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Note 2 - Basis of Presentation, Liquidity and Management's Plan
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12 Months Ended |
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Dec. 31, 2012
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| Business Description and Basis of Presentation [Text Block] |
NOTE
2 - BASIS OF PRESENTATION, LIQUIDITY, AND
MANAGEMENT’S PLAN
The
Consolidated Financial Statements contemplate
continuation of the Company as a going
concern. However, the auditor's report
with respect to the Consolidated Financial Statements
contains an explanatory paragraph regarding a going
concern uncertainty. The Company has sustained
cumulative net losses and negative cash flows from
operations since inception. As of December
31, 2012, the Company had an accumulated deficit of
$187,099,000 and incurred a net loss attributable to
Bluefly, Inc. stockholders of $24,776,000 for the
year ended December 31,
2012.
The
Company is currently in active discussions regarding
a strategic transaction under the direction of a
special committee consisting of independent members
of the Board of Directors, together with the
assistance of an independent financial advisor
(“Proposed Strategic Transaction”).
The Company expects that such transaction will
be at a price substantially below the current market
price of the Company’s common stock. We
currently have sufficient funds to support our
operations until the anticipated signing date of a
definitive agreement regarding the Proposed Strategic
Transaction, at which time we believe bridge
financing will be available until the transaction can
be consummated. Management believes that
the Proposed Strategic Transaction, if and when
consummated, will provide the necessary liquidity to
eliminate the factors that resulted in the going
concern qualification.
If
the Company is unable to complete the Proposed
Strategic Transaction or an alternative strategic
transaction, we will require additional financing
from existing or third party investors to fund our
operations. The Company has already implemented
certain cost containment measures. In
conjunction with seeking such financing, we would
reduce our workforce, reduce overhead and otherwise
streamline our operations, of which certain
initiatives have already been implemented. The
inability to raise additional financing would have a
material adverse effect on our
operations.
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