UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 14)*
BLUEFLY, INC.
-----------------------------------------
(Name of Issuer)
Common Stock, Par Value $0.01 Per Share
----------------------------------------
(Title of Class of Securities)
096227103
----------------------------------------
(CUSIP Number)
Stephen M. Vine, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue
New York, New York 10022
(212) 872-1000
-----------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 9, 2002
--------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box .
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.240.13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Continued on following pages
Page 1 of 36 Pages
Exhibit Index: Page 13
SCHEDULE 13D
CUSIP No. 096227103 Page 2 of 36 Pages
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only).
QUANTUM INDUSTRIAL PARTNERS LDC
2 Check the Appropriate Box if a Member of a Group (See Instructions)
a.[___]
b.[ X ]
3 SEC Use Only
4 Source of Funds (See Instructions)
WC
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
6 Citizenship or Place of Organization
Cayman Islands
7 Sole Voting Power
Number of 22,825,650
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 22,825,650
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
22,825,650**
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
[ X ]
13 Percent of Class Represented By Amount in Row (11)
81.72%**
14 Type of Reporting Person (See Instructions)
OO; IV
---------------
** See Item 6
SCHEDULE 13D
CUSIP No. 096227103 Page 3 of 36 Pages
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only).
QIH MANAGEMENT INVESTOR, L.P.
2 Check the Appropriate Box if a Member of a Group (See Instructions)
a. [___]
b. [ X ]
3 SEC Use Only
4 Source of Funds (See Instructions)
AF
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
[___]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 22,825,650
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 22,825,650
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
22,825,650**
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
[ X ]
13 Percent of Class Represented By Amount in Row (11)
81.72%**
14 Type of Reporting Person (See Instructions)
PN; IA
---------------
** See Item 6
SCHEDULE 13D
CUSIP No. 096227103 Page 4 of 36 Pages
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only).
QIH MANAGEMENT, INC.
2 Check the Appropriate Box if a Member of a Group (See Instructions)
a. [___]
b. [ X ]
3 SEC Use Only
4 Source of Funds (See Instructions)
AF
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
[__]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 22,825,650
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 22,825,650
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
22,825,650**
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
[ X ]
13 Percent of Class Represented By Amount in Row (11)
81.72%**
14 Type of Reporting Person (See Instructions)
CO
---------------
** See Item 6
SCHEDULE 13D
CUSIP No. 096227103 Page 5 of 36 Pages
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only).
SOROS FUND MANAGEMENT LLC
2 Check the Appropriate Box if a Member of a Group (See Instructions)
a. [___]
b. [ X ]
3 SEC Use Only
4 Source of Funds (See Instructions)
AF
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
[___]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 22,825,650
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 22,825,650
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
22,825,650**
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
[ X ]
13 Percent of Class Represented By Amount in Row (11)
81.72%**
14 Type of Reporting Person (See Instructions)
OO; IA
---------------
** See Item 6
SCHEDULE 13D
CUSIP No. 096227103 Page 6 of 36 Pages
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only).
SFM DOMESTIC INVESTMENTS LLC
2 Check the Appropriate Box if a Member of a Group (See Instructions)
a. [___]
b. [ X ]
3 SEC Use Only
4 Source of Funds (See Instructions)
WC
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
[___]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 746,885
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 746,885
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
746,885**
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
[X]
13 Percent of Class Represented By Amount in Row (11)
6.81%**
14 Type of Reporting Person (See Instructions)
OO
---------------
** See Item 6
SCHEDULE 13D
CUSIP No. 096227103 Page 7 of 36 Pages
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only).
