently~~ongoing ~~affecting~~businesses, ~~the~~and ~~results~~any ofdifficulties ~~our~~encountered ~~operations~~in the transition and ~~stock~~integration process, could affect ~~price~~our financial results.

~~The~~In ~~NewCo~~addition, ~~ordinary~~the ~~shares~~Merger toAgreement berestricts ~~received~~us, bywithout ~~our~~the ~~stockholders~~consent asof aHoldco, ~~result~~from ofmaking ~~the~~certain acquisitions and dispositions and taking other specified actions while the Merger ~~will~~is ~~have~~pending. ~~different~~These ~~rights~~restrictions may prevent us from pursuing attractive business opportunities and making other changes to our rbusiness prior to completion of the ~~shares~~Merger or termination of ~~our~~the ~~common~~Merger ~~stock~~Agreement.

~~Upon~~The ~~completion~~Holdco ~~of the~~Ordinary ~~Merger,~~Shares ~~our~~to ~~stockholders~~be ~~will~~received ~~become~~by ~~stockholders~~Naked ~~of the combined company and their rights as~~ stockholders ~~will be governed~~ byas ~~NewCo’s~~a ~~certificate~~result of ~~registration~~the ~~and~~Merger ~~constitution (bylaws). The combined company~~ will behave adifferent ~~Australian corporation and certain of the~~ rights ~~associated~~from ~~with~~ the ~~ordinary~~ shares of ~~the~~Naked ~~combined company will be materially different from the rights associated with our~~ common stock.

Upon completion of the Merger, Naked stockholders will become shareholders of the combined company and their rights as shareholders will be governed by Holdco’s certificate of registration and constitution. The combined company ~~may~~will ~~not~~be ~~experience~~an Australian company and certain of the rights associated with the ~~anticipated~~combined ~~strategic~~company ~~benefits~~ordinary ofshares will be different from the ~~Merger~~rights associated with Naked common stock.

Our management believes that the Merger would provide certain strategic benefits that may not be realized by each of the companies operating as standalones. Specifically, we believe the Merger would provide certain strategic benefits which would enable each of Naked and Bendon to accelerate their respective business plans through an increased access to capital in the public equity markets, increased management strength and management expertise, access to a larger customer base for the combined sales organization and distribution capabilities of the combined company. There can be no assurance that these anticipated benefits of the Merger will materialize or that if they materialize will result in increased stockholder value or revenue stream to the combined company. 24

~~Naked~~The ~~and~~lack ~~Bendon~~of ~~may~~a bepublic ~~unable~~market tofor Holdco’s ~~successfully~~shares ~~integrate~~makes ~~their~~it ~~operations~~difficult ~~following~~to evaluate the fairness of the Merger, thus our stockholders may receive consideration in the Merger that is greater than or less than the fair market value of their Naked shares.

ItThe isoutstanding ~~possible~~ordinary ~~that the~~shares ~~integration process could take longer than anticipated and could result in the loss~~ of ~~valuable employees, the disruption of~~Holdco ~~each~~are ~~company’s~~privately ~~ongoing~~held ~~businesses, processes~~ and ~~systems~~are ornot ~~inconsistencies~~traded in ~~standards,~~any ~~controls,~~public ~~procedures,~~market. ~~practices, policies~~The ~~and~~lack ~~compensation arrangements, any~~ of ~~which~~a ~~could~~public ~~adversely~~market ~~affect~~makes ~~the~~it ~~combined~~extremely ~~company’s~~difficult ~~ability~~ to ~~achieve the~~determine ~~anticipated benefits of~~ the ~~Merger.~~fair ~~The~~market ~~combined~~value ~~company’s results~~ of ~~operations~~Holdco. ~~could~~Because ~~also~~the benumber ~~adversely~~of ~~affected~~Holdco byOrdinary ~~any issues~~Shares ~~attributable~~ to ~~either~~be ~~company’s~~issued ~~operations~~to ~~that~~Naked ~~arise~~stockholders orwas ~~are~~ determined based on ~~events~~negotiations orbetween ~~actions that occur prior to~~ the ~~closing of~~parties, ~~the~~it ~~Merger.~~is ~~The companies may have difficulty addressing~~ possible ~~differences in corporate cultures and management philosophies. The integration process is subject to a number of uncertainties, and no assurance can be given~~ that the ~~anticipated~~value ~~benefits~~of ~~will be realized or, if realized,~~ the ~~timing~~combined ofcompany ~~their~~ordinary ~~realization.~~shares ~~Failure~~ to ~~achieve~~be ~~these~~issued ~~anticipated benefits could result~~ in ~~increased~~ ~~costs~~connection orwith ~~decreases in~~ the ~~amount~~Merger ofmay ~~expected~~be ~~revenues~~less ~~and~~than ~~could adversely affect the combined company’s future business, financial condition, operating results and prospects~~expected.

If the conditions to the completion of the Merger are not met, the Merger will not occur.

Even if the Merger is approved by our stockholders, additional specific conditions must be satisfied or waived (to the extent permitted under applicable law) in order to complete the Merger, including, among others:

The Registration Statement shall have become effective, and no stop order suspending effectiveness shall have been issued and remain in effect,

the completion of the Reorganization (as defined in the Merger Agreement) of Holdco;

the Holdco Ordinary Shares issuable to Naked’s stockholders in the Merger in accordance with the Merger Agreement will have been authorized for listing on the Nasdaq or NYSE,

no governmental entity shall have enacted any law or order which is in effect and which has the effect of making the Merger, the Reorganization or the other transactions contemplated by the Merger Agreement illegal or otherwise prohibiting consummation of the Merger, the Reorganization or the other transactions contemplated by the Merger Agreement,

no action, suit or proceeding shall be pending or threatened before any governmental entity which is reasonably expected to, among other things, prevent consummation of any of the transactions contemplated by the Merger Agreement or cause any of the transactions contemplated by the Merger Agreement to be rescinded following consummation,

the representations and warranties of each party to the Merger Agreement shall be true and correct subject to certain materiality qualifiers, and

each party shall have performed or complied with all agreements and covenants required by the Merger Agreement to be performed or complied with by it at or prior to the closing date.

These and other conditions are described in detail in the Merger Agreement. We cannot assure you that all of the conditions to the Merger will be satisfied. If the conditions to the Merger are not satisfied or waived (to the extent permitted under applicable law), the Merger will not occur or will be delayed, and Naked may lose some or all of the intended benefits of the Merger.

Delays in completing the Merger may substantially reduce the expected benefits of the Merger.

Satisfying the conditions to, and completion of, the Merger may take longer than, and could cost more than, weNaked ~~expect~~expects. Any delay in completing or any ~~additional~~ additional conditions imposed in order to complete the Merger may materially adversely affect the benefits that weHoldco and Naked expect to achieve from the Merger and the integration of their respective businesses. In addition, subject to certain exceptions, either of Naked and Holdco may terminate the Merger Agreement on notice to the other if the Merger is not completed by June 1, 2018, (as such date may be extended in accordance with the Merger Agreement.

22Should the Merger not qualify as tax free reorganization, for U.S. federal income tax purposes, Naked stockholders may recognize income, gain or loss in connection with the Merger.

It is aexpected ~~condition~~that to the ~~consummation of the~~ Merger ~~that~~will ~~the~~qualify ~~ordinary~~as ~~shares~~a oftax-free ~~NewCo~~reorganization befor ~~listed~~U.S. onfederal ~~the~~income ~~NASDAQ~~tax ~~Capital Market following the Merger~~purposes. The ~~listing~~parties, ~~qualification standards for new issuers are stringent and~~however, ~~although~~did ~~the~~not ~~combined~~seek ~~company may explore various actions~~a toruling ~~meet~~from the ~~minimum~~IRS ~~listing~~regarding ~~requirements, there is no guarantee that any such actions will be successful in bringing it into compliance with~~ the ~~requirements~~tax consequences of the ~~NASDAQ Capital Market or other national securities exchange~~Merger. ~~Even~~The iffailure ~~the stock~~ of the ~~combined~~Merger ~~company is~~to ~~listed~~qualify onas ~~the~~a ~~NASDAQ~~tax-free ~~Capital Market, no assurance can be given that the combined company will comply with the requirements~~reorganization for ~~continued listing set by the NASDAQ Capital Market at all times in the future~~U.S. Iffederal ~~the~~income ~~combined~~tax ~~company~~purposes ~~fails to comply with the requirements for continued listing set by the NASDAQ Capital Market, the combined company~~ could beresult ~~delisted~~in ~~from the NASDAQ Capital Market, which could have~~ a ~~material~~Naked ~~adverse~~stockholder ~~effect~~recognizing onincome, ~~its~~gain ~~business~~or ~~and~~loss ~~financial~~with ~~condition.~~respect Ifto the ~~combined company fails~~shares ~~to achieve listing~~ of ~~its~~Naked ~~ordinary~~common ~~shares~~stock onsurrendered ~~the~~by ~~NASDAQ~~such ~~Capital Market or a national securities exchange, the Merger may not close~~stockholder.

If it closes, the combined company’s ordinary shares may be traded on the OTC Bulletin Board or other over-the-counter markets in the United States, although there can be no assurance that its ordinary shares will be eligible for trading on any such alternative markets or exchanges in the United States. In the event that the Merger closes but the combined company is not able to obtain a listing on a national securities exchange or quotation on the OTC Bulletin Board or other quotation service for its common shares, it may be extremely difficult or impossible for stockholders to sell their common shares in the United States. Moreover, if the ordinary shares of the combined company is quoted on the OTC Bulletin Board or other over-the-counter market, the liquidity will likely be less, and therefore the price will be more volatile, than if its ordinary shares were listed on a national securities exchange. Stockholders may not be able to sell their common shares in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market. As a result of these factors, if the combined company’s common shares fail to achieve listing on a national securities exchange, the price of its ordinary shares is likely to decline. In addition, a decline in the price of the combined company’s ordinary shares could impair its ability to achieve a national securities exchange listing or to obtain financing in the future. 25

~~The~~Failure ~~combined~~or ~~company’s~~delay ~~stock price~~in isobtaining ~~expected~~any tonecessary beregulatory approvals ~~volatile,~~could ~~and~~cause the ~~market~~Merger ~~price~~not ofto ~~the~~be ~~combined~~completed ~~company~~or ~~ordinary~~to ~~shares~~be ~~may drop following the Merger~~postponed.

~~The~~To ~~market~~complete ~~price~~the ofMerger ~~NewCo’s~~and ~~ordinary~~all ~~shares~~transactions ~~could~~contemplated beby ~~subject~~the toMerger ~~significant~~Agreement ~~fluctuations~~and ~~following~~ the Merger~~. Moreover~~, ~~stock~~Holdco ~~markets~~must ~~generally~~comply with applicable federal and state ~~have~~securities ~~experienced~~laws ~~substantial~~and ~~volatility~~the ~~that~~rules ~~has~~and ~~often~~regulations ~~been~~of ~~unrelated~~Nasdaq toin ~~the~~connection ~~operating~~with ~~performance~~the ofissuance ~~individual~~and ~~companies.~~listing ~~Such market~~of ~~fluctuations~~shares ~~may~~of ~~also~~Holdco ~~adversely~~Ordinary Shares ~~affect~~and the ~~trading~~filing ~~price~~ of the ~~combined~~definitive ~~company’s~~proxy ~~ordinary~~statement/prospectus ~~shares~~with the SEC. ~~Declines~~Failure or delay in ~~the combined~~obtaining ~~company’s~~any ~~stock~~necessary ~~price~~approvals could ~~after~~cause the Merger not to be completed or to be postponed, which may ~~result~~materially ~~for~~adversely aaffect ~~number~~the benefits that Bendon and Naked expect to achieve from the Merger and the integration of ~~reasons~~their ~~including~~respective ~~if:~~ businesses.

–Naked ~~investors~~stockholders ~~react~~will ~~negatively~~not tobe ~~the~~entitled ~~prospects~~to ofappraisal ~~the~~rights in ~~combined company’s business and prospects from~~ the Merger;.

–Current holders of Naked common stock will not be entitled to dissenters’ or appraisal rights in the ~~effects~~Merger with respect to their shares of Naked common stock under Nevada law. Pursuant to the ~~Merger~~terms onof the ~~combined~~Merger ~~company’s~~Agreement, ~~business~~at ~~and~~the ~~prospects~~Effective ~~are~~Time ~~not~~(as ~~consistent~~defined ~~with~~in the ~~expectations~~Merger Agreement), each share of ~~financial~~Naked common stock issued and outstanding immediately prior to the Effective Time (other than shares owned by Naked or ~~industry~~its ~~analysts;~~wholly-owned subsidiary, Naked, Inc., which will be cancelled at the Effective Time without further consideration) will be automatically cancelled and extinguished and converted into the right to receive one Holdco Ordinary Share.

–Declines ~~the~~in ~~combined~~Holdco’s ~~company~~stock ~~does~~price ~~not~~or ~~achieve~~financial ~~the~~results could ~~perceived~~give ~~benefits~~rise ~~of the Merger as rapidly or~~ to ~~the~~stockholder ~~extent~~litigation ~~anticipated~~and bypotential ~~financial or industry analysts; or~~liability.

–In ~~other~~the ~~factors~~past, ~~beyond~~following periods of volatility in the ~~combined~~market price of a company’s ~~control~~securities, ~~including~~stockholders ~~but~~have ~~not~~often ~~limited~~instituted toclass ~~fluctuations~~action securities litigation against those companies. Such litigation, if instituted, could result in ~~the~~substantial ~~valuation~~costs ofand ~~companies~~diversion ~~perceived~~of bymanagement attention ~~investors~~and toresources, bewhich ~~comparable~~could tosignificantly harm the combined company’s profitability and reputation.

~~Furthermore,~~Holdco ~~the~~is ~~stock markets~~not ~~have~~expected ~~experienced price and volume fluctuations that have affected and continue~~ to ~~affect~~pay ~~the~~dividends ~~market~~on ~~prices~~its ~~of equity securities~~shares of ~~many~~ordinary ~~companies.~~shares ~~These~~in ~~fluctuations often have been unrelated or disproportionate to~~ the ~~operating~~foreseeable ~~performance of those companies~~future. These broad market and industry fluctuations, as well as general economic, political and market conditions, such as recessions, interest rate changes or international currency fluctuations, have and may continue to negatively affect the market price of our common stock.

~~NewCo~~For the foreseeable future, it is expected that the ~~surviving~~combined ~~corporation in~~company will continue to retain any earnings to finance the ~~Merger~~development and expansion of its business, ~~has~~and ~~never~~not ~~previously~~to ~~been~~pay any cash dividends on its ordinary shares. Consequently, your only opportunity to achieve a USreturn on ~~reporting~~your investment in the combined company will be if the market price of the ordinary shares appreciates and you sell your shares at a profit. There is no guarantee that the price of Holdco’s ordinary shares that will prevail in the market after the Merger will ever exceed the value of the Holdco Ordinary Shares exchanged in the Merger.

NewCo, which will be the surviving corporation in the Merger, will be a newly formed company that has never previously been a reporting company in the United States subject to U.S. federal and state securities laws, including the reporting obligations of the Exchange Act and other requirements of the Sarbanes-Oxley Act. The combined company will be required to increase its compliance efforts and incur significant costs in connection with complying with public company requirements under U.S. federal and state securities laws. The attention of management may be diverted on a frequent basis in order to carry out public company reporting and related obligations, rather than directing their full time and attention to the operation and growth of the business. Employees and some members of the management team have had limited experience working for a US reporting company, increasing the risk of non-compliance. The combined company’s disclosure controls and procedures may not prevent or detect all errors or acts of fraud or misconduct by persons inside or outside the combined company. Similarly, if the combined company fails to maintain an effective system of internal control over financial reporting, the combined company may not be able to accurately report its financial condition, results of operations or cash flows. Noncompliance with U.S. federal and state securities laws and other regulatory requirements could result in administrative or other penalties or civil or criminal judgments against the combined company or harm to the combined company’s reputation. These consequences could affect investor confidence in the combined company and cause the price of the stock to decline, result in the delisting of the combined company’s shares from the NASDAQ Capital Market, require the payment of fines or other amounts, distract management’s time and attention to the business or result in the loss of customer or supplier relationships, thus reducing the value of the combined company’s ordinary shares.26

23There may be less publicly available information concerning Holdco than there is for issuers that are not foreign private issuers because it is anticipated that Holdco will be considered a foreign private issuer and will be exempt from a number of rules under the Exchange Act and will be permitted to file less information with the SEC than issuers that are not foreign private issuers. Holdco, as a foreign private issuer, will be permitted to follow home country practice in lieu of the listing requirements of the Nasdaq, subject to certain exceptions.

A foreign private issuer under the Exchange Act is exempt from certain rules under the Exchange Act, and is not required to file periodic reports and financial statements with the SEC as frequently or as promptly as companies whose securities are registered under the Exchange Act but are not foreign private issuers, or to comply with Regulation FD, which restricts the selective disclosure of material non-public information. It is anticipated that Holdco will be exempt from certain disclosure and procedural requirements applicable to proxy solicitations under Section 14 of the Exchange Act. The members of Holdco’s management board, officers and principal shareholders will be exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act. Accordingly, there may be less publicly available information concerning Holdco than there is for companies whose securities are registered under the Exchange Act but are not foreign private issuers, and such information may not be provided as promptly as it is provided by such companies.

In addition, certain information may be provided by Holdco in accordance with Australian law, which may differ in substance or timing from such disclosure requirements under the Exchange Act. Further, as a foreign private issuer, under the Nasdaq rules Holdco may be subject to less stringent corporate governance requirements. Subject to certain exceptions, the rules of Nasdaq (and the NYSE) permit a foreign private issuer to follow its home country practice in lieu of the listing requirements of Nasdaq, including, for example, certain internal controls as well as board, committee and director independence requirements. Holdco would be required to disclose any significant ways in which its corporate governance practices differ from those followed by U.S. domestic companies under Nasdaq listing standards in its annual report on Form 20-F filed with the SEC or on its website. Although Holdco presently does not intend to rely on its home country practice in lieu of the Nasdaq corporate governance requirements, there can be no assurance it won’t elect to do so in the future. Accordingly, you may not have the same protections afforded to shareholders of companies that are required to comply with all of the Nasdaq corporate governance requirements.

Holdco may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses.

As a foreign private issuer, Holdco would not be required to comply with all the periodic disclosure and current reporting requirements of the Exchange Act and related rules and regulations. The determination of foreign private issuer status is made annually. There is a risk that Holdco will lose its foreign private issuer status in the future. Holdco would lose its foreign private issuer status if, for example, more than 50% of its assets are located in the U.S. and Holdco’s continue to fail to meet additional requirements necessary to maintain our foreign private issuer status. The regulatory and compliance costs to Holdco under U.S. securities laws as a U.S. domestic issuer may be significantly greater than the costs Holdco will incur as a foreign private issuer. If Holdco is not a foreign private issuer, it will be required to file periodic reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive in certain respects than the forms available to a foreign private issuer. Holdco would be required under current SEC rules to prepare our financial statements in accordance with U.S. GAAP and modify certain of its policies to comply with corporate governance practices associated with U.S. domestic issuers. Such conversion and modifications would involve additional costs. In addition, Holdco may lose its ability to rely upon exemptions from certain corporate governance requirements on U.S. stock exchanges that are available to foreign private issuers, which could also increase Holdco’s costs.

Risks Related to an Investment in Holdco Ordinary Shares

Currently, there is no public market for Holdco Ordinary Shares. Naked stockholders cannot be sure that an active trading market will develop for or of the market price of the Holdco Ordinary Shares they will receive.

Under the Merger Agreement, each share of Naked Common Stock will be converted into the right to receive one Holdco Ordinary Share. Holdco is newly formed entity and prior to this transaction it has not issued any securities in the U.S. markets or elsewhere nor has there been extensive information about it, its businesses or operations publicly available. Under the Merger Agreement, Bendon and Holdco have agreed to use their best efforts to cause the Holdco Ordinary Shares to be issued in the Merger to be approved for listing on the Nasdaq or NYSE prior to the effective time of the Merger and the approval of the listing on the Nasdaq or NYSE of the Holdco Ordinary Shares to be issued in the Merger is a condition to the closing of the Merger. In accordance with these provisions of the Merger Agreement, Holdco has applied to list the Holdco Ordinary Shares on Nasdaq. However, there can be no assurance that Nasdaq will approve Holdco’s application, and even if it does, the listing of the shares on Nasdaq does not assure that a market for the Holdco Ordinary Shares will develop or the price at which the shares will trade. No assurance can be provided as to the demand for or trading price of Holdco Ordinary Shares following the closing of the Merger and the Holdco Ordinary Shares may trade at a price less than the current market price of Naked Common Stock.

Even if the combined company is successful in developing a public market, there may not be enough liquidity in such market to enable shareholders to sell their ordinary shares. If a public market for the combined Holdco’s ordinary shares does not develop, investors may not be able to re-sell their ordinary shares, rendering their shares illiquid and possibly resulting in a complete loss of their investment. Holdco cannot predict the extent to which investor interest in the combined company will lead to the development of an active, liquid trading market. The trading price of and demand for Holdco Ordinary Shares following completion of the Merger and the development and continued existence of a market and favorable price for the Holdco Ordinary Shares will depend on a number of conditions, including the development of a market following, including by analysts and other investment professionals, the businesses, operations, results and prospects of Holdco, general market and economic conditions, governmental actions, regulatory considerations, legal proceedings and developments or other factors. These and other factors may impair the development of a liquid market and the ability of investors to sell shares at an attractive price. These factors also could cause the market price and demand for Holdco Ordinary Shares to fluctuate substantially, which may limit or prevent investors from readily selling their shares and may otherwise affect negatively the price and liquidity of Holdco Ordinary Shares. Many of these factors and conditions are beyond the control of Holdco or Holdco shareholders.

HoldCo’s share price may be volatile and could decline substantially.

The market price of Holdco’s ordinary shares may be volatile, both because of actual and perceived changes in the company’s financial results and prospects, and because of general volatility in the stock market. The factors that could cause fluctuations in Holdco’s share price may include, among other factors discussed in this section, the following:

actual or anticipated variations in the financial results and prospects of the company or other companies in the apparel

business;

changes in financial estimates by Wall Street research analysts;

actual or anticipated changes in the United States economy or the retailing environment;

changes in the market valuations of other specialty apparel companies;

announcements by Holdco or its competitors;

mergers or other business combinations involving Holdco;

additions and departures of key personnel;

changes in accounting principles;

the passage of legislation or other developments affecting Holdco or its industry;

the trading volume of Holdco’s ordinary shares in the public market;

changes in economic conditions;

financial market conditions;

natural disasters, terrorist acts, acts of war or periods of civil unrest; and

the realization of some or all of the risks described in this section.

In addition, the stock markets have experienced significant price and trading volume fluctuations from time to time, and the market prices of the equity securities of apparel companies have been extremely volatile and are sometimes subject to sharp price and trading volume changes. These broad market fluctuations may materially and adversely affect the market price of Holdco’s ordinary shares.

The financial performance, and price of the ordinary shares, of the combined company may be affected by factors different from those that historically have affected Naked.

Upon completion of the Merger, holders of Naked common stock will become holders of ordinary shares of Holdco. The business and target markets of Holdco and the combined company differ from those of Naked, and accordingly the results of operations and the price of Holdco Ordinary Shares will be affected by some factors that are different from those currently affecting the results of operations and stock price of Naked.

The combined company’s stock price is expected to be volatile, and the market price of the combined company ordinary shares may drop following the Merger. The market price of the combined company’s ordinary shares could be subject to significant fluctuations following the Merger. Moreover, stock markets generally have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. Such market fluctuations may also adversely affect the trading price of the combined company’s ordinary shares. Declines in the combined company’s stock price after the Merger may result for a number of reasons including if:

	·	investors react negatively to the prospects of the combined company’s business and prospects from the Merger;

	·	the effects of the Merger on the combined company’s business and prospects are not consistent with the expectations of financial or industry analysts;

	·	the combined company does not achieve the perceived benefits of the Merger as rapidly or to the extent anticipated by financial or industry analysts; or

other factors beyond the combined company’s control, including but not limited to fluctuations in the valuation of companies perceived by investors to be comparable to the combined company.

Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political and market conditions, such as recessions, interest rate changes or international currency fluctuations, have and may continue to negatively affect the market price of Holdco’s ordinary shares.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about Holdco or its business, its ordinary shares price and trading volume could decline.

The trading market for the Holdco’s ordinary shares will depend in part on the research and reports that securities or industry analysts publish about Holdco or its business. Securities and industry analysts do not currently, and may never, publish research on Holdco. If no securities or industry analysts commence coverage of Holdco, the trading price for its ordinary shares would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover Holdco downgrade its securities or publish inaccurate or unfavorable research about its business, its stock price would likely decline. If one or more of these analysts cease coverage of Holdco or fail to publish reports on Holdco, demand for its ordinary shares could decrease, which might cause its ordinary share price and trading volume to decline.

Item 1B.

Unresolved Staff Comments

Not applicable.

Item 2.

Properties

We currently maintain offices atshared ~~10th~~with ~~Floor~~Bendon –at 95180 Madison Avenue, Suite 505, New York, New York, USA, which weare ~~lease~~provided ~~for~~at ~~approximately~~no ~~$18,000~~cost ~~per~~by ~~month~~Bendon. ~~The~~ ~~lease is on a month-to-month basis.~~ We believe our New York offices are suitable and adequate premises from which to operate our business at this time as they provide us with sufficient space to conduct our operations.

We do not own any real property.

Item 3.

Legal Proceedings

We know of no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which our company or our subsidiary is a party or of which any of their property is subject. There are no proceedings in which any of our directors, officers, or affiliates, or any registered or beneficial stockholder holding more than 5% of our shares, is an adverse party or has a material interest adverse to our or our subsidiary’s interest.

Item 4.

Mine Safety Disclosures

Not Applicable.

2430

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information for Common Stock

Our common stock has been listed on the ~~NASDAQ~~Nasdaq Capital Market under the symbol “NAKD” since December 18, 2015. Prior to that time, our common stock was quoted on the OTCQB marketplace operated by the OTC Markets Group, Inc. The following table sets forth the high and low sales prices per share for our common stock for the periods indicated. Information for the period from ~~December~~February 181, ~~2015~~2016 through January 31, ~~2017~~2018 is the high and low closing sales prices of our common stock on the ~~NASDAQ~~Nasdaq Capital Market. Information for all periods prior thereto is the high and low bid quotations for our common stock on the OTCQB based upon information provided by the OTC Markets Group, Inc. Quotations reflect inter-dealer prices, without retail mark-up, mark-down commission, and may not represent actual transactions.

Period	High ($)		Low ($)
Year ended January 31, 2016
First Quarter		5.60		3.60
Second Quarter		5.20		3.30
Third Quarter		6.00		3.50
Fourth Quarter		4.00		2.54
Year ended January 31, 2017
First Quarter		2.95		1.49
Second Quarter		2.07		1.35
Third Quarter		2.95		1.03
Fourth Quarter		3.68		0.82
Year ended January 31, 2018
First Quarter		4.75		1.14
Second Quarter		3.00		1.25
Third Quarter		1.69		1.15
Fourth Quarter		1.75		1.24

Holders of Record

As of ~~April~~May 261, ~~2017,~~ 2018, we had approximately ~~208~~183 common stockholders of record. This figure does not include beneficial owners who hold shares of common stock in nominee name. The closing price per share of our common stock on April 2430, ~~2017~~2018 was $21.0338, as reported on the ~~NASDAQ~~ Nasdaq Capital Market.

Dividends

We have not declared any dividends since incorporation and do not anticipate that we will do so in the foreseeable future. Subject to compliance with applicable corporate laws, our directors will determine if and when dividends should be declared and paid in the future based on our financial position at the relevant time. All shares of our common stock are entitled to an equal share of any dividends declared and paid.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

Recent Sale of Unregistered Securities and Use of Proceeds

None.

2531

Securities Authorized for Issuance under Equity Compensation Plans

The information required by this item with respect to our equity compensation plans is incorporated by reference to our Proxy Statement for the ~~2017~~2018 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended January 31, ~~2017~~2018.

Item 6.

Selected Financial Data

Not Applicable.

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Form 10-K. In addition to our historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Form 10-K, particularly in Part I, Item 1A, “Risk Factors.”

Overview

We are an apparel ~~and~~ and lifestyle brand company that is currently focused on innerwear products for women and men. Under our flagship brand name and ~~registered~~ registered trademark “Naked®”, we design, manufacture and sell men’s and women’s underwear, ~~intimate~~ intimate apparel, loungewear and sleepwear through retail partners and direct to consumer through our online retail store www.wearnaked.com. We have a growing retail footprint for our men’s innerwear products in premium department and specialty stores and internet retailers in North America, including accounts such as Nordstrom.com, Dillard’s, Bloomingdale’s, Amazon.com, ~~Soma.com~~Chico’s, Saksfifthavenue.com, ~~barenecessities.com~~ and others.

Our net sales grew to $12,~~842~~859,~~065~~884 in fiscal ~~2017~~2018 from $1,~~389~~842,~~414~~ 065 in fiscal ~~2016~~2017. Net sales increased primarily as a result increases in sales ~~from~~across ~~our~~all ~~ecommerce~~sales ~~and~~channels, ~~third~~specifically third-party ecommerce sites, asand ~~well as increases in~~ sales to ~~specialty~~ ~~and retail~~ specialty accounts, as described below.

During the year ended January 31, ~~2017~~2018, sales to department stores accounted for approximately ~~38.7~~33% of total net sales, as compared to 4938.27% during ~~fiscal~~ ~~2016~~fiscal 2017. The ~~reason for the~~ decrease in the proportion of department store sales to total sales iswas asthe a result of the growth in our other sales channels. Increases in sales to ~~new~~ department store accounts, such as Bloomingdales, Dillards, Saks Fifth Avenue, Lord & Taylor and Chicos of $~~445~~214,~~076~~790 during fiscal ~~2017~~2018, were ~~offset~~outpaced by aincreases ~~decrease~~ of $~~414~~202,~~454~~768 ~~in sales to Nordstrom~~ and ~~HBC. The~~$417,347 ~~reduction in sales~~ to ~~Nordstrom~~third-party ~~during~~ecommerce ~~fiscal~~and ~~2017~~retail isand ~~as a result of a reduction by Nordstrom in replenishment orders due~~specialty toaccounts, ~~the elimination of in-store inventory~~respectively.

Net sales through ~~our~~ our ecommerce store (www.wearnaked.com) increased to approximately $~~382~~385,~~900~~300 for fiscal ~~2017~~2018 compared to $~~333~~382,~~200~~900 in fiscal ~~2016~~2017, an an increase of 140.96%. The small increase in sales to our ecommerce store is largely due to the increase in third-party ecommerce sales, as described below. Sales through our ecommerce store accounted for approximately 2013.850% of total net sales in fiscal ~~2017~~2018 as ~~compared~~ compared to 2420.08% of total net sales in fiscal ~~2016~~2017. The decrease in ecommerce sales as a percentage of total net sales is attributable to aproportionately larger ~~increase~~increases in ~~total~~sales ~~department~~to ~~and~~other ~~retail~~channels ~~store sales~~ in fiscal ~~2017~~2018 compared to the prior year~~, because of the addition of new department store accounts, as described above~~.

Net sales through ~~third~~ third party ecommerce sites increased to approximately $~~125~~328,~~900~~700 for fiscal ~~2017~~2018 compared to $52125,~~500~~900 in fiscal ~~2016~~2017, an increase of ~~139~~161.91%. Sales through these channels accounted for approximately 611.85% of total net sales in fiscal ~~2017~~2018 as compared to 36.8% of total net sales for fiscal ~~2016~~2017. This increase is attributable to ~~new~~an ~~third~~increase in sales to existing third-party ecommerce accounts ~~added~~and the addition of new third-party ecommerce accounts in fiscal ~~2017~~2018.

2632

Sales to retail and specialty store accounts constituted approximately $~~368~~878,~~785~~200, or 2028.06% of total net sales in fiscal ~~2017~~2018, as compared to $~~257~~368,~~871~~800, or 1820.60% of total net sales in fiscal ~~2016~~2017. Total sales to retail and specialty store sales increased by approximately 43166.03% over the comparative year, largely due to $441,453 in sales recorded for the fourth quarter relating to the consignment agreement with Bendon, dated October 4, 2017, as well as due to the addition of accounts during the fiscal year.

During fiscal ~~2017~~2018, we sold approximately $~~242~~316,~~700~~100 in out of season and overstock inventory through off price sales channels. Sales to these customers accounted for approximately 1311.21% of total net sales in fiscal ~~2017~~2018, as compared to 413.02% of total net sales in fiscal ~~2016~~2017. The high percentage of sales to off price channels was driven by attempts to lower overall aging inventory levels during the fiscal year. We expect to see the percentage of sales to off price channels to decrease in the next fiscal year due to the consignment agreement with Bendon.

During fiscal ~~2017~~2018, men’s products constituted 5035.93% of total sales and women’s products constituted 4964.16% of total sales. Going forward, we expect the majority of our growth to be driven by our women’s collections, as we anticipate that our women’s products will become more widely distributed. In addition, the women’s market is substantially larger than the men’s market. However, we also expect to continue to see stable growth in our men’s products through our sales and marketing initiatives.

During ~~the third quarter of~~ fiscal ~~2017~~2018, gross wemargins ~~launched~~increased ~~our~~to ~~first~~32.8%, ~~collections~~compared ofto ~~Wade~~20.5% Xduring ~~Naked~~fiscal 2017. The ~~Company~~increase ~~started~~in ~~shipping~~gross ~~these~~margins ~~orders~~was indue ~~September~~to ~~2016~~increased production efficiencies and increased sales offrom ~~these~~our ~~collections~~women’s ~~during~~products, ~~fiscal~~which ~~2017~~generate ~~were~~higher ~~$59,900~~margins. ~~The~~ ~~Wade~~However, Xthis ~~Naked~~is ~~collection~~largely isoffset in ofthe ~~key~~fourth ~~importance~~quarter indue to sales recorded per the ~~growth~~consignment agreement with Bendon, described above, in which we receive the proceeds of ~~our~~sales ~~men’s~~through ~~business~~Bendon at unit costs.

~~During~~Our ~~fiscal~~products ~~2017,~~are sold ~~gross~~in ~~margins~~North ~~increased~~America; tohowever, ~~20.5%.~~we ~~The~~believe ~~increase~~our inproducts ~~gross~~appeal ~~margins~~to inmen ~~was~~and ~~due~~women toworldwide. ~~increased~~We ~~production~~continue ~~efficiencies~~to ~~and~~explore ~~increased~~international ~~sales~~distribution ~~from~~relationships for our ~~women’s~~Naked products. On October 4, ~~which~~2017, ~~generate~~the ~~higher~~Company ~~margins.~~entered Ininto ~~addition,~~a inconsignment ~~fiscal~~agreement ~~2016~~with Bendon to consign 155,624 ~~our~~units ~~net~~of ~~margins~~finished ~~were~~goods ~~reduced~~inventory ~~significantly as~~for athe ~~result~~purpose of ~~the~~facilitating ~~write~~a ~~down~~sale of ~~certain~~the ~~inventory,~~consigned togoods ~~reduce~~by ~~inventory~~the toconsignee, ~~estimated~~per ~~net~~note 4 ~~realizable~~of ~~values,~~the ~~which~~accompanying ~~arose~~financial asstatements. aThis ~~result of~~inventory ~~seasonality~~is ~~and~~being ~~product~~sold ~~line~~through ~~changes~~Bendon retailers internationally.

Our products are sold in North America; however, we believe our products appeal to men and women worldwide. We continue to explore international distribution relationships for our Naked and Wade X Naked products.

In the future, we intend to expand the Naked brand on our own and through licensing partnerships into other apparel and product categories.

We operate in the apparel industry that is subject to seasonality of buying which can affect revenue and cash flows. We focus on two main buying seasons in the apparel industry: Fall/Winter season, which falls into the third to fourth quarters of our fiscal year and Spring/Summer season, which falls into the first to second quarters of our fiscal year, with some potential shipments at the last quarter. During fiscal ~~2017~~2018, the largest revenues were generated in our ~~third~~second and fourth fiscal quarters, which quarters generated 2923.94% and 2938.9%, respectively, of the aggregate annual revenues. These fluctuations arose from seasonal sales and promotions, and the introduction of new collections. However, the largest impact on quarterly fluctuations was adue ~~result~~to ~~of a decrease in~~ sales to ~~one~~Bendon ofper ~~our key customers, Nordstrom, in~~ the ~~second~~consignment ~~quarter of fiscal 2017 as a result of a reduction by Nordstrom in replenishment orders due~~agreement towhich ~~the~~occurred ~~elimination of~~ in~~-store~~ ~~stock, and a large return of merchandise from store closures. In~~ the ~~following~~fourth ~~two quarters, growth in our new customers offset the decrease in replenishment orders from Nordstrom~~quarter. As a result of this growth and changes to our business with the introductions of new product offerings, the natural seasonality of our business has historically had a reduced effect.

