Kirkland's, Inc. Files 8-K on Financial Obligations & Equity

TL;DR

Kirkland's 8-K drops: new debt, equity sales, and shareholder rights changes filed 10/21.

AI Summary

On October 21, 2024, Kirkland's, Inc. entered into a material definitive agreement related to its financial obligations. The company also reported on the creation of a direct financial obligation or an obligation under an off-balance sheet arrangement. Additionally, the filing addresses unregistered sales of equity securities and material modifications to the rights of security holders.

Why It Matters

This filing indicates significant financial and structural changes for Kirkland's, Inc., potentially impacting its debt, equity, and shareholder rights.

Risk Assessment

Risk Level: medium — The filing details material definitive agreements, financial obligations, and equity sales, which can introduce financial and operational risks.

Key Players & Entities

• Kirkland's, Inc. (company) — Registrant
• October 21, 2024 (date) — Date of earliest event reported

FAQ

Key Financial Figures

• $17 million — d's and its subsidiaries entered into a $17 million Term Loan Credit Agreement (the "Beyond
• $8.5 million — rs. The Beyond Term Loan consists of an $8.5 million loan that is mandatorily convertible in
• $1.85 — ar value ("Common Stock") at a price of $1.85 per share upon the approval of Kirkland
• $90 million — subordinated to the Company's existing $90 million revolving credit facility (the "Existin
• $12 million — the Company to repay and terminate its $12 million "first-in, last-out" asset-based term l
• $10 million — n included repayment of the outstanding $10 million principal balance, prepayment fees and
• $62.4 million — rrowings under the Beyond Term Loan and $62.4 million in borrowings under the Existing Credit
• $18.6 million — ing Credit Facility, with approximately $18.6 million available for borrowing under the Exist
• $8 million — pursuant to which Beyond will purchase $8 million of Kirkland's Common Stock at a price o

Filing Documents

• kirk-20241021.htm (8-K) — 82KB
• kirk-ex10_1.htm (EX-10.1) — 1330KB
• kirk-ex10_2.htm (EX-10.2) — 249KB
• kirk-ex10_3.htm (EX-10.3) — 198KB
• kirk-ex10_4.htm (EX-10.4) — 123KB
• kirk-ex10_5.htm (EX-10.5) — 149KB
• kirk-ex10_6.htm (EX-10.6) — 1489KB
• kirk-ex99_1.htm (EX-99.1) — 40KB
• img181585134_0.jpg (GRAPHIC) — 28KB
• img181585134_1.jpg (GRAPHIC) — 11KB
• 0000950170-24-115935.txt ( ) — 4385KB
• kirk-20241021.xsd (EX-101.SCH) — 23KB
• kirk-20241021_htm.xml (XML) — 4KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. Summary On October 21, 2024, Kirkland's, Inc. (the "Company" or "Kirkland's"), entered into a strategic partnership with Beyond, Inc. (NYSE: BYON) ("Beyond") to enable cohesive collaboration between the two companies including Beyond providing additional financing to Kirkland's and the companies working together on a number of operating arrangements. Credit Agreements On October 21, 2024, Kirkland's and its subsidiaries entered into a $17 million Term Loan Credit Agreement (the "Beyond Term Loan"), which was fully funded at closing of the Beyond Term Loan, with Beyond, as administrative agent and lender. Kirkland's and one of its subsidiaries are serving as the guarantors under the Beyond Term Loan, and Kirkland's other two subsidiaries are the borrowers. The Beyond Term Loan consists of an $8.5 million loan that is mandatorily convertible into Kirkland's common stock, no par value ("Common Stock") at a price of $1.85 per share upon the approval of Kirkland's shareholders and an $8.5 million loan that is non-convertible. The maturity date on the non-convertible loan is September 30, 2028, and the maturity date on the convertible loan is 180 days from closing of the Beyond Term Loan, or if shareholder approval is not obtained, the maturity date will be extended to September 30, 2028. Beyond can elect to convert a portion of the $8.5 million convertible loan into shares of Kirkland's Common Stock prior to shareholder approval up to a cap of 2,609,215 shares. The indebtedness under the Beyond Term Loan is subordinated to the Company's existing $90 million revolving credit facility (the "Existing Credit Facility") with Bank of America, N.A ("Bank of America") and is not subject to a borrowing base calculation. The Beyond Term Loan accrues interest at an annual rate equal to the Secured Overnight Financing Rate ("SOFR") plus a margin of 275 basis points with no SOFR floor. The Beyond Term Loan contains custo

