8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of theSecurities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 17, 2021

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BUTTERFLY NETWORK, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-39292	84-4618156
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer<br> Identification No.)
530 Old Whitfield StreetGuilford, Connecticut	****<br><br> <br>06437
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(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (203) 689-5650

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N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written<br>communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting<br>material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨	Pre-commencement<br>communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨	Pre-commencement<br>communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

Item 2.02.	Results of Operations and Financial Condition.

Butterfly Network, Inc. (the “Company”) is furnishing on Exhibit 99.1 attached hereto unaudited quarterly financial results for 2020 of BFLY Operations, Inc. (formerly known as Butterfly Network, Inc. prior to the business combination completed on February 12, 2021 and which is a wholly-owned subsidiary of the Company following the business combination) (“Legacy Butterfly”) for investors and analysts of the Company. The information furnished on Exhibit 99.1 represents a supplemental presentation of unaudited financial information and is not intended to replace the financial information presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2021, as amended by Form 10-K/A on May 12, 2021, or the Company’s Quarterly Reports on Form 10-Q, or the audited consolidated financial statements and related notes of Legacy Butterfly presented in the Company’s Current Report on Form 8-K filed with the SEC on February 16, 2021, as amended by Form 8-K/A on February 16, 2021 and March 29, 2021.

The information in this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01	Financial Statements and Exhibits.
(d)	Exhibits.
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Exhibit No.	Description
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99.1	Legacy Butterfly Unaudited Quarterly Financial Results for 2020

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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.

BUTTERFLY NETWORK, INC.
By:	/s/ Todd M. Fruchterman, M.D., Ph.D.
Name:  Todd M. Fruchterman, M.D., Ph.D.
Title:  President and Chief Executive Officer

Date: June 17, 2021

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Exhibit 99.1

LegacyButterfly

BFLYOperations, Inc. (formerly known as Butterfly Network, Inc.)

Unaudited Quarterly Financial Results for 2020

Butterfly Network, Inc. (the “Company”) is furnishing the following tables which set forth supplemental unaudited financial information of BFLY Operations, Inc. (formerly known as Butterfly Network, Inc. prior to the business combination completed on February 12, 2021 and which is a wholly- owned subsidiary of the Company following the business combination) (“Legacy Butterfly”) for the periods and as of the dates indicated. This supplemental presentation of unaudited financial information is not intended to replace the financial information presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2021, as amended by Form 10-K/A on May 12, 2021, or the Company’s Quarterly Reports on Form 10-Q, or the audited consolidated financial statements and related notes of Legacy Butterfly presented in the Company’s Current Report on Form 8-K filed with the SEC on February 16, 2021, as amended by Form 8-K/A on February 16, 2021 and March 29, 2021. Investors should refer to the notes to the financial statements included with such filings.

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BFLYOPERATIONS, INC.

(FORMERLY BUTTERFLY NETWORK, INC.)

CONDENSEDCONSOLIDATED BALANCE SHEETS

(Inthousands, except share and per share amounts)

(Unaudited)

