United States securities and exchange commission logo
February 23, 2023
Sue Gove
Chief Executive Officer
BED BATH & BEYOND INC
650 Liberty Avenue
Union, New Jersey 07083
Re: BED BATH & BEYOND
INC.
Preliminary
Prospectus Supplement
Filed February 6,
2023, as updated February 9, 2023
File No. 333-
267173
Dear Sue Gove:
We have reviewed your preliminary prospectus supplement and
issuer free writing
prospectus and have the following comments. Although you have
consummated the initial
offering, we believe that investors may benefit from revised disclosure
in response to our
comments. Please update your disclosure, as appropriate, in response to
these comments in your
Securities Act offering materials and ongoing Exchange Act filings.
Preliminary Prospectus Supplement dated February 6, 2023, updated
February 9, 2023
Cover Page
1. We note your disclosure
on page S-8 that [t]he investors in this offering may potentially
make a significant
profit with the resale of the securities they purchase in this offering
depending on the
trading price of [y]our securities at the time of a sale and the purchase
price of such
securities by them, and that [w]hile the investors in this offering may
experience a positive
rate of return based on the trading price of [y]our securities, the
existing holders of
[y]our common stock may not experience a similar rate of return on the
shares of common stock
they purchased due to differences in the applicable purchase price
and trading price.
Please provide comparable disclosure here and revise to clarify that
investors will have the
ability to acquire the common shares underlying the securities
issued in this offering
at a discount to the market price, so long as the market price does
not fall below $0.7160.
2. Revise to state, as you
do on pages S-3 and S-8, that if the Transactions are not
consummated, the
company expects it will likely file for bankruptcy protection, and
investors will likely
receive no recovery for any of the securities offered by this
registration statement.
Sue Gove
FirstName
BED BATHLastNameSue
& BEYONDGove
INC
Comapany23,
February NameBED
2023 BATH & BEYOND INC
February
Page 2 23, 2023 Page 2
FirstName LastName
"Future issuances of equity or debt securities by us may adversely affect the
market price of our
common stock"
3. We note your disclosure that you believe [you] will have 900.0
million shares of
common stock outstanding immediately after this offering and giving
effect to the
exercise or conversion, as applicable . . . . Please revise to
provide a reasonable basis for
such disclosure and in particular explain why you are assuming the use
of the Conversion
Price of $6.15 in your estimate. To balance your estimate of 900.0
million shares and
provide shareholders with a more complete picture of your outstanding
share count, please
also quantify the expected outstanding number of shares assuming
conversion of the
Series A Convertible Preferred Stock issued and outstanding as well as
such shares
underlying the Preferred Stock Warrants, based on Alternative
Conversions Prices of both
$0.7160 and 92.0% of the lowest VWAP of your common stock for the
applicable ten day
period. Revise using the trading price of the latest practicable date.
4. Please elaborate upon the risk you discuss here as it relates to
sufficient authorized shares
of common stock for future tranches to specify how much capacity
remains and what your
intentions are, if any, as it relates to seeking shareholder approval
to amend your charter.
Please explain the consequences if you cannot obtain stockholder
approval. Also,
counsel s legal opinion, attached as an exhibit to your current
report on Form 8-K filed
February 7, 2023, appears to omit to opine as to the common stock to
be issued pursuant
to the Preferred Stock Warrants and Common Stock Warrants, as well as
the Series A
Convertible Preferred Stock to be issued pursuant to the Preferred
Stock Warrants, even
though such securities were registered. Please revise or advise.
"Nasdaq may delist our common stock from quotation on its exchange..."
5. We note your disclosure that if Nasdaq considers that the offering
contemplated hereby
does not qualify as a public offering, [y]our common stock may
be suspended and/or
delisted. Please supplementally explain why your offering should be
considered a public
offering for the purpose of the Nasdaq listing standards. Please
tell us whether this
matter was discussed with Nasdaq and the outcome of those discussions.
If such
discussions occurred, please provide the name of the Nasdaq
representative.
"The issuance of the securities in this offering will significantly dilute the
ownership interest of
the existing holders..."
6. We note your disclosure that [y]our public float will be
significantly increased and the
market price of [y]our common stock could decline significantly as a
result of subsequent
sales of the shares of common stock issued in this offering, which
could occur at any time,
or the perception that such sales may occur. To provide investors
with a complete
picture of how this offering may impact your public float and the
related dilution risks,
please disclose the total amount of underlying common shares that may
be issued as a
result of this offering, and quantify what percentage such shares
would constitute of your
public float assuming the resale of all such shares. Provide
comparable disclosure in your
Sue Gove
FirstName
BED BATHLastNameSue
& BEYONDGove
INC
Comapany23,
February NameBED
2023 BATH & BEYOND INC
February
Page 3 23, 2023 Page 3
FirstName LastName
risk factor on page S-16 entitled The market price of our common
stock could decline . . .