Our products currently target men and women who are fashion and performance conscious, care about innovation and contemporary design, and desire comfort, quality and fit in their innerwear and apparel. We believe there is an increasing demand from our target customers to provide a luxury product at an affordable price that delivers excellent value. Our expansion into the women’s sleepwear and intimate apparel market is a key part of our growth strategy given that market data estimates the women’s market represent over 77% of the overall innerwear market. Daywear products that address consumer demand for versatile “athleisure” apparel – similar to several styles in our Fall 2015 women’s collection – have been the fastest growing segment of the women’s market. Our ability to attract women customers for the Naked brand is also important to our effort to penetrate the men’s innerwear market since a number of consumer research reports show that women purchase as much as 50% of men’s underwear for their husbands, boyfriends or sons.

Although we believe these trends will facilitate our growth, we also face potential challenges that could limit our ability to take advantage of these opportunities, including, among others, the risk of general economic or market conditions that could affect consumer spending and the financial health of our retail customers. In addition, we may not be able to effectively manage our growth and a more complex global business. We may not consistently be able to anticipate consumer preferences and develop new and innovative products that meet changing preferences in a timely manner. Furthermore, our industry is very competitive, and competition pressures could cause us to reduce the prices of our products or otherwise affect our profitability. We also rely on third-party suppliers and manufacturers outside the U.S. to provide fabrics and to produce our products, and disruptions to our supply chain could harm our business. For a more complete discussion of the risks facing our business, refer to the “Risk Factors” section included in Item 1A.33

27Although we believe these trends will facilitate our growth, we also face potential challenges that could limit our ability to take advantage of these opportunities, including, among others, the risk of general economic or market conditions that could affect consumer spending and the financial health of our retail customers. In addition, we may not be able to effectively manage our growth and a more complex global business. We may not consistently be able to anticipate consumer preferences and develop new and innovative products that meet changing preferences in a timely manner. Furthermore, our industry is very competitive, and competition pressures could cause us to reduce the prices of our products or otherwise affect our profitability. We also rely on third-party suppliers and manufacturers outside the U.S. to provide fabrics and to produce our products, and disruptions to our supply chain could harm our business. For a more fulsome discussion of the risks facing our business, refer to the “Risk Factors” section included in Item 1A.

Results of Operations

~~Revenue~~Net Sales

During fiscal ~~2017~~2018, we generated net sales of $12,~~842~~859,~~062~~884 compared to $1,~~389~~842,~~414~~065 in fiscal ~~2016~~2017, an increase of 3255.63%. Net sales increased primarily as a result of increases in net sales from ~~our ecommerce and~~ third -party ecommerce sites, aswhich ~~well~~includes asthe ~~increases~~addition inof ~~sales~~approximately to$301,600 ~~specialty~~in ~~and~~net ~~retail accounts. We also saw increased~~ sales to ~~new department store accounts~~Amazon, ~~including~~as ~~Bloomingdales,~~well ~~Dillards,~~as ~~Chicos,~~increases ~~and Saks~~in ~~Fifth~~net ~~Avenue, added during late fiscal 2016 and fiscal 2017, but these were offset by lower~~ sales to ~~Nordstroms.~~specialty ~~We launched our women’s sleepwear~~ and ~~loungewear~~retail ~~collection~~accounts inincluding ~~the~~$441,453 ~~third quarter of fiscal 2016~~ in ~~our~~net ~~direct~~sales to ~~consumer channels and~~Bendon. ~~launched~~We ~~these~~also ~~collections,~~saw asincreased ~~well~~net assales ~~additional women’s intimate apparel collections,~~ to department store ~~and specialty store~~ accounts, inincluding ~~the~~Bloomingdales, ~~first~~Nordstroms ~~quarter of fiscal 2017~~Dropship, ~~which~~and ~~also contributed to our overall increase in net sales through all sales channels~~Dillards.

Gross Margins

During fiscal ~~2017~~2018, gross margins increased to 2032.58%, compared to 720.15% during fiscal ~~2016~~2017. Our positive growth in gross margins in fiscal ~~2017~~2018 ~~the~~is the result of ~~increasing~~increased production efficiencies and increased sales from our women’s products, which generate higher margins. During fiscal ~~2017~~2018, men’s products constituted 5035.90% of total sales and women’s products constituted 4965.10% of total sales, compared to approximately 9350.29% and 649.81%, respectively in fiscal ~~2016~~2017.

In addition, in fiscal ~~2016~~2018, our net margins were reduced ~~significantly~~ as a result of the ~~write~~consignment ~~down~~agreement ofwith ~~certain~~Bendon ~~inventory,~~ to ~~reduce~~record ~~inventory~~sales toat ~~estimated net~~cost, ~~realizable~~beginning ~~values,~~in ~~which~~the fourth ~~arose~~quarter. asAs a result, ofour ~~seasonality~~gross ~~and~~margins ~~product~~were ~~line~~reduced ~~changes~~from 49.3% in the fourth quarter fiscal 2017 to 32.6% in the fourth quarter fiscal 2018.

Operating Expenses

	Year ended January 31						Change
	Year ended January 31,						Change
General and administrative	~~2017~~2018			~~2016~~2017			$			%
Bad debts		(3,~~027~~708	)		30(3,~~657~~027	)		~~(33~~6,~~684~~735	)		~~(109~~222.95	)
Bank charges and interest		2078,~~378~~696			1720,~~048~~378			358,~~330~~318			19286.52
Consulting		~~140~~457,~~360~~869			~~311~~140,~~003~~360			~~(170~~317,~~643~~509	)		~~(54~~226.92	)
Depreciation		~~13,215~~-			1713,~~420~~215			(413,~~205~~215	)		(24100.10	)
Directors fees		481,511			433,850			47,661			11.0
Directors fees(1)		287,971			481,511			(193,540	)		(40.2	)
Insurance		8388,~~235~~993			~~151~~83,~~859~~235			~~(68~~5,~~624~~758	)		~~(45~~6.29	)
Investor relations		~~185~~149,~~597~~366			73185,~~805~~597			~~111~~(36,~~792~~231	)		~~151~~(19.5	)
Marketing		1888,~~139,471~~884			1,~~156~~139,~~473~~471			(17250,~~002~~587	)		(122.50	)
Occupancy and rent		~~196~~126,~~588~~000			~~134~~196,~~068~~588			62(70,~~520~~588	)		46(35.69	)
Office and misc		~~204~~148,~~280~~944			~~215~~204,~~846~~280			(1155,~~566~~336	)		(527.41	)
Product development		~~440~~200,~~867~~674			~~747~~440,~~644~~867			(~~306~~240,~~777~~193	)		(4154.05	)
Professional fees		~~736~~683,~~849~~323			~~957~~736,~~025~~849			(~~220~~53,~~176~~526	)		(237.03	)
Salaries and benefits		6,950,518			6,780,037			170,481			2.5
Salaries and benefits(2)		3,654,408			6,950,518			(3,296,110	)		(47.4	)
Transfer agent and filing fees		7048,~~001~~136			~~121~~70,~~868~~001			(5121,~~867~~865	)		(4231.62	)
Travel		9544,~~425~~125			~~174~~95,~~294~~425			(7851,~~869~~300	)		(4553.38	)
Warehouse management		~~321~~137,~~083~~369			~~404~~321,~~092~~083			(83183,~~009~~714	)		(2057.52	)
Total		116,~~076~~998,~~351~~466			11,~~726~~076,~~989~~351			(~~650~~4,~~638~~077,885	)		(536.58	)

(1) Included in director compensation is an amount of $~~481~~262,~~511~~971 (fiscal ~~2016~~2017: $~~433~~481,~~850~~5110) for non-cash stock option compensation and stock compensation charges.

(2) Included in salaries and benefits is an amount of $42,~~918~~132,~~228~~371 (fiscal ~~2016~~2017: $4,~~936~~918,~~118~~228) for non-cash stock option compensation charges.

2834

General and administrative expenses decreased in fiscal ~~2017~~2018 to $116,~~076~~998,~~351~~466, compared to $11,~~726~~076,~~989~~351 in fiscal ~~2016~~2017, a decrease of $~~650~~4,~~638~~077, 885, or 536.58%.

Of the total general and administrative expenses, $52,~~348~~519,~~647~~792 was related to non-cash stock option compensation charges for fiscal ~~2017~~2018, as compared to $5,~~632~~348,~~267~~647 for fiscal ~~2016~~2017. These amounts are included in salaries and benefits, director fees, investor relations, product development and consulting components of general and administrative expenses above. These non-cash stock option compensation charges relate mostly to stock options issued to our management team, directors, and other strategic partners, as part of certain incentive -based compensation packages. The fair value of non-cash stock option compensation is calculated using the Black Scholes option ~~pricing~~ pricing model and is charged to operating expenses over the vesting term of the related option awards. See Note 10 to our consolidated financial statements included in this Form 10-K for more detailed information regarding these charges.

The decrease in general and administrative expenses is mostly attributable to decreases in ~~consulting,~~salaries ~~product~~and ~~development~~benefits, ~~professional~~directors’ fees, ~~insurance~~marketing, product ~~travel~~development, rent, and warehouse management as further explained below and partially offset by a large increase in consulting fees.

~~Consulting~~Salaries ~~fee~~and ~~expenses~~benefits decreased asin afiscal ~~result~~2018 ofcompared ato ~~recovery of stock option compensation charges recognized in~~ fiscal 2017 ~~for~~as ~~stock~~a ~~options~~result ~~issued~~of ~~to non-employees,~~employee ~~which~~departures ~~are~~that ~~being~~occurred ~~re-measured~~during atthe ~~each reporting~~ period inand ~~accordance~~as ~~with~~a ~~ASC 505-50, Equity Based Payments~~result ~~to Non-Employees, the value~~ of ~~which~~a ~~decreased during the year~~56.6% ~~This~~decrease ~~was~~in ~~offset~~stock-based bycompensation anrecorded ~~increase~~to insalaries ~~consulting~~due ~~fees~~to ~~for~~the ~~fees paid~~completion toof avesting ~~consulting~~of ~~firm~~options ~~which~~during ~~were~~the ~~previously~~second fiscal ~~included~~quarter inof ~~salaries~~fiscal ~~and wages~~2018.

~~Product~~Directors’ ~~development~~fees ~~costs have~~ decreased in ~~the~~fiscal ~~current~~2018 ~~period~~compared ~~because~~to wefiscal ~~incurred~~2017 ~~higher~~due ~~product~~to ~~development~~a ~~costs~~decrease in ~~the~~stock-based ~~comparative~~compensation ~~period~~recorded infor ~~connection with~~ the ~~launch~~completion of ~~our women’s collections. This decrease also relates to a recovery for product development consultant stock~~ ~~based~~vesting ~~compensation~~of ~~due~~options toduring athe ~~reduction~~second inquarter ~~share~~of ~~price during~~ fiscal ~~2017~~2018.

~~Professional~~Marketing fees decreased induring ~~the~~fiscal ~~current~~2018 ~~period~~compared asto afiscal ~~result~~2017 ofprimarily ~~new~~due ~~contracts~~to ~~and~~expenses ~~financing~~incurred ~~activities~~ in fiscal ~~2016~~2017 for merchandising consulting, photoshoots, and promotional material in connection with the launch of new collections; as well as aexpenses ~~decrease~~associated inwith ~~legal~~the ~~fees~~collaboration and endorsement agreement with Dwyane Wade, including advanced royalty charges, photoshoots, and promotional materials.

29Product development costs decreased in fiscal 2018 compared to fiscal 2017 primarily due to a decrease in the number of freelance designers for both the men and women’s collections, which was higher in fiscal 2017 due to launches of men’s and women’s collections in that year. The decrease was also due to decreased stock-based compensation in fiscal 2018 for the completion of vesting of warrants during fiscal 2017.

~~Insurance~~Rent ~~expenses~~ expense decreased in ~~mostly~~fiscal ~~due~~2018 compared to afiscal ~~change~~2017 inas ~~the~~a ~~way~~result ~~insurance~~of ~~was~~moving ~~being~~into ~~expensed. In~~ the ~~comparative~~Bendon ~~period~~offices, ~~insurance~~effective ~~was~~August ~~expensed~~2017, ~~when paid~~ and ~~included~~incurring ~~the~~no ~~initial down payment on our professional liability policy in June 2015. In the current period, the policy~~rent ~~was~~expense ~~set~~per ~~up as a prepaid and~~ the ~~financing~~Merger ~~payments~~Agreement ~~are~~with ~~being applied against the payable~~Bendon.

~~Transfer~~Warehouse ~~agent and~~management ~~filing~~expenses ~~fees~~decreased ~~have~~in ~~decreased~~fiscal 2018 as compared to fiscal 2017, as a result of ~~the~~reimbursements uptotaling ~~listing~~$60,262 offrom ~~our~~Bendon ~~common~~for ~~stock~~warehouse and toshipping ~~NASDAQ~~costs ~~from~~relating to the ~~OTC~~shipment ~~markets~~of inconsignment inventory to the ~~comparative period,~~Bendon ~~and~~warehouse ~~one-time~~per ~~costs~~the ~~associated~~consignment ~~therein~~agreement.

~~Decreases~~The todecrease ~~travel~~in general ~~expenses~~and inadministrative ~~fiscal~~expenses ~~2017~~described ~~are~~above aswere apartially ~~result~~offset ofby aan ~~decrease~~increase in ~~discretionary~~consulting ~~spending~~and ~~due~~bank tocharges ~~cash~~and ~~shortages as well as a decrease in financing related travel~~interest.

~~Warehouse~~Consulting ~~management~~ fee expenses increased ~~decreased~~for fees paid to a consulting firm totaling $100,000 which were previously included in ~~fiscal~~salaries ~~2017~~and aswages, ~~compared~~fees topaid in ~~fiscal~~connection ~~2016~~with corporate consulting work totaling $195,000, and as a result of ~~the~~a ~~engagement~~recovery of a$9,389 ~~new~~in ~~third~~stock ~~party~~option ~~warehouse~~compensation charges recognized in fiscal 2017 for stock options issued to non-employees, which are being re-measured at aeach reporting period ~~lower~~in ~~cost~~accordance with ASC 505-50, Equity Based Payments to Non-Employees, the value of which decreased during the year.

The ~~decrease~~increase in ~~general~~bank charges and ~~administrative~~interest ~~expenses~~expense ~~described~~in ~~above~~fiscal ~~were~~2018 ~~partially~~is ~~offset~~due byprimarily to an increase of $59,322 in ~~salaries~~fiscal ~~and~~2018 ~~benefits,~~over ~~investor~~fiscal ~~relations,~~2017 in merchant ~~and~~fees ~~rent~~incurred for payment processing, specifically related to the addition of Amazon FBA sales.

The increase in salaries and benefits during fiscal 2017 is due to increases in staffing in both the accounting/finance and sales departments as well as an increase in severance charges as a result of staff turnover.35

The increase in investor relations expense in fiscal 2017 is due to strategic investor and media relations consultants engaged in connection with a proposed business combination with Bendon.

Rent expense increased in fiscal 2017 as a result of an expanded team, which warranted increased occupancy.

Other income and expenses

We incurred interest expenses during fiscal ~~2017~~2018 of $8150,~~796~~616 and financing and accretion charges of $~~15,975~~287 as compared to interest expenses of $~~878~~81,~~933~~796 and financing and accretion charges of $715,~~255,346~~975 in fiscal ~~2016~~2017. ~~These~~The ~~decreases~~decrease in interest ~~expense~~expenses ~~are~~is attributable to the ~~automatic~~change ~~conversion~~in ofthe ~~our~~factoring 6%agreement ~~senior~~with ~~secured~~Wells ~~convertible~~Fargo, ~~debentures~~dated inJune ~~December~~28, ~~2015.~~2017, ~~The~~reducing ~~automatic~~the ~~conversion~~monthly offactoring ~~these~~fees ~~debentures~~incurred. inInterest ~~December~~expenses ~~2015~~and ~~also~~financing ~~gave~~charges ~~rise~~also todecreased ~~the increase~~ in ~~accretion charges in~~ fiscal ~~2016,~~2018 as a result of ~~the~~amounts ~~accelerated~~incurred ~~accretion~~in offiscal ~~the~~2017 ~~debt~~on ~~discount~~related party convertible ~~associated~~notes ~~with~~which ~~the~~were ~~debentures~~converted oninto shares in the ~~conversion~~fourth ~~date~~quarter of fiscal 2017.

We recorded other income of $234,532 during fiscal 2018 compared to $nil in fiscal 2017, for fourth quarter operating loss reimbursements receivable per the Second Amendment to the Merger Agreement.

We recorded a $83,333 gain on the extinguishment of debt during fiscal 2018 compared to $nil in fiscal 2017 due to the settlement of the Wade Agreement as discussed in Note 14 of the accompanying financial statements.

Net loss and comprehensive loss

Our net loss for fiscal ~~2017~~2018 was $(105,~~798~~789,~~503~~805), or $(10.7757) per share, as compared to a net loss of $(1910,~~063~~798,~~399~~503), or $(101.1377) per share, for fiscal ~~2016~~2017. The decrease in net loss in ~~the~~fiscal ~~current~~2018 ~~period~~ is primarily due to the ~~decrease~~increase in ~~accretion~~net ~~charges~~sales ~~associated~~and ~~with~~decrease ~~the~~in ~~automatic conversion~~general ofand ~~debt~~administrative expenses incompared to fiscal ~~2016~~2017.

The decrease in net loss per share is primarily due to the increased number of shares outstanding compared to the comparative period, as a result of the public offering of common stock ~~and~~in ~~conversion~~the first quarter of ~~debt~~fiscal 2018 as well as due to ~~common~~other ~~stock~~income of $266,962 in ~~December~~fiscal ~~2015~~2018, compared to other expenses of $97,771 in fiscal 2017, as discussed above.

Liquidity and Financial Condition

Liquidity

Our cash requirements have been principally to fund working capital needs, the development of new product lines and the procurement of inventory to support our growth.

As of January 31, ~~2017~~2018, we had cash totaling $~~879~~1,~~014~~414,871. ~~which~~Under ~~amount~~the ~~was~~Merger ~~insufficient~~Agreement, Bendon is required to fund all operating losses until closing [subject to compliance with an approved budget]. Due to this requirement, we believe we have sufficient working capital to implement our proposed ~~operations~~business ~~through~~plan ~~fiscal~~over ~~2018~~the next 12 months. However, this is dependent on the completion of the Merger with Bendon, which cannot be assured.

30Subsequent to January 31, 2018, we received $381,411 in proceeds from Bendon in connection with reimbursements and operating losses for December 2017 and January 2018.

~~Subsequent~~We expect to ~~January~~incur ~~31,~~significant ~~2017,~~further welosses ~~commenced~~in ~~an “at-~~the~~-market”~~ ~~offering~~development ~~pursuant~~of toour business which wecasts ~~sold~~substantial andoubt ~~aggregate~~about ofour ~~2,189,052~~ability ~~shares~~to ofcontinue ~~our~~as a ~~common~~going ~~stock~~concern. ~~for~~To ~~gross~~remain ~~proceeds~~a ofgoing $5concern,~~499~~ in the event the Merger is not completed,~~723~~ ~~through~~we ~~Maxim~~will ~~Group~~be ~~LLC~~required asto ~~sales~~obtain ~~agent~~the necessary financing to pursue our plan of operation.

InManagement ~~accordance with~~intends ~~the~~to ~~collaboration~~continue ~~and~~to ~~endorsement~~raise ~~agreement~~funds ~~with~~from ~~Dwayne~~equity ~~Wade,~~and wedebt ~~are~~financings ~~required~~ to ~~make~~fund ~~quarterly~~our ~~payments~~operations ~~for~~and ~~royalty~~objectives. ~~fees~~However, ~~based on~~we ~~the~~cannot ~~greater~~be ofcertain that afinancing ~~pre-determined~~will ~~percentage~~be ofavailable ~~certain~~on ~~sales,~~acceptable terms or aavailable ~~minimum~~at ~~annual amount~~all. ~~During~~To the ~~year~~extent ~~ended~~that ~~January 31, 2017,~~ we ~~did~~raise ~~not~~additional ~~make~~funds ~~all~~by ~~minimum~~issuing debt ~~royalty~~or ~~payments~~equity assecurities ~~they~~or ~~became~~through ~~due~~bank ~~under the terms of the agreement~~financing, ~~and~~our ~~consequently~~existing westockholders ~~have not~~may ~~fulfilled~~experience ~~our~~significant ~~obligations under the agreement~~dilution. ~~Accordingly,~~In addition, the ~~other~~terms ~~party~~of to the ~~agreement~~Merger ~~has~~Agreement ~~the~~with ~~right~~Bendon tomay ~~cause~~restrict ~~the~~us ~~agreement to~~from ~~enter~~pursuing ~~into~~any ~~default.~~of Ifthese ~~the~~alternatives ~~other~~without ~~party~~first ~~provides~~obtaining ~~such notice of default~~consents, which ~~this~~we ~~could~~may ~~affect~~not ~~our~~be ~~ability~~able to ~~sell~~obtain ~~certain portions of our Wade X Naked inventory~~ on ~~hand~~acceptable ~~and~~terms, onor ~~order~~ at ~~January 31, 2017~~all. AsIf ~~at January 31, 2017,~~ we ~~have~~are ~~not~~unable ~~been~~to ~~provided~~raise afunds ~~notice of~~when ~~default~~required byor ~~the~~on ~~other party to the agreement~~acceptable terms, ~~and~~ we ~~are~~may ~~currently~~have ~~negotiating~~to ~~settlement~~significantly ofscale ~~amounts~~back, ~~currently~~or ~~due~~discontinue, ~~under~~our ~~the agreement~~operations. ~~No provision for any losses that might be incurred in the event of a notice of default has been provided in the financial statements included in this Annual Report.~~

Our common stock is listed on the NASDAQ Capital Market under the symbol NAKD. In September, 2016, we received a letter from NASDAQ informing us that, at that time, we were not in compliance with NASDAQ rules requiring us to maintain a minimum of $2,500,000 in stockholders’ equity. In November 2016, we submitted a plan to regain compliance with this requirement and we were granted an extension until March 22, 2017, to evidence compliance therewith. In March 2017, we received a letter from NASDAQ informing us that, at the time, we regained compliance with this requirement. However, if we fail to evidence compliance with this requirement upon filing our next periodic report for the fiscal quarter ended April 30, 2017, our common stock may be subject to delisting from the NASDAQ Capital Market. 36

~~Management intends~~Working toCapital continue to raise funds from equity and debt financings to fund our operations and objectives. However, we cannot be certain that financing will be available on acceptable terms or available at all. To the extent that we raise additional funds by issuing debt or equity securities or through bank financing, our existing stockholders may experience significant dilution. If we are unable to raise funds when required or on acceptable terms, we may have to significantly scale back, or discontinue, our operations.(Consolidated)

Factoring Arrangement with Wells Fargo

	January 31,
	2018		2017
Current Assets	$	4,485,357	$	3,604,548
Current Liabilities	$	603,861	$	2,327,872
Working Capital	$	3,881,496	$	1,276,676

OnThe ~~June~~increase ~~14,~~in ~~2016,~~working wecapital ~~entered~~during ~~into a Joint Factoring Agreement (~~the ~~“Joint~~period ~~Factoring~~is ~~Agreement”)~~primarily ~~with~~attributable ~~Wells~~to ~~Fargo~~net ~~Bank,~~proceeds ~~National~~of ~~Association (“Wells Fargo”)~~$5.3 ~~The~~million ~~Factoring~~received ~~Agreement~~in ~~with~~connection ~~Wells Fargo replaced a factoring agreement~~ with ~~Capital Business Credit LLC, which was terminated effective on~~ the ~~same~~ATM ~~date~~offering agreement.

~~Under the terms of~~Cash the Joint Factoring Agreement, we may assign eligible accounts receivable (the “Accounts”) to Wells Fargo in exchange for loans and advances (each such loan or advance, an “Advance”) up to an aggregate amount (the “Borrowing Base”) not to exceed the lesser of (i) $6,000,000 or (ii) the sum of up to 80% of trade receivables deemed eligible by Wells Fargo plus (A) the lesser of up to (x) 50% of the value, calculated at the lower of cost or market, of finished goods, warehoused inventory deemed eligible by Wells Fargo or (y) $500,000, plus (B) the lesser of (x) up to 75% of marketable securities held in a blocked security account, subject to an account control agreement in favor of Wells Fargo (the “Securities Account”); provided, however, that at any time when the market value of the securities held in such Securities Account is below $1,067,000, then the value of such securities for purposes of calculating the Borrowing Base will be $0 or (y) $200,000, less any reserves that Wells Fargo may establish from time to time.Flows

In connection with Wells Fargo’s services under the Joint Factoring Agreement, Wells Fargo receives a commission equal to the Factoring Commission Percentage (as defined in the Joint Factoring Agreement) multiplied by the gross invoice amount of each Account purchased, which is charged to the Company’s account on the date a related Advance is made. During the initial term of the Joint Factoring Agreement, Wells Fargo will receive minimum commissions equal to $24,000, $36,000 and $50,000 during the first, second and third year, respectively.

	Year ended January 31,
	2018			2017
Cash Used in Operating Activities	$	(3,859,399	)	$	(5,501,268	)
Cash Used in Investing Activities		(306,201	)		(7,780	)
Cash Provided by Financing Activities		4,701,457			1,607,068
Net change in Cash During Period	$	535,857		$	(3,901,980	)

We bear the risk of credit loss on the Accounts, except where Wells Fargo provides credit approval in writing on such Account. The Advances bear interest on the daily net balance of any moneys owed at a rate of LIBOR plus 3%. All obligations under the Joint Factoring Agreement, including the Advances (collectively, the “Obligations”), are payable on demand and may be charged by Wells Fargo to the Company’s account at any time.

At January 31, 2017, there was approximately $217,628 available for advance under the Joint Factoring Agreement.

Working Capital (Consolidated)	2017		2016
Current Assets	$	3,604,548	$	6,786,672
Current Liabilities	$	2,327,872	$	2,115,527
Working Capital	$	1,276,676	$	4,671,145

Subsequent to January 31, 2017, the Company issued an aggregate of 2,189,052 shares of common stock for gross proceeds of $5,499,723 pursuant to an At The Market Offering Agreement.

Cash Flows
	Year ended January 31,
	2017			2016
Cash Used in Operating Activities	$	(5,501,268	)	$	(6,779,206	)
Cash Used in Investing Activities		(7,780	)		(38,433	)
Cash Provided by Financing Activities		1,607,068			9,655,398
Net change in Cash During Period	$	(3,901,980	)	$	2,837,759

Operating Activities

Cash used in our operating activities was $53,~~501~~859,~~268~~399 for fiscal ~~2017~~2018, compared to $65,~~779~~501,~~206~~268 for fiscal ~~2016~~2017. The cash used in operations during fiscal ~~2017~~2018 was largely the result of the net loss for the period, offset by net non-cash charges of $52,~~348~~388,~~647,~~746 mostly related to stock-based compensation charges of $2,519,792.

The cash used in operations during fiscal ~~2016~~2017 was largely the result of a net loss for the period, offset by net non-cash charges of $125,~~178~~348,~~713~~647, related to ~~derivative liability accounting and~~ to stock-based compensation charges.

Investing Activities

Investing activities used cash of $7306,~~780~~201 during fiscal ~~2017~~2018, compared to $387,~~433~~780 ~~for~~during fiscal ~~2016~~2017. Investing activities in fiscal ~~2017~~2018 ~~and~~consist ~~2016~~of amounts receivable from Bendon related to the Merger Agreement. Investing activities in fiscal 2017 consist mostly of cash outlays for patent and trademark acquisitions.

Financing Activities

In fiscal ~~2017~~2018, financing activities provided cash of $14,~~607~~701,~~068 for fiscal 2017~~457, compared to $91,~~655~~607,~~398~~068 for fiscal ~~2016~~2017. We received ~~cash~~net proceeds of $15,~~955~~307,~~003~~ 233 in connection with the issuance of shares pursuant to aour ~~registered~~“at the market” public offering. ~~These~~This ~~proceeds~~was ~~were~~ partially offset by ~~the~~repayments ~~repayment~~ of ~~convertible debentures which came due during fiscal 2017~~$302,776 inunder ~~the~~a ~~amount~~factoring ~~of $600~~arrangement,~~000.~~ ~~We also received an aggregate of~~ $~~477~~253,000 ~~from~~in ~~the~~short ~~issuance~~term ~~of promissory notes during fiscal 2017~~loans, ~~which~~and ~~proceeds were used to fund operations. During fiscal 2017, we received advances under factoring arrangements of~~ $150,~~050,~~000, ~~which~~in isthe ~~offset~~repurchase ~~by repayments under these facilities~~ of ~~$1,274,935,~~ ~~for net repayments of $224,935 during fiscal 2017~~warrants.

32In fiscal 2017, we received cash of $1,955,003 in connection with the issuance of shares pursuant to a registered public offering. These proceeds were partially offset by the repayment of convertible debentures which came due during fiscal 2017, in the amount of $600,000. We also received an aggregate of $477,000 from the issuance of promissory notes during fiscal 2017, which proceeds were used to fund operations. During fiscal 2017, we received advances under factoring arrangements of $1,050,000, which were offset by repayments under these facilities of $1,274,935, for net repayments of $224,935 during fiscal 2017.

In fiscal 2016, we received cash of $9,842,829 in connection with the issuance of shares pursuant to the exercise of outstanding warrants and pursuant to the Public Offering. These proceeds were partially offset by offering costs totaling $715,142. We also received factoring proceeds of $1,260,000 which were partially offset by repayments totaling $732,289.

Commitments and Capital Expenditures

We do not anticipate that we will expend any significant amount on capital expenditures like equipment over the next twelve months or enter into any other material commitments.

Factoring Arrangement with Wells Fargo

On June 14, 2016, we entered into a Joint Factoring Agreement (the “Joint Factoring Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”). The Joint Factoring Agreement with Wells Fargo replaced a factoring agreement with Capital Business Credit LLC, which was terminated effective on the same date.

Under the terms of the Joint Factoring Agreement, we may assign eligible accounts receivable (the “Accounts”) to Wells Fargo in exchange for loans and advances (each such loan or advance, an “Advance”) up to an aggregate amount (the “Borrowing Base”) not to exceed the lesser of (i) $6,000,000 or (ii) the sum of up to 80% of trade receivables deemed eligible by Wells Fargo plus (A) the lesser of up to (x) 50% of the value, calculated at the lower of cost or market, of finished goods, warehoused inventory deemed eligible by Wells Fargo or (y) $500,000, plus (B) the lesser of (x) up to 75% of marketable securities held in a blocked security account, subject to an account control agreement in favor of Wells Fargo (the “Securities Account”); provided, however, that at any time when the market value of the securities held in such Securities Account is below $1,067,000, then the value of such securities for purposes of calculating the Borrowing Base will be $0 or (y) $200,000, less any reserves that Wells Fargo may establish from time to time.

In connection with Wells Fargo’s services under the Joint Factoring Agreement, Wells Fargo receives a commission equal to the Factoring Commission Percentage (as defined in the Joint Factoring Agreement) multiplied by the gross invoice amount of each Account purchased, which is charged to the Company’s account on the date a related Advance is made. During the initial term of the Joint Factoring Agreement, Wells Fargo will receive minimum commissions (“Minimum Commissions”) equal to $24,000, $36,000 and $50,000 during the first, second and third year, respectively.

On June 28, 2017, the Joint Factoring Agreement was amended to remove the eligibility for Advances and remove the Minimum Commissions clause.

The Obligations are secured by a continuing security interest in all assets, properties, and rights of the Company, wherever located, whether owned as of the date of the Joint Factoring Agreement or subsequent thereto. On June 28, 2017, the Joint Factoring Agreement was amended to terminate the Guaranty by Carole Hochman and in connection the brokerage Account Pledge and Security Agreement between Wells Fargo and Carole Hochman.

The term of the Joint Factoring Agreement is for three years and will automatically renew, unless terminated at any time by Wells Fargo with thirty days’ written notice, or by us prior to such renewal, with sixty days’ prior written notice. On June 28, 2017, the Joint Factoring Agreement was amended to change the term commencing on June 28, 2017 to remain in full force and effect until June 30, 2018 and shall automatically renew annually, unless terminated at any time by Wells Fargo with thirty days’ written notice, or by us prior to such renewal, with sixty days’ prior written notice.

At January 31, 2018, an amount of $106,339 was due from the factor to the Company for collection of accounts receivable under the terms of the Joint Factoring Agreement, as amended and was received in full subsequent to year end. At January 31, 2017, $302,776 was owed to the factor for advances made to the Company, net of repayments of such advances through the sale of factored receivables.

Going Concern

At January 31, ~~2017~~2018, we ~~did~~had ~~not~~approximately ~~have~~$3,881,500 ~~sufficient~~in working capital toincluding ~~implement~~approximately ~~our~~$1,415,000 ~~proposed~~in ~~business plan over the next 12 months~~cash, had not yet achieved ~~profitable~~ profitable operations and expect to continue to incur significant losses from operations in the immediate future. ~~These~~Per ~~factors cast~~the ~~substantial~~Merger ~~doubt~~Agreement, Bendon ~~about~~is ~~our~~required ~~ability~~ to ~~continue~~fund asall aoperating ~~going~~losses ~~concern~~until closing. ToDue ~~remain~~to athis ~~going concern~~amendment, we ~~will~~believe bewe ~~required~~have tosufficient ~~obtain the~~working ~~necessary financing~~ capital to ~~meet~~implement our ~~obligations~~proposed ~~and repay our substantial existing liabilities as well as further liabilities arising from normal~~ business ~~operations~~plan asover ~~they~~the ~~come~~next ~~due~~12 months. ~~Management~~However, ~~plans~~should ~~to obtain~~ the ~~necessary~~Merger ~~financing~~not ~~through the issuance of equity to new investors and existing stockholders. Should we~~ be ~~unable to obtain this financing~~completed, we ~~may~~would need to ~~substantially~~ ~~scale~~raise ~~back~~additional ~~operations~~funds orin ~~cease~~order ~~business.~~to ~~The~~implement ~~financial~~our ~~statements~~proposed dobusiness ~~not include any adjustments that might result from the outcome of this uncertainty~~plans. ~~There~~These ~~are~~factors nocast ~~assurances~~substantial ~~that~~doubt weabout ~~will be able to obtain additional financing necessary to support~~ our ~~working~~ability ~~capital requirements. To the extent that funds generated from operations are insufficient, we will have~~ to ~~raise~~continue ~~additional~~as ~~working capital.~~a Nogoing ~~assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us~~concern.

To remain a going concern, in the event the Merger should not be completed, we will be required to obtain the necessary financing to meet our obligations and repay our substantial existing liabilities as well as further liabilities arising from normal business operations as they come due. Management plans to obtain the necessary financing through the issuance of equity to new investors and existing stockholders. Should we be unable to obtain this financing, we may need to substantially scale back operations or cease business. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. There are no assurances that we will be able to obtain additional financing necessary to support our working capital requirements. To the extent that funds generated from operations are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us.

Segment Reporting

We used several factors in identifying and analyzing reportable segments, including the basis of organization, such as differences in products and services, and geographical areas. Our chief operating decision makers review financial information presented on a consolidated basis for the purposes of making operating decisions and assessing financing performance. Accordingly, we have determined that as of January 31, ~~2017~~2018, and ~~2016~~2017, there is only a single reportable operating segment.

We operate in one industry, the manufacture and sale of direct and wholesale undergarments. Revenues from external customers are all derived from customers located within North America as follows:

	2017		2016
	2018		2017
United States	$	12,~~812~~738,~~120~~948	$	1,~~090~~812,~~024~~120
Canada		29120,~~945~~935		~~299~~29,~~390~~945
	$	12,~~842~~859,~~065~~884	$	1,~~389~~842,~~414~~065

At January 31, ~~2017~~2018, the net book value of long-lived assets all located within North America were as follows:

	2017				2016
	2018				2017
	Equipment		Intangible assets		Equipment		Intangible assets
United States	$	-	$	61,518	$	~~7,091~~-	$	5361,~~738~~518
Canada		-		19,357		~~6,124~~-		19,357
	$	-	$	80,875	$	~~13,215~~-	$	7380,~~095~~875

Disclosure of Outstanding Share Data

As of ~~April~~May 261, ~~2017~~2018, there were 10,342,191 shares of our common stock issued and outstanding. In addition, at ~~April~~May 261, ~~2017~~2018, the total dilutive securities outstanding, including options, warrants, and shares ~~issuable~~ issuable upon conversion of convertible debt instruments was approximately 34,~~914~~683,~~409~~451 shares.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Application of Critical Accounting Policies

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles used in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ significantly from these estimates under different assumptions or conditions.