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			June 30, <br><br> 2020			September 30,<br><br> 2020			December 31,<br><br> 2020
Assets
Current assets:
Cash and cash equivalents	70,006		$	73,428		$	51,686		$	60,206
Accounts receivable, net	1,993			5,374			2,828			5,752
Inventories	8,857			11,726			14,942			25,805
Current portion of vendor advances	3,937			2,958			236			2,571
Prepaid expenses and other current assets	3,021			1,729			3,102			2,998
Total current assets	87,814		$	95,215		$	72,794		$	97,332
Property and equipment, net	5,467			6,730			6,881			6,870
Non-current portion of vendor advances	46,940			46,940			46,940			37,390
Other non-current assets	3,548			3,461			3,478			5,599
Total assets	143,769		$	152,346		$	130,093		$	147,191
Liabilities, convertible preferred stock and stockholders' deficit
Current liabilities:
Accounts payable	6,588		$	6,920		$	8,330		$	16,400
Deferred revenue, current	4,607			6,128			5,350			8,443
Accrued purchase commitments, current	—			—			63,376			22,890
Accrued expenses and other current liabilities	4,268			6,840			8,886			21,962
Total current liabilities	15,463		$	19,888		$	85,942		$	69,695
Deferred revenue, non-current	587			587			1,099			2,790
Convertible debt	—			20,263			21,019			49,528
Loan payable	—			4,366			4,366			4,366
Accrued purchase commitments, non-current	—			—			—			19,660
Other non-current liabilities	563			567			624			2,146
Total liabilities	16,613		$	45,671		$	113,050		$	148,185
Commitments and contingencies
Convertible preferred stock:
Convertible preferred stock (Series A, B, C, and D) .0001 par<br> value with an aggregate liquidation preference of 383,829 at each reporting date	360,937			360,937			360,937			360,937
Stockholders' deficit:
Class A common stock .0001 par value	1			1			1			1
Class B common stock .0001<br> par value 1	—			—			—			—
Additional paid-in capital	22,633			25,393			27,969			32,874
Accumulated deficit	(256,415	)		(279,656	)		(371,864	)		(394,806	)
Total stockholders' deficit	(233,781	)	$	(254,262	)	$	(343,894	)	$	(361,931	)
Total liabilities, convertible preferred<br> stock and stockholders' deficit	143,769		$	152,346		$	130,093		$	147,191

All values are in US Dollars.

^1^There were 0 shares of Class B common stock issued and outstanding at each reporting date

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BFLYOPERATIONS, INC.

(FORMERLY BUTTERFLY NETWORK, INC.)

CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Inthousands, except shares and per share amounts)

(Unaudited)

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			June 30,<br><br> 2020			September 30,<br><br> 2020			December 31,<br><br> 2020 ^2^			Total
Revenue:
Product	7,209		$	9,990		$	8,621		$	12,527		$	38,347
Subscription	1,461			1,802			1,514			3,128			7,905
Total revenue	8,670		$	11,792		$	10,135		$	15,655		$	46,252
Cost of revenue:
Product 1	9,262			11,385			78,612			7,148			106,407
Subscription	244			242			774			(192	)		1,068
Total cost of revenue	9,506		$	11,627		$	79,386		$	6,956		$	107,475
Gross margin	(836	)	$	165		$	(69,251	)	$	8,699		$	(61,223	)
Operating expenses:
Research and development	12,516		$	11,940		$	11,971		$	13,311		$	49,738
Sales and marketing	5,915			5,955			5,538			8,855			26,263
General and administrative	5,242			5,341			5,068			8,744			24,395
Total operating expenses	23,673			23,236			22,577			30,910			100,396
Loss from operations	(24,509	)	$	(23,071	)	$	(91,828	)	$	(22,211	)	$	(161,619	)
Interest income	199		$	23		$	16		$	47		$	285
Interest expense	(5	)		(113	)		(300	)		(723	)		(1,141	)
Other income (expense), net	(29	)		(70	)		(84	)		(48	)		(231	)
Loss before provision for income taxes	(24,344	)	$	(23,231	)	$	(92,196	)	$	(22,935	)	$	(162,706	)
Provision for income taxes	10			10			12			7			39
Net loss and comprehensive loss	(24,354	)	$	(23,241	)	$	(92,208	)	$	(22,942	)	$	(162,745	)
Net loss per common share attributable to Class A common stockholders,<br> basic and diluted	(4.07	)	$	(3.85	)	$	(15.20	)	$	(3.73	)	$	(26.87	)
Weighted-average shares used to compute net loss per share attributable<br> to Class A common stockholders, basic and diluted	5,979,231			6,034,191			6,066,117			6,145,688			6,056,578
1 Losses (gains) on purchase commitments<br> included in product costs of revenue (in millions)	—		$	—		$	64.0		$	(3.9	)	$	60.1
2 In<br> Amendment No. 2 to the Company’s Current Report on Form 8-K/A filed with the SEC on March 29, 2021, the Company disclosed that<br> it had made reclassification adjustments from product revenues to subscription revenues in the amount of 650 and from product cost<br> of revenue to subscription cost of revenue in the amount of 533. The reclassifications were recorded during the three months ended<br> December 31, 2020 and also related to the three months ended September 30, 2020. The reclassifications were deemed immaterial. The<br> reclassifications do not impact total revenue, total cost of revenue or net loss for any period presented in this Current Report<br> or any previously issued financial statements.

