# EDGAR Filing Document

**Accession Number:** 0000886158
**File Stem:** 0001193125-23-025748
**Filing Date:** 2023-2
**Character Count:** 49342
**Document Hash:** b936d82e51ec4051f9c5a8518bd263bd
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-025748.hdr.sgml**: 20230206

**ACCESSION NUMBER**: 0001193125-23-025748

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 16

**CONFORMED PERIOD OF REPORT**: 20230206

**ITEM INFORMATION**: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230206

**DATE AS OF CHANGE**: 20230206

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** BED BATH & BEYOND INC
- **CENTRAL INDEX KEY:** 0000886158
- **STANDARD INDUSTRIAL CLASSIFICATION:** RETAIL-HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES [5700]
- **IRS NUMBER:** 112250488
- **STATE OF INCORPORATION:** NY
- **FISCAL YEAR END:** 0228

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-20214
- **FILM NUMBER:** 23591547

**BUSINESS ADDRESS:**
- **STREET 1:** 650 LIBERTY AVENUE
- **CITY:** UNION
- **STATE:** NJ
- **ZIP:** 07083
- **BUSINESS PHONE:** 908-688-0888

**MAIL ADDRESS:**
- **STREET 1:** 650 LIBERTY AVENUE
- **CITY:** UNION
- **STATE:** NJ
- **ZIP:** 07083

?xml version="1.0" encoding="utf-8" ? 8-K

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### UNITED STATES

### SECURITIES AND EXCHANGE COMMISSION

#### Washington, D.C. 20549

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### FORM 8-K

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#### CURRENT REPORT

#### PURSUANT TO SECTION 13 OR 15(d)

#### OF THE SECURITIES EXCHANGE ACT OF 1934

#### Date of Report (Date of earliest event reported): February 6, 2023

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## BED BATH & BEYOND INC.

#### (Exact name of registrant as specified in its charter)

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| | | |
|:---|:---|:---|
| **New York** | **0-20214** | **11-2250488**  |
| **(State or other jurisdiction of<br>incorporation or organization)** | **(Commission<br>File Number)** | **(IRS Employer<br>Identification No.)** |

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#### 650 Liberty Avenue, Union, New Jersey 07083

#### (Address of principal executive offices) (Zip Code)
(908) 688-0888

#### (Registrant's telephone number, including area code)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading<br>Symbol** | **Name of each exchange<br>on which registered** |
| Common stock, $0.01 par value | BBBY | The Nasdaq Stock Market LLC<br> (Nasdaq Global Select Market) |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

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| | |
|:---|:---|
| **Item 5.02** | **Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.**  |

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On February 2, 2023, the Board of Directors of Bed Bath & Beyond Inc. (the "Company") appointed Holly Etlin as the Company's Interim Chief Financial Officer. Laura Crossen, who has acted as the Company's Interim Chief Financial Officer since September 5, 2022, will resume her role as the Company's Senior Vice President of Finance and Chief Accounting Officer and continue as the Company's principal financial officer and principal accounting officer.

Ms. Etlin has over 30 years of experience in providing turnaround services for companies in the retail, distribution, and consumer products industries, including her service as Chief Restructuring Officer at Tailored Brands, Inc. from July 2020 to January 2021. Ms. Etlin has served as a Partner & Managing Director of AlixPartners since January 2007. AlixPartners provides various consulting services to the Company.

Ms. Etlin does not have any family relationships with any director, executive officer or person nominated or chosen by the Company to become a director or executive officer of the Company. Other than as disclosed herein, the Company is not aware of any related transactions or relationships between Ms. Etlin and the Company that would require disclosure under Item 404(a) of Regulation S-K, and there are no arrangements or understandings between Ms. Etlin and any other person pursuant to which Ms. Etlin was selected as an officer of the Company.

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| | |
|:---|:---|
| **Item 7.01** | **Regulation FD Disclosure.**  |

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On February 6, 2023, the Company issued a press release announcing the launch of an underwritten public offering (the "Offering") of (i) shares of the Company's Series A convertible preferred stock (the "Series A Convertible Preferred Stock"), (ii) warrants to purchase shares of Series A Convertible Preferred Stock and (iii) warrants to purchase the Company's common stock. The Offering is subject to market and other conditions, and there can be no assurance as to whether or when the Offering may be completed or as to the actual size or terms of the offering. The Company expects to raise approximately $225 million in the Offering together with an additional approximately $800 million through the issuance of securities requiring the holder thereof to exercise warrants to purchase shares of Series A Preferred Stock in future installments assuming certain condition are met. The Company cannot give any assurances that it will receive any or all of the proceeds of the Offering. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The Company entered into certain confidentiality agreements pursuant to which the Company agreed to publicly disclose certain information, including material non-public information thereunder (the "Cleansing Materials"), upon the occurrence of certain events set forth in such NDAs. A copy of the Cleansing Materials is attached to this Current Report on Form 8-K as Exhibit 99.2 and incorporated herein by reference.