GEORGE SOROS (in the capacity described herein)
2 Check the Appropriate Box if a Member of a Group (See Instructions)
a. [___]
b. [ X ]
3 SEC Use Only
4 Source of Funds (See Instructions)
AF
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
[__]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 23,572,535
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 23,572,535
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
23,572,535**
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
[___]
13 Percent of Class Represented By Amount in Row (11)
82.70%**
14 Type of Reporting Person (See Instructions)
IA
---------------
** See Item 6
Page 8 of 36 Pages
This Amendment No. 14 to Schedule 13D relates to shares of Common Stock,
$0.01 par value per share (the "Shares"), of Bluefly, Inc. (the "Issuer"). This
Amendment No. 14 supplementally amends the initial statement on Schedule 13D,
dated August 6, 1999, and all amendments thereto (collectively, the "Initial
Statement"), filed by the Reporting Persons (as defined herein). This Amendment
No. 14 is being filed by the Reporting Persons to report that QIP (as defined
herein) and SFM Domestic Investments (as defined herein) have entered into an
agreement with the Issuer as described herein, whereby QIP and SFM Domestic
Investments each purchased from the Issuer shares of preferred stock as
described herein. Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Initial Statement. The Initial Statement is
supplementally amended as follows.
Item 2. Identity and Background
This Statement is being filed on behalf of each of the following persons
(collectively, the "Reporting Persons"):
(i) Quantum Industrial Partners LDC ("QIP");
(ii) QIH Management Investor, L.P. ("QIHMI");
(iii) QIH Management, Inc. ("QIH Management");
(iv) Soros Fund Management LLC ("SFM LLC");
(v) SFM Domestic Investments LLC ("SFM Domestic Investments"); and
(vi) Mr. George Soros ("Mr. Soros").
This Statement relates to the Shares held for the accounts of QIP and SFM
Domestic Investments.
Item 3. Source and Amount of Funds or Other Consideration
The information set forth in Item 6 hereof is hereby incorporated by
reference into this Item 3.
QIP expended approximately $2,033,430 of its working capital to purchase
the securities reported herein as being acquired since June 21, 2002 (60 days
prior to the date hereof). SFM Domestic Investments expended approximately
$66,570 of its working capital to purchase the securities reported herein as
being acquired since June 21, 2002 (60 days prior to the date hereof).
Item 4. Purpose of Transaction
The information set forth in Item 6 hereof is hereby incorporated by
reference into this Item 4.
The Reporting Persons reserve the right to acquire, or cause to be
acquired, additional securities of the Issuer, to dispose of, or cause to be
disposed, such securities at any time or to formulate other purposes, plans or
proposals regarding the Issuer or any of its securities, to the extent deemed
advisable in light of general investment and trading policies of the Reporting
Persons, market conditions or other factors.
Page 9 of 36 Pages
Item 5. Interest in Securities of the Issuer
(a) (i) Each of QIP, QIHMI, QIH Management and SFM LLC may be deemed the
beneficial owner of 22,825,650 Shares (approximately 81.72% of the total number
of Shares outstanding assuming the exercise and conversion of all of the
securities (excluding the Series 2002 Preferred Stock) held for the account of
QIP). This number consists of A) 5,287,082 Shares, B) 3,806,923 Shares issuable
upon the conversion of 445,410 shares of Series A Preferred Stock, C) 12,829,524
Shares issuable upon the conversion of 8,607,843 shares of Series B Preferred
Stock, D) 363,113 Shares issuable upon the exercise of warrants held for the
account of QIP, E) 96,830 Shares issuable upon the exercise of Warrant No. 11
held for the account of QIP, F) 58,098 Shares issuable upon the exercise of
Warrant No. 13 held for the account of QIP, G) 96,830 Shares issuable upon the
exercise of Warrant No. 15 held for the account of QIP, and H) 287,250 Shares
issuable upon the exercise of Warrant No. 17 held for the account of QIP.
(ii) SFM Domestic Investments may be deemed the beneficial owner of 746,885
Shares (approximately 6.81% of the total number of Shares outstanding assuming
the exercise and conversion of all the securities (excluding the Series 2002
Preferred Stock) held for its account). This number consists of A) 172,995
Shares, B) 124,701 Shares issuable upon the conversion of 14,590 shares of
Series A Preferred Stock held for its account, C) 419,666 Shares issuable upon
the conversion of 281,571 shares of Series B Preferred Stock held for its
account, D) 11,887 Shares issuable upon the exercise of warrants held for its
account, E) 3,170 Shares issuable upon the exercise of Warrant No. 12 held for
its account, F) 1,902 Shares issuable upon the exercise of Warrant No. 14 held
for its account, G) 3,170 Shares issuable upon the exercise of Warrant No. 16
held for its account, and H) 9,394 Shares issuable upon the exercise of Warrant
No. 18 held for its account.
