Butterfly Network, Inc 10-Q for FY2021 Q1

Butterfly Network, Inc. (BFLY)

10-Q 2021-05-17 For: 2021-03-31

Added on April 09, 2026

About this 10-Q

Butterfly Network, Inc filed this 10-Q on May 17, 2021, covering the quarter ended March 31, 2021 (FY2021 Q1).

Headline figures

Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $12.44M; up 43.5% from $8.67M a year earlier
Net loss: $690K; compared with a net loss of $24.35M a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Delaware		84-4618156
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

530 Old Whitfield Street Guilford, Connecticut		06437
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, $0.0001 Par Value Per Share	BFLY	The New York Stock Exchange
Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per share	BFLY WS	The New York Stock Exchange


Large accelerated filer	¨	Accelerated filer	¨

Non-accelerated filer	☒	Smaller reporting company	☒	Emerging growth company	☒

		Page

	Cautionary Statement Regarding Forward-Looking Statements	2

Part I	Financial Information	3

Item 1.	Financial Statements	3

	Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020 (Unaudited)	3

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2021 and 2020 (Unaudited)	4

	Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three months ended March 31, 2021 and 2020 (Unaudited)	5

	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (Unaudited)	6

	Notes to Condensed Consolidated Financial Statements (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33

Item 4.	Controls and Procedures	34

Part II	Other Information	33

Item 1.	Legal Proceedings	35

Item 1A.	Risk Factors	35

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35

Item 3.	Defaults Upon Senior Securities	35

Item 4.	Mine Safety Disclosures	36

Item 5.	Other Information	36

Item 6.	Exhibits	36

Signatures		21


	March 31,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	18,850	$	60,206
Marketable securities		526,441		—
Accounts receivable, net		5,237		5,752
Inventories		36,128		25,805
Current portion of vendor advances		9,170		2,571
Prepaid expenses and other current assets		9,358		2,998
Total current assets	$	605,184	$	97,332
Property and equipment, net		7,254		6,870
Non-current portion of vendor advances		32,535		37,390
Other non-current assets		2,505		5,599
Total assets	$	647,478	$	147,191
Liabilities, convertible preferred stock and stockholders’ equity (deficit)
Current liabilities:
Accounts payable	$	5,268	$	16,400
Deferred revenue, current		9,548		8,443
Accrued purchase commitments, current		22,890		22,890
Accrued expenses and other current liabilities		14,666		21,962
Total current liabilities	$	52,372	$	69,695
Deferred revenue, non-current		4,014		2,790
Convertible debt		—		49,528
Loan payable		—		4,366
Warrant liabilities		133,214		—
Accrued purchase commitments, non-current		19,660		19,660
Other non-current liabilities		2,055		2,146
Total liabilities	$	211,315	$	148,185
Commitments and contingencies (Note 16)
Convertible preferred stock:
Convertible preferred stock (Series A, B, C and D) $.0001 par value with an aggregate liquidation preference of $0 and $383,829 at March 31, 2021 and December 31, 2020, respectively; 0 and 107,197,118 shares authorized, issued and outstanding at March 31, 2021 and December 31, 2020, respectively		—		360,937
Stockholders’ equity (deficit):
Class A common stock $.0001 par value; 600,000,000 and 116,289,600 shares authorized at March 31, 2021 and December 31, 2020, respectively; 164,862,470 and 6,593,291 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively		16		1
Class B common stock $.0001 par value; 27,000,000 and 26,946,089 shares authorized at March 31, 2021 and December 31, 2020, respectively; 26,426,939 and 0 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively		3		—
Additional paid-in capital		831,640		32,874
Accumulated deficit		(395,496)		(394,806)
Total stockholders’ equity (deficit)	$	436,163	$	(361,931)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	647,478	$	147,191