The information furnished in this Item 7.01 of this Current Report on Form 8-K (including Exhibits 99.1 and 99.2) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

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| | |
|:---|:---|
| **Item 8.01** | **Other Events**  |

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#### Recent Developments
On January 27, 2023, the Company received formal notice of full compliance from the Listing Qualifications Staff of The Nasdaq Stock Market LLC. The notice indicated that, based on the January 26, 2023 filing of the Company's Form 10-Q for the period ended November 26, 2022, it fulfilled the periodic filing requirement set forth in Nasdaq Listing Rule 5250(c)(1).

#### Additional Disclosures
In connection with the Offering, the Company disclosed certain information related to the Company, attached as Exhibit 99.3 to this Current Report on Form 8-K and incorporated herein by reference.

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On or around January 13, 2023, certain events of default were triggered under the Company's Amended and Restated Credit Agreement, dated as of August 9, 2021 (the "Credit Agreement"), consisting of a $1.130 billion asset-based revolving credit facility (the "ABL Facility") and a $375 million first-in-last-out term loan credit facility (the "FILO Facility"), as a result of the Company's failure to prepay an over-advance and satisfy a financial covenant, among other things. As a result of the continuance of such events of default, on January 25, 2023, JPMorgan Chase Bank, N.A., as administrative agent (the "Administrative Agent") under the Company's Credit Agreement, sent a notice of acceleration and default interest to the Company.

Concurrently with the closing of the Offering, the Company will enter into a waiver and amendment (the "Amendment") to the Credit Agreement (as amended by the Amendment, the "Amended Credit Agreement"), with certain of the Company's US and Canadian subsidiaries party thereto, the Administrative Agent, Sixth Street Specialty Lending, Inc., as FILO agent (the "FILO Agent"), and the lenders party thereto. Pursuant to the Amendment, the lenders are agreeing to (i) waive any outstanding defaults or events of default under the existing Credit Facilities and (ii) rescind the implementation of the acceleration of obligations under the existing Credit Facilities, the requirement to cash collateralize letters of credit obligations under the existing Credit Facilities and the default interest on the outstanding obligations under the existing Credit Facilities.

The Amendment will (i) decrease the total revolving commitment from $1.13 billion to $565 million, (ii) result in an outstanding principal amount of $428,897,500 as a result of the call protection being capitalized as principal to the Initial FILO Loan and (iii) provide for an additional $100 million of FILO loans (the "New FILO Loan" and together with the Initial FILO Loan, the "FILO Facility", and together with the ABL Facility, the "Credit Facilities"), as well as other amendments, modifications or supplements to certain other terms and provisions as more specifically contemplated by the Amendment. In connection with the New FILO Loan and the entry into the Amendment, the Company will pay certain customary fees to the applicable lenders. Under the Amendment, the interest rate margin on revolving loans will increase by 1.00% per annum across all levels of the pricing grid and the interest rate of the New FILO Loan is set at the same rate as existing Initial FILO Loan. The Amended Credit Agreement will also include call protection upon the prepayment of the FILO loans under certain circumstances.

Under the Amendment, the Company will be required to apply all net cash proceeds received from the New Filo Loan and the Offering to repay outstanding revolving loans under the ABL Facility. The Company will be able to continue to borrow under its ABL Facility subject to availability thereunder. Pursuant to the Amended Credit Agreement, the Company will be required to use proceeds from certain dispositions of assets and subsequent equity offerings to pay down outstanding borrowings under the Credit Facilities. In addition, the Amended Credit Agreement will provide for certain additional operational covenants and reporting obligations.

Entry into the Amendment is conditioned on the closing of the Offering. There can be no assurances that we will enter into the Amendment on the terms described herein or at all.

The foregoing description of the Amendment (including the Amended Credit Agreement) does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment (including the Amended Credit Agreement), which, if entered into, will be filed as an exhibit to a Current Report on Form 8-K.