(iii) Mr. Soros may be deemed the beneficial owner of 23,572,535 Shares
(approximately 82.70% of the total number of Shares outstanding assuming the
exercise and conversion of all of the securities (excluding the Series 2002
Preferred Stock) held for the accounts of QIP and SFM Domestic Investments).
This number consists of A) 5,287,082 Shares held for the account of QIP, B)
3,806,923 Shares issuable upon the conversion of 445,410 shares of Series A
Preferred Stock held for the account of QIP, C) 12,829,524 Shares issuable upon
the conversion of 8,607,843 shares of Series B Preferred Stock held for the
account of QIP, D) 363,113 Shares issuable upon the exercise of warrants held
for the account of QIP, E) 96,830 Shares issuable upon the exercise of Warrant
No. 11 held for the account of QIP, F) 58,098 Shares issuable upon the exercise
of Warrant No. 13 held for the account of QIP, G) 96,830 Shares issuable upon
the exercise of Warrant No. 15 held for the account of QIP, H) 287,250 Shares
issuable upon the exercise of Warrant No. 17 held for the account of QIP, I)
172,995 Shares held for the account of SFM Domestic Investments, J) 124,701
Shares issuable upon the conversion of 14,590 shares of Series A Preferred Stock
held for the account of SFM Domestic Investments, K) 419,666 Shares issuable
upon the conversion of 281,571 shares of Series B Preferred Stock held for the
account of SFM Domestic Investments, L) 11,887 Shares issuable upon the exercise
of warrants held for the account of SFM Domestic Investments, M) 3,170 Shares
issuable upon the exercise of the Warrant No. 12 held for the account of SFM
Domestic Investments, N) 1,902 Shares issuable upon the exercise of Warrant No.
14 held for the account of SFM Domestic Investments, O) 3,170 Shares issuable
upon the exercise of the Warrant No. 16 held for the account of SFM Domestic
Investments, and P) 9,394 Shares issuable upon the exercise of Warrant No. 18
held for the account of SFM Domestic Investments.
(b) (i) Each of QIP, QIHMI, QIH Management and SFM LLC (by virtue of the
QIP contract) may be deemed to have the sole power to direct the voting and
disposition of the 22,825,650 Shares held for the account of QIP (assuming the
conversion of all the Series A
Page 10 of 36 Pages
Preferred Stock and the Series B Preferred Stock, and the exercise of the
warrants and Warrant No. 11, Warrant No. 13, Warrant No. 15 and Warrant No. 17
held for the account of QIP).
(ii) SFM Domestic Investments may be deemed to have the sole power to
direct the voting and disposition of the 746,885 Shares held for its account
(assuming the conversion of all the Series A Preferred Stock and the Series B
Preferred Stock, and the exercise of the warrants and Warrant No. 12, Warrant
No. 14, Warrant No. 16 and Warrant No. 18 held for its account).
(iii) Mr. Soros (as a result of his position with SFM LLC and in his
capacity as the sole managing member of SFM Domestic Investments) may be deemed
to have the sole power to direct the voting and disposition of 23,572,535 Shares
held for the accounts of QIP and SFM Domestic Investments. This number consists
of A) 22,825,650 Shares held for the account of QIP (assuming the conversion of
all the Series A Preferred Stock and the Series B Preferred Stock, and the
exercise of the warrants and Warrant No. 11, Warrant No. 13, Warrant No. 15 and
Warrant No. 17 held for the account of QIP) and B) 746,885 Shares held for the
account of SFM Domestic Investments (assuming the conversion of all the Series A
Preferred Stock and the Series B Preferred Stock, and the exercise of the
warrants and Warrant No. 12, Warrant No. 14, Warrant No. 16 and Warrant No. 18
held for the account of SFM Domestic Investments).