	Three months ended March 31,
	2021		2020
Revenue:
Product	$	9,595	$	7,209
Subscription		2,848		1,461
Total revenue	$	12,443	$	8,670
Cost of revenue:
Product		5,648		9,262
Subscription		379		244
Total cost of revenue	$	6,027	$	9,506
Gross profit	$	6,416	$	(836)
Operating expenses:
Research and development	$	15,716	$	12,516
Sales and marketing		9,808		5,915
General and administrative		34,640		5,242
Total operating expenses		60,164		23,673
Loss from operations	$	(53,748)	$	(24,509)
Interest income	$	239	$	199
Interest expense		(638)		(5)
Change in fair value of warrant liabilities		54,112		—
Other income (expense), net		(631)		(29)
Loss before provision for income taxes	$	(666)	$	(24,344)
Provision for income taxes		24		10
Net loss and comprehensive loss	$	(690)	$	(24,354)
Net loss per common share attributable to Class A and B common stockholders, basic and diluted		(0.01)		(4.07)
Weighted-average shares used to compute net loss per share attributable to Class A and B common stockholders, basic and diluted		105,916,706		5,979,232


Three months ended March 31, 2020

	Convertible			Class A			Class B
	Preferred			Common			Common			Additional				Total
	Stock			Stock			Stock			Paid-In		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Equity (Deficit)
December 31, 2019	107,197,118	$	360,937	5,939,950	$	1	—	$	—	$	19,782	$	(232,061)	$	(212,278)
Net loss	—		—	—		—	—		—		—		(24,354)		(24,354)
Common stock issued upon exercise of stock options	—		—	73,515		—	—		—		154		—		154
Stock-based compensation expense	—		—	—		—	—		—		2,697		—		2,697
March 31, 2020	107,197,118	$	360,937	6,013,465	$	1	—	$	—	$	22,633	$	(256,415)	$	(233,782)


Three months ended March 31, 2021

	Convertible			Class A			Class B
	Preferred			Common			Common			Additional				Total
	Stock			Stock			Stock			Paid-In		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Equity (Deficit)
December 31, 2020	107,197,118	$	360,937	6,593,291	$	1	—	$	—	$	32,874	$	(394,806)	$	(361,931)
Net loss	—		—	—		—	—		—		—		(690)		(690)
Common stock issued upon exercise of stock options	—		—	3,155,050		—	—		—		6,313		—		6,313
Conversion of convertible preferred stock	(107,197,118)		(360,937)	80,770,178		8	26,426,939		3		360,926		—		360,937
Conversion of convertible debt	—		—	5,115,140		1	—		—		49,916		—		49,917
Net equity infusion from the Business Combination	—		—	69,228,811		6	—		—		361,281		—		361,287
Stock-based compensation expense	—		—	—		—	—		—		20,330		—		20,330
March 31, 2021	—	$	—	164,862,470	$	16	26,426,939	$	3	$	831,640	$	(395,496)	$	436,163


	•	each share of Legacy Butterfly capital stock (other than the Legacy Butterfly Series A preferred stock) that was issued and outstanding immediately prior to the Effective Time was automatically canceled and converted into the right to receive 1.0383 shares of the Company’s Class A common stock, rounded down to the nearest whole number of shares;


	•	each share of Legacy Butterfly Series A preferred stock that was issued and outstanding immediately prior to the Effective Time was automatically canceled and converted into the right to receive 1.0383 shares of the Company’s Class B common stock, rounded down to the nearest whole number of shares;


	•	the principal amount plus accrued but unpaid interest, if any, on the Legacy Butterfly convertible notes outstanding as of immediately prior to the Effective Time was automatically canceled and converted into the right to receive shares of the Company’s Class A common stock, with such shares of the Company’s Class A common stock calculated by dividing the outstanding principal plus accrued interest, if any, of each Legacy Butterfly convertible note by $10.00, rounded down to the nearest whole number of shares.

59
	•	95,633,659 shares of the Company’s Class A common stock issued to Legacy Butterfly stockholders (other than certain holders of Legacy Butterfly Series A preferred stock) and holders of Legacy Butterfly convertible notes in the Merger;


	•	17,500,000 shares of the Company’s Class A common stock issued in connection with the Closing to the PIPE Investors pursuant to the PIPE Financing;


	Pattern of	Three months ended March 31,
	Recognition	2021		2020
By Product Type:
Devices and accessories	Point-in-time	$	9,595	$	7,209
Subscription services and other services	Over time		2,848		1,461
Total revenue		$	12,443	$	8,670
By Geographical Market:
United States		$	8,896	$	6,352
International			3,547		2,318
Total revenue		$	12,443	$	8,670