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities. The information set forth in Item 1.01 above is incorporated by reference into this Item 3.02. The shares being sold to Beyond pursuant the Beyond Term Loan Agreement and Subscription Agreement are exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"). Beyond has represented to the Company that it is an "accredited investor" as defined in Rule 501(a) of Regulation D under the Securities Act and that the Common Stock is being acquired for investment purposes and not with a view to, or for sale in connection with, any distribution thereof, and appropriate legends will be affixed to any certificates evidencing shares of Common Stock issued.

03 Material Modification to Rights of Security Holders

Item 3.03 Material Modification to Rights of Security Holders. The information contained in Item 1.01, other than with respect to the Second Amendment to the Third Amended and Restated Credit Agreement is incorporated by reference into this Item 3.03.

01 Other Events

Item 8.01 Other Events. On October 21, 2024, the Company and Beyond issued a joint press release announcing the Company's strategic venture with Beyond, Inc. A copy of the joint press release is attached hereto as Exhibit 99.1 and incorporated by reference herein. Cautionary Statement Regarding Forward-Looking Statements This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section27A of the Securities Act and Section21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or the Company's future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "aim," "believe," "can," "may," "will," "estimate," "potential," "continue," "anticipate," "intend," "expect," "could," "would," "project," "forecast," "plan," "possible," "intend," "target," or the negative of these words or other similar expressions that concern the Company's expectations, strategy, priorities, plans, or intentions. Forward-looking statements in this Current Report on Form 8-K include, but are not limited to, the Company's ability to consummate the Transactions and satisfy applicable closing conditions, including the receipt of its shareholders' approval of the Nasdaq Proposal. The Company's expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties, including changes in the Company's plans or assumptions, that could cause actual results to differ materially from those projected. These risks include the risk of the Company's shareholders not approving the Transactions, the occurrence of any event, change or other circumstances that could result in the Subscription Agreement being terminated or the Transactions not being completed on the terms reflected in the Subscription Agreement, or at

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit Number Description 10.1 * Term Loan Credit Agreement dated as of October 21, 2024, by and between Kirkland's Stores, Inc., as Lead Borrower, the Borrowers named therein, the Guarantors named therein, Beyond, Inc., as Administrative Agent and Collateral Agent and the Lenders party thereto. 10.2 * Subscription Agreement, dated as of October 21, 2024, by and between Kirkland's, Inc. and Beyond, Inc. 10.3 Investor Rights Agreement, dated as of October 21, 2024, by and between Kirkland's, Inc. and Beyond, Inc. 10.4 * Collaboration Agreement dated as of October 21, 2024, by and between Kirkland's, Inc. and Beyond, Inc. 10.5 * Trademark License Agreement, dated as of October 21, 2024, by and between Kirkland's, Inc. and Beyond, Inc. 10.6 * Second Amendment to Third Amended and Restated Credit Agreement dated as of October 21, 2024, by and between Kirkland's Stores, Inc., as Lead Borrower, the Borrowers named therein, the Guarantors named therein, Bank of America, N.A., as Administrative Agent and Collateral Agent, and the Lenders party thereto. 99.1 Joint Press Release dated October 21, 2024 announcing the Company's strategic venture with Beyond, Inc. 104 Cover Page Interactive Data File (embedded within the Inline XBRL Document) * Exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K and will be supplementally provided to the SEC upon request.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Kirkland's, Inc. October 21, 2024 By: /s/ Carter R. Todd Name: Carter R. Todd Title: Senior Vice President and General Counsel

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View this 8-K filing on SEC EDGAR