Business Context and Reporting Period
This Form 6-K filing by Naked Brand Group Limited (the "Company") covers the month of August 2019, with the report dated August 16, 2019. The Company, a foreign private issuer, announced the entry into material definitive agreements for a registered direct offering of equity securities and a concurrent private placement of warrants.
Key Financial Metrics and Transaction Details
The filing details two primary capital-raising transactions executed on August 14, 2019:
- Cash Offering: Sale of 28,571,431 ordinary shares at $0.07 per share to institutional and accredited investors.
- Supplier Offering: Sale of 57,142,857 ordinary shares at $0.07 per share to suppliers, with payment made via the cancellation of trade payables and establishment of prepayment credits.
- Private Placement Warrants: Investors in the Cash Offering received warrants to purchase up to 100% of the shares purchased, exercisable at $0.07 per share.
- Placement Agent Fees: H.C. Wainwright & Co., LLC received an 8% cash fee (estimated at $160,000) and warrants to purchase 8% of the shares sold (2,285,714 shares) at an exercise price of $0.0875.
- Net Proceeds: Expected net cash proceeds from the Cash Offering are approximately $1.75 million after fees and expenses. The Supplier Offering is expected to result in approximately $4.00 million in cancelled trade payables and prepayment credits, with no cash inflow.
The filing does not provide specific revenue, profit, cash flow, or margin figures for the reporting period, as it focuses on the capital raise transaction.
Material Changes and Adjustments
Simultaneously with the new offerings, the Company agreed to amend outstanding warrants held by certain investors. The exercise price for warrants covering up to 18,550,000 ordinary shares was reduced from $0.10 to $0.07 per share, effective upon the closing of the Cash Offering. The expiration dates for these warrants (ranging from October 2021 to July 2025) remain unchanged.
Outlook, Risks, and Management Commentary
The Company anticipates closing the Cash Offering, Private Placement, and Supplier Offering on or about August 19, 2019, subject to customary closing conditions. The Company has agreed to a lock-up provision, restricting the issuance of new ordinary shares or related securities for 90 days following the closing (30 days for restricted securities), subject to exceptions. The filing notes that the warrants and placement agent warrants are not registered under the Securities Act of 1933 and are offered pursuant to exemptions under Section 4(a)(2) and Rule 506(b).
Key Facts for Investor Verification
- Verify the actual closing date of the offerings, which was anticipated to be August 19, 2019.
- Confirm the total number of shares outstanding post-closing to assess dilution from the 85,714,288 new shares issued (Cash and Supplier offerings combined) plus potential warrant exercises.
- Review the impact of the $4.00 million in cancelled trade payables on the Company's balance sheet and working capital.
- Monitor the exercise of the new warrants and the amended outstanding warrants, given the reduced exercise price of $0.07.
- Check for any subsequent filings regarding the satisfaction of closing conditions or changes to the transaction terms.