			Fair Value Measurement Level
	Total		Level 1		Level 2		Level 3
March 31, 2021:
Marketable securities:
Mutual funds	$	526,441	$	526,441	$	—	$	—
Total assets at fair value on a recurring basis	$	526,441	$	526,441	$	—	$	—

Warrants:
Public Warrants	$	89,010	$	89,010	$	—	$	—
Private Warrants		44,204		—		44,204		—
Total liabilities at fair value on a recurring basis	$	133,214	$	89,010	$	44,204	$	—


		Issuance		Shares	Total						Initial
		Price		Authorized,	Proceeds or				Net		Liquidation
	Year of	per		Issued and	Exchange		Issuance		Carrying		Price per
Class	Issuance	share		Outstanding	Value		Costs		Value		share
Series A	2012	$	0.04	26,946,090	$	1,038	$	11	$	1,027	$	0.77
Series B	2014		0.77	25,957,500		20,000		99		19,901		0.77
Series C	2014 – 2015		3.21	29,018,455		93,067		246		92,821		3.21
Series D	2018		9.89	25,275,073		250,000		2,812		247,188		9.89
				107,197,118


	Three months ended
	March 31,
	2021		2020
Total incurred for operating expenses	$	433	$	1,602

	March 31,		December 31,
	2021		2020
Due from related parties	$	—	$	38
Due to related parties		50		154


Years ending December 31:
Remainder of 2021	$	873
2022		2,043
2023		1,934
2024		1,904
2025		1,987
Thereafter		7,354
Total future minimum rental payments	$	16,095


	Three months ended March 31,
(In thousands)	2021		2020
Net loss	$	(690)	$	(24,354)
Interest income		(239)		(199)
Interest expense		638		5
Change in fair value of warrant liabilities		(54,112)		—
Other expense, net		631		29
Provision for income taxes		24		10
Stock based compensation		20,298		2,683
Depreciation and amortization		458		285
CEO transition costs		5,398		—
Warranty liability policy change		(560)		—
Transaction bonus		1,653		—
Adjusted EBITDA	$	(26,501)	$	(21,541)


(in thousands)	Total		< 1 year		1-3 Years		3-5 Years		> 5 years
Operating leases	$	16,095	$	1,360	$	3,936	$	3,945	$	6,854
Purchase obligations (1)		156,061		53,040		103,021		—		—
Total contractual obligations	$	172,156	$	54,400	$	106,957	$	3,945	$	6,854


Exhibit Number	Exhibit Description	Filed Herewith	Incorporated by Reference herein from Form or Schedule	Filing Date	SEC File/ Reg. Number
2.1†	Business Combination Agreement, dated as of November 19, 2020, by and among Butterfly Network, Inc. (formerly Longview Acquisition Corp.), Clay Merger Sub, Inc., and BFLY Operations, Inc. (formerly Butterfly Network, Inc.).		Form 8-K (Exhibit 2.1)	11/23/2020	001-39292
3.1	Second Amended and Restated Certificate of Incorporation of Butterfly Network, Inc.		Form 8-K (Exhibit 3.1)	2/16/2021	001-39292
3.2	Amended and Restated Bylaws of Butterfly Network, Inc.		Form 8-K (Exhibit 3.2)	2/16/2021	001-39292
4.1	Specimen Class A Common Stock Certificate.		Form 8-K (Exhibit 4.1)	2/16/2021	001-39292
10.5.1@	Exclusive (Equity) Agreement by and between BFLY Operations, Inc. (formerly Butterfly Network, Inc.) and the Board of Trustees of the Leland Stanford Junior University, dated as of June 28, 2013.		Form S-4 (Exhibit 10.13.1)	11/27/2020	333-250995
10.5.2@	Amendment No. 1, made effective as of April 23, 2019, to Exclusive (Equity) Agreement, dated as of June 28, 2013, by and between BFLY Operations, Inc. (formerly Butterfly Network, Inc.) and the Board of Trustees of the Leland Stanford Junior University.		Form S-4 (Exhibit 10.13.2)	11/27/2020	333-250995


	BUTTERFLY NETWORK, INC.

Date: May 17, 2021	By:	/s/ Todd Fruchterman, M.D., Ph.D.
		Todd Fruchterman, M.D., Ph.D.
		President and Chief Executive Officer

Date: May 17, 2021	By:	/s/ Stephanie Fielding
		Stephanie Fielding
		Chief Financial Officer