We believe that of our significant accounting policies, which are described in Note 3 to our annual financial statements, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, the following policies are the most critical to aid in fully understanding and evaluating our financial condition and results of operations

Revenue Recognition, Accounts Receivable and Allowance for Doubtful Accounts

Sales are recorded when title and risk of loss has passed to the customer, when persuasive evidence of a sales arrangement exists, the selling price is fixed and determinable and collectability is reasonable assured. For consignment sales, revenue is recognized when the consignee sells the goods. Significant management judgments and estimates must be made in connection with determination of revenue to be recognized in any accounting period in respect of the timing of when the applicable revenue recognition criteria have been met. If we made different judgments or utilized different estimates for any period, material differences in the amount and timing of revenue recognized could result.

Accounts receivables consist of amounts due from customers and are recorded upon the shipment of product to customers. Credit terms are extended to customers in the normal course of business and no collateral is required. We estimate an allowance for doubtful accounts based on historical losses, existing economic conditions, and the financial stability of its customers. Accounts receivable are written off when deemed uncollectible. Significant management judgment is involved in making the determination with respect to uncollectible amounts.

Inventory

Inventory is stated at the lower of cost or market value. Cost is determined using the weighted average method, which under the circumstances, management believes will provide for the most practical basis for the measurement of periodic income. Management periodically reviews inventory for slow moving or obsolete items to consider sell-through prospects based on our marketing strategies and sales forecasts to determine if an allowance is necessary. If market value is below cost, then an allowance is created to adjust the inventory carrying amount to reflect this.

Assumptions and estimates about the recoverability of certain inventory may be subject to significant judgment. A variety of factors must be incorporated into these estimates and assumptions such as industry and economic trends and internal factors such as changes in our business and forecasts.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. The most significant estimates we made are those relating to uncollectible receivables, inventory valuation and obsolescence, stock-based compensation expense, and derivative valuations.

Accounting for Stock-Based Compensation

ASC Topic 718, Compensation – Stock Compensation, requires that compensation expense for employee stock-based compensation be recognized over the requisite service period based on the fair value of the award, at the date of grant.

Stock–based compensation represents the cost related to stock–based awards granted to employees and non–employee consultants. We measure stock–based compensation cost at measurement date, based on the estimated fair value of the award, and generally recognize the cost as expense on a straight–line basis (net of estimated forfeitures) over the employee requisite service period or the period during which the related services are provided by the non–employee consultants and the options are earned. We estimate the fair value of stock options using a Black–Scholes option valuation model, which utilizes various assumptions and estimates that are subject to management judgment.

As we have insufficient historical data on which to estimate expected future share price volatility, we have estimated expected share price volatility based on the historical share price volatility of comparable entities. The expected life of options granted has been determined utilizing the “simplified” method as prescribed by the SEC’s Staff Accounting Bulletin (“SAB”) No. 110 Share–Based Payment. The risk–free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options. We have not paid and do not anticipate paying cash dividends on our shares of common stock; therefore, the expected dividend yield is assumed to be zero. In addition, ASC 718 requires companies to utilize an estimated forfeiture rate when calculating the expense for the period. We applied an estimated forfeiture rate of 0% in determining the expense recorded in our consolidated statement of operations given our limited forfeiture experience history.

Derivative Financial Instruments

From time to time, we may issue warrants and convertible instruments with embedded conversion options which, dependent on their specific contractual terms, may be required to be accounted for as separate derivative liabilities. These liabilities are required to be measured at fair value. These instruments are then adjusted to reflect fair value at each period end. Any increase or decrease in the fair value is recorded in results of operations as change in fair value of derivative liabilities. In determining the appropriate fair value, we use the binomial pricing model because these instruments are not quoted on an active market.

Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in assumptions can materially affect the fair value estimate and therefore the binomial model does not necessarily provide a reliable single measure of the fair value of these instruments.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In ~~June 2014~~ November 2015, the ~~FASB issued~~Financial ~~ASU No. 2014-12,~~ Accounting ~~for~~Standards ~~Share-Based~~Board ~~Payments When~~ (the ~~Terms~~“FASB”) ofissued anAccounting ~~Award~~Standards ~~Provide~~Update ~~That~~(“ASU”) No. 2015-17 a“Income ~~Performance~~Taxes: ~~Target~~Balance ~~Could Be~~Sheet ~~Achieved~~Classification ~~after~~of ~~the~~Deferred ~~Requisite~~Taxes ~~Service Period~~ (“ASU ~~2014~~2015-1217”). ASU ~~2014~~2015-~~12 requires that a performance target that~~17 ~~affects~~eliminates ~~vesting, and that could be achieved after~~ the ~~requisite~~requirement ~~service~~to ~~period,~~bifurcate bedeferred ~~treated~~taxes asbetween acurrent ~~performance~~and ~~condition.~~non-current Ason ~~such,~~ the ~~performance~~balance ~~target~~sheet ~~should~~and ~~not~~requires bethat ~~reflected in estimating the grant date fair value of the award. This update further clarifies~~deferred ~~that~~tax ~~compensation~~liabilities ~~cost~~and ~~should~~assets be ~~recognized~~classified inas ~~the~~noncurrent ~~period~~on ~~in which it becomes probable that~~ the ~~performance~~balance ~~target~~sheet. ~~will~~ASU be2015-17 ~~achieved and~~was ~~should~~effective ~~represent the compensation cost attributable to the period(s)~~ for ~~which~~public ~~the~~entities ~~requisite~~in ~~service has already been rendered.~~fiscal ~~The~~years ~~amendments~~beginning inafter ~~this~~December 15, ~~ASU~~2016, ~~are~~and ~~effective~~ for ~~annual periods and~~ interim periods within those ~~annual~~fiscal ~~periods~~years. ~~beginning~~ASU ~~after December 15,~~ 2015.-17 ~~This~~became ~~standard was~~ effective for ~~and adopted by~~ the Company inon ~~fiscal~~February 1, 2017. The adoption of ~~this~~ASU ~~standard~~2015-17 did not have aany ~~material~~effect ~~impact~~ on ~~the~~its ~~Company’s consolidated~~ financial ~~position~~condition, results of operations orand cash flows.

3541

In ~~August~~July ~~2014~~2015, the ~~FASB~~ FASB issued ASU No. ~~2014~~2015-1511, ~~Disclosure~~Simplifying the Measurement of ~~Uncertainties~~Inventory ~~about~~(“ASU an2015-11”) ~~Entity’s~~which ~~Ability~~requires a company to change ~~Continue~~the asmeasurement aprincipal ~~Going~~for ~~Concern~~inventory ~~(“ASU 2014-15”).~~measured ~~ASU~~using ~~2014-15~~the ~~will~~FIFO ~~explicitly~~or ~~require~~average ~~management~~cost tomethod ~~assess~~from anthe ~~entity’s~~lower ~~ability~~of cost or market to ~~continue~~the aslower aof ~~going~~cost ~~concern,~~ and tonet ~~provide~~realizable ~~related~~value. ~~footnote~~Treatment ~~disclosure~~of inventory valued under the last-in, ~~certain~~first-out ~~circumstances~~(“LIFO”) method is unchanged by ASU No. ~~This~~2015-11. ~~standard~~ASU No. 2015-11 must be applied prospectively and was effective for fiscal years beginning after December 15, 2016, and ~~adopted~~interim byperiods within those years. The standard became effective for the Company inon ~~fiscal~~February 1, 2017. The adoption of ~~this~~ASU ~~standard~~No. 2015-11 did not have aany ~~material~~effect ~~impact~~ on ~~the~~its ~~Company’s consolidated~~ financial ~~position~~condition, results of operations orand cash flows.

In ~~April~~ ~~2015~~March 2016, the FASB ~~Financial~~issued ~~Accounting~~ASU ~~Standards~~No. ~~Board (FASB)~~2016-09, Compensation ~~issued~~– ~~the~~Stock ~~Accounting~~Compensation ~~Standards~~(Topic 718): ~~Update~~Improvements ~~2015-03,~~to ~~Interest~~Employee Share- ~~Imputation~~Based ofPayment ~~Interest~~ Accounting (~~Subtopic~~“ASU ~~835~~2016-3009”). ASU 2016-09 ~~Simplifying~~was ~~the~~issued ~~Presentation~~as part of ~~Debt~~the ~~Issuance~~FASB’s ~~Costs,~~simplification ~~that~~initiative and ~~requires~~affects ~~debt~~all ~~issuance~~entities ~~costs~~that ~~related to~~issue ashare-based ~~recognized~~payment ~~debt~~awards ~~liability~~ to betheir ~~presented~~employees. inThe ~~the~~amendments ~~balance~~in ~~sheet~~ASU as2016-09 acover ~~direct~~such ~~deduction~~areas as ~~from~~ the ~~debt~~recognition ~~liability~~of ~~rather~~excess ~~than as~~tax anbenefits ~~asset.~~and ~~For public business entities~~deficiencies, the ~~final~~classification ~~guidance~~of ~~will~~those beexcess ~~effective~~tax ~~for~~benefits ~~fiscal~~on ~~years~~the ~~beginning~~statement ~~after 15 December 2015,~~of ~~however,~~cash ~~early adoption (including in interim periods) is permitted. Upon adoption~~flows, an ~~entity~~accounting ~~must~~policy ~~apply~~election ~~the~~for ~~new~~forfeitures ~~guidance~~which ~~retrospectively to all prior periods presented in~~ the ~~financial~~Company ~~statements.~~did Annot ~~entity~~elect isto ~~also~~adopt, ~~required in~~ the ~~year~~amount ofan ~~adoption~~employer can withhold to ~~provide~~cover ~~certain disclosures~~income ~~about~~taxes ~~the~~and ~~change~~still inqualify ~~accounting~~for ~~principle,~~equity ~~including~~classification and the ~~nature~~classification of ~~and~~those ~~reason~~taxes ~~for~~paid ~~the~~on ~~change,~~ the ~~transition method,~~statement aof ~~description~~cash offlows. ~~the~~ASU ~~prior~~2016-~~period~~09 ~~information~~was ~~that~~effective ~~has~~for ~~been~~fiscal ~~retrospectively~~years ~~adjusted~~beginning ~~and~~after ~~the~~December ~~effect~~15, of2016, ~~the~~and ~~change~~interim onperiods ~~the~~within ~~financial statement~~those ~~line items (that is~~fiscal years, ~~debt~~with ~~issuance~~early ~~cost~~adoption ~~asset and the debt liability)~~permitted. ~~This~~ASU ~~standard~~2016-09 ~~was~~ became effective for ~~and adopted by~~ the Company inon ~~fiscal~~February 1, 2017. ~~Adoption~~The adoption of ~~this~~ASU 2016-09 ~~standard~~did ~~resulted~~not inhave ~~the~~any ~~reclassification~~effect ~~of $15,058~~on inits ~~deferred~~financial ~~financing costs at January 31~~condition, ~~2016~~results ~~from~~of ~~assets~~operations toand acash ~~deduction from the related debt liability~~flows.

Accounting Standards Not Yet Effective

InUnless ~~May~~otherwise ~~2014~~discussed, ~~the Financial~~management ~~Accounting~~believes Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers". The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The premise of the ~~guidance~~impact ~~is that a Company should recognize revenue to depict the transfer~~ of ~~promised~~recently ~~goods~~issued orstandards, ~~services to customers in an amount that reflects the consideration to~~ which ~~the~~are ~~entity~~not ~~expects~~yet ~~to be entitled in exchange for those goods or services. ASU 2014-09 can be adopted by the Company either retrospectively or as a cumulative-effect adjustment as of the date of adoption. On April 1~~effective, ~~2015,~~will ~~the~~not ~~FASB~~have ~~decided to defer the effective date of the new revenue standard by one year. As~~ a ~~result,~~material ~~public entities would apply the new revenue standard to annual reporting periods beginning after December 15, 2017. We are currently evaluating the~~ impact ~~the adoption of this standard will have~~ on our consolidated financial statements upon adoption.

In ~~November 2015~~ May 2014, the ~~Financial~~FASB issued ~~Accounting~~ASU ~~Standards~~No. ~~Board~~2014-09, Revenue from Contracts with Customers (“~~FASB~~ASU 2014-09”). ~~issued~~ASU ~~Accounting~~2014-09 ~~Standards~~provides ~~Update~~a ~~No. 2015~~five-17step ~~Income~~analysis ~~Taxes:~~of ~~Balance~~transactions ~~Sheet~~to ~~Classification~~determine ofwhen ~~Deferred~~and ~~Taxes~~how ~~(“ASU~~revenue ~~2015-17”)~~is recognized. The premise of ASU ~~2015~~2014-1709 ~~eliminates~~is ~~the~~that ~~requirement~~a company should recognize revenue to ~~bifurcate~~depict ~~deferred~~the ~~taxes~~transfer ~~between~~of ~~current~~promised ~~and~~goods ~~non-current~~or onservices ~~the~~to ~~balance~~customers ~~sheet~~in ~~and~~an ~~requires~~amount that ~~deferred~~reflects ~~tax~~the ~~liabilities~~consideration ~~and~~to which ~~assets~~the entity expects to be ~~classified~~entitled asin ~~noncurrent~~exchange onfor ~~the~~those ~~balance~~goods ~~sheet~~or services. ASU ~~2015~~2014-1709 iscan ~~effective~~be ~~for~~adopted ~~public~~by ~~entities~~the inCompany ~~fiscal~~either ~~years beginning~~retrospectively ~~after~~or ~~December 15,~~as ~~2016,~~a ~~and~~cumulative-effect ~~for~~adjustment ~~interim~~as ~~periods~~of ~~within~~the ~~those~~date ~~fiscal~~of ~~years~~adoption. ~~The~~On ~~amendments~~April ~~for~~1, ~~ASU-~~2015~~-17~~, ~~can~~the beFASB ~~applied retrospectively~~decided orto ~~prospectively~~defer ~~and~~the ~~early~~effective ~~adoption~~date of isASU ~~permitted~~2014-09 by one year. ~~The~~As ~~adoption~~a ofresult, ~~this~~public ~~standard~~entities iswould ~~not~~apply ~~expected~~ASU 2014-09 to ~~have~~annual areporting ~~material impact~~periods ~~for~~beginning ~~any~~after ~~period~~December 15, ~~presented~~2017.

InThe Company’s ~~February~~assessment ~~2016,~~of ~~FASB~~the ~~issued~~guidance in ASU ~~2016~~2014-0209 has concluded that the majority of its revenue streams will be impacted by ASU 2014-09 including transactions such as wholesale customer support costs, ~~Leases~~ e-commerce direct to consumer programs, and customer related returns. The Company will adopt this standard on February 1, 2018 using the modified retrospective method. The ~~guidance~~Company ~~would~~has ~~require~~substantially completed ~~lessees~~its assessment of its revenue practices. Based on the evaluation performed to ~~recognize~~date, ~~most~~it ~~leases~~does not expect the adoption of ASU 2014-09 to have a material effect on ~~their~~income from operations, the Company expects to record a change to retained earnings upon ~~balance~~adoption ~~sheets~~totaling as$15,667 ~~lease~~related to new refund and contract liabilities ~~with~~adopted ~~corresponding~~under ~~right~~the ~~–of-use~~new ~~assets~~guidance. The ~~guidance~~Company isalso ~~effective~~expects to ~~for~~implement ~~annual~~changes ~~and~~to ~~interim~~presentation within the consolidated financial statements, which will include the separation of contract ~~reporting~~assets, ~~periods~~contract ~~beginning~~liabilities and receivables due from customers on orthe ~~after December~~statement ~~15,~~of ~~2018~~financial position. ~~The~~In ~~Company~~addition, isthe ~~currently~~Company will ~~evaluating~~implement the ~~impact~~addition of ~~its~~a ~~pending~~refund ~~adoption~~liability which will be calculated based on an allowance return, adjusted quarterly, based on historical actual refund percentages of 3.2%, and a loyalty program contract liability, adjusted quarterly, based on historical loyalty amounts redeemed of 5.6%, both of which will be analyzed quarterly for reasonableness. ASU ~~2016~~2014-0209 will also require expanded disclosures related to revenue streams, performance obligations and consideration and the related judgements used in developing the necessary estimates. In order to comply with the guidance, beginning on February 1, 2018, the Company will enact a change in its ~~consolidated~~revenue ~~financial~~recognition ~~statements~~policy and estimates per below.

~~In March 2016, the FASB issued ASC 2016-09, “Compensation – Stock Compensation (Topic 718) – Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”)~~i. ~~These~~Change ~~amendments~~in ~~are~~Revenue ~~intended~~Recognition to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. These amendments are effective for annual and interim reporting periods beginning on or after December 15, 2016. Early adoption is permitted. Entities have the option to apply the amendments on either a prospective basis or a modified retrospective basis. The Company is currently evaluating the impact this guidance will have on its financial condition, results of operations and cash flows.Policy

Sales are recorded when persuasive evidence of a contract exists, performance obligation(s) under contract have been completed, and indicators of the transfer of control have been deemed satisfied under ASC 606. This occurs when the title and risks and rewards of ownership have passed to the customer, the assets are in physical possession and/or have been accepted by the customer and the obligation to pay is present. We elect to consider shipping and handling activities as a fulfillment activity and to record the costs of fulfillment as a cost of sale.

All sales are accounted for utilizing the expected transaction price which is adjusted for variable considerations including customary business practices such as rights of return, loyalty programs, co-op advertising, and department store markdowns.

ii.

Change in Estimates

We make certain estimates and adjustments to revenue to account for its contracts with customers. We estimate an allowance and reduction of revenue for customers with contracts which allow them variable sales price adjustments through the period to allow for markdowns at retail, advertising and other allowances. An allowance of $58,145 (2017: $123,381) has been estimated at January 31, 2018.

We offer varying levels of right of returns to customers. To account for the right of return, an estimate is made at the end of the period to account for expected returns. The estimate is based on historical return rates of 3.2%. A return allowance of $12,000 has been estimated at January 31, 2018. These estimates are adjusted to actual in the corresponding periods.

We offer loyalty points to exclusive members of our e-commerce website. To account for the estimated contract liability, an estimate is made at the end of the period to determine the expected number of points redemptions. The estimate is based on historical redemptions of 5.6% of total outstanding points. A contract liability of $3,667 has been estimated at January 31, 2018.

The Company also estimates the date of receipt of goods to customers utilizing a five (5) day delivery window, which includes two (2) days of lead time and three (3) day shipping time rather than following tracking information and delivery notices. This method is an acceptable estimate of the delivery of goods and not material to users of the financial statements as the variance would not produce material differences.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 provides guidance that addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 will be effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. ASU 2016-01 will be effective for the Company on February 1, 2018. The Company does not expect the impact of ASU 2016-01 to have any material effect on the periods presented.

In February 2016, FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 would require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right–of-use assets. ASU 2016-02 is effective for annual and interim reporting periods beginning on or after December 15, 2018. The Company does not expect the impact of ASU 2016-02 to have any material effect on the periods presented.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). ASU 2016-15 reduces the existing diversity in practice in financial reporting across all industries by clarifying certain existing principles in ASC 230, Statement of Cash Flows, ("ASC 230") including providing additional guidance on how and what an entity should consider in determining the classification of certain cash flows. In addition, in November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash ("ASU 2016-18"). ASU 2016-18 clarifies certain existing principles in ASC 230, including providing additional guidance related to transfers between cash and restricted cash and how entities present, in their statement of cash flows, the cash receipts and cash payments that directly affect the restricted cash accounts. Early adoption is permitted. This amendment is effective for the Company beginning on February 1, 2018. The adoption of ASU 2016-15 and ASU 2016-18 will modify the Company's current disclosures and reclassifications within the consolidated statement of cash flows, but they are not expected to have a material effect on the Company’s consolidated financial statements

In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, “Compensation–Stock Compensation (Topic 718): Scope of Modification Accounting,” clarifying when a change to the terms or conditions of a share-based payment award must be accounted for as a modification. The new guidance requires modification accounting if the fair value, vesting condition or the classification of the award is not the same immediately before and after a change to the terms and conditions of the award. The new guidance is effective for the Company on a prospective basis beginning on February 1, 2018, with early adoption permitted. The Company does not expect the impact of ASU 2017-09 to have any material effect on the periods presented.

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

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Item 8.

Financial Statements and Supplementary Data

See pages F-1 through F-32 following the Exhibit Index of this Form 10-K.

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

N/A.

Item 9A.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive officer and our principal financial officer, to allow timely decisions regarding required disclosure.

Based on that evaluation, our principal executive officer and our principal financial officer concluded that as of the end of the period covered by this Form 10-K, our disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over our financial reporting. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, our management, with the participation of our principal executive officer and our principal financial officer has conducted an assessment, including testing, using the criteria in Internal Control — Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Our management believes that because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.

Based on our evaluation under the framework in COSO, our management concluded that our internal controls over financial reporting were effective as of January 31, ~~2017~~2018.

Changes in Internal Control Over Financial Reporting

There were no other changes in our internal control over financial reporting identified in management's evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Form 10-K that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.

Other Information

None.

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PART III

Item 10.

Directors, Executive Officers, and Corporate Governance

Directors and Executive Officers

The following table provides information regarding our executive officers and directors as of ~~April~~May 261, ~~2017~~2018:

Name	~~Age~~	Age	Position	~~Year First Appointed~~	Year First Appointed
Carole Hochman		7273	Chief Executive Officer, Chief Creative Officer, Director and Chairwoman of the Board		2014
Joel Primus		3031	President, Secretary and Director		2012
Kai-Hsiang Lin		53	Vice President of Finance		-
Juliana Daley		30	Chief Financial Officer, Principal Accounting Officer		2018
David Hochman		42	Director, Vice Chairman of the Board		2014
Paul Hayes		52	Director		2015
Andrew Kaplan		50	Director		2013
Martha Olson		62	Director		2015
Paul Hayes		51	Director		2015
Jesse Cole		45	Director		2015
Martha Olson		61	Director		2015
Edward Hanson		43	Director		2017
Jesse Cole		44	Director		2015
Justin Davis-Rice		48	Director		2017
Edward Hanson		41	Director		2017
Justin Davis-Rice		46	Director		2017

Carole Hochman has served as our Chief Executive Officer and Chief Creative Officer and as a member of our board of directors since June 2014. Ms. Hochman is a renowned designer and sleepwear pioneer. She is considered one of the single most influential women in the intimate apparel and sleepwear business in the United States. She has been creating intimate apparel for more than 30 years and was the driving force behind the Carole Hochman Design Group for which she served as Chief Creative Officer until her departure in November, 2013 and for which she was previously CEO from September, 1992 until its acquisition by Komar in 2010. Under Ms. Hochman’s leadership, Carole Hochman Design Group manufactured Carole Hochman brand of sleepwear, loungewear and daywear and numerous sleepwear collections including Christian Dior, Oscar de la Renta, Ralph Lauren, Jockey, Donna Karan, Tommy Bahama and Betsey Johnson. Ms. Hochman excels in translating brand identity into intimate apparel and has an innate ability to identify opportunities and trends and forecast successful endeavors that the rest of the industry quickly follows. She was one of the first designers to embrace the concept of QVC, recognizing the power of the home shopper, a customer who has proved loyal to her from the start. Ms. Hochman graduated from Drexel University.

We believe Ms. Hochman is qualified to serve on our board of directors because of her extensive business experience as described above.

Joel Primus has served as President and as a member of our board of directors since July 2012. Mr. Primus is the founder of our wholly-owned subsidiary, Naked Inc. and previously served as the President, CEO and a director of our subsidiary since its inception in 2010. Mr. Primus also served as our Chief Executive Officer until Ms. Hochman’s appointment to such office in June 2014 and as interim Chief Financial Officer until June 2014. Mr. Primus preceded his business activities with a successful athletic career. During his amateur running career, Mr. Primus was selected for three national teams and represented Canada at the World Youth Championships. Mr. Primus was also an Athlete Liaison to Canadian Sport Centre Pacific in addition to sitting on the board with Volunteer Abbotsford. He was awarded a full scholarship to High Point University in North Carolina where he made the Dean’s list and won the student athlete award. When an injury ended Mr. Primus’ running career, international travel in Central and South America inspired Mr. Primus to form the Project World Citizen Society, a non-profit society that aims to assist communities in the developing world that are struggling with social injustices. The organization currently works out of Ghana and Mr. Primus sits as the Co-Chair on its board of directors. Mr. Primus’ travels in South America inspired him to found Naked. In promotion of Naked, Mr. Primus has appeared on CBC’s Dragons Den three times in addition to Entertainment Tonight Canada, E Talk Daily Canada, Urban Rush, Shaw’s The Express and The Fanny Kiefer Show. During the start-up phase for Naked, which started in September 2008, Mr. Primus worked as an advertising consultant for the Black Press Group Ltd. (the Abbotsford News), a Canadian privately -owned publisher of newspapers, from November 2009 to April 2010. From April 2010 to June 2010, Mr. Primus was employed at Altitude Search Marketing where he handled business development. From September 2008 to October 2009, Mr. Primus operated the Sapera magazine.

3847

We believe Mr. Primus is qualified to serve on our board of directors due to the perspective and experience he brings as our founder and President.

~~Kai-Hsiang~~Juliana ~~Lin~~Daley, CPA has served as the ~~Vice~~Chief ~~President~~Financial ofOfficer ~~Finance~~and Principal Accounting Officer since March ~~2016~~2018. MrMs. ~~Lin~~Daley ~~became~~is ana ~~employee~~Chartered Professional Accountant, with over six years of ~~the~~accounting, ~~Company~~controller, inand ~~February~~financial ~~2016~~reporting experience. Since October 2015, ~~From~~Ms. ~~March~~Daley ~~2014~~has tobeen ~~February~~providing ~~2016,~~accounting ~~Mr.~~and ~~Lin~~financial ~~was~~reporting ~~Corporate~~services, ~~Controller~~through ~~for~~her ~~HVS~~position ~~Global~~with ~~Hospitality~~ACM ~~Services~~Management, Inc., a ~~leading~~provider of ~~consulting~~financial reporting and accounting services ~~organization~~to ~~focused~~public oncompanies ~~the~~in ~~hotel,~~various ~~mixed-use,~~industries ~~share~~both ~~ownership,~~in ~~gaming~~the ~~and~~United ~~leisure~~States ~~industries.~~and Canada. From ~~June,~~September ~~1991~~2011 to ~~February~~April 2015, ~~2014,~~ MrMs. ~~Lin~~Daley was ~~Corporate~~employed ~~Controller~~with ~~for~~Naked ~~The~~Brand ~~Good~~Group ~~Stuff~~Inc. ~~Company,~~where ~~LLC~~she worked in the accounting department, including aserving ~~distributor~~as ~~and~~Controller ~~manufacturer~~from ofAugust ~~licensed~~2013 ~~toys~~until ~~and~~her ~~novelties~~departure in April 2015. From July – September 2015, Ms. Daley ~~and~~had a ~~nationwide~~gap ~~toy~~in ~~crane~~employment ~~service~~in ~~operator~~preparation ~~with~~for ~~more~~writing ~~than~~the ~~200~~Common ~~employees~~Final ~~nationwide~~Examination (CFE) for her CPA designation. MrMs. ~~Lin~~Daley ~~holds~~also holds a BBA in Accounting and Economics from the ~~Fu-Jen~~ ~~Catholic~~ University inof ~~Taipei,~~the ~~Taiwan,~~Fraser ~~and~~Valley ~~an MBA~~ in ~~Computer Information Systems from Baruch College~~Abbotsford, ~~CUNY,~~British ~~New York~~Columbia.

David Hochman has served as a member of our board of directors since June 2014. He was appointed Vice Chairman of our company in May 2015. He is currently Managing Partner of Orchestra Medical Ventures, an investment firm that employs an innovative strategy to create, build and invest in medical technology companies intended to generate substantial clinical value and superior investor returns. Mr. Hochman is the Chairman of Vital Access Corp. and Motus GI Medical Technologies, and is a board director of Caliber Therapeutics, BackBeat Medical, Inc., FreeHold Surgical, Maternity Neighborhood, Inc. and Corbus Pharmaceuticals (NASDAQ: CRBP). Prior to joining Orchestra, Mr. Hochman was Chief Executive Officer of Spencer Trask Edison Partners, LLC, a principal investment partnership focused on early stage healthcare companies. He was also Managing Director of Spencer Trask Ventures, Inc. during which time he was responsible for directing the firm’s venture banking group and led financing transactions for over 20 early-stage companies, securing over $420 million in equity capital. Mr. Hochman was a board advisor of Health Dialog Services Corporation, a world leader in collaborative care management that was acquired in 2008 by the British United Provident Association for $750 million. He was also a co-founder and director of PROLOR Biotech, Inc., a biopharmaceutical company developing longer-lasting versions of approved therapeutic proteins, which was purchased by Opko Health, Inc. (NYSE: OPK) in 2013 for over $600 million. Mr. Hochman also currently serves as a board member of two non-profit organizations, the Citizens Committee for New York City and the Mollie Parnis Livingston Foundation. He graduated with honors from the University of Michigan.

We believe Mr. Hochman is qualified to serve on our board of directors because of his 18 years of venture capital, entrepreneurial and investment banking experience as described above.

Andrew Kaplan has served as a member of our board of directors since July 2013. Mr. Kaplan is a Vice President of Barry Kaplan Associates, a 25-year-old investor relations firm that works with small and medium sized public and private companies. He has been with the firm since 1995. Prior to this, Mr. Kaplan had been with major investment firms and a boutique investment bank specializing in the financing of companies going public through IPOs or reverse mergers. Mr. Kaplan received his BS/BA in Finance and Insurance from the University of Hartford in 1989. Mr. Kaplan has been a director of Coral Gold Resources Ltd. since July 2012.

We believe Mr. Kaplan is qualified to serve on our board of directors because of his extensive business experience in the area of finance as described above.

Paul Hayes has served as a member of our board of directors since February 2015. Mr. Hayes, a certified public accountant, has been the Vice President Finance for Parfums de Coeur Ltd, a beauty and wellness products concern, since September 2014. From October 2013 to August 2014 he was an independent consultant providing advice to a range of companies in the areas of financial reporting, systems implementation, risk management, and compliance. Through September 2013 and for more than five years previous he was with The Warnaco Group, Inc. in several roles of financial leadership. He has extensive global experience managing and driving growth in a wide range of industries, particularly in the intimate apparel and sleepwear categories through his tenure at Calvin Klein. Mr. Hayes is a Certified Public Accountant and led the commercial finance and accounting team for the $500 million Calvin Klein brand business in Europe in his capacity as Chief Financial Officer for the Europe region of The Warnaco Group. Previously, he held senior positions at Nokia Corporation and Deloitte & Touche LLP. Mr. Hayes received a BBA from Iona College and an MBA from New York University Leonard N. Stern School of Business.

We believe Mr. Hayes is qualified to serve on our board of directors because of his extensive business experiences in the apparel merchandising industries, as described above.

Martha Olson has served as a member of our board of directors since February 2015. Ms. Olson has a proven track record over her 30-year career of growing global, iconic brands such as Calvin Klein Underwear and Ralph Lauren Intimates while delivering superior stockholder returns. As a Warnaco Corporate Officer from 2004 through 2013 and the Group President of Calvin Klein Underwear Global and the Heritage Brands (Speedo, Chaps and Core Intimates Divisions) from 2010 through 2013, the businesses she had responsibility for grew to $1.4 billion and contributed 70% of Warnaco’s Operating Income. Calvin Klein Underwear revenue grew at an annualized compound rate of 8%. She has strong global expertise in general management, operations, commercial execution and marketing across a wide range of industries. She worked at Sara Lee Corp from 1992 to 2001. Her career with Sara Lee began as the Vice President of Marketing for the Playtex Intimate Apparel brand and progressed to several general management positions, both in Canada as President of Isotoner; President of Sara Lee Hosiery and in the U.S. as President of Specialty Intimates and President of Ralph Lauren Intimates. Ms. Olson began her career in Brand Management; leading growth, category expansion and turnaround for several iconic brands at General Mills (Cheerios, Betty Crocker, Bisquick) and Nestle (Toll House). She served as a Division Manager of Edison Schools, Inc. and worked for it from 2002 to 2004. She held several leadership positions within Branded Apparel (now Hanes Brands Inc.). She holds a BA degree from Lawrence University and an MBA from Northwestern University’s Kellogg School of Management.

We believe Ms. Olson is qualified to serve on our board of directors because of her extensive business experiences in the apparel merchandising industries, as described above.

Jesse Cole has served as a member of our board of directors since August 2015. Mr. Cole is an accomplished financier and is President and Chief Executive Officer of Design & Industry, a boutique talent agency focusing on staffing, licensing and media for fashion brands and celebrities. Mr. Cole was CEO of Haute Hippie, a popular women’s contemporary apparel brand, until its acquisition by Hilco in September 2015. Prior to joining Haute Hippie as CEO in 2012, Mr. Cole was founder and Chief Operator of Schonfeld IBS, a financial services company, from 2005 to 2009. Schonfeld IBS grew into a multi-million dollar business. Mr. Cole then joined Merlin Institutional from 2009 to September, 2012 where he developed the institutional research sales and trading division as a senior partner. Mr. Cole also serves as a member of the board of directors for Goodlife Clothing, Inc. and for the Ronald McDonald House. Mr. Cole received a BS degree in Sociology from Cornell University and received an MS in business from Columbia University.

We believe Mr. Cole is qualified to serve on our board of directors because of his extensive business experiences in the apparel merchandising industries, as described above.

Edward Hanson has served as a member of our board of directors since January 2017. Mr. Hanson has been involved in corporate finance and private equity for the last 20 years. He has been a principal of Global Partners Fund since 2009 and prior to this he served as a senior executive and director in the London office of Babcock & Brown Group from 1997 to 2009. He is also a director of London based investment companies Corviglia Capital Limited and Haka Capital Limited. He has been a Director of Long Island Iced Tea Corp. since May 27, 2015. Mr. Hanson holds a B.Com (Hons) from the University of Auckland in New Zealand.

We believe Mr. Hanson is qualified to serve on our board of directors because of his extensive business experience in corporate finance and private equity, as described above.

Justin Davis-Rice has served as a member of our board of directors since January 2017. Mr. Davis-Rice is currently Executive Chairman of Bendon Limited, a global leader in intimate apparel and swimwear renowned for best in category technology and design throughout its 70 -year history. Bendon Limited has a portfolio of 10 brands distributed through 4,000 doors across 34 countries. Bendon Limited’s brands include owned brands Bendon, Bendon Man, Davenport, Evollove, Fayreform, Hickory, Lovable (in Australia and New Zealand) and Pleasure State, as well as licensed brands Heidi Klum Intimates and Swimwear and Stella McCartney Lingerie and Swimwear. Prior to becoming Executive Chairman, Mr. Davis-Rice served as Chief Executive Officer of Bendon Limited for six years during which he transformed the company through an operational restructuring and a re-engineering of key functional and operational aspects of the business including, supply chain, human resources, design and development, sourcing, wholesale and retail sales. Prior to joining Bendon Limited, Mr. Davis-Rice co-founded Pleasure State, an intimate apparel company which he merged with Bendon Limited in May 2010. Mr. Davis-Rice helped turn Pleasure State into a business with multimillion dollar earnings.

We believe Mr. Davis-Rice is qualified to serve on our board of directors because of his extensive business experiences in the apparel merchandising industries, as described above.

Executive Officers

Our executive officers are designated by, and serve at the discretion of, our board of directors. ~~Other~~There ~~than Carole Hochman and her son, David Hochman, there~~ are no family relationships among any of our directors or executive officers.

Nomination of Directors

We do not have a standing nominating committee nor has our board of directors adopted a formal written charter relating to the director nomination process. However, our board of directors has adopted certain procedures related to director nominations whereby all discussions regarding director nominations are first discussed among all of the members of our board of directors and then, following such discussion, the members of our board of directors that are independent under ~~NASDAQ~~Nasdaq rules vote separately as to whether any such candidates for nomination will be nominated to our board of directors. Our board of directors has not established minimum qualifications and standards for director nominees.

Our board of directors will consider candidates for nomination to the board that are put forward by holders of our voting securities on a timely basis, which nominees we will bring to the attention of our board of directors within a reasonable time after we receive notice of such proposed nominee(s). Any such security holder nominees will be put through the same process for consideration by our board of directors as all other nominees for the board.

Stockholders may recommend individuals to our board of directors for consideration as potential director candidates by submitting the names of the recommended individuals, together with appropriate biographical information and background materials, to the board of directors, c/o Secretary, 95180 Madison Avenue, ~~10th~~Suite ~~Floor~~505, New York, New York 10016.