All values are in US Dollars.

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BFLY OPERATIONS, INC.

(FORMERLY BUTTERFLY NETWORK, INC.)

CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS

(Inthousands)

(Unaudited)

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	Three months ended
	March 31,<br><br> 2020			June 30, <br><br> 2020			September 30,<br><br> 2020			December 31,<br><br> 2020			Total
Cash flows from operating activities:
Net loss	$	(24,354	)	$	(23,241	)	$	(92,208	)	$	(22,942	)	$	(162,745	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		285			308			311			412			1,316
Write-down of other assets – related party		—			—			—			1,390			1,390
Write-down of vendor advance		—			—			—			10,560			10,560
Non-cash interest expense on convertible debt		—			113			305			629			1,047
Write-down of inventories		—			709			6,214			200			7,123
Stock-based compensation expense		2,683			2,662			2,382			3,277			11,004
Other		244			47			438			(153	)		576
Changes in operating assets and liabilities:
Accounts receivable		(229	)		(2,969	)		1,723			(2,902	)		(4,377	)
Inventories		528			(3,522	)		(9,432	)		(11,061	)		(23,487	)
Prepaid expenses and other assets		(1,495	)		2,030			(874	)		319			(20	)
Vendor advances		1,302			979			2,723			(3,346	)		1,658
Accounts payable		1,487			143			1,606			7,939			11,175
Deferred revenue		1,407			1,521			(266	)		4,784			7,446
Accrued purchase commitments		—			—			63,376			(20,826	)		42,550
Accrued expenses and other liabilities		(1,528	)		1,484			2,031			11,097			13,084
Net cash used in operating activities	$	(19,670	)	$	(19,736	)	$	(21,671	)	$	(20,623	)	$	(81,700	)
Cash flows from investing activities:
Purchases of property and equipment		(480	)		(1,428	)		(689	)		221			(2,376	)
Net cash used in investing activities	$	(480	)	$	(1,428	)	$	(689	)	$	221		$	(2,376	)
Cash flows from financing activities:
Proceeds from exercise of stock options		154			70			118			1,696			2,038
Proceeds from loan payable		—			4,366			—			—			4,366
Proceeds from issuance of convertible debt		—			20,150			500			29,350			50,000
Payments of deferred offering costs		—			—			—			(657	)		(657	)
Payments of debt issuance costs		—			—			—			(1,467	)		(1,467	)
Net cash provided by financing activities	$	154		$	24,586		$	618		$	28,922		$	54,280
Net (decrease) increase in cash and cash equivalents	$	(19,996	)	$	3,422		$	(21,742	)	$	8,520		$	(29,796	)
Cash and cash equivalents, beginning of period		90,002			70,006			73,428			51,686			90,002
Cash and cash equivalents, end of period	$	70,006		$	73,428		$	51,686		$	60,206		$	60,206

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Key Performance Metrics

In addition to providing supplemental unaudited consolidated financial information of Legacy Butterfly above based on generally accepted accounting principles in the United States of America (“GAAP”), the Company has also provided above additional key performance metrics of Legacy Butterfly. We review the key performance measures discussed below, to evaluate business and measure performance, identify trends, formulate plans and make strategic decisions.

Units fulfilled

We define units fulfilled as the number of devices whereby control is transferred to a customer. We do not adjust this metric for returns as our volume of returns has historically been low. We view units fulfilled as a key indicator of the growth of our business. We believe that this metric is useful to investors because it presents our core growth and performance of our business period over period.