(c) Except for the transactions described in Item 6 below, which were
effected in a privately negotiated transaction, there have been no transactions
effected with respect to the Shares since June 21, 2002 (60 days prior to the
date hereof) by any of the Reporting Persons.
(d) (i) The shareholders of QIP, including Quantum Industrial Holdings,
Ltd., a British Virgin Islands international business company, have the right to
participate in the receipt of dividends from, or proceeds from the sales of, the
securities held for the account of QIP in accordance with their ownership
interests in QIP.
(ii) Certain members of SFM Domestic Investments have the right to
participate in the receipt of dividends from, or proceeds from the sale of, the
securities held for the account of SFM Domestic Investments.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
On August 9, 2002, the Issuer entered into a Series 2002 Preferred Stock
Purchase Agreement (the "Purchase Agreement") with QIP and SFM Domestic
Investments. Pursuant to the terms of the Purchase Agreement, QIP purchased
2,033.43 shares of the Series 2002 Convertible Preferred Stock, par value $.01
per share ("Series 2002 Preferred Stock") for an aggregate purchase price of
$2,033,430, and SFM Domestic Investments purchased 66.57 shares of the Series
2002 Preferred Stock for an aggregate purchase price of $66,570. So long as any
shares of the Series 2002 Preferred Stock are owned by QIP, SFM Domestic
Investments or their respective affiliates, the Issuer has agreed not to take
any action to approve or otherwise facilitate certain change of control
transactions, including, but not limited to, a merger or consolidation of the
Issuer resulting in a change of control or a sale of substantially all the
assets of the Issuer, unless provision has been made for the holders of the
Series 2002 Preferred Stock to receive in connection with such transaction an
amount in cash equal to $1,000 per share of the Series 2002 Preferred Stock. The
foregoing description of the Purchase Agreement does not purport to be complete
and is qualified in its entirety by the terms of the Purchase Agreement, which
is attached in Exhibit EEE and is incorporated herein by reference in response
to this Item 6.
Page 11 of 36 Pages
Pursuant to the terms of the Certificate of Powers, Designations,
Preferences and Rights of the Series 2002 Convertible Preferred Stock (the
"Series 2002 Preferred Certificate of Designations") and pursuant to the terms
of the Certificate of Correction of Certificate of Powers, Designations,
Preferences and Rights of Series 2002 Convertible Preferred Stock (the "Series
2002 Preferred Certificate of Correction"), filed by the Issuer with the
Delaware Secretary of the State on August 9, 2002 and August 19, 2002,
respectively, the shares of the Series 2002 Preferred Stock are convertible (to
the extent stockholder approval is not required by the rules of the Nasdaq
SmallCap Market or any other national securities exchange or quotation system
upon which the Common Stock may be listed from time to time), at the option of
the holders thereof, into any equity securities sold by the Issuer for cash in
any subsequent round of financing at a conversion price based upon the lowest
price per share paid by any investor in such subsequent round of financing. The
holders of the Series 2002 Preferred Stock are entitled to a preference on a
liquidation, dissolution or winding up of the Issuer equal to $1,000 per share
of the Series 2002 Preferred Stock. So long as any shares of the Series 2002
Preferred Stock are outstanding, the approval of the holders of a majority of
the shares of the Series 2002 Preferred Stock, voting separately as a class,
must be obtained to designate or issue any shares of capital stock of the
Issuer, or any rights, warrants or options exchangeable for or convertible into
capital stock of the Issuer, ranking pari passu with or senior to the Series
2002 Preferred Stock in the event of a liquidation, dissolution or winding up of
the Issuer. The foregoing descriptions of the Series 2002 Preferred Certificate
of Designations and Series 2002 Preferred Certificate of Correction do not
purport to be complete and are qualified in their entirety by the terms of the
Series 2002 Preferred Certificate of Designations and Series 2002 Preferred
Certificate of Correction, which are attached in Exhibit FFF and Exhibit GGG,
respectively, and are incorporated herein by reference in response to this Item
6.