#### Forward-Looking Statements
This Current Report on Form 8-K contains a number of forward-looking statements. Words such as "expect," "will," "working," "plan" and variations of such words and similar future or conditional expressions are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding the Company's beliefs and expectations relating to the closing of the Company's anticipated Offering and the anticipated use of proceeds of the Offering. These forward-looking statements are not guarantees of future results and are subject to a number of risks and uncertainties, many of which are difficult to predict and beyond the Company's control. Important factors that may cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the uncertainties related to market conditions and the completion of Offering on the anticipated terms or at all, the Company's ability to use proceeds from the Offering to pay down outstanding debt obligations and operate its business; risks related to the failure to consummate the Offering, which the Company expects will likely force it to file for bankruptcy protection; the Company's ability to regain access to

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its credit agreement; the Company's ability to deliver and execute on its turnaround plan; the Company's potential need to seek additional strategic alternatives, including restructuring or refinancing of its debt, seeking additional debt or equity capital, reducing or delaying its business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including obtaining relief under the U.S. Bankruptcy Code, and the terms, value and timing of any transaction resulting from that process; the Company's ability to finalize or fully execute actions and steps that would be probable of mitigating the existence of "substantial doubt" regarding the Company's ability to continue as a going concern; and the Company's ability to increase cash flow to support the Company's operating activities and fund its obligations and working capital needs, and the other risk factors described in the Company's filings with the SEC, including the factors set forth under the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended February 26, 2022, the Company's Quarterly Report on Form 10-Q for the quarter ended November 26, 2022 and Exhibit 99.3 to this Current Report on Form 8-K. The Company disclaims and does not undertake any obligation to update or revise any forward-looking statement in this Current Report on Form 8-K, except as required by applicable law or regulation.

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| | |
|:---|:---|
| **Item 9.01.** | **Financial Statements and Exhibits**  |

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(d) Exhibits

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| | |
|:---|:---|
| **Exhibit**<br> **No.** | **Description of Exhibit** |
| 99.1 | [Press release, dated February 6, 2023](d441746dex991.htm) |
| 99.2 | [Cleansing Materials](d441746dex992.htm) |
| 99.3 | [Additional Disclosures](d441746dex993.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

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#### SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | **BED BATH & BEYOND INC.**<br> (Registrant) | **BED BATH & BEYOND INC.**<br> (Registrant) |
| Date: February 6, 2023 |  |  |
|  | By: | */s/ David M. Kastin* |
|  | By: | David M. Kastin |
|  | Title: | Executive Vice President, Chief Legal Officer and Corporate Secretary |

---

## Exhibit 99.1

**Exhibit 99.1**![LOGO](g441746g0206140710991.jpg)

**Bed Bath & Beyond Inc. Announces Proposed Offering of** 

**Series A Convertible Preferred Stock and Warrants** 

**UNION, N.J., Feb. 6, 2023** – Bed Bath & Beyond Inc. (the "Company") (Nasdaq: BBBY) today announced a proposed underwritten public offering (the "Offering") of (i) shares of the Company's Series A convertible preferred stock (the "Series A Convertible Preferred Stock"), (ii) warrants to purchase shares of Series A Convertible Preferred Stock and (iii) warrants to purchase the Company's common stock. The Offering is subject to market and other conditions, and there can be no assurance as to whether or when the Offering may be completed or as to the actual size or terms of the Offering. The Company expects to raise approximately $225 million of gross proceeds in the Offering together with an additional approximately $800 million of gross proceeds through the issuance of securities requiring the holder thereof to exercise warrants to purchase shares of Series A Preferred Stock in future installments assuming certain condition are met. The Company cannot give any assurances that it will receive any or all of the proceeds of the Offering.

The Company intends to use the net proceeds from the initial closing of the Offering, along with $100 million to be drawn under its amended and upsized FILO Facility, to repay outstanding revolving loans under its ABL Facility in accordance with the terms of an amendment to the Company's Credit Agreement waiving existing defaults thereunder (the "Amendment") to be entered concurrently with the initial closing of the Offering. Under the Amendment, the Company will be required to use availability under its credit facilities to make the missed interest payment on its senior notes by March 3, 2023. Outstanding revolving loans repaid using net proceeds of the Offering may be reborrowed, subject to availability under the ABL Facility, and the Company expects to use those borrowings for general corporate purposes, including, but not limited to, rebalancing the Company's assortment and building back the Company's inventory. In addition, proceeds from the conversion of warrants to purchase shares of Series A Convertible Preferred Stock will be used to further repay outstanding amounts under the ABL Facility with 50% of such conversion amounts being applied against the borrowing base of the ABL Facility. Such repaid amounts may be reborrowed subject to availability under the ABL Facility.