Board Leadership Structure and Risk Oversight

The positions of our chairperson of the board of directors and principal executive officer are served by Carole Hochman. Our board of directors has no formal policy on whether the role of the chairperson of the board of directors and principal executive officer should be held by separate persons. We believe it is important to maintain flexibility to have either combined offices or a separate chairperson and principal executive officer structure as circumstances dictate and to make that determination based on the strategic and operational position and direction of the company and the character of the membership of our board of directors.

Our board of directors believes that our current management structure, in which Ms. Hochman serves in a combined chairperson and principal executive officer role, is appropriate for us at this time. Ms. Hochman possesses an understanding of the operational issues, opportunities, risks and challenges facing the Company and its business on a day-to-day and long-term basis. Given Ms. Hochman’s particular skills and knowledge, as well as our size and stage of development, we believe Ms. Hochman is best positioned to identify key risks and developments facing the Company to be brought to our board’s attention and to lead discussion and execution of strategy. We have not designated an independent lead director.

Both the full board of directors and its committees oversee the various risks faced by the Company. Management is responsible for the day-to-day management of the Company’s risks and provides periodic reports to the board of directors and its committees relating to those risks and risk-mitigation efforts. Our board of directors’ oversight of risk is conducted primarily through the standing committees of the board of directors, the members of which are all independent directors, with the Audit Committee taking a lead role on oversight of financial risks and in interfacing with management on significant risks or exposures and assessing the steps management has taken to minimize such risks. The Audit Committee also is charged with, among other tasks, oversight of management on the Company’s guidelines and policies to govern the process by which the Company’s exposure to risk is handled. Members of the Company’s management, including our principal financial officer, periodically report to the Audit Committee regarding risks overseen by the Audit Committee, including quarterly with respect to the Company’s internal control over financial reporting. The Compensation Committee, in consultation with management, has reviewed the design and operation of the Company’s compensation arrangements and evaluated the relationship between the Company’s risk management policies and practices and these arrangements. As a result of this review, the Compensation Committee has determined that the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. Our board of directors does not believe that its role in the oversight of our risks affects the board’s leadership structure.

Committees of the Board of Directors

Our board of directors has established two standing committees: the Audit Committee and the Compensation Committee.

Audit Committee Compensation Committee Mr. Hayes(C)(FE)* Ms. Olson(C)* Mr. Kaplan*Cole ~~Mr. Kaplan~~* Mr. ~~Cole~~ Hayes* MrMs. ~~Hayes~~Olson*

(C)	Chair of the committee.

(FE)	Qualifies as a financial expert.

* Independent director under the applicable listing standards of ~~NASDAQ~~Nasdaq and the SEC rules.

Audit Committee

Our board of directors has determined that Mr. Hayes qualifies as an Audit Committee financial expert within the meaning of SEC regulations based on his formal education and the nature and scope of his previous experience. Our board of directors has determined that all current Audit Committee members meet the heightened independence criteria of Rule 10A-3 of the Exchange Act applicable to Audit Committee members. Our Audit Committee oversees and reports to our board of directors on various auditing and accounting-related matters, including, among other things, the maintenance of the integrity of our financial statements, reporting process and internal controls; the selection, evaluation, compensation and retention of our independent registered public accounting firm; legal and regulatory compliance, including our disclosure controls and procedures; and oversight over our risk management policies and procedures.

The Audit Committee operates under a charter that was adopted by our board of directors. A copy of the Audit Committee charter is available at http://ir.nakedbrands.com/governance-docs.

During fiscal ~~2017~~2018, the Audit Committee met in person or by telephone, or acted by unanimous written consent, four times.

Compensation Committee

All of the members of the Compensation Committee are independent directors, including after giving consideration to the factors specified in the ~~NASDAQ~~Nasdaq listing rules for Compensation Committee independence. Our Compensation Committee assists our board of directors in the discharge of its responsibilities relating to the compensation of our executive officers. ~~Our Compensation Committee assists our board of directors in discharging its responsibilities relating to compensation of our directors and executive officers.~~ Its responsibilities include, among other things, reviewing, approving and recommending compensation programs and arrangements applicable to our officers; ~~determining~~ determining the objectives of our executive officer compensation programs; overseeing the evaluation of our senior executives; ~~administering~~ administering our incentive compensation plans and equity-based plans, including reviewing and granting equity awards to our executive officers; and reviewing and approving director compensation and benefits. The Compensation Committee can delegate to other members of our board of directors, or an officer or officers of the Company, the authority to review and grant stock-based compensation for employees who are not executive officers.

The Compensation Committee has the responsibilities and authority designated by ~~NASDAQ~~Nasdaq rules. Specifically, the Compensation Committee has the sole discretion to select and receive advice from a compensation consultant, legal counsel or other adviser and is directly responsible for oversight of their work. The Compensation Committee is also and must determine reasonable compensation to be paid to such advisors by us.

Prior to the formation of our Compensation Committee, our board of directors performed the functions that would have been handled by the Compensation Committee.

The Compensation Committee operates under a charter that was adopted by our board of directors. A copy of the Compensation Committee charter is available at http://ir.nakedbrands.com/governance-docs.

During fiscal ~~2017,~~ 2018, the Compensation Committee met in person or by telephone, or acted by unanimous written consent, approximately four times.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act and the rules of the SEC require our directors, executive officers and persons who own more than 10% of our common stock to file reports of their ownership and changes in ownership of our common stock with the SEC. Based solely on our review of the reports filed during fiscal ~~2017~~2018 and questionnaires from our directors and executive officers, we determined that no director, executive officer, or beneficial owner of more than 10% of our common stock failed to file a report on a timely basis during fiscal ~~2017~~2018.

Code of Ethics and Business Conduct

We have adopted a Code of Ethics and Business Conduct that applies to members of our board of directors, our executive officers, employees, contractors, consultants and others working on our behalf. The Code of Ethics and Business Conduct is available on our website at http://ir.nakedbrands.com/governance-docs. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Code of Ethics and Business Conduct by posting such information on our website at the address specified above.

4352

Item 11.

Executive Compensation

Named Executive Officers

Our named executive officers for fiscal ~~2017~~2018 set forth in this Form 10-K (the “Named Executive Officers”) are:

•· Carole Hochman, Chief Executive Officer and Chief Creative Officer; •· Joel Primus, President, Secretary and Treasurer; •· Kai-Hsiang Lin, Vice President of Finance; ~~• Michael Flanagan, Former Chief Financial Officer and Former Chief Operating Officer; and • Carlos Serra, Former Vice President of Sales and Merchandising.~~

Summary Compensation Table

The following table summarizes the compensation of our Named Executive Officers during fiscal ~~2017~~2018 and fiscal ~~2016~~2017.

Name and Principal Position	Fiscal Year	Salary ($)(2)	Bonus ($)	~~Stock~~Total ~~Awards~~ ($)	~~Option Awards ($) (1)~~	~~Non-Equity Incentive Plan Compensation ($)~~	~~Nonqualified Deferred Compensation Earnings ($)~~	~~All Other Compensation ($)~~	~~Total ($)~~
Carole Hochman CEO, CCO and Director	2017 2016	400,000 261,562	- -	- -	- -	- -	- -	- 18,796	400,000 280,358
Carole Hochman (1) CEO, CCO and Director	2018 2017	369,592 400,000	- -	369,592 400,000
Joel Primus (2) President, Secretary, Treasurer and Director and former CEO	2017 2016	129,223 164,000	- -	- -	- 1,257,700	- -	- -	- -	129,223 1,421,700
Joel Primus (2)(3) President, Secretary, Treasurer and Director and former CEO	2018 2017	77,256 129,223	- -	77,256 129,223
Michael Flanagan(3) Former CFO and Former COO	2017 2016	128,846 200,000	- -	- -	- -	- -	- -	- -	128,846 200,000
Kai-Hsian Lin (4)(5)(6) Vice President of Finance	2018 2017	152,500 136,288	17,500 -	170,000 136,288
Carlos Serra(4) Former VP Sales & Merchandising	2017 2016	181,731 175,000	- 25,000	- -	- -	- -	- -	- -	181,731 200,000
Kai-Hsian Lin(5) Vice President of Finance	2017 2016	136,288 -	- -	- -	- -	- -	- -	- -	136,288 -

(1)	~~For~~Effective aMarch ~~description~~1, ~~of the methodology and assumptions used in valuing the option awards granted to our Named Executive Officers during the fiscal years~~ 2017 ~~and 2016~~, ~~please~~Ms. ~~review~~Hochman’s ~~Notes~~salary 3was ~~and~~restored 10 to ~~the consolidated financial statements included in this Form 10-K~~$400,000. ~~Option awards shown here represent the aggregate grant date fair value of all options granted.~~
(2)	Compensation paid in Canadian dollars during fiscal ~~2017~~2018 is stated in United States dollars based on an exchange rate of 0.7677 US dollars for each Canadian dollar.
(3)	Effective September 1, 2017, Mr. ~~Flanagan~~Primus’ ~~retired~~salary ~~effective~~was ~~March~~reduced 17from CDN$116,000 ~~2016~~to CDN$77,000.
(4)	Effective April 1, 2017, Mr. ~~Serra~~Lin’s ~~resigned~~salary ~~effective~~was ~~July~~increased 31from $140,000 ~~2016~~to $155,000.
(5)	Mr. Lin was ~~appointed~~awarded ~~Vice~~a ~~President~~discretionary bonus of ~~Finance~~$10,000 inon ~~March~~June ~~2016~~15, 2017 and $7,500 on January 31, 2018.
(6)	Mr. Lin resigned effective March 23, 2018.

4453

Employment Arrangements

Carole Hochman

In connection with the appointment of Carole Hochman as Chief Executive Officer and Chief Creative Officer, we entered into an employment agreement for a term of three years whereby (a) we will pay Ms. Hochman a base salary of $400,000 per year, provided Ms. Hochman waived the first twelve months of the base salary and received only minimum wage for that period; (b) Ms. Hochman received a sign-on stock option grant to purchase 1,428,750 shares of our common stock, equal to 20% of our issued shares of common stock on a fully-diluted basis following the final closing of the private placement in July 2014, with each option exercisable at $5.12 per share and vesting in equal monthly installments over a period of three years from the date of grant; (c) Ms. Hochman is eligible to receive an annual cash bonus for each whole or partial year during the employment term payable based on the achievement of one or more performance goals established annually by our board of directors; (d) Ms. Hochman is entitled to participate in our company’s employee benefit plans; and (e) Ms. Hochman is entitled to an annual expense allowance.

Ms. Hochman’s employment agreement further provides that if Ms. Hochman’s employment is terminated for any reason she will be entitled to all earned but unpaid base salary and bonus, accrued vacation, vested benefits or compensation, indemnification rights she would otherwise be entitled to and any incurred but unreimbursed expenses. In addition, if Ms. Hochman’s employment is terminated by our company without cause, or by Ms. Hochman for good reason (each as defined in Ms. Hochman’s employment agreement), she will also be entitled to (a) a pro-rata portion of her target bonus for the year in which the termination of employment occurs and (b) continued payments of base salary paid in cash in equal monthly installments for a period of 12 months following the termination date. In the event that Ms. Hochman’s employment is terminated due to death or disability, she will be entitled to receive benefits in accordance with our company’s then established plans, programs and practices and her outstanding equity awards will be treated in accordance with their terms.

On June 10, 2015, Ms. Hochman became eligible to receive her full base salary pursuant to the terms of her employment agreement, however, such base salary remained unpaid. We were accruing such base salary compensation payable, and Ms. Hochman had agreed to allow the Company to defer payment of such amounts provided such amounts accrued interest at a rate of 3% per annum. On March 13, 2017, Ms. Hochman surrendered accrued base salary compensation in the amount of $654,637. On the same day, the Company granted to Ms. Hochman 1,200,000 options to purchase shares of the Company’s common stock with an exercise price of $2.14, the price of the Company’s common stock as of March 13, 2017.

Joel Primus

Mr. Primus received compensation of $164,000 per year from June 2014 through August 2015, acting as President of our Company.

On August 18, 2015, we entered into an employment agreement with Mr. Primus pursuant to which he continued to serve as our President. The employment agreement provided for an initial term of one year, which could be extended for additional one-year periods upon the expiration of the then-current term with the mutual agreement in writing of us and Mr. Primus. As compensation for his services, the employment agreement ~~provides~~provided that we shall pay Mr. Primus a base salary of $164,000 per year. In addition, Mr. Primus was eligible to receive an annual cash bonus for each whole or partial year during the term of his employment, payable based on the achievement of one or more performance goals established annually by our board of directors in consultation with Mr. Primus or as otherwise determined by our board of directors in its discretion. The annual bonus, if any, would be paid in a lump sum cash payment as soon as reasonably practicable following the end of the calendar year to which the bonus relates, but no later than March 15 of the following year. On August 18, 2015, Mr. Primus was also granted stock options to purchase 299,899 shares of our common stock, with each option exercisable at $4.40 per share and vesting as to 25% immediately on the date of grant and the remaining 75% in equal monthly installments over a period of three years from the date of grant.

The employment agreement has expired, and Mr. Primus currently receives a salary of CDN$~~116~~77,000 per year, which reflects a reduction in salary from CDN$116,000 per year. The reduction become effective in September 2017.

4554

Michael Flanagan

We appointed Mr. Flanagan as our Chief Financial Officer and Chief Operating Officer in June 2014. In connection with the appointment of Mr. Flanagan, we entered into an offer letter pursuant to which (a) we agreed to pay Mr. Flanagan a base salary of $200,000 per year; (b) Mr. Flanagan received a sign-on stock option grant to purchase 70,000 shares of our common stock, with each option exercisable at $5.12 per share and vesting annually over a period of four years from the date of grant; and (c) Mr. Flanagan was entitled to participate in our company’s employee benefit plans. Effective March 17, 2016, Mr. Flanagan retired and as such, his employment agreement was terminated. In connection with his retirement, the Company entered into a separation agreement pursuant to which Mr. Flanagan will receive (i) a severance payment equal to one hundred thousand dollars ($100,000), which is the equivalent of six (6) months of severance pay, payable in equal monthly installments and (ii) a payment equal to accrued and unused vacation time through the date of his retirement. Additionally, his unvested options were immediately forfeited on the date of his retirement and any vested options were exercisable until ninety (90) days after the date of his retirement, at which time the vested options expired.

Carlos Serra

We appointed Mr. Serra as our Vice President Sales and Merchandising in June 2014. In connection with the appointment of Mr. Serra, we entered into an offer letter pursuant to which pursuant to which (a) we agreed to pay Mr. Serra a base salary of $175,000; (b) Mr. Serra was entitled to receive an annual bonus based on mutually agreeable net sales targets, with “low”, “moderate” and “high” thresholds with the bonus amount equal to 15% of base salary with respect to the low threshold, 25% of base salary with respect to the moderate threshold and 35% of base salary with respect to the high threshold; (c) Mr. Serra was entitled to receive a sign-on stock option grant to purchase 92,500 shares of our common stock, exercisable at $5.12 per share, with 46,250 of such shares underlying the option vesting annually over a period of three years from the date of grant and 46,250 of such shares underlying the option vesting based upon the achievement of certain milestones, provided, that, notwithstanding the foregoing, Mr. Serra subsequently agreed that all 92,500 options would vest annually over a four year period; and (c) Mr. Serra was entitled to participate in our company’s employee benefit plans. Effective July 31, 2016, Mr. Serra resigned and as such, his employment agreement was terminated. In connection with his resignation, the Company paid Mr. Serra six (6) months of severance pay. Additionally, his unvested options immediately vested on the date of his resignation and were exercisable until ninety (90) days after the date of his resignation, at which time all outstanding options held by Mr. Serra expired.

Kai-Hsiang Lin

In connection with the retirement of Mr. Flanagan, we appointed Mr. Lin as our Vice President of Finance, effective March 22, 2016. We have agreed to pay Mr. Lin a base salary of $140,000 per year. Mr. Lin will also be entitled to participate in our employee benefit plans.

Effective April 2017, Mr. Lin’s salary was increased from $140,000 to $155,000 per year. On June 15, 2017, Mr. Lin was awarded a discretionary bonus of $10,000 and on January 31, 2018, Mr. Lin was awarded a discretionary bonus of $7,500.

On March 12, 2018, Mr. Lin informed the Company that he will resign and step down as Vice President of Finance, effective as of March 23, 2018.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth for each named executive officer certain information concerning the outstanding equity awards as of January 31, ~~2017~~2018:

	Option awards				~~Option awards~~											~~Stock awards~~
Name and Principal Position	Number of Securities Underlying Unexercised Options Exercisable	Number of Securities Underlying Unexercised Options ~~Exercisable~~Unexercisable	Option Exercise Price	Option Expiration Date	~~Number of Securities Underlying Unexercised Options Unexercisable~~			~~Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options~~		~~Option Exercise Price~~		~~Option Expiration Date~~		~~Number of Shares or Units of Stock that Have Not Vested~~		~~Market Value of Shares or Units of Stock that Have Not Vested~~		~~Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested~~		~~Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested~~
Carole Hochman	1,428,750(1)	-	~~1,349,358~~$5.12	~~(1)~~6/6/2024		~~79,392~~	~~(1)~~		-		~~$5.12~~		~~6/6/2024~~		-		-		-		-
CEO, CCO and Director	1,200,000	-	$2.14	3/13/2021
Joel Primus	256,167(2)	43,732(2)	~~199,935~~$4.40	~~(2)~~8/18/2025		~~99,964~~	~~(2)~~		-		~~$4.40~~		~~8/18/2025~~		-		-		-		-
President, Secretary, Treasurer and Director	7,500	-	~~7,500~~$10.00	7/30/2022		-			-		~~$10.00~~		~~7/30/2022~~		-		-		-		-
Michael Flanagan			-			-			-		-		-		-		-		-		-
Kai-Hsiang Lin	-	-	-	-
Former CFO, COO
VP Finance
Carlos Serra			-			-			-		-		-		-		-		-		-
Former VP Sales & Merchandising
Kai-Hsiang Lin			-			-			-		-		-		-		-		-		-
VP Finance

(1)	Of the total, 1,~~275~~428,~~578~~750 options exercisable, ~~and 75~~1,~~047~~350,625 options ~~unexercisable~~ are held through Carole S. Hochman Trust, of which Carole’s son, David Hochman is a trustee. These ~~option~~options are vesting monthly over a term of 36 months, commencing on June 10, 2014.
(2)	The options vest as to 25% immediately upon grant and the remaining 75% in equal monthly instalments over a term of three years from August 18, 2015.

Retirement or Similar Benefit Plans

We do not currently have any plans in place that provide for the payment of retirement benefits, or benefits that will be paid primarily following retirement, including but not limited to tax-qualified defined benefit plans, supplemental executive retirement plans, tax-qualified defined contribution plans and nonqualified defined contribution plans.

Resignation, Retirement, Other Termination, or Change in Control Agreements

For a description of the material terms of each contract, agreement, plan or arrangement, whether written or unwritten, that provides for payment(s) to a named executive officer at, following, or in connection with the resignation, retirement or other termination of a named executive officer, or a change in control of the company or a change in the named executive officer’s responsibilities following a change in control, see above under the heading “Employment Arrangements.”

Fiscal ~~2017~~2018 Director Compensation

~~The following table presents the total compensation for each person who served as a member of our board of directors during~~In fiscal ~~2017. Other than as set forth in the table and described more fully below, in~~2018 ~~fiscal 2017~~ we did not pay any fees to, make any equity awards to, or pay any other compensation to the members of our board of directors who served as members during fiscal ~~2017~~2018. Ms. Hochman and Mr. Primus do not receive compensation for their service as directors. Total compensation for Ms. Hochman and Mr. Primus for services as employees is presented in “Executive Compensation—Summary Compensation Table” above.

Name	Fees Earned or Paid in Cash ($)	Stock Awards ($)	Option Awards ($)(1)	Non-equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
David Hochman	-	-	14,100	-	-	-	14,100
Andrew Kaplan	-	-	-	-	-	-	-
Paul Hayes	-	-	-	-	-	-	-
Martha Olson	-	-	-	-	-	-	-
Jesse Cole	-	-	-	-	-	-	-
Edward Hanson	-	-	-	-	-	-	-
Justin Davis-Rice	-	-	-	-	-	-	-

(1) For a description of the methodology and assumptions used in valuing the option awards granted to our named executive officers and directors during fiscal 2017 and fiscal 2016, please review Notes 3 and 10 to the consolidated financial statements included in the Original Filing. Option awards shown here represent the aggregate grant date fair value of all options granted.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of ~~April~~May 261, ~~2017~~2018, certain information with respect to the beneficial ownership of our common stock by each stockholder known by us to be the beneficial owner of more than 5% of our common stock, and by each of our current directors and NEOs. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.

Except as otherwise noted, the address of each person or entity in the following table is c/o Naked Brand Group Inc., ~~10th~~180 ~~Floor - 95~~ Madison Avenue, Suite 505, New York, New York 10016.

	~~Shares of Common Stock Beneficially Owned(1)~~	Shares of Common Stock Beneficially Owned(1)
Name of Beneficial Owner	~~Amount and Nature of Beneficial Ownership~~	~~Percent~~Amount and Nature of ~~Class(2)~~Beneficial Ownership	Percent of Class(2)
Carole Hochman	~~2,040,077(3)~~	~~17.6%~~2,040,077(3)	13.6%
Joel Primus	~~333,923(4)~~	~~3.2%~~416,399(4)	2.8%
Kai-Hsiang Lin	-	*
Kai-Hsiang Lin(5)		-	0%
David Hochman	1,547,156(5)	13.1%
Paul Hayes		37,500(6)	*
Andrew Kaplan	208,288(6)	2.0%
Martha Olson		40,500(7)	*
Paul Hayes	28,000(7)	*
Jesse Cole		12,500(8)	*
Martha Olson	25,000(8)	*
Edward Hanson		-	*
Jesse Cole	12,500(9)	*
Justin Davis-Rice		-	*
Edward Hanson	-	*
All directors and executive officers as a group (pre-transactions) (8 individuals)		3,923,851	26.1%
Justin Davis-Rice	-	*
5% Stockholders		-	*
Directors and Officers as a group (10 individuals)	4,194,944	31.4%
David Hochman		1,547,156(9)	10.3%

(1)	Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable, or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.
(2)	Based on 10,342,191 shares of our common stock issued and outstanding as of ~~April~~May 261, ~~2017~~2018.
(3)	Includes 78,125 options to acquire shares of our common stock at a price of $5.12 per share, and 1,200,000 options to acquire shares of our common stock at a price of $2.14 per share which are exercisable within 60 days.
(4)	Includes 7,500 options to acquire shares of our common stock at a price of $10.00 per share, which are currently exercisable and ~~212~~287,~~431~~403 options to acquire shares of our common stock at a price of $4.40 which are exercisable within 60 days. Excludes options to acquire 8712,~~468~~496 shares of our common stock at a price of $4.40 per share which are not currently exercisable within 60 days.
(5)	~~Includes options to acquire 1,350,625 shares of our common stock at a price of $5.12 held by Carole S. Hochman Trust, of which~~ Mr. ~~Hochman~~Lin’s isresignation abecame ~~trustee,~~effective ~~options~~on toMarch ~~acquire 72~~23,~~000~~ ~~shares of our common stock at a price of $5~~2018.~~12 per share and options to acquire 10,000 shares of our common stock at $2.50 per share which are exercisable within 60 days.~~
(6)	Includes options to acquire 3637,~~000~~500 shares of our common stock at a price of $5.12 per share, which are exercisable within 60 days.
(7)	Includes options to acquire 2537,~~000~~500 shares of our common stock at a price of $54.1248 per share, which are ~~exercisable~~currently ~~within 60 days. Excludes options to acquire 12,500 shares of our common stock which are not~~ exercisable ~~within 60 days~~.
(8)	Includes options to acquire 25,000 shares of our common stock at a price of $4.4840 per share, which are currently exercisable. Excludes options to acquire 12,500 shares of our common stock at a price of $4.4840 per share which are not currently exercisable within 60 days.
(9)	Includes options to acquire 121,~~500~~350,625 shares of our common stock at a price of $45.4012 ~~per~~held ~~share~~by Carole S. Hochman Trust, of which ~~are~~Mr. ~~currently~~Hochman ~~exercisable.~~is ~~Excludes~~a trustee, options to acquire 2572,000 shares of our common stock at a price of $45.4012 per share ~~which~~and ~~are~~options ~~not~~to ~~currently~~acquire 10,000 shares of our common stock at $2.50 per share all of which are exercisable within 60 days. The address for Mr. Hochman is 15 Weston Hill Road, Riverside, CT 06878.

4857

Securities Authorized for Issuance Under Equity Compensation Plans

The following table summarizes compensation plans under which our equity securities are authorized for issuance as of January 31, ~~2017~~2018.

Plan Category	(a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		(b) Weighted-average Exercise Price Of Outstanding Options, Warrants and Rights($)	(bc) ~~Weighted-average~~Number ~~Exercise~~of ~~Price~~Securities OfRemaining ~~Outstanding~~Available ~~Options,~~for ~~Warrants~~Future ~~and~~Issuance ~~Rights~~Under Equity Compensation Plans ($Excluding Securities Reflected in Column (a))		~~(c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))~~
Equity compensation plans approved by security holders (1)	2,240,399	~~2,240,399~~	$4.67	509,601	~~$4.67~~		~~509,601~~
Equity compensation plans not approved by security holders(2)	32,000	~~47,000~~	$10.00	-	~~$10.00~~		-
Equity compensation plans not approved by security holders (3)	1,200,000		$2.14	-

(1)	Reflects our 2014 Long-Term Incentive Plan.

(2)	Reflects our 2012 Stock Option Plan.

49(3) Reflects Options issued to Ms. Hochman for surrendered deferred compensation

Item 13.

Certain Relationship and Related Transactions, and Director Independence

Other than as set ~~forth~~ forth below, since February 1, 2015, there has been no transaction, or currently proposed transaction, in which our company was or is to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at at year -end for the last two completed fiscal years and in which any of the following persons had or will have a direct or indirect material interest:

•· any of our directors or officers; •· any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock; •· any person who acquired control of our company when it was a shell company or any person that is part of a group, consisting of two or more persons that agreed to act together for the purpose of acquiring, holding, voting or disposing of our common stock, that acquired control of Naked Brand Group Inc. when it was a shell company; and •· any member of the immediate family (including spouse, parents, children, siblings and in-laws) of any of the foregoing persons.

In connection with a Joint Factoring Agreement, the Carole Hochman executed a guaranty (the “Guaranty”) to personally guarantee performance of the obligations and also agreed to provide her own brokerage account as security for the obligations under the Joint Factoring Agreement. Accordingly, in connection with her brokerage account Ms. Hochman entered into a brokerage account pledge and security agreement (the “Pledge and Security Agreement”) and securities account control agreement (the “Account Control Agreement”) in favor of Wells Fargo Bank, National Association (“Wells Fargo”). Pursuant to the Pledge and Security Agreement, Ms. Hochman has agreed to pledge, sell, assign, grant a security interest in and transfer to Wells Fargo all of her rights, title and interest in and to her brokerage account. On June 28, 2017, the Joint Factoring Agreement was amended to terminate the Guaranty by Carole Hochman and in connection the brokerage Account Pledge and Security Agreement between Wells Fargo and Carole Hochman.

On ~~July~~March 313, ~~2015~~2017, we entered into agreements to amend certain warrants to purchase shares of our common stock held by Carole Hochman, David Hochman and Nico Pronk, President and CEO of Noble Financial Capital Markets Inc. The warrants were initially issued in conjunction with the ~~closing of our private placement offering on June 10, 2014. Pursuant to these amendments, the original warrants held by~~ Ms. ~~and~~ ~~Mr.~~ Hochman ~~and~~surrendered ~~Mr.~~accrued ~~Pronk~~salary ~~were~~compensation ~~amended~~plus tointerest ~~(i)~~in ~~reduce~~ the ~~exercise~~amount ~~price to $4.00 per share~~ of ~~common stock in cash~~$654, ~~(ii) shorten the exercise period~~637, ~~(iii)~~including ~~restrict~~salary ~~the ability of the holders of shares issuable upon exercise of such warrants to sell, make~~compensation ~~any~~payable ~~short sale~~ of, ~~loan~~$638,724 ~~grant~~plus ~~any~~accrued ~~option~~interest ~~for~~on ~~the purchase of, or otherwise dispose of any of~~ such ~~shares~~amounts ~~without our prior written consent for a period~~ of ~~one hundred and twenty (120) days~~$15, ~~and (iv) provide that a holder~~913, ~~acting~~which ~~alone~~had oraccrued ~~with~~under ~~others,~~an ~~will~~employment ~~not affect~~agreement ~~any~~dated ~~purchases or sales of any of our securities in any “short sales” or any type of direct and indirect stock~~effective ~~pledges,~~June ~~forward sale contracts~~10, ~~options, puts, calls, short sales, swaps, “put equivalent positions” or similar arrangements, or sales or other transactions through non-U~~2014.S. ~~broker~~As ~~dealers or foreign regulated brokers through the expiration of the above-mentioned one hundred and twenty day period. On July 3~~consideration, ~~2015,~~Naked ingranted ~~connection with the amendments~~ to the ~~warrants described above,~~ Ms. Hochman ~~exercised~~ ~~117~~1,~~616 amended warrants~~200,000 ~~pursuant~~options to ~~which~~purchase ~~we issued an aggregate of 117,616~~ shares of ~~our~~Naked ~~common~~Common ~~stock~~Stock ~~for aggregate~~at ~~gross proceeds of approximately $470,464, Mr. Hochman, on behalf of himself and~~ an ~~entity~~exercise ~~controlled~~price ~~by him, exercised 22,633 amended warrants, pursuant to which we issued an aggregate~~ of ~~22,633 shares of our common stock for aggregate gross proceeds of approximately~~ $~~90,532~~2.14 ~~and~~per ~~Nico~~a ~~Pronk~~period ~~exercised 64,999 amended warrants, pursuant to which we issued an aggregate~~ of ~~64,999~~four ~~shares~~years offrom ~~our~~the ~~common stock~~date ~~for aggregate gross proceeds~~ of ~~approximately~~the ~~$260,004~~grant.

OnWe ~~December~~incur ~~23,~~ongoing ~~2015,~~marketing ~~Carole~~fees with a marketing agency of which Ms. Hochman’s daughter is a principal. Since February 1, ~~our~~2015 ~~Chief~~through ~~Executive~~January ~~Officer~~31, ~~Chief~~2018, we ~~Creative~~have ~~Officer~~paid ~~and~~approximately a$514,313 ~~director~~in ofmarketing ~~our~~fees to the company, ~~purchased~~pursuant ~~287~~to the consulting agreement,~~500~~ ~~shares~~which ofincludes $184,609 ~~our~~during ~~common~~fiscal ~~stock~~2018 atand a$231,176 ~~price~~in fiscal 2017, of which $427,809 ~~per~~in ~~share~~fiscal 2018 and $33,520 in ~~connection~~fiscal ~~with~~2017 ~~the~~were ~~close~~in ofconnection anwith third-party ~~underwritten~~pass ~~public~~through ~~offering~~costs.

On ~~December~~October 234, ~~2015~~2017, ~~David~~the ~~Hochman,~~Company entered into a ~~director~~consignment ofagreement ~~our~~with ~~company~~Bendon to consign 155,624 ~~purchased~~units 17of finished goods inventory,~~500~~ ~~shares~~in the value of ~~our~~$1,189,072, ~~common~~for ~~stock~~the atpurpose of facilitating a ~~price~~sale of $4the consigned goods by the consignee, per ~~share~~note in4. ~~connection~~The agreement is effective as of October 4th and will continue for a period of twelve months with the ~~close~~ability ofto extend the term for an ~~underwritten~~additional twelve ~~public~~months ~~offering~~upon mutual acceptance. Payment is due by the consignee to the Company based on units sold every 90 days commencing on January 31, 2018. The title to and property of the consigned goods shall remain with the Company until such time as they are sold to third parties. At January 31, 2018, included in accounts receivable is $441,453 owing from Bendon in relation to this agreement and included in inventory is $747,763 in consignment inventory held by Bendon in relation to this agreement.

OnAt ~~December~~January 2331, ~~2015~~2018, ~~Paul~~included ~~Hayes,~~in aadvances ~~director~~receivable ofis ~~our~~$540,733 ~~company~~(January 31, ~~purchased~~2017: 3$Nil) including $306,~~000~~201 ~~shares~~owing offrom ~~our~~Bendon ~~common~~for ~~stock~~expenses atincurred by athe ~~price~~Company on behalf of Bendon and $4234,532 for fourth quarter operating loss reimbursements receivable per ~~share~~the inSecond ~~connection~~Amendment to ~~with~~the Merger Agreement. The amount due from Bendon is unsecured, non-interest bearing and has no specific repayment terms. In February 2018, the ~~close~~Company received cash in the amount of an$381,411 ~~underwritten~~against ~~public~~this ~~offering~~receivable.

5059

On October 21, 2016 and November 3, 2016, the Company entered into subscription agreements with Carole Hochman, David Hochman and Andrew Kaplan, pursuant to which the Company issued a convertible promissory note in the principal amount of $112,000, $12,000 and $100,000, respectively. The convertible promissory notes bear interest at a rate of 9% per annum and were repayable upon the earliest of (i) the liquidation and dissolution of the Company pursuant to a plan of complete liquidation or (ii) December 31, 2017, unless earlier converted, redeemed or repurchased. On January 12, 2017, entered into a securities purchase agreement with certain investors providing for the issuance and sale by the Company of 1,879,811 shares of the Company’s common stock. In connection therewith, the notes held by Ms. Hochman, Mr. Hochman and Mr. Kaplan were automatically converted. Ms. Hochman converted an outstanding balance of $114,320 into 92,943 shares based on a conversion price per share of $1.23 and Mr. Hochman and Mr. Kaplan converted an outstanding balance of $12,210 and $101,751, respectively, into 11,740 shares and 97,837 shares based on a conversion price per share of $1.04.

On December 14, 2016, the Company entered into a promissory note agreement with Carole Hochman, pursuant to which the Company issued a promissory note in the principal amount of $153,000. The promissory note bears interest at 10% per annum and is repayable upon the earlier to occur of (i) May 7, 2017 or (ii) the date of the closing date of an Equity Financing (as defined in the promissory note). In the event the Company fails to pay the principal amount plus accrued but unpaid interest on the maturity date and does not cure such failure to pay within ten business days, then the interest rate shall automatically increase to 13%.

We incur ongoing marketing fees with a marketing agency of which Ms. Hochman’s daughter, and Mr. Hochman’s sister, is a principal. Since February 1, 2015 through January 31, 2017, we have paid approximately $514,313 in marketing fees to the company pursuant to the consulting agreement, which includes $231,176 during fiscal 2017 and $282,277 in fiscal 2016, of which $33,520 in fiscal 2017 and $90,777 in fiscal 2016 were in connection with third-party pass through costs.

Board Independence

Except as may otherwise be permitted by the applicable listing standards of ~~NASDAQ~~Nasdaq, a majority of the members of our board of directors shall be independent directors. Our board of directors has determined that ~~Andrew Kaplan,~~ Paul Hayes, Martha Olson, Jesse Cole, and Edward Hanson qualify as independent directors under the applicable listing standards of ~~NASDAQ~~Nasdaq. Our board of directors has also determined that each director who currently serves on the Audit Committee is independent under the applicable listing standards of ~~NASDAQ~~Nasdaq and Rule 10A-3 under the Exchange Act, and that each director who currently serves on the Compensation Committee meets ~~NASDAQ~~Nasdaq’s heightened ~~standard~~ standard of independence applicable to Compensation Committee members. Ms. Hochman and Mr. Primus are not independent for purposes of the rule because each of them is an executive officer of our company. Mr. Hochman is not independent for purposes of the rule ~~because~~ because he is Ms. Hochman’s son. Mr. Davis-Rice is not independent because he is an officer of Bendon Limited.

5160

Item 14.

Principal Accounting Fees and Services

The following table presents aggregate ~~fees~~ fees billed to us for services rendered by BDO USA, LLP during the fiscal years ~~2017~~2018 and ~~2016~~2017.

	Fiscal year ended January 31, 2017		Fiscal year ended January 31, 2016
	Fiscal year ended January 31, 2018		Fiscal year ended January 31, 2017
Audit Fees	$	~~161~~254,~~669~~709	$	~~258~~161,~~800~~669
Audit-Related Fees		—		—
Tax Fees		13,~~016~~707		2513,~~400~~016
All Other Fees		—		—
Total	$	~~174~~254,~~685~~416	$	~~284~~174,~~200~~685

Audit Fees

Audit Fees are the aggregate fees billed by our independent auditor for the audit of our consolidated annual financial statements and attestation services that are provided in connection with statutory and regulatory filings or engagements.

