Beyond (BYON) SC 13DKIRKLAND'S / BEYOND ownership change

This statement on Schedule 13D (the “Schedule 13D”) relates to the shares of common stock, no par value (the “Common Stock”), of Kirkland’s, Inc., a Tennessee corporation (the “Issuer”), whose principal executive office is located at 5310 Maryland Way, Brentwood, Tennessee.

The Schedule 13D is being filed by Beyond, Inc. (the “Reporting Person”), a Delaware corporation. The business address of the Reporting Person is 799 W. Coliseum Way, Midvale, Utah 8407. The Reporting Person is a publicly traded company e-commerce company that owns the Bed Bath & Beyond brand among several others.

During the last five years, the Reporting Person has not been (i) convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

The Reporting Person acquired the Convertible Note (as defined below) for aggregate consideration of $8.5 million in connection with the entry into the Credit Agreement (as defined below) with the Issuer. The Reporting Person used funds from its working capital to fund the acquisition of the Convertible Note.

Pursuant to a secured Term Loan Credit Agreement, dated October 21, 2024 (the “Credit Agreement”), the Reporting Person agreed provide $17 million in debt financing to the Issuer, including an $8.5 million promissory note (the “Promissory Note”) and a $8.5 million convertible note (the “Convertible Note” and, together with the Promissory Note, the “Loan”). The Loan is secured by the Issuer’s assets and second in priority behind Bank of America’s existing loan to the Issuer. A portion of the Convertible Note (plus accrued interest) can be converted into Common Stock at a conversion price of $1.85 per share in an amount not to exceed 2,609,215 shares at the Reporting Person’s election prior to obtaining the Issuer’s stockholder approval of the Subscription Agreement (as defined below), and the full amount of the Convertible Note will automatically convert upon obtaining such stockholder approval.

The Credit Agreement is subject to customary affirmative covenants and negative covenants as well as financial covenants.

The Reporting Person and the Issuer also entered into a Subscription Agreement, dated as of October 21, 2024, pursuant to which the Reporting Person has also agreed to purchase 4,324,324 shares of Common Stock at a price of $1.85 per share, subject to receiving approval of the Issuer’s stockholders.

In connection with the foregoing transactions, the Reporting Person and the Issuer entered into an Investor Rights Agreement, dated as of October 21, 2024. The Investor Rights Agreement provides that, upon obtaining the Issuer’s stockholder approval of the share issuance, the Reporting Person will have the right to designate two persons for appointment to Issuer’s board of directors (the “Board”) as independent directors to replace two current members of the Board. The Reporting Person will also have the right to appoint one individual as a non-voting observer to the Board. The Investor Rights Agreement also provides the Reporting Person with customary registration rights, including shelf and piggyback registration rights, with respect to any shares of Common Stock it acquires upon conversion of the Convertible Note our pursuant to the Subscription Agreement. Finally, the Investor Rights Agreement includes certain standstill and voting provisions, pursuant to which the Reporting Person has agreed during the Standstill Period (as defined in the Investor Rights Agreement) to (i) vote all of its shares of Common Stock in accordance with the recommendation of the Board with respect to any matter brought before a meeting of the Issuer’s stockholders, and (ii) not to take any action that would have the purpose or effect of changing the control or management of the Issuer, in each case subject to certain exceptions.

 

 

The Reporting Person may retain or sell all or a portion of its securities the Issuer in the open market or in privately negotiated transactions. In addition, subject to the terms of the Investor Rights Agreement, the Reporting Person may acquire additional securities of the Issuer and may engage in discussions with management, the Board, and other securityholders of the Issuer and other relevant parties or encourage, cause or seek to cause the Issuer or such persons to consider or explore extraordinary corporate transactions, such as: a merger, reorganization or take-private transaction that could result in the de-listing or de-registration of the Common Stock; security offerings and/or stock repurchases by the Issuer; sales or acquisitions of assets or businesses; changes to the capitalization or dividend policy of the Issuer; or other material changes to the Issuer’s business or corporate structure, including changes in management or the composition of the Board.

To facilitate its consideration of such matters, the Reporting Person may retain consultants and advisors and may enter into discussions with potential sources of capital and other third parties. The Reporting Person may exchange information with any such persons pursuant to appropriate confidentiality or similar agreements. The Reporting Person will likely take some or all of the foregoing steps at preliminary stages in its consideration of various possible courses of action before forming any intention to pursue any particular plan or direction.

 

Other than as described above, the Reporting Person does not currently have any plans or proposals that relate to, or would result in, any of the matters listed in Items 4(a)–(j) of Schedule 13D, although, depending on the factors discussed herein, the Reporting Person may change its purpose or formulate different plans or proposals with respect thereto at any time.

 

The share amount reported herein consists of 2,609,215 shares of Common Stock currently issuable upon the conversion of the Convertible Note, based upon 13,111,638 shares of Common Stock outstanding as of August 29, 2024 as disclosed in the Issuer’s Quarterly Report on Form 10-Q filed on September 5, 2024. This amount excludes 1,985,379 shares of Common Stock underlying the Convertible Notes and 4,324,324 shares of Common Stock that will be issuable pursuant to the Subscription Agreement upon obtaining the Issuer’s stockholder approval.

Item 4 above summarizes certain provisions of the Credit Agreement, the Subscription Agreement and the Investor Rights Agreement and is incorporated herein by reference. Copies of each of the agreements are attached as exhibits to this Schedule 13D and are incorporated herein by reference.

 

Except as described herein, the Reporting Person does not have any contracts, arrangements, understandings or relationships (legal or otherwise) with any person with respect to any securities of the Issuer, including but not limited to any contracts, arrangements, understandings or relationships concerning the transfer or voting of such securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.