B. Riley Securities is acting as sole book-running manager for the Offering.

The securities are being offered pursuant to an automatically effective shelf registration statement on Form S-3 filed with the Securities and Exchange Commission ("SEC") on August 31, 2022, as amended. A preliminary prospectus supplement and accompanying prospectus relating to and describing the terms of the Offering will be filed with the SEC and may be obtained, when available, from: B. Riley Securities, Inc., by telephone at (703)-312-9580 or by email at <u>prospectuses@brileyfin.com</u> or by accessing the SEC's website at www.sec.gov.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended.

**<u>About the Company</u>**

The Company is an omnichannel retailer that makes it easy for its customers to feel at home. The Company sells a wide assortment of merchandise in the Home, Baby, Beauty and Wellness markets. Additionally, the Company is a partner in a joint venture which operates retail stores in Mexico under the name Bed Bath & Beyond.

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**<u>Forward-Looking Statements</u>**

This press release contains a number of forward-looking statements. Words such as "expect," "will," "working," "plan" and variations of such words and similar future or conditional expressions are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding the Company's beliefs and expectations relating to the closing of the Company's anticipated Offering and the anticipated use of proceeds of the Offering. These forward-looking statements are not guarantees of future results and are subject to a number of risks and uncertainties, many of which are difficult to predict and beyond the Company's control. Important factors that may cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the uncertainties related to market conditions and the completion of Offering on the anticipated terms or at all, the Company's ability to use proceeds from the Offering to pay down outstanding debt obligations and operate its business; risks related to the failure to consummate the Offering, which the Company expects will likely force it to file for bankruptcy protection; the Company's ability to regain access to its credit agreement; the Company's ability to deliver and execute on its turnaround plan; the Company's potential need to seek additional strategic alternatives, including restructuring or refinancing of its debt, seeking additional debt or equity capital, reducing or delaying its business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including obtaining relief under the U.S. Bankruptcy Code, and the terms, value and timing of any transaction resulting from that process; the Company's ability to finalize or fully execute actions and steps that would be probable of mitigating the existence of "substantial doubt" regarding the Company's ability to continue as a going concern; and the Company's ability to increase cash flow to support the Company's operating activities and fund its obligations and working capital needs, and the other risk factors described in the Company's filings with the SEC, including the factors set forth under the section entitled "Risk Factors" in our Annual Report on Form 10-K for the year ended February 26, 2022, our Quarterly Report on Form 10-Q for the quarter ended November 26, 2022 and Exhibit 99.3 to our Current Report on Form 8-K filed on February 6, 2023. The Company disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release, except as required by applicable law or regulation.

**CONTACTS:** 

INVESTORS: Susie A. Kim, <u>IR@bedbath.com</u>

MEDIA: Julie Strider, <u>Media@bedbath.com</u>

## Exhibit 99.2

**Exhibit 99.2** 

The Company entered into certain confidentiality agreements pursuant to which the Company agreed to publicly disclose certain information, including material non-public information thereunder (the "Cleansing Materials"), upon the occurrence of certain events set forth in the NDAs. The Company hereby provides the following information pursuant to such NDAs:

• Plans for current store fleet optimization program to be expanded to more than 400, including closure of an
approximately 150 additional lower-producing Bed Bath & Beyond stores, which builds on closure of approximately 200 Bed Bath & Beyond stores and approximately 50 standalone Harmon stores in the U.S.

• Plans for Fiscal 2023 Comparable Sales in mid- to high-single digit range
based on Comparable Sales down 30 percent to 40 percent in the fiscal first quarter and sequential, quarterly sales improvement thereafter.

• Plans for improving inventory position with in-stocks at historical
operating levels by Back-to-College 2023.

• Plans for Fiscal 2023 Adjusted Gross Margin in the low-30 percent range throughout the fiscal year, inclusive of cost savings from supply chain network initiatives.

• Plans for Fiscal 2023 Adjusted SG&A expense reduction of up to $1 billion, reflecting annualized cost
optimization initiatives that began in fiscal 2022, as well as incremental cost reductions associated with additional store closures, as well as corporate and operating expense realignment to occur by early fiscal 2023.