, so as to highlight the significant negative impact sales of such
shares could have on the
public trading price of your common stock, and also discuss there the
risk that investors
may further purchase the [s]hares having an aggregate offering
price of $105.6 million
[which] remained unsold under the ATM program as of the end of fiscal
December 2022,
as disclosed on page 34 of your current report on Form 10-Q filed
January 26, 2023.
7. Please explain how the investors in this offering may potentially
make a significant profit
with the resale of the securities they purchase by explaining and
quantifying the discount
associated with the conversion feature of the Series A Convertible
Preferred Stock you
issued. In particular, explain and quantify the discount to be
received by the holder that
purchased at least 20,000 shares of Series A Convertible Preferred
Stock in this offering
whom you discuss on page S-24.
"Trading in our securities is highly speculative, and we may be required to
file for bankruptcy
protection..."
8. Please revise this risk factor to clarify your reference to equity
holders and distinguish
between holders of common stock and the overlying equity you issued in
this offering.
Issuer Free Writing Prospectus dated February 7, 2023, filed February 7, 2023
9. Please revise to explain how you arrived at the Alternate Conversion
Price of $2.3727 and
also explain how you used such price to arrive at the number of Common
Stock Warrants
issued in this offering. In this regard, we note your disclosure that
the number of
Common Stock Warrants issued in this offering depends in-part on
the Alternate
Conversion Price (as measured as of the date of pricing of this
Offering).
10. We note that your Pricing Term Sheet discloses that, using an
Alternate Conversion Price
of $2.3727, there would be 99,822,986 shares of Common Stock
underlying the 23,685
shares of Series A Convertible Preferred Stock issued, as well as
95,387,533 shares of
common stock underlying the 95,387,533 Common Stock Warrants issued.
However, you
do not appear to disclose the number of common shares that ultimately
underlie the
84,216 Preferred Stock Warrants; please disclose such amount.
Prospectus Supplement Summary
11. We note your disclosure that you will be required to use
availability under [your] Credit
Facilities to make the Notes Interest Payment by March 3, 2023, as
well as your
disclosure that you may continue to borrow under [your] ABL
Facility subject to
availability thereunder. Please revise your disclosure to provide
investors with a
complete picture of how the proceeds of this offering were used, your
upcoming payment
obligations, including the upcoming interest payment due on the Senior
Notes, and any
available capacity under the Credit Facilities, including a more
detailed discussion of the
additional operational covenants agreed upon pursuant to the
Amended Credit
Agreement and how such covenants will impact such capacity.
Sue Gove
BED BATH & BEYOND INC
February 23, 2023
Page 4
12. With a view to understanding the amount and use of future proceeds to
be received from
the sale of securities in this offering, please quantify the amount of
proceeds that you may
raise on or shortly after February 27, 2023 by requiring certain
holders to exercise the
maximum permissible amount of preferred stock warrants at such time,
and discuss the
extent to which you may rely upon such forced exercise to satisfy your
upcoming payment
obligations. Last, explain under what circumstances you can force an
exercise, and also
quantify the expected amounts to be received and at what corresponding
time over the
next ten months.
Risk Factors
"If the Transactions are not consummated, we expect that we will likely file
for bankruptcy
protection"
13. Please revise to provide a more detailed discussion of the extent that
you may rely upon
proceeds from future forced exercises to avoid bankruptcy, and whether
you will likely
utilize total possible proceeds in an amount to exceed $1 billion,
with a view to clarifying
your reference to fully consummating the Transactions. In your
disclosure, please
revise to narratively discuss the price and volume limitation
conditions to raising proceeds
in multiple subsequent closings.
Use of Proceeds
14. We note your disclosure that proceeds from the exercise of Series A
Convertible
Preferred Stock Warrants will be used to further repay outstanding
amounts under the
ABL Facility with 50% of such exercise amounts being applied against
the borrowing
base of the ABL Facility. Please revise to disclose that such use
of proceeds does not
apply to proceeds raised in connection with the first and second
Forced Exercise Dates,
as you disclose on page S-2. Make conforming changes on page S-5.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Please contact Brian Fetterolf at (202)-4551-6613 or Mara Ransom at
202-551-3264 with
any other questions.
FirstName LastNameSue Gove Sincerely,
Comapany NameBED BATH & BEYOND INC
Division of
Corporation Finance
February 23, 2023 Page 4 Office of Trade
& Services
FirstName LastName