Audit-Related Fees

Audit-Related Fees are fees charged by our independent auditor for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under "Audit Fees."

Tax Fees

Tax Fees are the aggregate fees billed by our independent auditor for professional services rendered for tax compliance, tax advice, and tax planning.

All Other Fees

All Other Fees are the aggregate fees by our independent auditor for products and services other than those described in the categories above.,

Preapproval Policies and Procedures

Our Audit Committee has established a policy governing our use of the services of our independent registered public accounting firm. Under this policy, our Audit Committee is required to pre-approve all audit and non-audit services performed by our independent registered public accounting firm in order to ensure that the provision of such services does not impair the public accountants’ independence. All services provided by BDO USA, LLP for our fiscal years ~~2017~~2018 and ~~2016~~2017 were pre-approved by our Audit Committee in accordance with this policy.

5261

PART IV

Item 15.

Exhibits, Financial Statement Schedules.

Exhibit
Number		Description of Exhibit
2.1		~~Acquisition~~ Agreement and Plan of Reorganization, dated ~~February~~May 2825, ~~2012~~2017, by and among ~~our~~Naked ~~company~~Brand Group Inc., ~~Naked~~Bendon ~~Boxer~~Limited, ~~Brief~~Bendon ~~Clothing~~Group Holdings Limited, Naked Merger Sub Inc. and ~~SBH~~Bendon ~~Acquisition~~Investments ~~Corp~~Ltd. (incorporated by reference from Exhibit 102.1 of our current report on Form 8-K, as filed with the SEC on March 125, ~~2012~~2018)
2.2		Amendment No. 1 to Agreement and Plan of Reorganization, dated July 26, 2017, by and among Naked Brand Group Inc., Bendon Limited, Bendon Group Holdings Limited, Naked Merger Sub Inc and Bendon Investments Ltd. (incorporated by reference to Exhibit 2.1 to our current report on Form 8-K, as filed with the SEC on July 27, 2017)
2.3		Amendment No. 2 to Agreement and Plan of Reorganization, dated February 21, 2018, by and among Naked Brand Group Inc., Bendon Limited, Bendon Group Holdings Limited, Naked Merger Sub Inc and Bendon Investments Ltd. (incorporated by reference to Exhibit 2.1 to our current report on Form 8-K, as filed with the SEC on February 21, 2018)
2.4		Amendment No. 3 to Agreement and Plan of Reorganization, dated March 19, 2018, by and among Naked Brand Group Inc., Bendon Limited, Bendon Group Holdings Limited, Naked Merger Sub Inc and Bendon Investments Ltd. (incorporated by reference to Exhibit 2.1 to our current report on Form 8-K, as filed with the SEC on March 20, 2018)
2.5		Amendment No. 4 to Agreement and Plan of Reorganization, dated April 23, 2018, by and among Naked Brand Group Inc., Bendon Limited, Bendon Group Holdings Limited, Naked Merger Sub Inc and Bendon Investments Ltd. (incorporated by reference to Exhibit 2.1 to our current report on Form 8-K, as filed with the SEC on April 23, 2018)
3.1		Articles of Incorporation (incorporated by reference from our registration statement on Form SB-2, as filed with the SEC on December 8, 2006)
3.2		Articles of Merger (incorporated by reference from Exhibit 10.1 of our current report on Form 8-K, as filed with the SEC on August 30, 2012)
3.3		Certificate of Amendment to Articles of Incorporation (incorporated by reference from Exhibit 3.3 of our quarterly report on Form 10-Q, as filed with the SEC on September 15, 2014)
3.4		Certificate of Change effective as of August 10, 2015 (incorporated by reference from Exhibit 3.1 to our current report on Form 8-K, as filed with the SEC on August 7, 2015)
3.5		Amended Bylaws (incorporated by reference from Exhibit 3.1 to our current report on Form 8-K, as filed with the SEC on January 28, 2013)
3.6		Amendment to Articles of Incorporation as of August 11, 2016 (incorporated by reference from Exhibit 3.1 to our current report on Form 8-K, as filed with the SEC on August 12, 2016)
4.0		Specimen stock certificate for common stock (incorporated by reference from Exhibit 4.1 to our registration statement on Form S-1, as filed with the SEC on September 24, 2015)
10.1±		2012 Stock Option Plan (incorporated by reference from Exhibit 10.14 to our current report on Form 8-K, as filed with the SEC on ~~July~~August 311, 2012)
10.2±		Form of Stock Option Agreement (incorporated by reference from Exhibit 10.15 to our current report on Form 8-K, as filed with the SEC on ~~July~~August 311, 2012)
10.3		Form of Stock Option Agreement with Shark Investments, LLC dated October 9, 2012 (incorporated by reference from Exhibit 10.1 to our current report on Form 8-K, as filed with the SEC on October 15, 2012)
10.4		Amendment Agreement dated July 22, 2013 (incorporated by reference from Exhibit 10.1 to our current report on Form 8-K, as filed with the SEC on July 29, 2013)
10.5		Form of Amended and Restated Promissory Note (incorporated by reference from Exhibit 10.2 to our current report on Form 8-K, as filed with the SEC on July 29, 2013)
10.6		Form of Amendment to Warrant Certificate (incorporated by reference from Exhibit 10.3 to our current report on Form 8-K, as filed with the SEC on July 29, 2013)
10.7		Agency and Interlender Agreement dated November 14, 2013 (incorporated by reference from Exhibit 10.3 to our current report on Form 8-K, as filed with the SEC on November 19, 2013)
10.8		Amended and Restated Security Agreement dated November 14, 2013 (incorporated by reference from Exhibit 10.4 to our current report on Form 8-K, as filed with the SEC on November 19, 2013)
10.9		Form of Subscription Agreement for Convertible Notes and Warrants (incorporated by reference from Exhibit 10.5 to our current report on Form 8-K, as filed with the SEC on November 19, 2013)
10.10		Form of Warrant Issuance Agreement (incorporated by reference from Exhibit 10.6 to our current report on Form 8-K, as filed with the SEC on November 19, 2013)
10.11		Form of Warrant Certificate (incorporated by reference from Exhibit 10.7 to our current report on Form 8-K, as filed with the SEC on November 19, 2013)
10.12		Form of Securities Purchase Agreement dated April 7, 2014 (incorporated by reference from Exhibit 10.1 to our current report on Form 8-K, as filed with the SEC on April 10, 2014)
10.13		Form of 6% Convertible Note (incorporated by reference from Exhibit 10.2 to our current report on Form 8-K, as filed with the SEC on April 10, 2014)
10.14		Form of Security Agreement dated April 7, 2014 (incorporated by reference from Exhibit 10.3 to our current report on Form 8-K, as filed with the SEC on April 10, 2014)
10.15		Amendment to Security Agreements dated April 4, 2014 (incorporated by reference from Exhibit 10.7 to our current report on Form 8-K, as filed with the SEC on April 10, 2014)

5362

10.16		Amendment to Amended and Restated Promissory Note dated April 4, 2014 (incorporated by reference from Exhibit 10.8 to our current report on Form 8-K, as filed with the SEC on April 10, 2014)
10.3		Warrant Agreement with Kalamalka Partners Ltd. Dated April 4, 2014 (incorporated by reference from Exhibit 10.12 to our current report on Form 8-K, as filed with the SEC on April 10, 2014)
10.17		Amendment to Promissory Note dated April 4, 2014 (incorporated by reference from Exhibit 10.9 to our current report on Form 8-K, as filed with the SEC on April 10, 2014)
10.4		Form of Warrant (incorporated by reference from Exhibit 10.4 to our current report on Form 8-K, as filed with the SEC on June 11, 2014)
10.18		Inter-lender Agreement dated April 4, 2014 (incorporated by reference from Exhibit 10.10 to our current report on Form 8-K, as filed with the SEC on April 10, 2014)
10.5 ±		2014 Long Term Incentive Plan (incorporated by reference from Exhibit 10.6 to our current report on Form 8-K, as filed with the SEC on June 11, 2014)
10.19		Warrant Agreement with Kalamalka Partners Ltd. Dated April 4, 2014 (incorporated by reference from Exhibit 10.12 to our current report on Form 8-K, as filed with the SEC on April 10, 2014)
10.6		Note Termination Agreement between the company and JMJ Financial dated June 5, 2014 (incorporated by reference from Exhibit 10.7 to our current report on Form 8-K, as filed with the SEC on June 11, 2014)
10.20		Form of Subscription Agreement by and among the company and the purchasers signatory thereto (incorporated by reference from Exhibit 10.1 to our current report on Form 8-K, as filed with the SEC on June 11, 2014)
10.7±		Form of Option Award Agreement (incorporated by reference from Exhibit 10.8 to our current report on Form 8-K, as filed with the SEC on June 11, 2014)
10.21		Form of 6% Senior Secured Convertible Debenture (incorporated by reference from Exhibit 10.2 to our current report on Form 8-K, as filed with the SEC on June 11, 2014)
10.8±		Employment Agreement between the company and Carole Hochman dated June 6, 2014 (incorporated by reference from Exhibit 10.9 to our current report on Form 8-K, as filed with the SEC on June 11, 2014)
10.22		Form of Security Agreement (incorporated by reference from Exhibit 10.3 to our current report on Form 8-K, as filed with the SEC on June 11, 2014)
10.9±		Amended and Restated Stock Option Award Agreement with Carole Hochman (incorporated by reference from Exhibit 10.1 to our current report on Form 8-K, as filed with the SEC on August 26, 2014)
10.23		Form of Warrant (incorporated by reference from Exhibit 10.4 to our current report on Form 8-K, as filed with the SEC on June 11, 2014)
10.10		Form of Amendment to Warrant to Purchase Common Stock (incorporated by reference from Exhibit 10.1 to our current report on Form 8-K, as filed with the SEC on July 7, 2015)
10.24		Form of Registration Rights Agreement (incorporated by reference from Exhibit 10.5 to our current report on Form 8-K, as filed with the SEC on June 11, 2014)
10.11		Collaboration & Endorsement Agreement with Wade Enterprises LLC, effective June 15, 2015 (incorporated by reference from Exhibit 10.58 to our Post-Effective Amendment No. 2 to our registration statement on Form S-1, as filed with the SEC on November 5, 2015) (1)
10.25 ±		2014 Long Term Incentive Plan (incorporated by reference from Exhibit 10.6 to our current report on Form 8-K, as filed with the SEC on June 11, 2014)
10.12±		Employment Agreement between the Company and Mr. Joel Primus (incorporated by reference from Exhibit 10.1 to our current report on Form 8-K, as filed with the SEC on August 24, 2015)
10.26		Note Termination Agreement between the company and JMJ Financial dated June 5, 2014 (incorporated by reference from Exhibit 10.7 to our current report on Form 8-K, as filed with the SEC on June 11, 2014)
10.27±		Form of Option Award Agreement (incorporated by reference from Exhibit 10.8 to our current report on Form 8-K, as filed with the SEC on June 11, 2014)
10.28±		Employment Agreement between the company and Carole Hochman dated June 6, 2014 (incorporated by reference from Exhibit 10.9 to our current report on Form 8-K, as filed with the SEC on June 11, 2014)
10.29±		Amended and Restated Stock Option Award Agreement with Carole Hochman (incorporated by reference from Exhibit 10.1 to our current report on Form 8-K, as filed with the SEC on August 26, 2014)
10.30		Form of Amendment to Warrant to Purchase Common Stock (incorporated by reference from Exhibit 10.1 to our current report on Form 8-K, as filed with the SEC on July 7, 2015)
10.31		Collaboration & Endorsement Agreement with Wade Enterprises LLC, effective June 15, 2015 (incorporated by reference from Exhibit 10.58 to our Post-Effective Amendment No. 2 to our registration statement on Form S-1, as filed with the SEC on November 5, 2015) (1)
10.32		Form of Amendment No. 1 to 6% Senior Secured Convertible Debenture (incorporated by reference from Exhibit 10.1 to our current report on Form 8-K, as filed with the SEC on August 6, 2015)
10.33		Form of Amendment to Warrant to Purchase Common Stock (incorporated by reference from Exhibit 10.2 to our current report on Form 8-K, as filed with the SEC on August 6, 2015)
10.34±		Employment Agreement between the Company and Mr. Joel Primus (incorporated by reference from Exhibit 10.1 to our current report on Form 8-K, as filed with the SEC on August 24, 2015)
10.35±		Guaranty by Carole Hochman in favor of Capital Business Credit LLC dated June 11, 2015 (incorporated by reference from Exhibit 10.62 to our registration statement on Form S-1, as filed with the SEC on September 24, 2015)
10.36±		Offer Letter between the Company and Mr. Carlos Serra (incorporated by reference from Exhibit 10.63 to our registration statement on Form S-1, as filed with the SEC on September 24, 2015)
10.37±		Offer Letter between the Company and Mr. Michael Flanagan (incorporated by reference from Exhibit 10.64 to our registration statement on Form S-1, as filed with the SEC on September 24, 2015)
10.38±		Description of Deferred Compensation Arrangement with Carole Hochman (incorporated by reference from Exhibit 10.565 to our Post-Effective Amendment No. 2 to our registration statement on Form S-1, as filed with the SEC on November 5, 2015)

5463

10.39		Form of Underwriters’ Warrant (incorporated by reference from Exhibit 10.66 to our registration statement on Form S-1 filed with the SEC on December 16, 2015)
10.13±		Guaranty by Carole Hochman in favor of Capital Business Credit LLC dated June 11, 2015 (incorporated by reference from Exhibit 10.62 to our registration statement on Form S-1, as filed with the SEC on September 24, 2015)
10.40		Compensation Arrangement between the Company and Mr. Kai-Hsiang Lin (incorporated by reference to Exhibit 10.40 to our Form 10-K, as filed with the SEC on April 28, 2016)
10.14±		Description of Deferred Compensation Arrangement with Carole Hochman (incorporated by reference from Exhibit 10.65 to our Post-Effective Amendment No. 2 to our registration statement on Form S-1, as filed with the SEC on November 5, 2015)
10.41		Form of 9% Convertible Promissory Note (incorporated by reference to Exhibit 4.1 of our current report on Form 8-K, as filed with the SEC on October 27, 2016)
10.15		Form of Underwriters’ Warrant (incorporated by reference from Exhibit 10.66 to our registration statement on Form S-1 filed with the SEC on December 16, 2015)
10.42		Form of 10% Promissory Note (incorporated by reference to Exhibit 4.2 of our current report on Form 8-K, as filed with the SEC on November 9, 2016)
10.16		Compensation Arrangement between the Company and Mr. Kai-Hsiang Lin (incorporated by reference to Exhibit 10.40 to our Form 10-K, as filed with the SEC on April 28, 2016)
10.43		Securities Purchase Agreement dated January 12, 2017, between Naked Brand Group Inc. and certain investors (incorporated by reference to Exhibit 10.1 of our current report on Form 8-K, as filed with the SEC on January 18, 2017)
10.17		Form of 9% Convertible Promissory Note (incorporated by reference to Exhibit 4.1 of our current report on Form 8-K, as filed with the SEC on October 27, 2016)
10.44		Form of Voting Agreement (incorporated by reference to Exhibit 10.2 of our current report on Form 8-K, as filed with the SEC on January 18, 2017)
10.18		Form of 10% Promissory Note (incorporated by reference to Exhibit 4.2 of our current report on Form 8-K, as filed with the SEC on November 9, 2016)
10.45		Letter of Intent, dated December 9, 2016 (incorporated by reference to Exhibit 10.3 of our current report on Form 8-K, as filed with the SEC on January 18, 2017)
10.19		Securities Purchase Agreement dated January 12, 2017, between Naked Brand Group Inc. and certain investors (incorporated by reference to Exhibit 10.1 of our current report on Form 8-K, as filed with the SEC on January 18, 2017)
10.46		Amended Letter of Intent, dated February 9, 2017 (incorporated by reference to Exhibit 10.1 of our current report on Form 8-K, as filed with the SEC on February 10, 2017)
10.20		Form of Voting Agreement (incorporated by reference to Exhibit 10.2 of our current report on Form 8-K, as filed with the SEC on January 18, 2017)
10.47		At The Market Agreement dated February 10, 2017 between Naked Brand Group Inc. and Maxim Group LLC (incorporated by reference to Exhibit 10.1 of our current report on Form 8-K, as filed with the SEC on February 10, 2017)
10.21		Letter of Intent, dated December 9, 2016 (incorporated by reference to Exhibit 10.3 of our current report on Form 8-K, as filed with the SEC on January 18, 2017)
10.48		Amendment No. 2 to Letter of Intent, dated March 9, 2017 (incorporated by reference to Exhibit 10.1 of our current report on Form 8-K, as filed with the SEC on March 10, 2017)
10.22		Amended Letter of Intent, dated February 9, 2017 (incorporated by reference to Exhibit 10.1 of our current report on Form 8-K, as filed with the SEC on February 10, 2017)
10.49		Amendment No. 3 to Letter of Intent, dated April 10, 2017 (incorporated by reference to Exhibit 10.1 of our current report on Form 8-K, as filed with the SEC on April 11, 2017)
10.23		At The Market Agreement dated February 10, 2017 between Naked Brand Group Inc. and Maxim Group LLC (incorporated by reference to Exhibit 10.1 of our current report on Form 8-K, as filed with the SEC on February 10, 2017)
10.24		Amendment No. 2 to Letter of Intent, dated March 9, 2017 (incorporated by reference to Exhibit 10.1 of our current report on Form 8-K, as filed with the SEC on March 10, 2017)
10.25		Amendment No. 3 to Letter of Intent, dated April 10, 2017 (incorporated by reference to Exhibit 10.1 of our current report on Form 8-K, as filed with the SEC on April 11, 2017)
10.26±		Engagement Letter between Naked Brand Group Inc. and ACM Management Inc. (incorporated by reference to Exhibit 10.1 of our current report on Form 8-K, as filed with the SEC on March 27, 2018)
10.27±		Indemnification Agreement between Naked Brand Group Inc. and Julie Daley. (incorporated by reference to Exhibit 10.2 of our current report on Form 8-K, as filed with the SEC on March 27, 2018)
21.1*		List of Subsidiaries
23.1*		Consent of BDO USA, LLP
24.1*		Powers of Attorney (incorporated by reference to the signature page hereto).
31.1*		Section 302 Certification of Principal Executive Officer
31.2*		Section 302 Certification of Principal Financial Officer and Principal Accounting Officer
32.1*		Section 906 Certification of Principal Executive Officer
32.2*		Section 906 Certification of Principal Financial Officer and Principal Accounting Officer
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase
101.DEF*		XBRL Taxonomy Extension Definition Linkbase
101.LAB*		XBRL Taxonomy Extension Label Linkbase
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase

* Filed herewith. ~~± Indicates a management contract or compensatory plan.~~

± Indicates a management contract or compensatory plan.

⁽¹⁾Portions of this exhibit containing confidential information have been omitted pursuant to an order for confidential treatment granted by the SEC pursuant to Rule 406 under the Securities Act. Confidential information has been omitted from the exhibit in places marked “[***]”and has been filed separately with the SEC.

5564

Item 16.

Form 10-K Summary

None.

5665

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on this ~~26th~~1st day of ~~April~~May ~~2017~~2018.

		NAKED BRAND GROUP INC.
Date:	~~April~~May 261, ~~2017~~2018	/S/ ~~Kai-Hsiang~~Juliana ~~Lin~~Daley
		Kai-Hsiang Lin
		Juliana Daley
		Vice President of Finance
		Chief Financial Officer and Principal Accounting Officer

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Joel Primus and ~~Kai-Hsiang Lin~~Juliana Daley, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

/s/ Carole Hochman	~~April 26, 2017~~	May 1, 2018
Carole Hochman
Chief Executive Officer, Chief Creative Officer and Chairwoman of the Board
(Principal Executive Officer)
/s/ Kai-Hsiang Lin	April 26, 2017
/s/ Juliana Daley		May 1, 2018
Kai-Hsiang Lin
Juliana Daley
Vice President of Finance
Chief Financial Officer, Principal Accounting Officer
(Principal Financial Officer and Principal Accounting Officer)
/s/ Joel Primus	~~April 26, 2017~~	May 1, 2018
Joel Primus
President, Secretary and Director
/s/ Andrew Kaplan	April 26, 2017
/s/ Paul Hayes		May 1, 2018
Andrew Kaplan
Paul Hayes
Director
/s/ David Hochman	April 26, 2017
/s/ Martha Olson		May 1, 2018
David Hochman
Martha Olson
Director
/s/ Paul Hayes	April 26, 2017
/s/ Jesse Cole		May 1, 2018
Paul Hayes
Jesse Cole
Director
/s/ Martha Olson	April 26, 2017
/s/ Edward Hanson		May 1, 2018
Martha Olson
Edward Hanson
Director
/s/ Jesse Cole	April 26, 2017
/s/ Justin Davis-Rice		May 1, 2018
Jesse Cole
Justin Davis-Rice
Director

/s/ Edward Hanson	April 26, 2017
Edward Hanson
Director

/s/ Justin Davis-Rice	April 26, 2017
Justin Davis-Rice
Director

	Naked Brand Group Inc.
	Consolidated Financial Statements
	For the Years Ended January 31, 2018 and 2017

Naked Brand Group Inc. Consolidated Financial Statements For the Years Ended January 31, 2017 and 2016

F-1

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors ~~and Stockholders~~

Naked Brand Group, Inc.

New York, NY

WeOpinion ~~have~~on ~~audited~~ the ~~accompanying~~Consolidated ~~consolidated~~Financial ~~balance~~Statements sheets of Naked Brand Group Inc. as of January 31, 2017 and 2016 and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended January 31, 2017. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We have ~~conducted~~audited ~~our~~the ~~audits~~accompanying inconsolidated ~~accordance~~balance ~~with~~sheets ~~the standards~~ of ~~the~~Naked ~~Public~~Brand ~~Company~~Group, ~~Accounting~~Inc. ~~Oversight Board~~ (~~United~~the ~~States~~“Company”). ~~Those standards require that we plan~~ and ~~perform~~subsidiaries ~~the~~as of ~~audit~~January to31, ~~obtain~~2018 ~~reasonable~~and ~~assurance~~2017, ~~about whether~~ the ~~financial~~related consolidated statements ~~are free~~ of ~~material misstatement. The Company is not required to have~~operations, ~~nor~~stockholders’ ~~were we engaged to perform~~equity, anand ~~audit~~cash offlows ~~its internal control~~for ~~over~~the ~~financial~~years ~~reporting.~~then ~~Our~~ended, ~~audits~~and ~~included~~the ~~consideration~~related ofnotes ~~internal~~(collectively ~~control~~referred ~~over~~to ~~financial reporting~~ as athe ~~basis~~“consolidated ~~for~~financial ~~designing~~statements”). ~~audit~~In ~~procedures~~our ~~that~~opinion, ~~are appropriate in~~ the ~~circumstances,~~consolidated ~~but~~financial ~~not~~statements ~~for~~present ~~the~~fairly, ~~purpose~~in ofall ~~expressing~~material anrespects, ~~opinion~~the onfinancial ~~the~~position ~~effectiveness~~ of the Company’s ~~internal~~and ~~control~~subsidiaries ~~over~~at ~~financial~~January ~~reporting. Accordingly~~31, we2018 ~~express~~and ~~no such opinion. An audit also includes examining~~2017, onand athe ~~test~~results ~~basis,~~of ~~evidence~~their ~~supporting~~operations ~~the amounts~~ and ~~disclosures~~their incash ~~the~~flows ~~financial~~for ~~statements, assessing~~ the ~~accounting~~years ~~principles~~then ~~used~~ended, ~~and~~in ~~significant~~conformity ~~estimates~~with ~~made~~accounting byprinciples ~~management,~~generally asaccepted ~~well~~in ~~as evaluating~~ the ~~overall~~United ~~financial~~States ~~statement~~of ~~presentation~~America. ~~We believe that our audits provide a reasonable basis for our opinion.~~

InGoing ~~our~~Concern opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Naked Brand Group Inc. at January 31, 2017 and 2016, and the results of its operations and its cash flows for each of the two years in the period ended January 31, 2017, in conformity with accounting principles generally accepted in the United States of America.Uncertainty

The accompanying ~~consolidated~~ consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As ~~described~~ discussed in Note 2 to the consolidated financial statements, the Company ~~incurred~~has asuffered ~~net~~recurring ~~loss~~losses offrom ~~$10,798,503~~operations ~~for~~and ~~the~~does ~~year~~not ~~ended~~have ~~January~~sufficient ~~31,~~capital ~~2017 and the Company expects~~ to ~~incur~~fund ~~further~~operations ~~losses~~which ~~in the development of its business. This condition~~ raises substantial doubt about ~~the~~its ~~Company’s~~ ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

BDO is the brand name for the BDO network and for each of the BDO Member Firms.

F-2

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ BDO USA, LLP

We have served as the Company's auditor since 2014.

New York, NY

~~April 26~~May 1, ~~2017~~2018

F-23

Naked Brand Group Inc.

Consolidated Balance Sheets

(Expressed in USUnited States Dollars)

	2017			2016
As at January 31,	2018			2017
ASSETS
Current assets
Cash	$	~~879~~1,~~014~~414,871		$	4879,~~780,994~~014
Accounts receivable, net of allowances of $29,668 (January 31, 2016: $34,398)		-			127,422
Accounts receivable, net of allowance for doubtful accounts of $4,664 (January 31, 2017: $29,668)		198,982			-
Inventory, net of allowances of $375,784 (January 31, 2016: $390,000)		2,228,813			921,449
Accounts receivable, related party		441,453			-
Prepaid expenses and deposits		496,721			956,807
Due from factor		106,339			-
Total current assets		3,604,548			6,786,672
Inventory, net of allowances of $269,742 (January 31, 2017: $375,784)		1,584,434			2,228,813
Equipment, net		-			13,215
Advances receivable, related party		540,733			-
Intangible assets, net		80,875			73,095
Prepaid expenses and deposits		198,545			496,721
TOTAL ASSETS	$	3,685,423		$	6,872,982
Total current assets		4,485,357			3,604,548
Intangible assets, net		80,875			80,875
TOTAL ASSETS	$	4,566,232		$	3,685,423
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	1,761,367		$	993,399
Trade payables and accrued liabilities	$	600,411		$	1,761,367
Interest payable		~~7,279~~-			67,~~025~~279
Factored line of credit		~~302,776~~-			~~527~~302,~~711~~776
Promissory note payable		256,450			3,450
Promissory notes payable		3,450			256,450
Convertible promissory notes		-			584,942
Total current liabilities		603,861			2,327,872
Total current liabilities		2,327,872			2,115,527
Deferred compensation		-			37,037
Deferred compensation		37,037			170,369
TOTAL LIABILITIES		603,861			2,364,909
TOTAL LIABILITIES		2,364,909			2,285,896
STOCKHOLDERS' EQUITY
Common stock Authorized 2,000,000 shares of blank check preferred stock, no par value 18,000,000 shares of common stock, par value $0.001 per share (2016: 11,250,000 common shares, par value $0.001 per share) Issued and outstanding 6,560,964 shares of common stock (2016: 6,069,982)		6,561			6,070
Common stock
Common stock to be issued		1,670,003			15,000
Authorized
Accumulated paid-in capital		56,829,778			50,953,341
2,000,000 shares of blank check preferred stock, no par value
Accumulated deficit		(57,179,583	)		(46,381,080	)
18,000,000 shares of common stock, par value $0.001 per share
Issued and outstanding
10,342,191 shares of common stock (January 31, 2017: 6,560,964)		10,342			6,561
Common stock to be issued		14,141			1,670,003
Accumulated paid-in capital		66,913,521			56,829,778
Accumulated deficit		(62,969,388	)		(57,179,583	)
Accumulated other comprehensive loss		(6,245	)		(6,245	)
Total stockholders' equity		13,~~320~~962,~~514~~371			41,~~587~~320,~~086~~514
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	34,~~685~~566,~~423~~232		$	63,~~872~~685,~~982~~423

The accompanying notes are an integral part of these consolidated financial statements.

F-34

Naked Brand Group Inc.

Consolidated Statements of Operations

(Expressed in US Dollars)

Years ended January 31,	~~2017~~2018			~~2016~~2017
Net sales	$	12,~~842~~859,~~065~~884		$	1,~~389~~842,~~414~~065
Cost of sales		1,~~464~~921,~~654~~477			1,~~291~~464,~~219~~654
Gross profit		~~377~~938,~~411~~407			98377,~~195~~411
Operating Expenses
Operating expenses
General and administrative expenses		116,~~076~~998,~~351~~466			11,~~726~~076,~~989~~351
Foreign exchange		1(3,~~792~~292	)		91,~~225~~792
Total operating expenses		116,~~078~~995,~~143~~174			11,~~736~~078,~~214~~143
Operating loss		(106,~~700~~056,~~732~~767	)		(1110,~~638~~700,~~019~~732	)
Other income (expense)
Other expense (income)
Interest expense		~~(81~~50,~~796~~616	)		~~(878~~81,~~934~~796	)
Accretion of debt discounts and finance charges		~~(15,975~~287	)		(715,~~255,346~~975	)
Fair value mark-to-market adjustments		-			708,900
Other income		(234,532	)		-
Total other expense		(97,771	)		(7,425,380	)
(Gain) loss on extinguishment of debt		(83,333	)		-
Net loss	$	(10,798,503	)	$	(19,063,399	)
Total other expense (income)		(266,962	)		97,771
Net loss	$	(5,789,805	)	$	(10,798,503	)
Net loss per share
Basic	$	(1.77	)	$	(10.13	)
Basic and Diluted	$	(0.57	)	$	(1.77	)
Diluted	$	(1.77	)	$	(10.13	)
Weighted average shares outstanding
Basic		6,092,688			1,881,901
Basic and Diluted		10,073,504			6,092,688
Diluted		6,092,688			1,881,901

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Naked Brand Group Inc.

Consolidated Statement of Changes in Stockholders’ Equity (Capital Deficit)

(Expressed in US Dollars)

													Accumulated			Total
					Accumulated								Other			Stockholders'
	Common Stock				Paid-in			Common stock		Accumulated			Comprehensive			Equity
	Shares		Amount		Capital			to be issued		Deficit			Loss			(Capital Deficit)
Balance, February 1, 2015		1,010,391	$	1,011	$	25,083,735		$	15,000	$	(27,317,681	)	$	(6,245	)	$	(2,224,180	)
Shares issued pursuant to the conversion of debt		79,025		79		236,985			-		-			-			237,064
Shares issued in exchange for services rendered		2,500		2		11,998			-		-			-			12,000
Shares issued as payment for interest owing under convertible debt arrangements		183,205		183		774,964			-		-			-			775,147
Shares issued pursuant to the exercise of amended warrants		585,705		586		2,342,243			-		-			-			2,342,829
Less: commissions paid		-		-		(91,422	)		-		-			-			(91,422	)
Shares issued in a public offering		1,875,000		1,875		7,498,125			-		-			-			7,500,000
Less: share issue costs		-		-		(623,720	)		-		-			-			(623,720	)
Shares issued upon automatic conversion of debentures		2,312,150		2,312		6,934,138			-		-			-			6,936,450
Rounding shares issued in connection with reverse stock split		22,006		22		(22	)		-		-			-			-
Derivative liability reclassifications		-		-		3,091,050			-		-			-			3,091,050
Stock based compensation		-		-		5,632,267			-		-			-			5,632,267
Modification of warrants		-		-		63,000			-		-			-			63,000
Net loss for the year		-		-		-			-		(19,063,399	)		-			(19,063,399	)
Balance, January 31, 2016		6,069,982	$	6,070	$	50,953,341		$	15,000	$	(46,381,080	)	$	(6,245	)	$	4,587,086
Shares issued pursuant to the conversion of debt		202,520		203		228,078			-								228,281
Shares issued in a public offering		288,462		288		299,712			1,655,003								1,955,003
Stock based compensation		-		-		5,348,647			-		-			-			5,348,647
Net loss for the period		-		-		-			-		(10,798,503	)		-			(10,798,503	)
Balance, January 31, 2017		6,560,964	$	6,561	$	56,829,778		$	1,670,003	$	(57,179,583	)	$	(6,245	)	$	1,320,514

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Naked Brand Group Inc.

Consolidated ~~Statements~~Statement of ~~Cash~~Changes ~~Flows~~in Stockholders' Equity (Capital Deficit)

(Expressed in US Dollars)

for the year ended January 31,	2017			2016
																Accumulated
Cash flows from operating activities
							Accumulated			Common						Other			Total
Net loss	$	(10,798,503	)	$	(19,063,399	)
	Common Stock						Paid-in			stock			Accumulated			Comprehensive			Stockholders'
Adjustments to reconcile net loss to net cash used in operating activities:
	Shares			Amount			Capital			to be issued			Deficit			Loss			Equity
Provision for doubtful accounts		(4,730	)		26,877
Balance, February 1, 2016		6,069,982		$	6,070		$	50,953,341		$	15,000		$	(46,381,080	)	$	(6,245	)	$	4,587,086
Provision for obsolete inventory		(14,216	)		211,000
Shares issued pursuant to the conversion of debt		202,520			203			228,078			-									228,281
Depreciation and amortization		13,215			17,420
Shares issued in a public offering		288,462			288			299,712			1,655,003									1,955,003
Other non cash items (Schedule 1)		5,348,647			12,178,713
Stock based compensation		-			-			5,348,647			-			-			-			5,348,647
Changes in operating assets and liabilities:
Net loss for the period		-			-			-			-			(10,798,503	)		-			(10,798,503	)
Accounts receivable		132,152			(55,154	)
Balance, January 31, 2017		6,560,964		$	6,561		$	56,829,778		$	1,670,003		$	(57,179,583	)	$	(6,245	)	$	1,320,514
Prepaid expenses and deposits		460,086			(573,156	)
Shares issued in a public offering		1,592,175			1,592			1,654,270			(1,655,862	)		-			-			-
Inventory		(1,293,148	)		(949,223	)
Shares issued in an at-the-market offering		2,189,052			2,189			5,497,534			-			-			-			5,499,723
Accounts payable		767,968			705,485
less; commission		-			-			(192,490	)		-			-			-			(192,490	)
Interest payable		5,535			722,231
Issuance of options for accrued salary compensation		-			-			654,637			-			-			-			654,637
Deferred costs		15,058			-
Warrants repurchased		-			-			(50,000	)											(50,000	)
Deferred compensation		(133,332	)		-
Stock based compensation		-			-			2,519,792			-			-			-			2,519,792
Net cash used in operating activities		(5,501,268	)		(6,779,206	)
Net loss for the period		-			-			-			-			(5,789,805	)		-			(5,789,805	)
Cash flows from investing activities
Balance, January 31, 2018		10,342,191		$	10,342		$	66,913,521		$	14,141		$	(62,969,388	)	$	(6,245	)	$	3,962,371
Acquisition of intangible assets		(7,780	)		(33,314	)
Purchase of equipment		-			(5,119	)
Net cash used in investing activities		(7,780	)		(38,433	)
Cash flows from financing activities
Proceeds from share issuances		300,000			9,842,829
Share issuance offering costs		-			(715,142	)
Proceeds from share subscriptions received		1,655,003			-
Proceeds from the issuance of promissory notes		253,000			-
Proceeds from convertible promissory notes		224,000			-
Repayments of convertible promissory notes		(600,000	)		-
Repayments under factoring arrangements		(1,274,935	)		(732,289	)
Advances under factoring arrangements		1,050,000			1,260,000
Net cash provided by financing activities		1,607,068			9,655,398
Net increase (decrease) in cash		(3,901,980	)		2,837,759
Cash at beginning of the period		4,780,994			1,943,235
Cash at end of the period	$	879,014		$	4,780,994

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Naked Brand Group Inc.