• Plans for Fiscal 2023 Adjusted EBITDA Margin in mid-single-digit range,
based on achievement of aforementioned assumptions and reflecting negative Adjusted EBITDA Margins in the fiscal first quarter and a return to positive Adjusted EBITDA Margins beginning in the fiscal second quarter.

We have not reconciled forward-looking Adjusted Gross Margin, Adjusted SG&A and Adjusted EBITDA Margin to their most directly comparable GAAP measure, because we cannot predict with reasonable certainty the ultimate outcome of certain components of such reconciliations, including market-related assumptions that are not within our control, or others that may arise, without unreasonable effort. For these reasons, we are unable to assess the probable significance of the unavailable information, which could materially impact our future results of operations.

## Exhibit 99.3

**EXHIBIT 99.3** 

**RISK FACTORS** 

*As used herein, the term "Transactions" refers to the entry into the Amendment, the offering of the securities contemplated by separate offerings, the use of proceeds therefrom and the transactions contemplated by the foregoing.* 

**Risks Related to the Transactions, our Business and Liquidity** 

***We need the proceeds from the Transactions to pay our outstanding obligations under our Credit Facilities and Senior Notes and to operate our business, and we expect that we will likely file for bankruptcy protection if the the Transactions are not consummated.***

On or around January 13, 2023, certain events of default were triggered under the Company's Amended and Restated Credit Agreement, dated as of August 9, 2021 (the "Credit Agreement"), consisting of a $1.130 billion asset-based revolving credit facility (the "ABL Facility") and a $375 million first-in-last-out term loan credit facility (the "FILO Facility" and, together with the ABL Facility, the "Credit Facilities"), as a result of the Company's failure to prepay an over-advance and satisfy a financial covenant, among other things. As a result of the continuance of such events of default, on January 25, 2023, JPMorgan Chase Bank, N.A., as administrative agent (the "Administrative Agent") under the Company's Credit Agreement, sent a notice of acceleration and default interest to the Company and notified the Company that (i) the principal amount of all outstanding loans under the Credit Facilities, together with accrued interest thereon, the FILO Applicable Premium (as defined in the Credit Agreement) and all fees (including, for the avoidance of doubt, any break funding payments) and other obligations of the Company accrued under the Credit Agreement, were due and payable immediately, (ii) the Company was required, effective January 25, 2023, to cash collateralize letter of credit obligations under the Credit Facilities, and (iii) effective as of January 25, 2023, all outstanding loans and obligations under the Credit Facilities shall bear interest at an additional default rate of 2% per annum. Absent the Transactions, the Company does not have sufficient resources to repay the amounts due under the Credit Facilities following the notice of acceleration. The Company has engaged advisors to explore strategic alternatives including if needed filing for bankruptcy protection.

Concurrently with the closing of this offering, the Company will enter into a waiver and amendment (the "Amendment") to the Credit Agreement (as amended by the Amendment, the "Amended Credit Agreement"), with certain of the Company's US and Canadian subsidiaries party thereto, the Administrative Agent, Sixth Street Specialty Lending, Inc., as FILO agent (the "FILO Agent"), and the lenders party thereto. Pursuant to the Amendment, the lenders are agreeing to (i) waive any outstanding defaults or events of default under the Credit Facilities and (ii) rescind the implementation of the acceleration of obligations under the Credit Facilities, the requirement to cash collateralize letters of credit obligations under the Credit Facilities and the default interest on the outstanding obligations under the Credit Facilities.

In addition, on February 1, 2023, the Company did not make an interest payment of approximately $25 million due on the Senior Notes (as defined below) (the "Notes Interest Payment"). The Company has a 30-day cure period, or until March 3, 2023, to make the interest payment. If, at the expiration of such 30-day cure period on March 3, 2023, the Company does not make the interest payment, the applicable trustee under the Senior Notes or holders of 25% in principal amount of the applicable series of Senior Notes may declare the principal of, and all accrued and unpaid interest on, the applicable series of Senior Notes to be due and payable immediately, which would require the Company to pay approximately $1.03 billion immediately. As of the date hereof, the Company has the following outstanding series of notes (collectively, the "Senior Notes"): (i) $215.4 million in aggregate principal amount of 3.749% Senior Notes due 2024, (ii) $209.7 million in aggregate principal amount of 4.915% Senior Notes due 2034 and (iii) $604.8 million in aggregate principal amount of 5.165% Senior Notes due 2044.