Pursuant to the terms of a letter (the "Letter"), dated August 19, 2002,
from the Company to QIP and SFM Domestic Investments, the Company has agreed to
put forth a proposal seeking stockholder approval of the conversion rights of
the Series 2002 Preferred Stock at the Company's next annual or special meeting
of stockholders to the extent that stockholder approval of such conversion
rights is required by the rules of the Nasdaq SmallCap Market or any other
national securities exchange or quotation system upon which the Common Stock may
be listed from time to time. The foregoing description of the Letter does not
purport to be complete and is qualified in its entirety by the terms of the
Letter, which is attached in Exhibit HHH and is incorporated herein by reference
in response to this Item 6.
In connection with its purchase of $2,100,000 of shares of the Series 2002
Preferred Stock, QIP and SFM Domestic Investments reduced their standby
commitment under the Standby Commitment (a copy of which was previously filed as
Exhibit YY to Schedule 13D Amendment No. 11 and is incorporated herein by
reference in response to this Item 6) to zero. In connection with the Standby
Commitment, QIP and SFM Domestic Investments have agreed with the Issuer to
waive the anti-dilution provisions contained in Section 5.8.6. of the Issuer's
Certificate of Incorporation (a copy of which was previously filed as Exhibit RR
to Schedule 13D Amendment No. 8 and is incorporated herein by reference in
response to this Item 6) with respect to the issuance of any additional
securities of the Issuer into which the shares of the Series 2002 Preferred
Stock are converted, but only if there are no purchasers of securities in such
financing other than QIP and SFM Domestic Investments or their respective
affiliates and only if none of QIP, SFM Domestic Investments or their respective
affiliates invest any additional funds in such financing. The foregoing
descriptions of the Standby Commitment and the Certificate of Incorporation do
not purport to be complete and are qualified in their entirety by the terms of
the Standby Commitment and the Certificate of Incorporation, respectively.
Except as set forth herein, the Reporting Persons do no have any contracts,
arrangements, understandings or relationships with respect to any securities of
the Issuer.
Item 7. Material to be Filed as Exhibits
The Exhibit Index is incorporated herein by reference.
Page 12 of 36 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this Statement is
true, complete and correct.
Date: August 20, 2002 QUANTUM INDUSTRIAL PARTNERS LDC
By: /s/ Richard D. Holahan, Jr.
-----------------------------
Richard D. Holahan, Jr.
Attorney-in-Fact
QIH MANAGEMENT INVESTOR, L.P.
By: QIH Management, Inc.,
its General Partner
By: /s/ Richard D. Holahan, Jr.
-----------------------------
Richard D. Holahan, Jr.
Vice President
QIH MANAGEMENT, INC.
By: /s/ Richard D. Holahan, Jr.
-----------------------------
Richard D. Holahan, Jr.
Vice President
SOROS FUND MANAGEMENT LLC
By: /s/ Richard D. Holahan, Jr.
-----------------------------
Richard D. Holahan, Jr.
Assistant General Counsel
SFM DOMESTIC INVESTMENTS LLC
By: George Soros
Its Managing Member
By: /s/ Richard D. Holahan, Jr.
----------------------------
Richard D. Holahan, Jr.
Attorney-in-Fact
GEORGE SOROS
By: /s/ Richard D. Holahan, Jr.
-----------------------------
Richard D. Holahan, Jr.
Attorney-in-Fact
Page 13 of 36 Pages
EXHIBIT INDEX
EEE. Form of the Series 2002 Preferred Stock Purchase Agreement, 14
dated as of August 9, 2002, between Bluefly, Inc. and the
investors listed on Schedule 1 thereto.
FFF. Form of the Certificate of Powers, Designations, 29
Preferences and Rights of Series 2002 Convertible
Preferred Stock of Bluefly, Inc.
GGG. Form of the Certificate of Correction of the 35
Certificate of Powers, Designations, Preferences
and Rights of the Series 2002 Convertible
Preferred Stock of Bluefly, Inc.
HHH. Form of letter, dated as of August 19, 2002, between 36
Bluefly, Inc. and Quantum Industrial Partners LDC.