Consolidated Statements of Cash Flows

(Expressed in US Dollars)

Supplemental Cash Flow Information
for the year ended January 31,	2018			2017
for the year ended January 31,	2017			2016
Cash flows from operating activities
Cash paid during the period for:
Net loss	$	(5,789,805	)	$	(10,798,503	)
Interest	$	20,909		$	70,923
Adjustments to reconcile net loss to net cash
Income Taxes		-			-
used in operating activities:
Non-cash financing activities:
Provision for doubtful accounts		(25,004	)		(4,730	)
Extinguishment of accounts payable with equity	$	-		$	12,000
Provision for obsolete inventory		(106,042	)		(14,216	)
Reclassification of derivative liability to additional paid in capital		-			3,091,050
Depreciation and amortization		-			13,215
Conversion of convertible debt to shares		224,000			7,169,809
Stock based compensation		2,519,792			5,348,647
Interest paid in shares		4,281			78,856
Changes in operating assets and liabilities:
Schedule 1 to the Statements of Cash Flows
Accounts receivable		(173,978	)		132,152
Profit and loss items not involving cash consists of:
Related party accounts receivable		(441,453	)		-
Stock based compensation	$	5,348,647		$	5,632,267
Related party advances receivable		(234,532	)		-
Compensation charge in connection with amendment of warrants		-			63,000
Due from factor		(106,339	)		-
Change in fair value of derivative financial instruments		-			(708,900	)
Prepaid expenses and deposits		298,424			460,086
Amortization of deferred financing fees		-			28,364
Inventory		750,421			(1,293,148	)
Accretion of debt discount		-			7,163,982
Trade payables and accrued liabilities		(506,567	)		767,968
	$	5,348,647		$	12,178,713
Interest payable		(7,279	)		5,535
Deferred costs		-			15,058
Deferred compensation		(37,037	)		(133,332	)
Net cash used in operating activities		(3,859,399	)		(5,501,268	)
Cash flows from investing activities
Acquisition of intangible assets		-			(7,780	)
Related party advances receivable		(306,201	)		-
Net cash used in investing activities		(306,201	)		(7,780	)
Cash flows from financing activities
Proceeds from share issuances, net		5,307,233			300,000
Repurchase of warrants		(50,000	)		-
Proceeds from share subscriptions received		-			1,655,003
Proceeds from the issuance of promissory notes		-			253,000
Repayments of promissory notes		(253,000	)		-
Proceeds from convertible promissory notes		-			224,000
Repayments of convertible promissory notes		-			(600,000	)
Repayments under factoring arrangements		(302,776	)		(1,274,935	)
Advances under factoring arrangements		-			1,050,000
Net cash provided by financing activities		4,701,457			1,607,068
Net increase (decrease) in cash		535,857			(3,901,980	)
Cash at beginning of the period		879,014			4,780,994
Cash at end of the period	$	1,414,871		$	879,014

The accompanying notes are an integral part of these consolidated financial statements.

F-7

Naked Brand Group Inc.

~~Notes~~Supplemental toCash ~~Consolidated~~Flow ~~Financial Statements~~Information

(Expressed in US Dollars)

Supplemental Cash Flow Information

for the year ended January 31,	2018		2017

Cash paid during the period for:
Interest	$	10,619	$	20,909
Income Taxes		-		-

Non-cash financing activities:
Extinguishment of accrued salary with equity	$	654,637	$	-
Conversion of convertible debt to shares		-		224,000
Interest paid in shares		-		4,281

Schedule 1 to the Statements of Cash Flows

Profit and loss items not involving cash consists of:
Stock based compensation	$	2,519,792	$	5,348,647


	$	2,519,792	$	5,348,647

The accompanying notes are an integral part of these consolidated financial statements.

F-8

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

January 31, 2018

(Expressed in US Dollars)

1.	Nature of Business

Naked Brand Group Inc. (the “Company”) is a manufacturer and seller of direct and wholesale men’s and women’s undergarments and intimate apparel inwithin ~~the United~~North ~~States~~America ~~and Canada~~ to consumers and retailers through its wholly owned subsidiary, Naked Inc. (“Naked”). The Company ~~currently~~ currently operates out of New York, United States of America.

~~Effective~~On ~~August~~May 1025, ~~2015~~2017, the Company ~~effected~~entered into aan ~~reverse~~Agreement ~~stock~~and ~~split~~Plan of ~~its~~Reorganization ~~common~~(the ~~stock~~“Merger onAgreement”), ~~the~~by ~~basis~~and ofamong ~~1:40.~~Bendon AsLimited, ~~such~~a New Zealand limited company (“Bendon”), ~~the~~Bendon ~~Company’s~~Group ~~authorized~~Holdings ~~capital~~Limited, ~~was~~an ~~decreased~~Australia ~~from~~limited company (“Holdco”), Naked Merger ~~450~~Sub Inc.,~~000,000~~ ~~shares~~a Nevada corporation and a wholly owned subsidiary of ~~common~~Holdco ~~stock~~(“Merger toSub”), 11and,~~250,000~~ ~~shares~~solely for the purposes of ~~common~~Sections ~~stock~~2.28 and an5.18(b) ~~aggregate~~ of 53the Merger Agreement,~~278~~ Bendon Investments Ltd.,~~818~~ ~~shares~~a ofNew ~~common~~Zealand ~~stock~~company ~~issued~~ and ~~outstanding~~the ~~were~~owner ~~decreased~~of toa ~~1,331,977~~majority of the outstanding shares of ~~common~~Bendon ~~stock.~~(the ~~These~~“Principal ~~financial~~Shareholder”), ~~statements~~pursuant ~~give~~to ~~retroactive~~which ~~effect~~Merger toSub ~~such reverse~~will ~~stock~~be ~~split~~merged with and ~~all~~into ~~share~~Naked ~~and~~(the ~~per~~“Merger”) ~~share~~with ~~amounts~~Naked ~~have~~as ~~been~~the ~~adjusted~~surviving ~~accordingly~~corporation.

On ~~December~~July 1926, ~~2016~~2017, ~~the~~Naked ~~Company~~ entered into Amendment aNo. ~~letter~~1 ~~of intent with Bendon Limited~~ (the “~~LOI~~Amendment”), to anthe ~~intimate~~Merger ~~apparel~~Agreement. ~~company~~The ~~based~~Amendment inprovides ~~New Zealand (“Bendon”)~~that, as ~~amended~~among onother ~~February 9~~things, ~~2017, March 9, 2017 and April 10, 2017, for a proposed merger of~~ the ~~companies,~~date ~~whereby a newly formed~~on ~~Australian~~which ~~holding~~Holdco ~~company (“NewCo”)~~ will beuse ~~formed~~best ~~which~~efforts ~~will~~to befile the ~~ultimate~~registration ~~parent~~statement ~~company of Bendon and the Company (the “Merger”). The LOI became binding~~ on ~~the~~Form ~~Company~~F-4 onin ~~January~~connection ~~12,~~with ~~2017 upon entry into certain purchase agreements. Upon consummation of~~ the ~~proposed~~ Merger, ~~NewCo~~has ~~will~~been ~~issue~~ extended to ~~the~~August ~~current~~25, ~~holders of the outstanding capital stock of Bendon an aggregate of 146~~2017,~~311,063~~ ~~ordinary~~and ~~shares of NewCo (the “~~Bendon ~~Shares”)~~has ~~and~~agreed ~~issue~~ to ~~the~~pay ~~Company~~certain apublic ~~number~~company ofoperating ~~ordinary shares~~expenses of ~~NewCo equal to the number of shares of outstanding common stock of the Company (the “~~Naked ~~Shares”)~~not ~~immediately prior~~ to ~~the~~exceed ~~Merger~~$130,000 ~~and as of the effective time of the Merger, no other shares of NewCo will be outstanding. In connection with~~per ~~the~~month ~~closing of the Merger, NewCo’s shares must be approved~~ for ~~listing on~~ the ~~NASDAQ~~months ~~Capital Market. Completion~~ of ~~the~~September ~~proposed Merger is further subject to the negotiation of a definitive merger agreement (the “Merger Agreement”), satisfaction of the conditions negotiated therein~~ and ~~approval~~October ~~of the proposed Merger by the Company’s stockholders~~2017.

On November 7, 2017, the Company and Bendon announced that Holdco confidentially submitted its response to comments from the SEC regarding the confidentially filed draft registration statement on Form F-4 related to the Merger. The parties continue to work towards completing the merger and finalizing the Form F-4 which is subject to SEC approval.

On February 21, 2018, Naked entered into Amendment No. 2 (the “Second Amendment”) to the Merger Agreement. The Second Amendment provides that, among other things;

·	The holders of the Naked Common Stock shall receive a number of Holdco Ordinary Shares so that upon the Closing, such holders will hold approximately 9.0% of the outstanding Holdco Ordinary Shares on a fully diluted basis, subject to certain adjustments set forth in the Merger Agreement.

Modifications to (i) the Per Share Stock Consideration, (ii) the adjustment provisions relating to Naked Closing Net Assets and Bendon Closing Net Debt, (iii) provisions relating to the conversion and assumption by Holdco of Naked Derivative Securities and (iv) the weighted average conversion price of Bendon Convertible Notes below which the Principal Shareholder is required to surrender Holdco Ordinary Shares in certain events, all which modifications resulted from certain capital structure changes at Holdco necessary for Holdco to satisfy initial listing requirements of the Nasdaq Capital Market.

·	Bendon shall pay to Naked, on a monthly basis until the Closing, an amount equal to Naked’s net operating loss for each such month (or portion thereof).

·	Naked is permitted to solicit alternative transactions if the Closing is not competed before the Outside Date or if Bendon fails to make the payments described above.

The extension of the Outside Date to April 28, 2018, subject to certain events that may extend such date to a date no later than May 7, 2018. In the event the Merger is not consummated before the Outside Date, either party may terminate the Merger Agreement subject to the satisfaction of certain conditions.

F-9

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

January 31, 2018

(Expressed in US Dollars)

Nature of Business – Continued

Naked would be required to issue 2,500,000 shares of its common stock in the event Bendon terminates the Merger Agreement if the Merger fails to occur on or before the Outside Date and such failure resulted from a material breach by Naked of its obligations under the Merger Agreement. Previously, the Merger Agreement provided that such shares would be issuable if the Merger was not consummated primarily as a result of actions or omissions by Naked. Also, the Amendment modified the Merger Agreement to eliminate the delisting of the Naked Common Stock from Nasdaq as an event that would trigger the issuance of such shares.

On March 19, 2018, Naked entered into Amendment No. 3 (the “Third Amendment”) to the Merger Agreement. The Third Amendment makes certain technical corrections, clarifications, and other changes to the Merger Agreement, including the following:

Clarifying that each issued and outstanding share of Naked Common Stock issued and outstanding immediately prior to the Effective Time (other than shares to be cancelled pursuant to Section 1.5(d) of the Merger Agreement) shall automatically be converted into the right to receive 0.2 Holdco Ordinary Shares;

Clarifying that the total number of shares constituting the Merger Consideration for Naked Common Stock shall not be less than 9.0% of the total number of Holdco Ordinary Shares issued and outstanding immediately following the Closing (and not on a fully diluted basis), subject to adjustment of the Bendon Target Share Number;

Adding a provision specifying that, so long as Naked does not incur any expenditures that in the aggregate exceed any line item in the Budget by more than 10% unless such excess is approved by the Budget Committee, the Net Assets Shortfall Amount or Net Assets Excess Amount, as applicable, shall be deemed to be less than $150,000 and no adjustment shall be made to the Bendon Target Share Number in respect thereof;

·	Correcting certain representations and covenants of Bendon, Holdco and Merger Sub in light of certain capital structure changes at Holdco necessary for Holdco to satisfy initial listing requirements of the Nasdaq Capital Market; and

·	Defining the term “Measurement Period” to mean the date on which the Securities and Exchange Commission informs Holdco that it has no further comments on the Registration Statement.

On April 23, 2018, Naked entered into Amendment No. 4 (the “Fourth Amendment”) to the Merger Agreement. The Fourth Amendment amended the Merger Agreement to reflect, among other things, the following:

The adjustment of the number of Holdco Ordinary Shares issuable to the shareholders of Bendon in the Reorganization will be calculated based upon Naked’s Net Assets and Bendon’s Net Debt as of the Closing instead of as of the date on which the Securities and Exchange Commission informs Holdco that it has no further comments on the Registration Statement. In addition, Naked will deliver the Estimated Naked Net Assets Statement and Bendon will deliver the Estimated Bendon Net Debt Statement at least five Business Days prior to the Closing Date. The adjustment of the number of Holdco Ordinary Shares issuable to the shareholders of Bendon in the Reorganization will be subject to a post-Closing true-up based on Naked’s actual Net Assets and Bendon’s actual Net Debt each as of the Closing Date.

·	Upon the consummation of the Reorganization, 22,680,527 Holdco Ordinary Shares will be outstanding, subject to adjustment as provided in the Reorganization Agreement in accordance with the Merger Agreement.

F-10

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

January 31, 2018

(Expressed in US Dollars)

1.	Nature of Business – Continued

·	The total number of shares constituting the Merger Consideration for Naked Common Stock shall not be less than 8.35% (instead of 9.0%) of the total number of Holdco Ordinary Shares issued and outstanding immediately following the Closing, subject to adjustment of the Bendon Target Share Number.

·	Changes in Naked’s Net Asset Amount from $5,400,000 to $3,500,000 (subject to adjustment as per the definition of Net Asset Amount) and in Bendon’s Net Debt Amount from $2,100,000 to $(8,500,000).

·	The extension of the Outside Date to June 1, 2018, subject to certain events that may extend such date to a date no later than June 11, 2018 and the extension of the date by which Bendon may deliver an Outside Date Breach Notice to May 22, 2018.

Immediately prior to the consummation of the Merger, Bendon and Holdco will consummate a reorganization (the “Reorganization”), pursuant to which all of the shareholders of Bendon will exchange all the outstanding ordinary shares of Bendon (the “Bendon Ordinary Shares”) for 146,311,063 ordinary shares of Holdco (“Holdco Ordinary Shares”), subject to certain potential adjustments pursuant to the Merger Agreement. As a result of the Reorganization and Merger, Bendon and Naked, respectively, will become wholly owned subsidiaries of Holdco and the shareholders of Bendon and the stockholders of Naked, respectively, will become the shareholders of Holdco.

The completion of the Merger is subject to the satisfaction or waiver of certain customary conditions, including, among others: (i) the accuracy of the other party’s representations and warranties; (ii) performance in all material respects by the other party of its obligations under the Merger Agreement; (iii) the listing of Holdco Ordinary Shares on the Nasdaq Capital Market or the New York Stock Exchange (“NYSE”), subject to official notice of issuance; (iv) the declaration of effectiveness by the SEC of the registration statement on Form F-4 filed by Holdco in connection with the transactions (the “Registration Statement”); (v) Naked stockholder’s approving the Merger Agreement and the transactions contemplated thereby at a meeting called for such purposes (the “Stockholder Meeting”); and (vi) other conditions as further described in the Merger Agreement.

The Merger Agreement also contains specified termination rights, including the right to terminate the Merger Agreement (i) by mutual agreement of the parties to terminate; (ii) by either party if (1) the Merger has not been consummated by May 1, 2018 (the “Outside Date”), except if the primary reason the Merger has not been consummated is because of the continued review of the Registration Statement by the SEC or the Holdco Ordinary Shares have not been approved for listing on the Nasdaq Capital Market or the NYSE, in which case the Outside Date shall be fifteen (15) days after the later of the completion of the Special Meeting and approval of all regulatory bodies and Nasdaq or the NYSE, (2) any law or order permanently prohibits consummation of the Merger, or (3) Naked stockholder approval is not obtained by the Outside Date; (iii) by either party if the other party has breached or failed to perform in any material respect any of its representations and warranties or covenants under the Merger Agreement such that a closing condition is not satisfied (subject to notice and cure and other customary exceptions); and (iv) by Naked if (1) Bendon substantially changes its business as conducted as of the date of the Merger Agreement, or (2) Naked accepts a Superior Proposal (as defined in the Merger Agreement).

F-11

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

January 31, 2018

(Expressed in US Dollars)

Ability to Continue as a Going Concern

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) on a going concern basis, which assumes that the Company will continue to realize its assets and discharge its obligations and commitments in the normal course of operations. Realization values may be substantially different from carrying values as shown and these consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern.

As of January 31, ~~2017~~2018, the Company had not yet achieved profitable operations, incurred a net loss of $105,~~798~~789,~~503~~805 during the year ended January 31, ~~2017~~2018, had an accumulated ~~deficit~~ deficit of $5762,~~179~~969,~~583~~388 and expects to incur significant further losses in the development of its business, which casts substantial ~~doubt~~ doubt about the Company’s ability to continue as a going concern. Per the Merger Agreement, Bendon is required to fund all operating losses until closing. Due to this amendment, we believe we have sufficient working capital to implement our proposed business plan over the next 12 months. To remain a going concern, in the event the Merger is not completed, the Company will be required to obtain the necessary financing to pursue its plan of operation. Management plans to obtain the necessary financing through the issuance of equity and/or debt. Should the Company not be able to obtain this financing, it may need to substantially scale back operations or cease business. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

F-8

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

(Expressed in US Dollars)

Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Accounting

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Naked. All inter-company transactions and balances have been eliminated.

Reporting Currency and Foreign Currency

The functional currency of the Company is the US dollar. Transaction amounts denominated in foreign currencies are translated into their US dollar equivalents at exchange rates prevailing at the transaction dates. Financial instruments denominated in foreign currencies are revalued each period at exchange rates prevailing at each balance sheet date until settled. Foreign currency gains and losses on transactions or settlements are recognized in the consolidated statement of operations.

These consolidated financial statements have been presented in US dollars, which is the Company’s reporting currency.

Basis of Presentation

The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in accordance with GAAP in the United States of America.

Segment Reporting

The Company used several factors in identifying and analyzing reportable segments, including the basis of organization, such as differences in products and services, and geographical areas. The Company’s chief operating decision makers review financial information presented on a consolidated basis for the purposes of making operating decisions and assessing financing performance. Accordingly, the Company has determined that as of January 31, ~~2017~~2018 and ~~2016~~2017, there is only a single reportable operating segment.

The Company operates in one industry, the manufacture and sale of direct and wholesale undergarments. Revenues from external customers are all derived from customers located within North America as follows:F-12

	2017		2016
United States	$	1,812,120	$	1,090,024
Canada and other		29,945		299,390
	$	1,842,065	$	1,389,414

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

January 31, 2018

(Expressed in US Dollars)

At January 31, 2016, the net book value of long-lived assets all located within North America were as follows:

	2017				2016
		Equipment		Intangible assets		Equipment		Intangible assets
United States	$	-	$	61,518	$	7,091	$	53,738
Canada		-		19,357		6,124		19,357
	$	-	$	80,875	$	13,215	$	73,095

F-9

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

(Expressed in US Dollars)

Summary of Significant Accounting Policies (Continued)

	2018		2017

United States	$	2,738,948	$	1,812,120
Canada and other		120,935		29,945

		$2, 859,884	$	1,842,065

At January 31, 2018, the net book value of long-lived assets all located within North America were as follows:

	2018				2017
	Equipment		Intangible assets		Equipment		Intangible assets

United States	$	-	$	61,518	$	-	$	61,518
Canada		-		19,357		-		19,357

	$	-	$	80,875	$	-	$	80,875

Revenue Recognition, Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable consist of amounts due from customers and are recorded upon the sale of product to customers. Credit terms are extended to customers in the normal course of business and no collateral is required. The Company estimates an allowance for doubtful accounts based on historical losses, the existing economic conditions and the financial stability of its customers. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received.

Inventory

Inventory is stated at the lower of cost or ~~market~~or net realizable value. Cost is determined using the weighted average method, which under the circumstances, management believes will provide for the most practical basis for the measurement of periodic income. Management periodically reviews inventory for slow moving or obsolete items and considers realizability based on the Company’s marketing strategies and sales forecasts to determine if an allowance is necessary. If ~~market~~net realizable value is below cost, then an allowance is created to adjust the carrying amount of inventory.

Equipment

Equipment is recorded at cost. Equipment is depreciated using the straight-line method over the estimated useful lives.

F-13

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

January 31, 2018

(Expressed in US Dollars)

3.	Summary of Significant Accounting Policies (Continued)

The estimated useful lives for each asset group are as follows:

		Years

Furniture and equipment		5
Computer equipment		2

At the time depreciable property is retired or otherwise disposed of the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is reflected in the consolidated statement of operations.

Intangible Assets

Indefinite-life intangible assets, consisting of costs to acquire trademarks with an indefinite life, are recorded at cost, net of impairment charges, if applicable. No amortization has been taken on indefinite life intangible assets. Indefinite-life intangible assets are reviewed for impairment annually and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

F-10

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

(Expressed in US Dollars)

3. Summary of Significant Accounting Policies (Continued)

Website Costs

The Company recognizes the costs associated with developing a website in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350–40, Website development costs (“ASC 350-40”).

Internal and external costs incurred during the preliminary project stage are expensed as they are incurred. Internal and external costs incurred to develop internal–use computer software during the application development stage are capitalized. Training costs are not internal–use software development costs and, if incurred during this stage, are expensed as incurred.

These capitalized costs are amortized based on their estimated useful life over two years.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the related carry amounts may not be recoverable. Such a review involves assessing qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that a long-lived asset is impaired.

If the Company assesses that there is a ~~likelihood~~ likelihood of impairment, then the Company will perform a quantitative analysis comparing the carrying value of the assets with the estimated future net undiscounted cash flows expected to result from the use of the assets, including cash flows from disposition. ~~Should~~ Should the sum of the expected future net cash flows be less than the carrying value, the Company would recognize an impairment loss at that date for the amount by which the carrying amount of the asset exceeds its fair value. Management has determined that no impairment has been identified in the years ended January 31, ~~2017~~2018 or ~~2016~~2017.

Shipping and Handling Costs

Costs associated with the Company’s third-party shipping, warehousing and handling activities are included within operating expenses on the consolidated statements of operations.

(i) Shipping costs associated with marketing related promotions are included as a component of general and administrative expenses. These shipping costs were $146,~~430~~649 for the year ended January 31, ~~2017~~2018 ($1014,~~440~~430 for the year ended January 31, ~~2016~~2017).

~~(ii) Shipping costs billed to customers are recorded as revenues and related out~~F-~~bound shipping costs incurred by the Company are recorded as cost of sales.~~14

~~(iii)~~Naked ~~Warehousing~~Brand ~~and~~Group ~~handling~~Inc. ~~costs,~~Notes ~~and shipping costs associated with transfers of inventory~~ to ~~and~~Consolidated ~~from~~Financial ~~third~~StatementsJanuary party warehouses to the Company’s warehouse are included in general and administrative expense as warehouse management. These warehousing, shipping and handling costs were $319,830 for the year ended January 31, ~~2017~~ 2018(~~$404,092~~Expressed ~~for~~in ~~the~~US ~~year ended January 31, 2016~~Dollars).

F-11

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

(Expressed in US Dollars)

Summary of Significant Accounting Policies (Continued)

(ii)

Shipping costs billed to customers are recorded as revenues and related out-bound shipping costs incurred by the Company are recorded as cost of sales.

(iii)

Warehousing and handling costs, and shipping costs associated with transfers of inventory to and from third party warehouses to the Company’s warehouse are included in general and administrative expense as warehouse management. These warehousing, shipping and handling costs were $137,369 for the year ended January 31, 2018 ($319,830 for the year ended January 31, 2017).

Advertising Expense

The Company expenses advertising costs to operations during the period in which they are incurred. The Company expensed $~~252~~139,~~895~~650 and $~~201~~252,~~198~~895 related to advertising for the years ended January 31, ~~2017~~2018 and ~~2016~~2017, respectively.

Income Taxes

The current income tax represents the amount of income taxes expected to be paid or the benefit expected to be received for the current year taxable income or loss. Deferred income taxes are recognized for the future tax consequences of temporary differences arising between the carrying value of assets and liabilities for financial statement and tax reporting purposes. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

In assessing the recoverability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considers projected future taxable income and tax planning strategies in making this assessment.

The Company recognizes the impact of a ~~tax~~ tax position in the consolidated financial statements if the position is more likely than not to be sustained upon examination on the technical merits of the position. The Company’s policy is to recognize interest accrued related to unrecognized tax ~~benefits~~ benefits and penalties as income tax expense. The Company has no uncertain tax positions as of January 31, ~~2017~~2018 and ~~2016~~2017, respectively; consequently, no interest or penalties have been accrued by the Company.

Fair Value of Financial Instruments

The Company accounts for its financial assets and liabilities in accordance with ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value hierarchy contains three levels of inputs that may be used to measure fair value as follows:

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals; and

~~Level 3 inputs are unobservable inputs for the asset or liability which are typically based on an entity’s own assumptions, as there is little, if any, related market activity.~~F-15

~~F-12~~Naked Brand Group Inc. Notes to Consolidated Financial StatementsJanuary 31, 2018(Expressed in US Dollars)

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

(Expressed in US Dollars)

Summary of Significant Accounting Policies (Continued)

Level 3 inputs are unobservable inputs for the asset or liability which are typically based on an entity’s own assumptions, as there is little, if any, related market activity.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The Company’s financial instruments ~~consist~~ consist of cash, accounts receivable, accounts payable, notes payable, and convertible promissory notes. Other than convertible ~~promissory~~ promissory notes, the fair values of these financial instruments approximate their respective carrying values because of the short ~~maturity~~ maturity of these instruments. The Company determined that the aggregate fair value of promissory notes payable outstanding at January 31, ~~2017~~ 2018 and ~~2016~~2017, based on Level 2 inputs in the fair value hierarchy, was equal to their aggregate book value based on the short maturities and current borrowing rates available to the Company.

The fair value of the Company’s convertible promissory notes is based on Level 3 inputs in the fair value hierarchy. The Company calculated the fair value of these notes by discounting future cash flows using rates representative of current borrowing rates for debt instruments without a conversion feature and by using the Black Scholes option pricing model to determine the fair value of the conversion feature using the following assumptions:

	2017		2016
Risk-free interest rate	-		0.33	%
Expected life (years)	-		0.67
Expected volatility (1)	-		91.47	%
Stock price	-	$	2.79
Dividend yields	-		0.00	%

(1) Where the Company has insufficient historical data on which to estimate expected future share price volatility, the Company has estimated expected share price volatility based on the historical share price volatility of comparable entities.

There were no convertible promissory notes outstanding at January 31, 2017. The Company determined that the fair value of the convertible promissory notes at January 31, 2016 was $567,776, based on a market interest rate of 18%.

Debt issuance costs

The Company incurs costs in connection with debt issuances, such as commissions and professional fees. Debt issuance costs are initially recorded as a reduction of the related debt on the consolidated balance sheets, and are amortized to financing expense over the term of the respective borrowings using the effective interest method.

Any costs incurred or paid to the lender in connection with the issuance of debt represent a reduction in the proceeds received by the Company. The resulting discount is amortized as accretion expense over the term of the debt using the effective interest method.

F-13

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

(Expressed in US Dollars)

3. Summary of Significant Accounting Policies (Continued)

Derivative Financial Instruments

The Company evaluates stock options, stock warrants and other contracts to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for under the relevant sections of ASC 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity (“ASC 815”). The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative financial instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative financial instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC 815 are reclassified to a liability account at the fair value of the instrument on the reclassification date.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Derivative instruments that become subject to reclassification are reclassified at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not settlement of the derivative instrument is expected within 12 months of the balance sheet date.

The Company estimates the fair value of these instruments using the binomial option pricing model. This model uses Level 3 inputs in the fair value hierarchy established by ASC 820.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

Actual results could materially differ ~~from~~ from those estimates. The most significant estimates made by the Company are those relating to uncollectible receivables, inventory valuation and obsolescence, product returns, stock-based compensation, and derivative valuations.

F-14

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

(Expressed in US Dollars)

3. Summary of Significant Accounting Policies (Continued)

Loss per share

Earnings or loss per share (“EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding for the period. ~~Diluted EPS is computed by dividing net income (loss) by the weighted-average of all potentially dilutive shares of common stock that were outstanding during the periods presented.~~

The treasury stock method is used in calculating diluted EPS for potentially dilutive stock options and share purchase warrants, which assumes that any proceeds received from the exercise of in-the-money stock options and share purchase warrants, would be used to purchase common stock at the average market price for the period.

~~EPS for convertible debt is calculated under the “if~~F-converted” method. Under the if converted method, EPS is calculated as the more dilutive of EPS (i) including all interest (both cash interest and non-cash discount amortization) and excluding all shares underlying the convertible debt or; (ii) excluding all interest and costs directly related to the convertible debt (both cash interest and non-cash discount amortization) and including all shares underlying the convertible debt. For the years ended January 31, 2017 and 2016, diluted EPS was calculated by including interest expense related to the convertible debt and excluding the shares underlying the convertible debt.16

~~Net~~Naked ~~loss~~Brand ~~per~~Group ~~share~~Inc. ~~was~~Notes ~~determined~~to asConsolidated ~~follows:~~Financial StatementsJanuary 31, 2018(Expressed in US Dollars)

	2017			2016
Numerator
Net loss	$	(10,798,503	)	$	(19,063,399	)
Denominator Weighted average shares outstanding		6,092,688			1,881,901
Effect of dilutive securities
Warrants and options		-			-
Convertible debt		-			-
Diluted weighted average shares outstanding		6,092,688			1,881,901
Basic net loss per share	$	(1.77	)	$	(10.13	)
Diluted net loss per share	$	(1.77	)	$	(10.13	)
Anti-dilutive securities not included in diluted loss per share relating to:
Warrants and options outstanding		3,914,409			3,836,472
Convertible debt		-			60,000
		3,914,409			3,896,472

F-15

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

(Expressed in US Dollars)

Summary of Significant Accounting Policies (Continued)

Net loss per share was determined as follows:

	2018			2017
Numerator
Net loss	$	(5,789,805	)	$	(10,798,503	)

Denominator
Weighted average shares outstanding		10,073,504			6,092,688
Effect of dilutive securities
Warrants and options		-			-
Diluted weighted average shares outstanding		10,073,504			6,092,688
Basic net loss per share	$	(0.57	)	$	(1.77	)
Diluted net loss per share	$	(0.57	)	$	(1.77	)
Anti-dilutive securities not included in diluted loss per share relating to:
Warrants and options outstanding		4,684,701			3,914,409
		4,684,701			3,914,409

Accounting for Stock-Based Compensation

ASC Topic 718, Compensation – Stock Compensation (“ASC 718”), requires that compensation expense for employee stock-based compensation be recognized over the requisite service period based on the fair value of the award, at the date of grant.

The Company accounts for the granting of ~~equity~~ equity-based awards to employees using the fair value method whereby all awards to employees will be recorded at fair value on the date of the grant. The fair value of all equity -based awards is expensed over their vesting period with a corresponding increase to to additional paid in capital. Compensation costs for stock-based payments to employees with graded vesting are recognized on a straight-line basis. The amount of cumulated compensation expense recognized at any date must at least equal the portion of the grant date value of the award that is vested at that date.

Based on guidance in ASC 505-50, stock-based payments to non-employees are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The fair value of stock-based payments to non-employees is periodically re-measured until the counterparty performance is complete, and any change therein is recognized over the vesting period of the award. Compensation costs for stock-based payments with graded vesting are recognized on a straight-line basis. The cost of the stock-based payments to non-employees that are fully vested and non-forfeitable as at the grant date are measured and recognized at that date, unless there is a contractual term for services in which case such compensation would be amortized over the contractual term.

F-17

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

January 31, 2018

(Expressed in US Dollars)

3.	Summary of Significant Accounting Policies (Continued)

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB, which are adopted by the Company as of the specified date. Unless otherwise discussed, management believes the impact of recently issued standards, which are not yet effective, will not have a material impact on our consolidated financial statements upon adoption.

Recently Adopted Accounting Pronouncements

In ~~June 2014~~November 2015, the ~~Financial Accounting Standards Board (“~~FASB”) issued Accounting Standards Update ~~(“ASU”)~~ No. ~~2014-12,~~ ~~Accounting~~2015-17 ~~for~~“Income ~~Share-Based Payments~~Taxes: ~~When~~Balance ~~the~~Sheet ~~Terms~~Classification of anDeferred ~~Award~~Taxes ~~Provide That a Performance Target Could Be Achieved after the Requisite Service Period~~ (“ASU ~~2014~~ 2015-1217”). ASU ~~2014~~ 2015-~~12 requires~~17 ~~that~~eliminates athe ~~performance~~requirement ~~target~~to ~~that~~bifurcate ~~affects~~deferred ~~vesting,~~taxes ~~and~~between ~~that~~current ~~could~~and benon-current ~~achieved~~on ~~after~~ the ~~requisite service~~ ~~period,~~balance besheet ~~treated~~and asrequires athat ~~performance~~deferred ~~condition.~~tax Asliabilities ~~such,~~and ~~the~~assets ~~performance target should not~~ be ~~reflected~~classified inas ~~estimating~~noncurrent ~~the~~on ~~grant date fair value of~~ the ~~award~~balance sheet. ~~This~~ASU ~~update~~2015-17 was ~~further~~effective ~~clarifies~~for ~~that~~public ~~compensation~~entities ~~cost should be recognized~~ in ~~the~~fiscal ~~period~~years inbeginning ~~which it~~after ~~becomes~~December 15, ~~probable~~2016, ~~that~~and ~~the~~for ~~performance~~interim ~~target~~periods ~~will~~within bethose fiscal ~~achieved~~years. ~~and~~The ~~should~~standard ~~represent~~became ~~the~~effective ~~compensation cost attributable to the period(s)~~ for ~~which~~ the ~~requisite service has already been rendered. The~~ Company ~~adopted this standard~~ on February 1, ~~2016~~2017. The adoption of this standard did not have any effect on its financial condition, results of operations and cash flows.

FIn July 2015, the FASB issued ASU No. 2015-1611, Simplifying the Measurement of Inventory (“ASU 2015-11”) which requires a company to change the measurement principal for inventory measured using the FIFO or average cost method from the lower of cost or market to the lower of cost and net realizable value. Treatment of inventory valued under the last-in, first-out (“LIFO”) method is unchanged by this guidance. The new guidance must be applied prospectively and was effective for fiscal years beginning after December 15, 2016, and interim periods within those years. The standard became effective for the Company on February 1, 2017. The adoption of this standard did not have any effect on its financial condition, results of operations and cash flows.

~~Naked~~In ~~Brand~~March ~~Group~~2016, ~~Inc~~the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). ASU 2016-09 was issued as part of the FASB’s simplification initiative and affects all entities that issue share-based payment awards to their employees. The amendments in this update cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures which the Company did not elect to adopt, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. ASU 2016-09 was effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The standard became effective for the Company on February 1, 2017. The adoption of this standard did not have any effect on its financial condition, results of operations and cash flows.

~~Notes~~Accounting toPronouncements ~~Consolidated~~Not ~~Financial~~Yet ~~Statements~~Effective

~~(Expressed~~Unless otherwise discussed, management believes inthe USimpact ~~Dollars)~~of recently issued standards, which are not yet effective, will not have a material impact on our consolidated financial statements upon adoption.

F-18

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

January 31, 2018

(Expressed in US Dollars)

3.	Summary of Significant Accounting Policies (Continued)

In ~~August~~May 2014, the FASB issued ASU No. 2014-1509, ~~Disclosure~~Revenue offrom ~~Uncertainties~~Contracts ~~about~~with anCustomers ~~Entity’s~~(“ASU ~~Ability~~2014-09”). toASU ~~Continue~~2014-09 asprovides a ~~Going~~five-step ~~Concern~~analysis ~~(“ASU~~of ~~2014-15”)~~transactions to determine when and how revenue is recognized. The premise of ASU 2014-~~15 will~~09 ~~explicitly~~is ~~require~~that ~~management~~a company should recognize revenue to ~~assess~~depict the antransfer ~~entity’s~~of ~~ability~~promised goods or services to ~~continue~~customers asin aan ~~going~~amount ~~concern,~~that ~~and~~reflects the consideration to ~~provide~~which ~~related~~the ~~footnote~~entity expects ~~disclosure~~to be entitled in ~~certain~~exchange ~~circumstances.~~for ~~This~~those ~~standard~~goods ~~was~~or ~~effective~~services. ~~for~~ASU ~~and~~2014-09 can be adopted by the Company either retrospectively or as ina ~~fiscal~~cumulative-effect ~~2017.~~adjustment ~~The~~as ~~adoption~~of the date of ~~this~~adoption. ~~standard~~On ~~did~~April ~~not~~1, ~~have~~2015, athe ~~material~~FASB ~~impact~~decided onto defer the ~~Company’s~~effective ~~consolidated~~date ~~financial~~of ~~position,~~ASU ~~results~~2014-09 ofby ~~operations~~one oryear. ~~cash~~As ~~flows~~a result, public entities would apply ASU 2014-09 to annual reporting periods beginning after December 15, 2017.