Under the terms of the Transactions and the Amendment, the Company will be required to use availability under its Credit Facilities to make the Notes Interest Payment by March 3, 2023.

If the Transactions are not consummated in accordance with their terms, (i) the Company will not enter into the Amendment, and (ii) the Company will not be able to make the Notes Interest Payment, which could result in the acceleration of the entire aggregate principal amounts of the Senior Notes. If the Company does not consummate the Transactions, the Company would not have the financial resources to satisfy its payment obligations under the Credit Facilities or the Senior Notes, and the Company expects that it will likely file for bankruptcy protection and that its assets will likely be liquidated. Our equity holders would likely not receive any recovery at all in a bankruptcy scenario.

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***If the Transactions are not consummated, we expect that we will likely file for bankruptcy protection.***

If the Transactions are not fully consummated, we expect that we will likely file for bankruptcy protection. The Transactions are structured to be consummated in multiple closings or tranches, with a portion of the proceeds received by us in an upfront tranche and additional proceeds to be be received in multiple closings thereafter. There are certain conditions to our receipt of the proceeds at each closing, including that our common stock shall remain listed on a national securities exchange, that we have sufficient authorized common stock to issue the shares subject to such closing, that we have not filed for bankruptcy protection and that, to the extent we are in default under our material indebtedness, we have a valid and enforceable forbearance agreement. We cannot assure you that we will satisfy the conditions for the future funding tranches, including that we will have sufficient authorized capital common stock to issue the shares subject to such closing, and therefore that we will receive all of the proceeds from the Transactions. If we do not receive any or all of the proceeds from the Transactions, whether because we cannot satisfy the conditions precedent or otherwise, irrespective of our expectation of our transformation plan then we expect that we will likely file for bankruptcy protection, in which case you will likely receive no recovery at all for your securities offered hereby.

***The issuance of the securities in this offering will significantly dilute the ownership interest of the existing holders of our common stock, and the market price of our common stock will likely decline significantly as a result of sales of such securities into the public market by investors in this offering and subsequent investors or the perception that such sales may occur.***

Our existing holders of common stock will be significantly diluted by the issuance of the securities in this offering. Our public float will be significantly increased and the market price of 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.

In addition, the shares purchased by the investors in this offering, including in the additional tranches, will be purchased at different prices, many of which at prices below the current and/or then trading prices of shares of our common stock or at prices below the price at which our existing shareholders purchased our common stock. The 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 our securities at the time of a sale and the purchase price of such securities by them. While the investors in this offering may experience a positive rate of return based on the trading price of our securities, the existing holders of 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.

***Certain events of default have occurred under our Credit Agreement, as a result of which loans outstanding thereunder have been accelerated, among other things, and our lenders may exercise remedies against the collateral securing our obligations under the Credit Facilities.***

Our obligations under the ABL Facility and the FILO Facility are secured by first priority liens on substantially all assets of the Company and certain of its subsidiaries, subject to customary exceptions. As described above, on or around January 13, 2023, certain events of default were triggered under our Credit Facilities as a result of our failure to prepay an over-advance and satisfy a financial covenant, among other things. As a result of the continuance of such events of default, on January 25, 2023, we received a notice of acceleration with respect to our Credit Facilities. Concurrently with the closing of this offering, we will enter into an Amendment with our lenders pursuant to which our lenders agreed to (i) waive any outstanding defaults or events of default under the Credit Facilities and (ii) rescind the implementation of the acceleration of obligations under the Credit Facilities, the requirement to cash collateralize letters of credit obligations under the Credit Facilities and the default interest on the outstanding obligations under the Credit Facilities, among other things. If the Transactions are not consummated in accordance with their terms, we will not enter into the Amendment, and as a result the existing events of default under the Credit Facilities will remain unwaived and the acceleration of obligations under the Credit Facilities will not be rescinded. Without access to our revolving credit facility, we will not have the necessary cash resources for our operations and we may not have the cash resources available to repay accelerated obligations, refinance such indebtedness on commercially reasonable terms, or at all, or cash collateralize our letters of credit, and lenders under our Amended Credit Agreement may exercise remedies against the collateral securing our obligations thereunder, all of which would have a material adverse effect on our business, financial condition, results of operations and liquidity. If we do not receive any or all of the proceeds from the Transactions then we expect that we will likely file for bankruptcy protection, in which case you may receive no recovery at all for your shares.

