X0202 4 2005-06-24 0001030896 BLUEFLY INC BFLY 0000922382 QUANTUM INDUSTRIAL PARTNERS LDC ET AL KAYA FLAMBOYAN 9 WILLEMSTAD, CURACAO NETHERLANDS ANTILLES 0 0 1 0 0001237660 QIH MANAGEMENT INVESTOR LP 888 SEVENTH AVENUE 33RD FLOOR NEW YORK NY 10106 0 0 1 0 0001237658 QIH MANAGEMENT LLC 888 SEVENTH AVENUE 33RD FLOOR NEW YORK NY 10106 0 0 1 0 0001029160 SOROS FUND MANAGEMENT LLC 888 SEVENTH AVENUE 33RD FLOOR NEW YORK NY 10106 0 0 1 0 Series D Convertible Preferred Stock .76 2005-06-24 4 S 0 2242.057 1000.00 D Common Stock 2950075 4668.262 I See footnote Series F Convertible Preferred Stock 2.32 2005-06-24 4 P 0 2904.6 1000.00 A Common Stock 1251983 2904.6 I See footnote This amount represents the initial conversion price of the Issuer's Series D Convertible Preferred Stock, par value $0.01 per share ("Series D Preferred Stock"), into the Issuer's Common Stock, par value $0.01 per share ("Shares"). Each share of Series D Preferred Stock is convertible into a number of Shares equal to the face amount ($1000) divided by such conversion price. The terms of the Series D Preferred Stock provide for certain anti-dilution adjustments to such initial conversion price. The disposition of shares of Series D Preferred Stock and the acquisition of shares of Series F Preferred Stock (defined below) reported hereby occurred simultaneously on June 24, 2005. These securities are immediately exercisable and have no expiration date. This amount is based upon the initial conversion price of $0.76 per share and is subject to certain anti-dilution adjustments. In addition, the Series D Preferred Stock is subject to a 12% accruing dividend that is payable upon conversion, redemption or liquidation of the Issuer. These securities are held for the benefit of Quantum Industrial Partners LDC, an exempted limited duration company formed under the laws of the Cayman Islands ("QIP"). QIH Management Investor, L.P., an investment advisory firm organized as a Delaware limited partnership ("QIHMI"), is a minority shareholder of, and is vested with investment discretion with respect to portfolio assets held for the account of, QIP. The sole general partner of QIHMI is QIH Management LLC, a Delaware limited liability company ("QIH Management"). Soros Fund Management LLC, a Delaware limited liability company ("SFM"), is the sole managing member of QIH Management. This amount represents the initial conversion price of the Issuer's Series F Convertible Preferred Stock, par value $0.01 per share ("Series F Preferred Stock") into Shares. Each share of Series F Preferred Stock is convertible into a number of Shares equal to the face amount ($1000) divided by such conversion price. The terms of the Series F Preferred Stock provide for certain anti-dilution adjustments to such initial conversion price. This amount is based upon the initial conversion price of $2.32 per share and is subject to certain anti-dilution adjustments. In addition, the Series F Preferred Stock is subject to a 7% accruing dividend that is payable upon conversion, redemption or liquidation of the Issuer. The filing of this statement shall not be deemed an admission that any of the Reporting Persons is the beneficial owner of any securities not held directly for its account for purposes of Section 16 of the Securities Act of 1934, as amended, or otherwise. Jay Schoenfarber, as Attorney-in-Fact for Quantum Industrial Partners LDC 2005-06-28 Jay Schoenfarber, as Assistant General Counsel of Soros Fund Management LLC, which is the Managing Member of QIH Management LLC, which is the General Partner of QIH Management Investor, L.P. 2005-06-28 Jay Schoenfarber, as Assistant General Counsel of Soros Fund Management LLC, which is the Managing Member of QIH Management LLC 2005-06-28 Jay Schoenfarber, as Assistant General Counsel of Soros Fund Management LLC 2005-06-28