InThe ~~April~~Company’s ~~2015,~~assessment of the ~~FASB~~guidance in ~~issued~~ ASU ~~No. 2015~~2014-~~03, Interest -~~09 ~~Imputation~~has identified the majority of ~~Interest~~revenue ~~(Subtopic~~streams ~~835~~will be impacted by ASU 2014-~~30)~~09 including transactions such as wholesale customer support costs, e-commerce ~~Simplifying~~direct to consumer programs, and customer related returns. The Company will adopt this standard on February 1, 2018 using the ~~Presentation~~modified retrospective method. The Company has substantially completed its assessment of ~~Debt~~its ~~Issuance~~revenue practices. ~~Costs~~Based (“on the evaluation performed to date, it does not expect the adoption of ASU ~~2015~~2014-~~03”),~~09 ~~which~~to have a material effect ~~requires~~on ~~debt~~income ~~issuance~~from ~~costs~~operations, ~~related~~the Company expects to record a ~~recognized~~change ~~debt~~to ~~liability~~retained earnings upon adoption totaling $15,667 related to new berefund ~~presented~~and incontract liabilities adopted under the ~~balance~~new ~~sheet~~guidance. asThe aCompany ~~direct~~also ~~deduction~~expects to implement changes to presentation ~~from~~within the ~~debt~~consolidated ~~liability~~financial ~~rather~~statements, ~~than~~which aswill aninclude ~~asset.~~the Inseparation ~~addition~~of contract assets, contract liabilities and receivables due from customers on the ~~FASB~~statement ~~issued~~of ~~ASU~~financial Noposition. ~~2015-15~~In addition, ~~Presentation~~ ~~and~~the ~~Subsequent Measurement~~Company ofwill ~~Debt~~implement ~~Issuance~~the ~~Costs~~addition ~~Associated~~of ~~with~~a ~~Line-of-Credit~~refund ~~Arrangements:~~liability which ~~Amendments~~will tobe ~~SEC~~calculated ~~Paragraph~~based ~~Pursuant~~on toan ~~Staff~~allowance ~~Announcement at~~return, ~~June~~adjusted 18quarterly, ~~2015~~based ~~EITF~~on ~~Meeting (“ASU~~historical ~~2015-15”)~~actual refund percentages of 3.2%, and ~~which~~a ~~permits~~loyalty ~~entities~~program tocontract ~~defer~~liability, ~~and~~adjusted ~~present~~quarterly, ~~debt~~based ~~issuance~~on ~~costs related~~historical toloyalty ~~line-of-credit~~amounts ~~arrangements~~redeemed asof ~~assets~~5.6%, ~~and~~both ~~was~~of ~~adopted~~which will ~~concurrently~~be ~~with~~analyzed ~~ASU~~quarterly ~~No.~~for ~~2015-03~~reasonableness. ~~The~~ASU ~~Company~~2014-09 ~~adopted~~will ~~these standards~~also onrequire aexpanded ~~retroactive~~disclosures ~~basis~~related onto ~~February~~revenue 1streams, ~~2016.~~performance obligations ~~Adoption~~and ofconsideration ~~this~~and ~~standard~~the ~~resulted~~related judgements used in developing the ~~reclassification~~necessary ofestimates. ~~$15,058~~In inorder to comply with the ~~deferred~~guidance, ~~financing~~beginning ~~costs~~on atFebruary ~~January~~1, 312018, ~~2016~~the ~~from~~Company ~~assets~~will toenact a ~~deduction~~change ~~from~~in ~~the~~its ~~related~~revenue ~~debt~~recognition ~~liability.~~policy and estimates per below;

~~Accounting~~i. ~~Pronouncements~~Change ~~Not~~in ~~Yet~~Revenue ~~Adopted~~Recognition Policy

InSales ~~May~~are ~~2014,~~recorded ~~the~~when ~~Financial Accounting Standards~~persuasive ~~Board~~evidence ~~("FASB")~~of ~~issued~~a ~~Accounting~~contract ~~Standards~~exists, ~~Update~~performance obligation(~~"ASU"~~s) ~~2014-09,~~under ~~"Revenue~~contract ~~from~~have ~~Contracts~~been ~~with~~completed, ~~Customers". The~~and ~~new~~indicators ~~revenue~~of ~~recognition~~the ~~standard~~transfer ~~provides a five-step analysis~~ of control ~~transactions~~have tobeen ~~determine~~deemed ~~when~~satisfied ~~and~~under ~~how~~ASC ~~revenue is recognized~~606. ~~The~~ ~~premise~~This ofoccurs when the ~~guidance~~title isand ~~that~~risks aand ~~Company~~rewards ~~should recognize revenue to depict the transfer~~ of ~~promised~~ownership ~~goods~~have orpassed ~~services~~ to ~~customers in an amount that reflects~~ the ~~consideration~~customer, ~~to which~~ the ~~entity~~assets ~~expects~~are ~~to be entitled~~ in ~~exchange~~physical ~~for~~possession ~~those goods~~ and/or ~~services.~~ ~~ASU~~have ~~2014-09~~been ~~can~~accepted ~~be adopted~~ by the ~~Company~~customer ~~either~~and ~~retrospectively or as a cumulative-effect adjustment as of~~ the ~~date of~~obligation ~~adoption. On April 1, 2015, the FASB decided~~ to ~~defer~~pay ~~the~~is ~~effective date of the new revenue standard by one year~~present. ~~As a result,~~ ~~public~~We ~~entities~~elect ~~would apply the new revenue standard~~ to ~~annual~~consider ~~reporting~~shipping ~~periods~~and ~~beginning~~handling ~~after~~activities ~~December~~as ~~15,~~a ~~2017.~~fulfillment ~~The~~activity ~~Company is~~and ~~currently~~to ~~evaluating~~record the ~~impact~~costs ~~this~~of ~~guidance~~fulfillment ~~will~~as ~~have~~a ~~on its financial condition, results~~ cost of ~~operations and cash flows~~sale.

InAll ~~November 2015, the~~sales ~~FASB~~are ~~issued~~accounted ~~Accounting~~for ~~Standards Update No. 2015-17 “Income Taxes: Balance Sheet Classification of Deferred Taxes~~utilizing ~~(“ASU 2015-17”). ASU 2015-17 eliminates~~ the ~~requirement~~expected totransaction ~~bifurcate~~price ~~deferred~~which ~~taxes~~is ~~between~~adjusted ~~current~~for ~~and~~variable ~~non-current on~~considerations ~~the~~including ~~balance~~customary ~~sheet~~business ~~and~~practices ~~requires~~such ~~that deferred tax liabilities and assets be classified~~ as ~~noncurrent on the balance sheet. ASU~~rights ~~2015-17~~of isreturn, ~~effective~~loyalty ~~for public entities in fiscal years beginning after December 15~~programs, ~~2016, and for interim periods within those fiscal years. The amendments for ASU~~co-~~2015-17~~op ~~can~~advertising, ~~be applied retrospectively or prospectively~~ and ~~early~~department ~~adoption~~store ~~is permitted~~markdowns. ~~The adoption of this standard is not expected to have a material impact for any period presented.~~

~~In February 2016, FASB issued ASU 2016-02, Leases~~ii. ~~The~~Change ~~guidance~~in would require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right –of-use assets. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2018. The Company is currently evaluating the impact of its pending adoption of ASU 2016-02 on its consolidated financial statements.Estimates

~~F-17~~We make certain estimates and adjustments to revenue to account for its contracts with customers. We estimate an allowance and reduction of revenue for customers with contracts which allow them variable sales price adjustments through the period to allow for markdowns at retail, advertising and other allowances. An allowance of $58,145 (2017: $123,381) has been estimated at January 31, 2018.

~~Naked~~We ~~Brand~~offer ~~Group~~varying ~~Inc~~levels of right of returns to customers. To account for the right of return, an estimate is made at the end of the period to account for expected returns. The estimate is based on historical return rates of 3.2%.

~~Notes to Consolidated Financial Statements~~F-19

Naked Brand Group Inc. Notes to Consolidated Financial StatementsJanuary 31, 2018(Expressed in US Dollars)

3.	Summary of Significant Accounting Policies (Continued)

~~In March~~A ~~2016,~~return ~~the~~allowance ~~FASB~~of ~~issued ASC 2016-09~~$12, ~~“Compensation – Stock Compensation (Topic 718) – Improvements to~~000 ~~Employee~~has ~~Share-Based~~been ~~Payment~~estimated ~~Accounting”~~at ~~(“ASU~~January ~~2016-09”)~~31, 2018. These ~~amendments~~estimates are ~~intended~~adjusted to ~~simplify~~actual ~~several aspects~~in of the ~~accounting~~corresponding for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. These amendments are effective for annual and interim reporting periods ~~beginning on or after December 15, 2016~~. Early adoption is permitted. Entities have the option to apply the amendments on either a prospective basis or a modified retrospective basis. The Company is currently evaluating the impact this guidance will have on its financial condition, results of operations and cash flows.

The company also estimates the date of receipt of goods to customers utilizing a five (5) day delivery window, which includes two (2) days of lead time and three (3) day shipping time rather than following tracking information and delivery notices. This method is an acceptable estimate of the delivery of goods and not material to users of the financial statements as the variance would not produce material differences.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 provides guidance that addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 will be effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. ASU 2016-01 will be effective for the Company on February 1, 2018. The Company is currently evaluating the impact this guidance will have on its financial condition, results of operations and cash flows.

In February 2016, FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 would require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right–of-use assets. ASU 2016-02 is effective for annual and interim reporting periods beginning on or after December 15, 2018. The Company currently does not have any leases and therefore does not expect the impact of ASU 2016-02 to have any material effect on the periods presented.

In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, “Compensation–Stock Compensation (Topic 718): Scope of Modification Accounting,” clarifying when a change to the terms or conditions of a share-based payment award must be accounted for as a modification. The new guidance requires modification accounting if the fair value, vesting condition or the classification of the award is not the same immediately before and after a change to the terms and conditions of the award. The new guidance is effective for the Company on a prospective basis beginning on February 1, 2018, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its financial condition, results of operations and cash flows.

F-20

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

January 31, 2018

(Expressed in US Dollars)

4.	Inventory

Inventory of the Company consisted of the ~~following~~ following at January 31, ~~2017~~2018 and ~~2016~~2017:

	2017			2016
	2018			2017
Finished goods	$	21,~~604~~106,~~597~~413		$	12,~~308~~604,~~442~~597
Raw material		-			3,007
Inventory consigned to related party (1)		747,763			-
		2,604,597			1,311,449
		1,854,176			2,604,597
Less: allowance for obsolete inventory		(~~375~~269,~~784~~742	)		(~~390~~375,~~000~~784	)
Total inventory	$	21,~~228~~584,~~813~~434		$	~~921~~2,~~449~~228,813

~~Balances~~(1) atSee ~~January~~note ~~31,~~8 ~~2017~~for ~~and~~details ~~2016~~regarding ~~are~~inventory ~~recorded at~~on ~~historical~~consignment ~~cost,~~to ~~less~~a ~~amounts~~related ~~for potential declines in value.~~party

Balances at January 31, 2018 and 2017 are recorded at historical cost, less amounts for potential declines in value.

5.	Equipment

Equipment of the Company consisted of the ~~following~~ following at January 31, ~~2017~~2018 and January 31, ~~2016~~2017:

	2017			2016
	2018			2017
Furniture & equipment	$	10,250		$	10,250
Computer equipment		26,082			26,082
		36,332			36,332
Less: Accumulated depreciation		(36,332	)		(2336,~~117~~332	)
	$	-		$	~~13,215~~-

Depreciation expense for the year ended ~~January~~ January 31, ~~2017~~2018 was $~~13,215~~Nil (~~2016~~2017: $13,~~047~~215).

~~F-18~~6. Intangible Assets

~~Naked~~Intangible ~~Brand~~assets ~~Group~~of ~~Inc.~~the Company consisted of the following at January 31, 2018 and 2017:

Notes to Consolidated Financial Statements

	2018			2017			Useful life (Years)

Trade Names/Trademarks	$	80,875		$	80,875		Indefinite
Website		49,512			49,512		2

		130,387			130,387
Less: accumulated amortization		(49,512	)		(49,512	)

	$	80,875		$	80,875

~~(Expressed~~Amortization expense for the year ended inJanuary US31, ~~Dollars~~2018 was $Nil (2017: $Nil).

~~5. Equipment (Continued)~~F-21

~~Intangible~~Naked ~~Assets~~Brand Group Inc. Notes to Consolidated Financial StatementsJanuary 31, 2018(Expressed in US Dollars)

~~Intangible~~7. ~~assets~~Accounts ofPayable ~~the Company consisted of the following at January 31, 2017~~ and ~~2016:~~Accrued Liabilities

	2017			2016			Useful life (Years)
Trade Names/Trademarks	$	80,875		$	73,095		Indefinite
Website		49,512			49,512		2
		130,387			122,607
Less: accumulated amortization		(49,512	)		(49,512	)
	$	80,875		$	73,095

Accounts payable and accrued liabilities consisted of the following at January 31, 2018 and 2017:

Amortization expense for the year ended January 31, 2017 was $Nil (2016: $4,375).

	2018		2017

Trade payables	$	375,252	$	897,474
Accrued payroll		13,521		641,044
Accrued expenses		199,580		176,436
Sales taxes payable		6,070		5,468
Customer deposits and unearned revenue		5,988		9,922
Other payables		-		31,023

	$	600,411	$	1,761,367

68. ~~Accounts~~Related ~~Payable~~Party Transactions and ~~Accrued Liabilities~~Balances

Accounts payable and accrued liabilities consisted of the following at January 31, 2017 and 2016:

	2017		2016
Trade payables	$	897,474	$	486,967
Accrued payroll		641,044		283,864
Accrued expenses		176,436		211,234
Sales taxes payable		5,468		5,215
Customer deposits and unearned revenue		9,922		6,119
Other payables		31,023		-
	$	1,761,367	$	993,399

F-19

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

(Expressed in US Dollars)

7. Related Party Transactions and Balances

Related Party Balances

AtOn ~~January~~October 314, 2017, ~~included~~the inCompany ~~accounts payable~~entered ~~and~~into ~~accrued~~a ~~liabilities~~consignment isagreement ~~$129~~with Bendon to consign 155,~~186~~624 ~~(2016:~~units of finished goods inventory, in the value of $431,~~089)~~189,072, ~~owing~~for the topurpose ~~directors~~of facilitating a sale of the consigned goods by the consignee, per note 4. The agreement is effective as of October 4th and ~~officers~~will continue for a period of twelve months with the ~~Company~~ability to extend the term for ~~reimbursable~~an ~~expenses~~additional ~~and~~twelve months ~~unpaid~~upon ~~fees,~~mutual ~~and~~acceptance. ~~$53,500~~Payment ~~(2016:~~is ~~$Nil)~~due ~~owing~~by the consignee to ~~Bendon~~the ~~for~~Company ~~expenses~~based ~~incurred~~on units sold every 90 days commencing on ~~behalf~~January 31, 2018. The title to and property of the consigned goods shall remain with the Company. ~~These~~until ~~amounts~~such time as they are ~~unsecured~~sold to third parties. At January 31, ~~non-interest~~2018, ~~bearing~~included ~~with~~in noaccounts ~~specific~~receivable ~~terms~~is of$441,453 ~~repayment~~owing from Bendon in relation to this agreement and included in inventory is $747,763 in consignment inventory held by Bendon in relation to this agreement.

At January 31, ~~2017~~2018, included in ~~promissory~~advances ~~notes~~receivable ~~payable~~ is ~~an amount of~~ $~~153~~540,~~000~~733 (~~2016~~January 31, 2017: $Nil) including $306,201 owing from Bendon for expenses incurred by the Company on behalf of Bendon and $234,532 for fourth quarter operating loss reimbursements receivable per the Second Amendment to athe ~~director~~Merger Agreement. The amount due from Bendon is unsecured, non-interest bearing and ~~officer~~has ofno specific repayment terms. In February 2018, the Company. received ~~(Note~~cash ~~9(i))~~in the amount of $381,411 against this receivable.

At January 31, 2018, included in accounts payable and accrued liabilities is $Nil (2017: $129,186) owing to directors and officers of the Company for reimbursable expenses and unpaid fees. These amounts are unsecured, non-interest bearing with no specific terms of repayment.

Related Party Transactions

During the year ended January 31, ~~2017~~2018, ~~included~~ included in general and administrative expenses is $~~481~~287,~~511~~971 (~~2016~~2017: $~~433~~481,~~850~~511) in respect of directors fees and investor relations fees, $42,~~907~~132,~~285~~ 371 (~~2016~~2017: $54,~~334~~907,~~266~~285) in respect of share based compensation expense for the vesting of stock options granted to directors and officers of the Company, and $~~231~~184,~~176~~609 (~~2016~~2017: $~~282~~231,~~277~~176) in respect of marketing fees, of which $3327,~~520~~809 (~~2016~~2017: $9033,~~777~~520) was related to third party pass through costs, paid to a firm of which a direct family member of a director and officer of the Company is a principal.

Effective June 10, 2014, the Company entered into an employment agreement with the Chief Executive Officer and director (the “CEO”) of the Company for a term of three years whereby the CEO was entitled to a base salary of $400,000 per year, provided the CEO would forgo the first twelve months of the base salary and only receive minimum wage during that period. At January 31, 2017 an amount of $37,037 (2016: $170,369) is included in deferred compensation relating to the amortization of the total base salary compensation due under this employment agreement, which is being amortized on a straightF-~~line basis over the term of the employment agreement.~~22

OnNaked ~~June~~Brand ~~10,~~Group ~~2015,~~Inc. ~~the~~Notes ~~CEO became eligible~~ to ~~receive~~Consolidated ~~her~~Financial ~~full~~StatementsJanuary ~~base salary pursuant to the terms of her employment agreement, however, such base salary has not yet been paid in full as of January~~ 31, ~~2017. The Company has accrued her base salary compensation payable and at January 31, 2017, an amount of $622,708~~ 2018(~~2016:~~Expressed ~~$266,664) is included~~ in ~~accounts~~US payable and accrued liabilities in respect of such base salary payable, including interest owed on such amounts. The CEO agreed to allow the Company to defer payment of her salary provided such amounts accrue interest at a rate of 3% per annum. Subsequent to January 31, 2017, the CEO surrendered accrued base salary compensation plus interest in the amount of $654,637, including base salary compensation payable of $638,724 plus accrued interest on such amounts of $15,913. On the same day, the Company granted to the CEO 1,200,000 options to purchase shares of the Company’s common stock at an exercise price of $2.14 per a period of four years from the date of issuance. The surrendered accrued base salary compensation will be recorded as a contribution to equity in the period in which it is surrendered.Dollars)

In connection with a Joint Factoring Agreement (Note 7 ii), the CEO executed a guaranty (the “Guaranty”) to personally guarantee performance of the Obligations and also agreed to provide her own brokerage account as security for the Obligations (as defined in Note 9ii))8. ~~Accordingly,~~Related inParty ~~connection with~~Transactions ~~her brokerage account the CEO entered into a brokerage account pledge~~ and ~~security~~Balances ~~agreement~~ (~~the “Pledge and Security Agreement”~~Continued) and securities account control agreement (the “Account Control Agreement”) in favor of Wells Fargo Bank, National Association (“Wells Fargo”). Pursuant to the Pledge and Security Agreement, the CEO agreed to pledge, sell, assign, grant a security interest in and transfer to Wells Fargo all of her rights, title and interest in and to her brokerage account.

FEffective June 10, 2014, the Company entered into an employment agreement with the Chief Executive Officer and director (the “CEO”) of the Company for a term of three years whereby the CEO was entitled to a base salary of $400,000 per year, provided the CEO would forgo the first twelve months of the base salary and only receive minimum wage during that period. At January 31, 2018 an amount of $nil (2017: $37,037) is included in deferred compensation relating to the amortization of the total base salary compensation due under this employment agreement, which is being amortized on a straight-20line basis over the term of the employment agreement.

~~Naked~~On ~~Brand~~March ~~Group~~13, ~~Inc~~2017, the CEO surrendered accrued base salary compensation plus interest accrued to February 28, 2017 in the amount of $654,637, including base salary compensation payable of $638,724 plus accrued interest on such amounts of $15,913. On the same day, the Company granted to the CEO 1,200,000 options to purchase shares of the Company’s common stock at an exercise price of $2.14 per a period of four years from the date of issuance. The options were fair valued based on a Black-Scholes model upon the date of issuance. The excess of fair value of the options was expensed as stock-based compensation during the first quarter of fiscal 2018.

~~Notes~~In connection with a Joint Factoring Agreement (Note 9), the CEO executed a guaranty (the “Guaranty”) to ~~Consolidated~~personally ~~Financial~~guarantee ~~Statements~~performance of the Obligations and also agreed to provide her own brokerage account as security for the Obligations (as defined in Note 9)). Accordingly, in connection with her brokerage account the CEO entered into a brokerage account pledge and security agreement (the “Pledge and Security Agreement”) and securities account control agreement (the “Account Control Agreement”) in favor of Wells Fargo Bank, National Association (“Wells Fargo”). Pursuant to the Pledge and Security Agreement, the CEO agreed to pledge, sell, assign, grant a security interest in and transfer to Wells Fargo all of her rights, title and interest in and to her brokerage account. Effective June 28, 2017, the Company had repaid all advances received under the terms of the Joint Factoring Agreement and the Company entered into an Amendment to the Joint Factoring Agreement pursuant to which the personal guarantee of the CEO was terminated.

~~(Expressed in~~9. USFactoring ~~Dollars)~~Line of Credit

8. Factoring Line of Credit

i)	Capital Business Credit

On June 11, 2015, the Company entered into a factoring agreement (the “CBC Factoring Agreement”) with Capital Business Credit LLC (“CBC”) whereby the Company could borrow the lesser of (i) $750,000 or (ii) the sum of up to 80% of trade receivables, 60% of finished goods inventory and 100% of any accepted side collateral, under the terms and conditions as outlined in the CBC Factoring Agreement. A director and officer of the Company provided side collateral of $500,000 to support a portion of the borrowings and guaranteed repayment of the Company’s indebtedness and performance of its obligations under the CBC Factoring Agreement. The facility was secured by a general security interest over all of the Company assets and interests. The term of the agreement was for a period of one year and would automatically renew for additional one -year terms, unless terminated at any time by CBC or by the Company prior to such renewal, with thirty days’ prior written notice. During the year ended January 31, 2017, the Company did not renew the CBC Factoring Agreement with CBC.

On June 14, 2016, the Company entered into a Joint Factoring Agreement (the “Joint Factoring Agreement”) with Wells Fargo. The Joint Factoring Agreement with Wells Fargo replaced the CBC Factoring Agreement, which was terminated effective on the same date.

ii) Wells Fargo

Under the terms of the Joint Factoring Agreement, the Company may assign eligible accounts receivable (the “Accounts”) to Wells Fargo in exchange for loans and advances (each such loan or advance, an “Advance”) up to an aggregate amount (the “Borrowing Base”) not to exceed the lesser of (i) $6,000,000 or (ii) the sum of up to 80% of trade receivables deemed eligible by Wells Fargo plus (A) the lesser of up to (x) 50% of the value, calculated at the lower of cost or market, of finished goods, warehoused inventory deemed eligible by Wells Fargo or (y) $500,000, plus (B) the lesser of (x) up to 75% of marketable securities held in a blocked security account, subject to an account control agreement in favor of Wells Fargo (the “Securities Account”); provided, however, that at any time when the market value of the securities held in such Securities Account is below $1,067,000, then the value of such securities for purposes of calculating the Borrowing Base will be $0 or (y) $200,000, less any reserves that Wells Fargo may establish from time to time.

F-21

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

(Expressed in US Dollars)

8. Factoring Line of Credit (Continued)

The Company bears the risk of credit loss on the Accounts, except where Wells Fargo provides credit approval in writing on such Account. The Advances will bear interest on the daily net balance of any moneys owed at a rate of LIBOR plus 3%. All obligations under the Joint Factoring Agreement, including the Advances (collectively, the “Obligations”), are payable on demand and may be charged by Wells Fargo to the Company’s account at any time.

The Obligations are secured by a continuing security interest in all assets, properties, and rights of the Company, wherever located, whether owned as of the date of the Joint Factoring Agreement or subsequent thereto. The term of the Joint Factoring Agreement is for three years and will automatically renew, unless terminated at any time by Wells Fargo with thirty days’ written notice, or by the Company prior to such renewal, with sixty days’ prior written notice.

The Joint Factoring Agreement contains covenants that are customary for agreements of this type. The failure to satisfy covenants under the Joint Factoring Agreement or the occurrence of other specified events that constitute an event of default could result in the termination of the Joint Factoring Agreement and/or the acceleration of the repayment obligations of the Company. The Joint Factoring Agreement contains provisions relating to events of default that are customary for agreements of this type.

Where the Joint Factoring Agreement results in the transfer of the Company’s receivables, without recourse, to Wells Fargo, and the transaction meets the applicable criteria under Accounting Standards Codification 860, the Company has accounted for such invoices sold as a sale of financial assets. As such, the accounts receivable are excluded from the balance sheet upon receipt of consideration for such transfer to Wells Fargo.

Factor expenses and interest charged to operations during the year ended January 31, 2017 were $41,304 (2016: $35,582). At January 31, 2017, an amount of $302,776 (2016: $527,711) was owing under the terms of the Factoring Agreement, for advances made to the Company, net of repayments of such advances through the collection of factored receivables.

F-22

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

(Expressed in US Dollars)

9. Promissory Notes Payable

	2017			2016
Unsecured promissory notes, accruing interest at a rate of 10% per annum maturing on the earlier of (i) May 7, 2017 or (ii) the date of closing of an equity financing (see (i))	$	253,000		$	-
Promissory notes, non-interest bearing, repayable upon the Company reporting net income from operations in a single month (see (ii))		3,450			3,450
		256,450			3,450
Less: current portion		(256,450	)		(3,450	)
	$	-		$	-

(i) During the year ended January 31, 2017, the Company issued promissory notes in the aggregate principal amount of $253,000 in exchange for cash, including an amount of $153,000 to a director and officer of the Company. The promissory notes accrue interest at the rate of ten percent per annum and mature on the earlier to occur of (i) May 7, 2017 or (ii) the date of the closing date of an Equity Financing (as defined in the promissory note). In the event the Company fails to pay the principal amount plus accrued but unpaid interest on the maturity date and does not cure such failure to pay within ten business days, then the interest rate shall automatically increase to 13%.

(ii) On November 7, 2013, the Company issued a promissory note in the principal amount of CDN$28,750. The Company received $24,467 (CDN$25,000) in respect of this note, after an original issue discount (“OID”) of 15%, or $3,670 (CDN$3,750). The principal amount, net of the OID, matured and was repaid during the year ended January 31, 2015. At January 31, 2017, an amount of $3,450 (CDN$3,750) (2016: $3,450 (CDN$3,750)) is outstanding relating to the OID, which is repayable upon the Company reporting net income from operations in any single month.

F-23

Naked Brand Group Inc. Notes to Consolidated Financial StatementsJanuary 31, 2018(Expressed in US Dollars)

~~Notes~~9. toFactoring ~~Consolidated~~Line ~~Financial~~of ~~Statements~~Credit (Continued)

~~(Expressed in~~ii) USWells ~~Dollars)~~Fargo

~~10.~~Under ~~Convertible~~the ~~Promissory~~terms ~~Notes~~of ~~Payable~~the Joint Factoring Agreement dated June 14, 2016, the Company may assign eligible accounts receivable (the “Accounts”) to Wells Fargo in exchange for loans and advances (each such loan or advance, an “Advance”) up to an aggregate amount (the “Borrowing Base”) not to exceed the lesser of (i) $6,000,000 or (ii) the sum of up to 80% of trade receivables deemed eligible by Wells Fargo plus (A) the lesser of up to (x) 50% of the value, calculated at the lower of cost or market, of finished goods, warehoused inventory deemed eligible by Wells Fargo or (y) $500,000, plus (B) the lesser of (x) up to 75% of marketable securities held in a blocked security account, subject to an account control agreement in favor of Wells Fargo (the “Securities Account”).

	2017		2016
First and Second Kalamalka Amendment Agreement, bearing interest at 6% per annum, collateralized by a priority general security agreement over all of the present and future assets of the company ranked pari-passu to Senior Secured Convertible Debentures due October 1, 2016 (see (i))	$	-	$	600,000
Less: deferred finance fees		-		(15,058	)
		-		584,942
Less: current portion		-		(584,942	)
	$	-	$	-

In connection with Wells Fargo’s services under the Joint Factoring Agreement, Wells Fargo receives a commission equal to the Factoring Commission Percentage (as defined in the Joint Factoring Agreement) multiplied by the gross invoice amount of each Account purchased, which is charged to the Company’s account on the date a related Advance is made. During the initial term of the Joint Factoring Agreement, Wells Fargo would receive minimum commissions equal to $24,000, $36,000 and $50,000 during the first, second and third year, respectively (the “Minimum Commissions”).

The Company bears the risk of credit loss on the Accounts, except where Wells Fargo provides credit approval in writing on such Account. The Advances would bear interest on the daily net balance of any moneys owed at a rate of LIBOR plus 3%. All obligations under the Joint Factoring Agreement, including the Advances (icollectively, the “Obligations”), ~~Senior~~were ~~Secured~~payable ~~Convertible~~on ~~Note~~demand ~~Agreements~~and ~~with~~may ~~Kalamalka~~be ~~Partners~~charged by Wells Fargo to the Company’s account at any time.

The Company ~~borrowed~~accounted ~~$600,000~~for byinvoices ~~the issuance~~sold ~~of convertible promissory notes (the “Notes”), pursuant~~ to ~~certain Agency Agreements with Kalamalka Partners (“Kalamalka”) and certain lenders (~~the ~~“Lenders”)~~Wells asFargo ~~set~~under ~~out in~~ the ~~Agency~~Joint ~~Agreements~~Factoring ~~dated~~Agreement ~~August 10, 2012 and November 14, 2013,~~ as ~~amended. The Notes were secured by~~ a ~~general~~sale ~~security interest in the present and future assets~~ of ~~the~~financial ~~Company~~assets. The principal amounts outstanding were accruing interest at a rate of 6% per annum, calculated and payable quarterly and were due on October 1, 2016. The principal amounts, and any accrued and unpaid interest thereon, were convertible into common stock at any time at the option of the Lenders at a conversion price of $10.00 per share.

~~During~~Effective ~~the~~June ~~year ended January 31~~28, 2017, the Company had repaid all ~~principal~~loans and ~~accrued~~advances received under the Joint Factoring Agreement. The Company and ~~unpaid~~Wells ~~interest~~Fargo ~~amounts~~entered ~~due~~into an Amendment to the Joint Factoring Agreement pursuant to which the Parties agreed to amend certain terms of the agreement as follows: (i) no further advances would be available under the ~~Notes~~Joint inFactoring ~~their~~Agreement; ~~entirety~~(ii) Wells Fargo would not be entitled to the Minimum Commissions; (iii) the Company may terminate the Joint Factoring Agreement upon seven days’ written notice to Wells Fargo and asWells ~~such,~~Fargo ~~these~~may ~~Notes~~terminate the Joint Factoring Agreement upon thirty days’ written notice to the Company; (iv) the Guaranty ~~are~~(Note no8) ~~longer~~was ~~outstanding~~terminated in its entirety.

~~During~~Under the ~~year~~terms ~~ended~~of ~~January~~the 31Joint Factoring Agreement, ~~2017~~as amended, the Company ~~recorded~~bears ~~$15,058~~the ~~(2016:~~financial ~~$28,364)~~risk inassociated ~~financing~~with ~~charges~~the infactored ~~respect~~receivables. ofConsequently, the ~~amortization~~Company no oflonger ~~fees~~accounts ~~incurred~~for ininvoices ~~connection~~assigned ~~with the~~to ~~issuance~~Wells ~~and~~Fargo ~~modification~~for collections as a sale of ~~these~~financial ~~Notes~~assets.

Factor expenses and interest charged to operations during the year ended January 31, 2018 were $46,828 (2017: $41,304). At January 31, 2018, an amount of $106,339 was due from the factor to the Company for collection of accounts receivable under the terms of the Joint Factoring Agreement, as amended and was received in full subsequent to year end. At January 31, 2017, $302,776 was owed to the factor for advances made to the Company, net of repayments of such advances through the sale of factored receivables.

F-24

Naked Brand Group Inc. Notes to Consolidated Financial StatementsJanuary 31, 2018(Expressed in US Dollars)

~~Notes~~10. toPromissory ~~Consolidated~~Notes ~~Financial Statements~~Payable

(Expressed in US Dollars)

	2018			2017
Unsecured promissory notes, accruing interest at a rate of 10% per annum maturing on the earlier of (i) May 7, 2017 or (ii) the date of closing of an equity financing (see (i))	$	-		$	253,000
Promissory notes, non-interest bearing, repayable upon the Company reporting net income from operations in a single month (see (ii))		3,450			3,450
		3,450			256,450
Less: current portion		(3,450	)		(256,450	)
	$	-		$	-

10(i) During the year ended January 31, 2017, the Company issued promissory notes in the aggregate principal amount of $253,000 in exchange for cash, including an amount of $153,000 to a director and officer of the Company. ~~Convertible~~The ~~Promissory~~promissory ~~Notes~~notes ~~Payable~~accrue interest at the rate of ten percent per annum and mature on the earlier to occur of (~~Continued~~i) May 7, 2017 or (ii) the date of the closing date of an Equity Financing (as defined in the promissory note). In the event the Company fails to pay the principal amount plus accrued but unpaid interest on the maturity date and does not cure such failure to pay within ten business days, then the interest rate shall automatically increase to 13%. During the 2nd quarter fiscal 2018, the full principal balance of $253,000 plus accrued interest totaling $10,619 was paid in full.

(ii) 9On November 7, 2013, the Company issued a promissory note in the principal amount of CDN$28,750. The Company received $24,467 (CDN$25,000) in respect of this note, after an original issue discount (“OID”) of 15%, ~~Convertible~~or ~~Debentures~~$3,670 (CDN$3,750). The principal amount, net of the OID, matured and was repaid during the year ended January 31, 2015. At January 31, 2017, an amount of $3,450 (CDN$3,750) (2016: $3,450 (CDN$3,750)) is outstanding relating to the OID, which is repayable upon the Company reporting net income from operations in any single month.

During the year ended January 31, 2017, the Company entered into subscription agreements with directors and an officer of the Company, pursuant to which the Company issued convertible promissory notes in the aggregate principal amount of $224,000 (the “Convertible Notes”). The Convertible Notes were bearing interest at a rate of 9% per annum and were repayable upon the earliest of (i) the liquidation and dissolution of the Company pursuant to a plan of complete liquidation or (ii) December 31, 2017, unless earlier converted, redeemed or repurchased.

Under the terms of the Convertible Notes, in the event the Company consummated an equity financing resulting in gross proceeds to the Company of at least $1,000,000, excluding the proceeds from the purchase of the Convertible Notes (a “Qualified Financing”), the entire unpaid principal amount of the Convertible Notes and all accrued unpaid interest thereon (the “Outstanding Balance”) would automatically convert, at the initial closing of such financing, into equity securities issued at the price per security (the “Conversion Price”) issued in such Qualified Financing (the “Qualified Financing Securities”) and on the same terms and conditions that apply to the Qualified Financing Securities, provided; however, that the Conversion Price could not be less than the greater of book or market value of the common stock as of the date of issuance of the Convertible Notes, as calculated in accordance with the Nasdaq Listing Rules.

The Convertible Notes were recorded as stock settled debt in accordance with Accounting Standards Codification (“ASC”) 480, which requires such liabilities be carried at fair value. The Company recorded the Convertible Notes at their fair value of $224,000, which was equal to the face values at the date of issuance. During the year ended January 31, 2017, the Company accrued interest of $4,281 (2016: $Nil) under the terms of the Convertible Notes.

On January 12, 2017, in connection with a Securities Purchase Agreement with certain investors (Note 10) these Convertible Notes were automatically converted, along with accrued and unpaid interest of $4,281, into 202,520 shares of common stock, pursuant to the automatic conversion terms. The principal amount of $224,000, together with accrued interest of $4,281, was recorded as a credit to equity upon conversion, with no gain or loss recorded upon settlement of the debt.

11.

Stockholders’ Equity

Effective August 10, 2015, the Company effected a reverse stock split of the basis of 1:40. As such, the Company’s authorized capital was decreased from 450,000,000 shares of common stock to 11,250,000 shares of common stock and an aggregate of 53,278,818 shares of common stock issued and outstanding were decreased to 1,331,977 shares of common stock. These financial statements give retroactive effect to such reverse stock split and all share and per share amounts have been adjusted accordingly.

Effective August 11, 2016, the Company amended its articles of incorporation to increase the number of authorized shares of common stock from 11,250,000 to 18,000,000 and to provide authority to issue up to 2,000,000 shares of blank check preferred stock.

Authorized

2,000,000 shares of blank check preferred stock, no par value.

18,000,000 shares of common stock, par value $0.001.

Year ended January 31, 2018

On February 10, 2017, the Company entered into an At the Market Offering Agreement (the “Agreement”) with Maxim Group LLC (“Maxim”), as amended on March 30, 2017, pursuant to which the Company could sell from time to time, up to an aggregate of $5,500,000 of shares of the Company’s common stock (the “Shares”), through Maxim, as sales agent.