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***Our borrowing capacity under our Credit Facilities depends on the value of our assets, and the full committed amount of our Credit Facilities may not be available to us.***

As amended by the Amendment, our Amended Credit Agreement will provide for a $565 million ABL Facility and approximately $530 million outstanding under our FILO Facility. Our borrowing capacity under the ABL Facility varies according to the Company's inventory levels and credit card receivables, net of certain reserves, and the FILO Facility is subject to a borrowing base consisting of eligible credit card receivables, eligible inventory and eligible intellectual property. In the event of any decrease in the amount of or appraised value of these assets or upon the disposition of assets or upon the receipt of certain equity proceeds including proceeds from securities offered hereby, our borrowing capacity under either the ABL Facility or the FILO Facility, would similarly decrease, which could adversely impact our business and liquidity. We have announced the closure of approximately 150 lower-producing Bed Bath & Beyond banner stores. As the closures are completed and in the event of future closures, we expect our borrowing capacity under both the ABL Facility and FILO Facility will decrease to the extent sales and cash flow levels decrease following such store closures. The ABL Facility and FILO Facility contain customary affirmative and negative covenants and certain restrictions on operations become applicable if our availability falls below certain thresholds. These covenants could impose significant operating and financial limitations and restrictions on us, including restrictions on our ability to enter into particular transactions such as asset sales and acquisitions, and to engage in other actions that we may believe are advisable or necessary for our business.

***Trading in our securities is highly speculative, and we may be required to file for bankruptcy protection even if the Transactions are fully consummated.***

Trading in our securities is highly speculative and poses substantial risks to investors. Trading prices for our securities may bear little or no relationship to the actual recovery, if any, by holders of our securities in any bankruptcy proceeding and our equityholders will likely not receive any recovery at all in a bankruptcy scenario. Our operations and ability to develop and execute our business plan, our financial condition, our liquidity and our continuation as a going concern, are subject to risks and uncertainties. These risks include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to execute our transformative plan including our ability to negotiate rent reductions and other
amounts owed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to maintain our current relationships with or attract new vendors, suppliers, service providers,
customers, employees, and other third parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reestablish customary vendor terms, the failure of which may affect our cash flow and liquidity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to maintain contracts that are critical to our operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to attract, motivate and retain key employees; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the actions and decisions of our creditors and other third parties including, but not limited to, our landlords
and vendors who have interests that may be inconsistent with our plans.

These risks and uncertainties could affect our business and operations in various ways. If some of these risks materialize, we may not be able to have sufficient resources to continue to operate our business and we may be required to file for bankruptcy even if the Transactions are fully consummated. Our shareholders may not receive any recovery at all in a bankruptcy scenario.

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***Even if the Transactions are fully consummated, we may not be successful in implementing our transformative plan, including building back our inventory and increasing customer sales, and we have historically underperformed in implementing management plans, which may force us to seek additional strategic alternatives in the future.***

We expect to use the net proceeds from the Transactions to repay outstanding revolving loans under the ABL Facility. Outstanding revolving loans repaid using net proceeds of the offering may be reborrowed subject to availability under the ABL Facility, and we expect to use those borrowings for general corporate purposes, including, but not limited to, rebalancing the Company's assortment and building back the Company's inventory. As previously disclosed, we are undertaking a number of actions to support our ongoing transformation, including but not limited to, cost cutting, lowering capital expenditures, and reducing our store footprint including related distribution centers which are expected to result in our digital channel becoming a higher proportion of our sales. We will continue to seek reductions in rental obligations with landlords in our determination of the appropriate footprint. The timely achievement of our transformative plan as well as our ability to maintain an adequate level of liquidity are subject to various risks, some of which are outside of our control. In particular, our ability to build back inventory is critical to the success of our transformative plan and we cannot give assurance that our vendors will cooperate and effectively allow us to build back inventory at a scale needed for us to successfully operate our business. We have failed to timely make payments due to our vendors, landlords and similar other business partners, which has affected our relationship with such parties and our reputation and may affect our ability to successfully engage with such parties and other business partners in the future. Further, our ability to achieve expected results depends on our ability to attract customers to our sales channels and increase customer sales. Our ability to attract customers and increase customer sales largely depends various factors, including our ability to provide customers with an attractive assortment of merchandise. If we are unable to maintain our relationships with our merchandise suppliers, we will not be able to provide the necessary assortment of merchandise that will enable us to attract customers to our sales channels or increase sales.