Under the terms of the Agreement, Maxim was entitled to a commission at a fixed rate of 3.5% of the gross sales price of Shares sold under the Agreement. The Company also reimbursed Maxim for certain expenses incurred in connection with the Agreement and agreed to provide indemnification and contribution to Maxim with respect to certain liabilities under the Securities Act and the Securities Exchange Act of 1934, as amended.

F-25

Naked Brand Group Inc. Notes to Consolidated Financial StatementsJanuary 31, 2018(Expressed in US Dollars)

Notes to Consolidated Financial Statements

(Expressed in US Dollars)

11.

Stockholders’ Equity (Continued)

Year ended January 31, 2018

During the year ended January 31, 2018 pursuant to and under the terms of the Agreement, as amended, the Company issued an aggregate of 2,189,052 shares of common stock for gross proceeds of $5,499,723, net proceeds of $5,307,233 after deducting commissions.

Year ended January 31, 2017

iii) On January 12, 2017, the Company entered into a Securities Purchase Agreement with certain investors providing for the issuance and sale by the Company of 1,879,811 shares of common stock in a registered direct offering (the “Offering”). The shares were sold at a price of $1.04 per share for gross proceeds of $1,955,003. Of the total, 288,462 shares were issued during the year ended January 31, 2017 and the remaining 1,~~591~~592,~~349~~175 shares were issued subsequently and are included in common stock to be issued at January 31, 2017.

iiiii) On January 12, 2017, in connection with the Offering, the Company issued 202,520 shares pursuant to the conversion of convertible promissory notes owed to directors and an officer of the Company in the aggregate principal amount of $224,000, along with accrued and unpaid interest of $4,281.

Year ended January 31, 2016

i) In connection with a debt settlement agreement, the Company issued 2,500 shares of common stock to a consultant of the Company in exchange for services rendered. The fair value of $4.80 per share was determined with reference to the quoted market price of the Company’s shares on the date these shares were committed to be issued. There was no gain or loss recorded in connection with issuance of these shares.

ii) On July 3, 2015, the Company issued an aggregate 205,248 shares of common stock at $4 per share, in connection with warrant amendment agreements (the “Warrant Amendments”) for gross proceeds of $821,000. Under the terms of the Warrant Amendments, the holders of such warrants elected to reduce the exercise price of the warrants from $6 to $4, subject to a shortened exercise period and subject to certain resale restrictions on the shares issuable upon exercise of such warrants. Of the total, an aggregate of 140,249 of the shares issued were issued to the CEO and a director of the Company, for an aggregate exercise price of $560,996.

The Company determined that the Warrant Amendments must be accounted for using modification accounting pursuant to the guidance under Accounting Standards Codification 718 (“ASC 718”). Under this guidance, a short-term inducement offer shall be accounted for as a modification of the terms of equity based awards, to the extent that the inducement is accepted by the equity holders. Modification accounting requires the incremental fair value of the instrument arising from the modification to be recognized as an expense on the income statement, or a charge directly to equity, depending on the nature of the offer. The Company determined that it was appropriate to record the incremental fair value of the Warrant Amendments as an expense on the income statement and consequently the Company recorded the incremental fair value as a component of general and administrative expenses on the consolidated statement of operations for the year ended January 31, 2016. The Company determined that the incremental fair value of the instruments arising from the modification was $32,800, based on the difference between the fair value of the warrants immediately prior to the amendment and the fair value of these instruments immediately after the amendment. The fair values were determined using the Black Scholes option pricing model based on the following assumptions: risk free interest rate 1.33%, expected life: 3.94 years, expected volatility: 139.54%, dividend yields: 0.00%.

F-26

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

(Expressed in US Dollars)

11. Stockholders’ Equity (Continued)

iii) On August 3, 2015, the Company consummated a tender offer to amend and exercise certain warrants to purchase common stock of the Company. Under the terms of the tender offer, the holders of such warrants elected to reduce the exercise price of the warrants from $6 to $4, subject to a shortened exercise period and subject to certain resale restrictions on the shares issuable upon exercise of such warrants. Pursuant to the tender offer, the holders of an aggregate of 380,461 warrants agreed to amend their warrants and tendered and exercised such warrants for gross proceeds to the Company of $1,521,829.

In connection with the tender offer, the Company incurred issuance costs of $91,422.

The Company determined that the Warrant Amendments must be accounted for using modification accounting pursuant to the guidance under Accounting Standards Codification 718 (“ASC 718”). Under this guidance, a short-term inducement offer shall be accounted for as a modification of the terms of equity based awards, to the extent that the inducement is accepted by the equity holders. Modification accounting requires the incremental fair value of the instrument arising from the modification to be recognized as an expense on the income statement, or a charge directly to equity, depending on the nature of the offer. The Company determined that it was appropriate to record the incremental fair value of the Warrant Amendments as an expense on the income statement and consequently the Company recorded the incremental fair value as a finance fee on the consolidated statement of operations for the year ended January 31, 2016. The Company determined that the incremental fair value of the instruments arising from the modification was $63,000, based on the difference between the fair value of the warrants immediately prior to the amendment and the fair value of these instruments immediately after the amendment. The fair values were determined using the Black Scholes option pricing model based on the following assumptions: risk free interest rate 1.26%, expected life: 3.86 years, expected volatility: 138.81%, dividend yields: 0.00%.

iv) On December 23, 2015, the Company completed an underwritten public offering of 1,875,000 shares of its common stock at $4 per share for gross proceeds of $7,500,000. In connection with the offering, the Company incurred share issuance costs of $623,720 consisting of (i) a cash commissions equal to 8% of the gross proceeds from certain participants, equal to $548,720; (ii) warrants to purchase that number of shares of common stock equal to 8% of the shares sold in the offering, equal to 137,180 share purchase warrants and (iii) underwriter legal fees equal to $75,000.

2014 Stock Option Plan

On June 6, 2014, the Company’s board of directors approved a 2014 Long-Term Incentive Plan (the “2014 Plan”), which provides for the grant of stock options, restricted shares, restricted share units and performance stock and units to directors, officers, employees and consultants of the Company. Stockholder approval of the plan was obtained on August 21, 2014.

The maximum number of our common stock reserved for issue under the plan is 2,750,000 shares subject to adjustment in the event of a change of the Company’s capitalization (as described in the 2014 Plan). As a result of the adoption of the 2014 Plan, no further option awards will be granted under any previously existing stock option plan. Stock option awards previously granted under previously existing stock option plans remain outstanding in accordance with their terms.

~~F-27~~The 2014 Plan is administered by the board of directors, except that it may, in its discretion, delegate such responsibility to a committee of such board. The exercise price will be determined by the board of directors at the time of grant. Stock options may be granted under the 2014 Plan for an exercise period of up to ten years from the date of grant of the option or such lesser periods as may be determined by the board, subject to earlier termination in accordance with the terms of the 2014 Plan. At January 31, 2018, 509,601 (2017: 759,601) options remain available for issuance under the 2014 Plan.

~~Naked Brand Group Inc.~~F-26

Naked Brand Group Inc. Notes to Consolidated Financial ~~Statements~~StatementsJanuary 31, 2018(Expressed in US Dollars)

(Expressed in US Dollars)

11.

Stockholders’ Equity (Continued)

The 2014 Plan is administered by the board of directors, except that it may, in its discretion, delegate such responsibility to a committee of such board. The exercise price will be determined by the board of directors at the time of grant. Stock options may be granted under the 2014 Plan for an exercise period of up to ten years from the date of grant of the option or such lesser periods as may be determined by the board, subject to earlier termination in accordance with the terms of the 2014 Plan. At January 31, 2017, 759,601 (2016: 607,101) options remain available for issuance under the 2014 Plan.

Stock Based Compensation

A summary of the status of the Company’s outstanding stock options for the period ended January 31, ~~2017~~2018 is presented below:

	Number			Weighted Average		Weighted Average Grant Date
	of Options			Exercise Price		Fair Value
Outstanding at January 31, 2015		1,794,875		$	5.48	$	8.40
Outstanding at January 31, 2016		2,191,274		$	5.12	$	7.86
Expired		(22,250	)	$	22.81
Forfeited		(3,750	)	$	4.48
Granted		422,399		$	4.48	$	4.15
Outstanding at January 31, 2016		2,191,274		$	5.12
Expired		(93,875	)	$	5.19
Forfeited		(70,000	)	$	5.12
Granted		260,000		$	2.21	$	1.41
Outstanding at January 31, 2017		2,287,399		$	4.78	$	6.96
Exercisable at January 31, 2017		1,709,238		$	5.26
Expired		(15,000	)	$	10.00		9.37
Granted		1,200,000		$	2.14	$	0.89
Outstanding at January 31, 2018		3,472,399		$	3.85	$	4.85
Exercisable at January 31, 2018		3,316,167		$	3.87

~~F-28~~At January 31, 2018, the following stock options were outstanding, entitling the holder thereof to purchase common stock of the Company as follows:

Naked Brand Group Inc.

Number			Exercise Price		Expiry Date	Number Vested
	1,250		$	10.00	February 1, 2018		1,250
	3,750		$	10.00	May 1, 2018		3,750
	2,000		$	10.00	April 1, 2019		2,000
	25,000		$	10.00	July 30, 2022		25,000
	1,536,750		$	5.12	June 6, 2024		1,536,750
	25,000		$	6.00	June 10, 2024		25,000
	37,500		$	4.48	February 3, 2025		25,000
	37,500		$	4.48	February 25, 2025		25,000
	6,250		$	4.80	July 6, 2025		6,250
	337,399		$	4.40	August 18, 2025		281,167
	10,000		$	2.50	February 2, 2026		10,000
	100,000		$	2.50	November 1, 2026		100,000
	150,000		$	2.00	November 1, 2026		75,000
	1,200,000	*	$	2.14	March 13, 2021		1,200,000

	3,472,399						3,316,167

~~Notes~~*These tostock ~~Consolidated~~options ~~Financial~~were ~~Statements~~issued outside of the 2014 Plan.

~~(Expressed~~The aggregate intrinsic value of stock inoptions USoutstanding ~~Dollars~~is calculated as the difference between the exercise price of the underlying awards and the fair value of the Company’s common stock. At January 31, 2018, the aggregate intrinsic value of stock options outstanding is $Nil and exercisable is $Nil (2017: $Nil and $Nil, respectively).

F-27

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

January 31, 2018

(Expressed in US Dollars)

11.

Stockholders’ Equity (Continued)

AtStock ~~January~~Based ~~31,~~Compensation ~~2017, the following stock options were outstanding, entitling the holder thereof to purchase common stock of the Company as follows:~~(Continued)

Number		Exercise Price		Expiry Date	Number Vested
	15,000	$	10.00	October 9, 2017		15,000
	1,250	$	10.00	February 1, 2018		1,250
	3,750	$	10.00	May 1, 2018		3,750
	2,000	$	10.00	April 1, 2019		2,000
	25,000	$	10.00	July 30, 2022		25,000
	1,536,750	$	5.12	June 6, 2024		1,302,297
	25,000	$	6.00	June 10, 2024		25,000
	37,500	$	4.48	February 3, 2025		12,500
	37,500	$	4.48	February 25, 2025		12,500
	6,250	$	4.80	July 6, 2025		6,250
	337,399	$	4.40	August 18, 2025		193,691
	10,000	$	2.50	February 2, 2026		10,000
	100,000	$	2.50	November 1, 2026		100,000
	150,000	$	2.00	November 1, 2026		-
	2,287,399					1,709,238

During the year ended January 31, 2018, the Company recognized $2,478,633 (2017: $5,452,931) of stock-based compensation expense in general and administrative expenses, relating to the issuance of stock options in exchange for services. An amount of approximately $202,411 in stock-based compensation expense is expected to be recognized over the remaining vesting term of these options to August 2018.

The aggregate intrinsic value of stock options outstanding is calculated as the difference between the exercise price of the underlying awards and the fair value of the Company’s common stock. At January 31, 2017, the aggregate intrinsic value of stock options outstanding is $Nil and exercisable is $Nil (2016: $Nil and $Nil, respectively).

During the year ended January 31, 2017, the Company recognized $5,452,931 (2016: $5,374,465) of stock based compensation expense in general and administrative expenses, relating to the issuance of stock options in exchange for services. An amount of approximately $2,179,590 in stock based compensation expense is expected to be recognized over the remaining vesting term of these options to August, 2018.

The fair value of each option award was estimated on the date of the grant using the Black-Scholes option pricing model based on the following weighted average assumptions:

	2017			2016
	2018			2017
Expected term of stock option (years) (1)		98.7175			69.4371
Expected volatility (2)		75.7860	%		~~124~~75.3378	%
Stock price at date of issuance	$	01.9943		$	40.7199
Risk-free interest rate		2.2969	%		12.8129	%
Dividend yields		0.00	%		0.00	%

⁽¹⁾As the Company has insufficient historical data on which to estimate the expected term of the options, the Company has elected to apply the short-cut method to determine the expected term under the guidance of Staff Accounting Bulletin No. 110 (“SAB 110”).

⁽²⁾ As the Company has insufficient historical data on which to estimate expected future share price volatility, the Company has estimated expected share price volatility based on the historical share price volatility of comparable entities.

F-29

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

(Expressed in US Dollars)

11. Stockholders’ Equity (Continued)

Share Purchase Warrants

At January 31, ~~2017~~2018, the Company had 1,~~627~~212,~~010~~302 share purchase warrants outstanding as follows:

~~Number~~	Number		~~Exercise Price~~	Exercise Price	Expiry Date
	12,451		$	10.00	August 10, 2017
	3,750		$	10.00	August 10, 2018
	60,001		$	6.00	April 4, 2019
	555,968		$	6.00	June 10, 2019
	155,052		$	3.00	June 10, 2019
	168,883		$	6.00	July 8, 2019
	29,343		$	3.00	July 8, 2019
	24,625		$	8.00	October 23, 2019
	137,180		$	4.80	December 23, 2020
	365,688		$	4.80	June 15, 2022
	36,569	(1)	$	4.80	June 15, 2022
	15,000		$	4.80	July 6, 2022
	62,500		$	5.11	September 1, 2022
	1,627,010
	1,212,302

~~(1)~~The ~~These~~Company ~~warrants~~recognized ~~may~~stock-based ~~vest~~compensation expense ~~and~~of ~~become~~$41,159 ~~exercisable~~during ~~only~~the ~~under~~year ~~certain~~ended ~~anti~~January 31, 2018 (2017: recovery stock-~~dilution~~based ~~performance~~compensation ~~conditions~~expense ~~contained~~of $104,284) in ~~the~~connection with ~~warrant~~warrants granted.

~~During~~On ~~the~~December ~~year ended January 31~~7, ~~2016~~2017, the Company ~~issued~~paid ~~an aggregate of 479,756 warrants exercisable at a weighted average exercise price of~~ $~~4.84 per share for a period~~50,000 ofin ~~seven~~cash ~~years~~to ~~from~~re-purchase ~~the date of issuance~~365,688 ~~pursuant~~warrants ~~to negotiated consulting~~ and ~~endorsement agreements. The weighted average grant date fair value of these warrants at issuance was $4.67 for an aggregate grant date fair value of $2~~36,~~239,000,~~569 ~~based on the Black~~anti-~~Scholes option~~dilution ~~pricing~~warrants ~~model~~held ~~using~~by the ~~following~~other ~~weighted average assumptions: expected term 7 years, expected volatility 158~~party.04%, expected dividend yield 0.00%, risk free interest rate 2.09%. Stock based compensation is being recorded in the financial statements over the vesting term of three years from the date of grant. The Company recognized a recovery of stock based compensation expense of $104,284 during the year ended January 31, 2017 (2016: stock based compensation expense of $257,802) in connection with warrants granted.

~~Certain of the warrants granted during the year ended January 31, 2017 become exercisable only under certain anti~~F-dilution performance conditions contained in the warrant agreement. The fair value of these warrants at issuance was calculated to be $168,500 based on the Black-Scholes option pricing model using the following assumptions: expected term 7 years, expected volatility 153.00%, expected dividend yield 0.00%, risk free interest rate 2.11%. No stock-based compensation has been recorded in the financial statements as none of the performance conditions have yet been met.28

~~F-30~~Naked Brand Group Inc. Notes to Consolidated Financial StatementsJanuary 31, 2018(Expressed in US Dollars)

Naked Brand Group Inc.

Notes to Consolidated Financial Statements

(Expressed in US Dollars)

11.

Stockholders’ Equity (Continued)

A summary of the Company’s share purchase warrants outstanding is presented below:

	Number of			Weighted Average
	Warrants			Exercise Price
Outstanding at January 31, 2015		1,628,581		$	5.74
Issued		616,937		$	4.83
Exercised		(585,709	)	$	6.00
Expired		(14,611	)	$	9.82
Outstanding at January 31, 2016		1,645,198		$	5.27
Expired		(18,188	)	$	4.00
Outstanding at January 31, 2017		1,627,010		$	5.29
Repurchased		(402,257	)		4.80
Expired		(12,451	)		10.00
Outstanding at January 31, 2018		1,212,302		$	5.40

12.

Income Taxes

The reconciliation of income tax provision computed at statutory rates to reported income tax provision is as follows:

January 31,	~~2017~~2018			~~2016~~2017
		34	%		34	%
Loss for the year	$	(105,~~798~~789,~~503~~805	)	$	(1910,~~063~~798,~~399~~503	)
Expected income tax recovery		(31,~~671~~968,000	)		(63,~~482~~671,000	)
Non-deductible other expenses		~~101~~(107,000	)		21101,000
Non-deductible accretion and financing fees		~~5,000~~-			25,~~467,~~000
Non-deductible derivative mark-to-market adjustments		-			(241,000	)
Effect of reduction in statutory rate		5,667,000			-
Effect of foreign exchange and other adjustments		-			(4,000	)
True up to prior years’ tax provision		138,000			12,000
True up to prior years’ tax provision		12,000			(120,600	)
Change in valuation allowance		(3,730,000	)		3,553,000
Change in valuation allowance		3,553,000			4,359,600
Total income tax expense	$	-		$	-

F-Significant components of the Company’s net deferred tax assets at January 31, 2018 and 2017:

Naked Brand Group Inc.

January 31,	2018			2017

Temporary differences relating to:
Net operating loss carry forwards	$	5,355,200		$	7,469,700
Equipment and intangible assets		22,000			30,700
Unpaid expenses		2,900			218,000
Inventory provision		56,600			-
Stock based compensation		3,731,500			5,184,700
		9,168,200			12,903,100
Valuation allowance		(9,168,200	)		(12,903,100	)

Net deferred taxes	$	-		$	-

~~Notes to Consolidated Financial Statements~~F-29

Naked Brand Group Inc. Notes to Consolidated Financial StatementsJanuary 31, 2018(Expressed in US Dollars)

12.

Income Taxes (Continued)

~~Significant~~Deferred ~~components~~tax assets and liabilities are determined based on temporary basis differences between assets and liabilities reported for financial reporting and tax reporting. The ultimate realization of the net deferred tax asset is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company’s considers projected future taxable income, recent financial performance and tax planning strategies in making this assessment. The Company is required to record a valuation allowance to reduce its net deferred tax asset to the amount that is more likely than not to be realized. Accounting guidance allows the Company to look to future earnings to support the realizability of the net deferred assets. atSince the Company has had cumulative net operating losses since inception, the ability to use forecasted future earnings is diminished. As a result, the Company concluded a full valuation allowance against the net deferred tax asset was appropriate. At January 31, 2018 and 2017 the total change in valuation allowance for items affecting the current year was $(3,730,000) and ~~2016:~~$3,553,000, respectively.

January 31,	2017			2016
Temporary differences relating to:
Net operating loss carry forwards	$	7,469,700		$	5,968,100
Equipment and intangible assets		30,700			25,700
Unpaid expenses		218,000			1,200
Stock based compensation		5,184,700			3,456,000
		12,903,100			9,451,000
Valuation allowance		(12,903,100	)		(9,451,000	)
Net deferred taxes	$	-		$	-

At January 31, 2018, the Company had accumulated net operating losses in Canada totaling approximately $5,066,000 (2017: $5,066,000), which may be available to reduce taxable income in Canada in future taxation years. At January 31, 2018, the Company had accumulated net operating losses in the United States totaling approximately $25,499,000 (2017: $22,201,000), which may be available to reduce taxable income in the United States in future taxation years. Unless previously utilized, these net operating losses will begin to expire in 2025.

~~Deferred~~Section ~~tax~~382 ~~assets~~of ~~and~~the ~~liabilities~~Internal ~~are~~Revenue ~~determined~~Code ~~based~~(“Section on382”) ~~temporary~~impose ~~basis~~substantial ~~differences~~restrictions ~~between~~on ~~assets~~the ~~and~~utilization ~~liabilities reported for financial reporting and tax reporting. The ultimate realization~~ of ~~the~~ net ~~deferred~~operating ~~tax~~losses ~~asset~~in ~~is dependent upon~~ the ~~generation~~event of ~~future~~an ~~taxable income during the periods in which~~“ownership ~~those~~change” ~~temporary~~as ~~differences~~defined ~~become deductible. The Company considers projected future taxable income, recent financial performance and tax planning strategies~~ in ~~making~~Section ~~this assessment~~382. ~~The~~As ~~Company is required to record~~ a ~~valuation~~result ~~allowance~~of toequity ~~reduce~~transactions ~~its~~during ~~net deferred tax asset to~~ the ~~amount~~year ~~that~~ended isJanuary ~~more~~31, ~~likely~~2016, ~~than not to be realized. Accounting guidance allows the Company to look to~~management ~~future~~believes ~~earnings to support~~ the ~~realizability~~utilization of ~~the~~ net ~~deferred assets. Since the Company has had cumulative net~~ operating losses ~~since~~ ~~inception,~~may ~~the~~be ~~ability~~subject to ~~use~~this ~~forecasted future earnings is diminished~~limitation. AsIf aan ~~result,~~ownership ~~the~~change ~~Company~~is ~~concluded~~deemed ato ~~full~~have ~~valuation~~occurred ~~allowance~~as ~~against~~a ~~the~~result ~~net~~of ~~deferred~~these ~~tax~~equity ~~asset~~ownership ~~was~~changes ~~appropriate.~~or ~~At January 31~~offerings, ~~2017 and 2016~~ the ~~total~~Company ~~change~~has inestimated ~~valuation~~that ~~allowance for~~the ~~items~~net ~~affecting~~operating ~~the~~losses ~~current~~would ~~year~~be ~~was~~limited to approximately $316,~~553~~654,000 ~~and~~(2017: $413,~~359~~356,~~600, respectively~~000).

AtThe ~~January~~Company ~~31,~~files ~~2017,~~income ~~the~~tax ~~Company~~returns ~~had accumulated~~in ~~net~~the ~~operating~~United ~~losses~~States inand Canada. ~~totaling~~All ~~approximately~~of ~~$5,066,000~~the ~~(2016:~~Company’s ~~$5,066,000),~~tax ~~which~~returns ~~may~~are besubject ~~available~~ to ~~reduce~~tax ~~taxable~~examinations ~~income in~~until ~~Canada~~the inrespective ~~future~~statute of ~~taxation~~limitations ~~years~~expires. AtThe ~~January 31, 2017, the~~ Company ~~had~~currently ~~accumulated~~has ~~net~~no ~~operating~~tax ~~losses~~years inunder ~~the~~examination. ~~United~~The ~~States totaling~~Company’s ~~approximately~~tax ~~$22,063,000~~filings ~~(2016:~~for ~~$17,483,000), which may be available to reduce taxable income in~~ the ~~United States in~~fiscal ~~future taxation~~ years. ~~Unless~~2012 ~~previously~~to ~~utilized,~~2018 ~~these~~remain ~~net~~open ~~operating losses will begin~~ to ~~expire in 2025~~examination.

~~Section~~Based ~~382~~on management’s assessment of ~~the~~ASC ~~Internal~~Topic ~~Revenue~~740 ~~Code~~Income ~~(“Section~~Taxes, ~~382”) imposes substantial restrictions on~~ the ~~utilization~~Company ofdoes ~~net~~not ~~operating~~have ~~losses~~an inaccrual ~~the~~for ~~event~~uncertain oftax anpositions ~~“ownership change”~~ as ~~defined in Section 382. As a result~~ of ~~equity transactions during the year ended~~ January 31, ~~2016,~~2018 ~~management believes the utilization of net operating losses may~~and ~~be subject to this limitation~~2017. IfThe anCompany ~~ownership~~does ~~change~~not isanticipate ~~deemed~~significant ~~to have occurred as a result of these equity ownership~~ changes or ~~offerings,~~to ~~the~~its ~~Company~~unrecognized ~~has~~tax ~~estimated~~benefits ~~that~~within the ~~net~~next ~~operating~~twelve ~~losses would be limited to approximately $13,123,000 (2016: $8,635,000)~~months.

~~The~~On ~~Company~~December ~~files~~22, ~~income~~2017, ~~tax~~the ~~returns~~President ~~in the~~of the United States signed into law the Tax Cuts and ~~Canada~~Jobs Act (“Tax Reform Act”). ~~All~~The oflegislation ~~the~~significantly ~~Company’s~~changes U.S. tax ~~returns~~law ~~are~~by, ~~subject~~among toother ~~tax~~things, ~~examinations~~lowering ~~until~~corporate ~~the~~income ~~respective~~tax ~~statute~~rates, ~~of limitations~~implementing ~~expires.~~a ~~The~~territorial ~~Company~~tax ~~currently~~system ~~has~~and noimposing a transition tax ~~years~~on ~~under~~deemed ~~examination~~repatriated earnings of foreign subsidiaries. The ~~Company’s~~Tax ~~tax~~Reform ~~filings~~Act ~~for~~permanently reduces the ~~fiscal~~U.S. ~~years~~corporate ~~2012~~income totax ~~2017~~rate ~~remain~~from ~~open~~a maximum of 35% to ~~examination~~a flat 21% rate, effective January 1, 2018.

~~Based~~The onCompany ~~management’s~~uses ~~assessment~~the ofasset and liability ~~ASC~~method ~~Topic~~of ~~740~~accounting ~~Income~~for ~~Taxes~~income taxes. Under this method, ~~the~~deferred ~~Company~~tax ~~does~~assets ~~not~~and ~~have~~liabilities anare ~~accrual~~recognized for ~~uncertain~~the future tax consequences ~~positions~~attributable asto differences between the financial statement carrying amounts of ~~January~~existing ~~31,~~assets ~~2017~~and liabilities and ~~2016.~~their ~~The~~respective ~~Company~~tax ~~does~~basis. ~~not~~Deferred ~~anticipate~~tax ~~significant~~assets ~~changes~~and toliabilities ~~its~~are ~~unrecognized~~measured using enacted tax ~~benefits~~rates ~~within~~expected to apply to taxable income in the ~~next~~years ~~twelve~~in ~~months~~which those temporary differences are expected to reverse.

F-3230

Naked Brand Group Inc. Notes to Consolidated Financial StatementsJanuary 31, 2018(Expressed in US Dollars)

~~Notes~~12. toIncome ~~Consolidated~~Taxes ~~Financial Statements~~(Continued)

~~(Expressed~~As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the Tax Reform Act, the Company revalued its ending net deferred tax assets at January 31, 2018 to $9,168,200. There was an offsetting reduction in USthe ~~Dollars)~~deferred tax assets reserve of $3,734,900. The Company did not need to recognize any provisional tax expense for the year ended January 31, 2018.

The Tax Reform Act also provided for a one-time deemed mandatory repatriation of post – 1986 undistributed foreign subsidiary earnings and profits (“E&P”) as well as Global Intangible Low-Taxed Income (“GILTI”) and Base-Erosion Anti-Abuse provisions. The Company had no adjustments related to these latter noted provisions at January 31, 2018.

13.

Customer Concentrations

The Company has concentrations in the volumes of business transacted with particular customers. The loss of these customers could have a material adverse effect on the Company’s business.

For the year ended January 31, ~~2017~~2018, the Company had concentrations of sales with ~~two~~three customers equal to 2628.6% of the Company’s net sales (~~2016~~2017: sales with ~~one customer~~two customers equal to 4126% of the Company’s net sales). As at January 31, ~~2017~~2018, the accounts receivable balance for these customers ~~was~~ was $085,792 (~~2016~~2017: $~~73,347~~Nil).

14.

Commitments and Contingencies

In accordance with a negotiated agreement, the Company is required to pay royalty fees based on the greater of a pre-determined percentage of certain sales, not to exceed 10% of these net wholesale sales, as defined in such agreements, or a minimum annual amount. Minimum royalty payments are being amortized to operations over the period for which royalties accrue under the terms of the agreement. The Company may terminate the agreement in the event that the other party fails to perform any of the services required to be performed under the agreement or breaches any of its other covenants or agreements set forth in the agreement.

~~During~~On ~~the~~November ~~year ended January 31~~29, 2017, the Company signed ~~did~~a ~~not~~termination ~~make~~agreement ~~all~~to ~~minimum~~settle ~~royalty~~the ~~payments~~above asagreement. ~~they~~The ~~became~~Company ~~due~~agreed ~~and~~to ~~payable~~pay ~~under~~$200,000 ~~the~~cash ~~terms~~which ofincludes ~~the~~a ~~agreement, however~~one-time asroyalty atpayment ~~January~~of 31$150,000 ~~2017~~and $50,000 ~~the~~to ~~Company~~re-purchase ~~had~~365,688 ~~not~~warrants ~~been~~and ~~provided~~36,569 aanti-dilution ~~notice~~warrants ofheld ~~default~~ by the other party. On toDecember 7, 2017, the ~~agreement.~~Company Ifpaid ~~the~~$200,000 ~~other party~~to ~~provides~~settle ~~such~~the ~~notice~~terms of ~~default~~this atagreement. aUpon ~~later date~~settlement, ~~this~~the ~~could~~Company ~~affect~~recorded a gain on the ~~Company’s~~extinguishment ~~ability~~of todebt ~~sell~~totaling ~~certain~~$83,333 ~~portions of~~for ~~its~~the ~~inventory~~difference onbetween ~~hand~~the atnet ~~January~~carrying ~~31,~~value ~~2017~~of ~~that~~the ~~are~~liability ~~covered~~of ~~under~~$233,333 and the ~~royalty~~consideration ~~agreement~~paid of $150,000 for outstanding royalties.

During the year ended January 31, 2017, $300,000 (2016: $75,000) in minimum royalties were expensed to operations. At January 31, 2017, an amount of $75,000 is included in accounts payable and accrued liabilities in connection with minimum royalty payments due and payable.

The Company is committed to future minimum royalty payments as follows:

Year ending January 31,		Amount
2018	$	350,000
2019		350,000
2020		262,500
	$	962,500

ii)

Pursuant to a Strategic Consulting and Collaboration Agreement, the Company is committed to pay a monthly cash retainer ranging from $10,000 to $20,000 over the three-year term of the agreement. The Company has negotiated a hold on the monthly cash retainer, effective March 1, 2016 and continuing indefinitely.

F-3331

Naked Brand Group Inc. Notes to Consolidated Financial StatementsJanuary 31, 2018(Expressed in US Dollars)

Notes to Consolidated Financial Statements

(Expressed in US Dollars)

15.

Subsequent Events

On ~~February~~March 1012, ~~2017~~2018, the ~~Company~~Vice ~~entered~~President ~~into an At The Market Offering Agreement (the “Agreement”) with Maxim Group LLC (“Maxim”) pursuant to which the Company may sell from time to time, up to an aggregate~~ of ~~$5,000,000 of shares~~ ofFinance ~~the~~announced ~~Company’s~~his ~~common~~resignation ~~stock~~effective ~~(the “Shares”), through Maxim,~~ as ~~sales~~of ~~agent. On~~ March 3023, ~~2017~~2018, ~~the~~per ~~Company entered into Amendment No. 1 to~~ the ~~Agreement~~8K ~~which~~filed ~~increased~~with the ~~number~~SEC ofon ~~shares~~March ~~that could be sold under the Agreement to $5~~16,~~500,000~~ 2018.

~~Subject~~On toMarch 26, 2018, the ~~terms~~Company appointed a Chief Financial Officer and ~~conditions~~Principal ofAccounting Officer provided pursuant to an engagement letter (the “Agreement”), dated ~~Maxim~~March ~~will~~11, ~~use~~2018. ~~its~~In ~~commercially~~addition ~~reasonable~~to ~~efforts~~the provision of services to ~~sell~~act ~~the~~as ~~Shares~~temporary ~~from~~Chief ~~time~~Financial toOfficer ~~time,~~and ~~based~~principal onaccounting officer of the Company's, ~~instructions. Under~~ the Agreement, ~~Maxim~~provides ~~may~~among ~~sell~~other things, assistance to the ~~Shares~~Company bywith ~~any~~(i) ~~method~~preparing ~~permitted~~its byregulatory disclosures ~~law~~and ~~deemed~~filings, toincluding beits anannual, ~~“at~~quarterly and periodic reports filed with the ~~market~~Securities ~~offering”~~and Exchange Commission, ~~including,~~(ii) ~~without~~preparing ~~limitation,~~the ~~sales~~Company’s ~~made~~financial ~~directly~~statements onand records and (iii) coordinating the ~~Nasdaq~~Company’s ~~Capital~~annual ~~Market~~audits with the Company’s outside audit firm.

~~The~~As ~~Company~~consideration isfor ~~not~~the ~~obligated~~provision toof ~~make any sales~~the ofservices ~~Shares~~described ~~under~~in the Agreement., ~~The~~excluding ~~offering~~the ofservices provided as the ~~Shares~~Company’s oftemporary ~~Common~~Chief ~~Stock~~Financial ~~pursuant~~Officer toprincipal accounting officer, the ~~Agreement~~Company ~~will~~has ~~terminate~~agreed ~~upon~~to ~~the~~pay ~~earlier of~~on ~~(i)~~a ~~the~~monthly ~~sale~~retainer basis of ~~all~~CDN ~~Common~~$10,000 ~~Stock~~a ~~subject~~month. toAs consideration for the provision ~~Agreement~~of orthe ~~(ii)~~services ~~termination~~as oftemporary Chief Financial Officer and principal accounting officer, the ~~Agreement~~Company inagreed ~~accordance~~to ~~with~~pay ~~its~~CDN $5,000 ~~terms~~per month.

~~Under~~The ~~the~~term ~~terms~~ of the Agreement, ~~Maxim~~commenced ~~will~~on beMarch ~~entitled~~26, to2018 aand ~~commission~~will atcontinue auntil ~~fixed~~February ~~rate~~28, of2019, ~~3.5%~~provided ofthat ~~the~~services ~~gross~~as ~~sales price of Shares sold under~~ the ~~Agreement.~~Company’s ~~The~~temporary ~~Company~~Chief ~~will~~Financial ~~also~~Officer ~~reimburse~~and ~~Maxim~~principal ~~for~~accounting ~~certain~~officer ~~expenses~~will ~~incurred~~terminate inupon ~~connection~~completion ~~with~~of the ~~Agreement,~~Company’s ~~and~~previously ~~agreed~~disclosed ~~to provide indemnification and~~anticipated ~~contribution~~business tocombination ~~Maxim~~ with ~~respect~~Bendon ~~to certain liabilities under the Securities Act and the Securities Exchange Act of 1934, as amended.~~Limited

~~Subsequent~~and toBendon ~~January~~Group ~~31,~~Holdings ~~2017~~Limited. ~~pursuant to~~Either ~~and~~party ~~under~~may ~~the~~terminate ~~terms of~~ the Agreement, asimmediately ~~amended, the Company issued an aggregate of 2,189,052 shares of common stock~~ for ~~gross proceeds~~failure of ~~$5,499,723,~~the ~~net~~other ~~proceeds~~party ofto ~~$5,307,232~~meet ~~after~~its ~~deducting~~obligations ~~commissions~~thereunder.

~~F-34~~On March 26, 2018, the Company and appointed temporary Chief Financial Officer and Principal Accounting Officer (the “CFO”) Officer entered into an Indemnification Agreement (the “Indemnification Agreement”) pursuant to which, among other things, the Company is required, subject to certain exceptions and satisfaction of the applicable standard of conduct (where applicable) as set forth in the Indemnification Agreement, to indemnify the CFO to the fullest extent permitted by Nevada law against any and all Losses (as defined in the Indemnification Agreement) if the CFO was or is or becomes a party to or participant in, or is threatened to be made a party to or participant in, any Claim (as defined in the Indemnification Agreement) by reason of or arising in part out of any Indemnifiable Event (as defined in the Indemnification Agreement). In addition, subject to certain exceptions and repayment conditions, the CFO shall have the right to advancement by the Company of all indemnifiable expenses actually and reasonably paid or incurred by the CFO in connection with any such Claim.

F-32

Filing Compare · NAKED BRAND GROUP INC.