We have historically underperformed in implementing management plans, including our transformative plan. For example, after launching a turnaround plan in the second and the third quarters of fiscal year 2022, we were not able to achieve our anticipated 2022 holiday results, largely due to our inability to supply our various sales channels with the appropriate level of merchandise and decrease in traffic trends. If we are not successful in implementing our transformative plan, our business, financial condition and results of operations may adversely be affected, which may force us to consider additional strategic alternatives, including restructuring or refinancing our debt, seeking additional debt or equity capital, reducing or delaying our business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including filing for bankruptcy protection. We may not be able to successfully execute any strategic alternatives we are currently considering or any others, and our ability to do so could be adversely affected by numerous factors, including changes in the economic or business environment, financial market volatility and the performance of our business.

***Nasdaq may delist our common stock from quotation on its exchange, which could limit investors' ability to sell and purchase our securities and subject us to additional trading restrictions and if our shares of common stock are delisted, the investors in the Transactions will not be required to fund additional tranches.***

Our common stock is currently listed on the Nasdaq Global Select Market under the trading symbol "BBBY." However (i) if our share price drops and for a period of 30 consecutive business days, the closing bid price for our common stock is below the minimum of $1.00 per share required for continued inclusion on Nasdaq under Nasdaq Listing Rule 5550(a)(2), or (ii) Nasdaq considers that the offering contemplated hereby does not qualify as a "public offering," our common stock may be suspended and/or delisted. If our common stock is not listed on Nasdaq at any time after this offering, we could face significant material adverse consequences, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a limited availability of market quotations for our securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduced liquidity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a determination that our common stock is a "penny stock" which will require brokers trading in our
shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a limited amount of news and analyst coverage for our company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a decreased ability to issue additional securities or obtain additional financing in the future.

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One of the condition precedents to the funding of additional tranches in the Transactions is that our shares of common stock is listed on an exchange. If our shares of common stock are delisted from Nasdaq, the investors in the Transactions that acquire Preferred Stock Warrants will not be required to fund additional tranches. If we do not receive any or all of the proceeds from the Transactions, whether because we cannot satisfy the conditions precedent or otherwise, then we expect that we will likely file for bankruptcy protection, in which case you may receive no recovery at all for your shares.

***Our recurring losses and negative cash flow from operations, as well as current cash and liquidity projections, raise substantial doubt about our ability to continue as a going concern.***

Based on recurring losses from operations and negative cash flows from operations for the nine months ended November 26, 2022 as well as current cash and liquidity projections, we have concluded that there is substantial doubt about our ability to continue as a going concern for the next twelve months. Our consolidated financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result if we do not continue as a going concern. You should not rely on our consolidated balance sheet as an indication of the amount of proceeds that would be available to satisfy claims of creditors, and potentially be available for distribution to shareholders, in the event of liquidation.

***We have experienced significant turnover in our senior management team and across our organization, and our failure to attract and retain qualified personnel, skilled workers and key officers could have an adverse effect on us.***

We have recently experienced significant turnover in our senior management team and reductions in our workforce and have promoted employees to fill certain key roles and are conducting searches for additional key roles, including a permanent chief financial officer. Our ability to retain key employees in the long-term is affected by our financial situation, our business performance and our ability to successfully implement our transformative plan. Our business may be adversely affected by the transitions in our senior management team and reduction in workforce, and turnover at the senior management level may create instability within the Company, which could disrupt and impede our day-to-day operations, internal controls and our ability to fully implement our business plan and growth strategy. In addition, management transition inherently causes some loss of institutional knowledge, which can negatively affect strategy and execution, and our results of operations and financial condition could be negatively impacted as a result. Competition for key management personnel is intense. If we fail to successfully attract and appoint permanent replacements with the appropriate expertise, we could experience increased employee turnover and harm to our business, results of operations, cash flow and financial condition. The search for permanent replacements could also result in significant recruiting and relocation costs, as well as increased salary and benefit costs. Like most businesses, our employees are important to our success and we are dependent in part on our ability to retain the services of our key management, operational, compliance, finance, administrative and store associate personnel. In order to compete and implement our growth strategy, we must attract, retain, and motivate employees, and turnover of senior management, store closures and reductions in workforce may make it difficult to retain qualified and skilled employees.