Forthe three months ended

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Subscription Mix

We define subscription mix as a percentage of our total revenue recognized in a reporting period that is subscription based, consisting primarily of our software as a service (“SaaS”) offering. We view subscription mix as a key indicator of the profitability of our business, and thus we believe that this metric is useful to investors.

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Non-GAAP Financial Measures

In addition to providing supplemental unaudited consolidated financial information of Legacy Butterfly above based on generally accepted accounting principles in the United States of America (“GAAP”), the Company has also provided above additional financial metrics of Legacy Butterfly that are not prepared in accordance with GAAP (“non-GAAP”). The non-GAAP financial measures included in this exhibit are Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin. The Company presents non-GAAP financial measures in order to assist readers of its consolidated financial statements in understanding the core operating results that its management uses to evaluate the business and for financial planning purposes. These non-GAAP financial measures provide an additional tool for investors to use in comparing our financial performance over multiple periods.

Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin are key performance measures that the Company’s management uses to assess its operating performance. These non-GAAP measures facilitate internal comparisons of the Company’s operating performance on a more consistent basis. The Company uses these performance measures for business planning purposes and forecasting. The Company believes that Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin enhance an investor’s understanding of the Company’s financial performance as they are useful in assessing its operating performance from period-to-period by excluding certain items that the Company believes are not representative of its core business.

Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin may not be comparable to similarly titled measures of other companies because they may not calculate these measures in the same manner. Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin are not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. When evaluating the Company’s performance, you should consider Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin alongside other financial performance measures prepared in accordance with GAAP, including net loss, gross profit and gross margin.

The non-GAAP financial measures do not replace the presentation of the Company’s GAAP financial results and should only be used as a supplement to, not as a substitute for, the Company’s financial results presented in accordance with GAAP. In this exhibit, the Company has provided a reconciliation of Adjusted EBITDA to net loss, Adjusted gross profit to gross profit, and Adjusted gross margin to gross margin, the most directly comparable GAAP financial measures. Management strongly encourages investors to review the Company’s financial statements and publicly-filed reports in their entirety and not rely on any single financial measure.

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BFLY OPERATIONS,INC.

(FORMERLY BUTTERFLY NETWORK,INC.)

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RECONCILIATION OF GAAPTO NON-GAAP

FINANCIAL MEASURES

(In thousands)

(Unaudited)

	Three months ended
	March 31,<br> 2020			June 30,<br> 2020			September 30,<br> 2020			December 31,<br> 2020			Total
Revenue	$	8,670		$	11,792		$	10,135		$	15,655		$	46,252
Cost of revenue		9,506			11,627			79,386			6,956			107,475
Gross profit	$	(836	)	$	165	****	$	(69,251	)	$	8,699	****	$	(61,223	)
Gross margin	****	-9.6	%	****	1.4	%	****	-683.3	%	****	55.6	%	****	-132.4	%
Add:
Depreciation and amortization		22			24			23			71			140
Loss (gain) on purchase commitments		—			—			63,993			(3,880	)		60,113
Inventory write-downs		—			—			2,570			—			2,570
Adjusted gross profit	$	(814	)	$	189		$	(2,665	)	$	4,890		$	1,600
Adjusted gross margin	****	-9.4	%	****	1.6	%	****	-26.3	%	****	31.2	%	****	3.5	%
	Three months ended
	March 31,<br> 2020			June 30,<br> 2020			September 30,<br> 2020			December 31,<br> 2020			Total
Net loss	$	(24,354	)	$	(23,241	)	$	(92,208	)	$	(22,942	)	$	(162,745	)
Interest income		(199	)		(23	)		(16	)		(47	)		(285	)
Interest expense		5			113			300			723			1,141
Other expense, net		29			70			84			48			231
Provision for income taxes		10			10			12			7			39
Stock based compensation		2,683			2,662			2,382			3,277			11,004
Depreciation and amortization		285			308			311			412			1,316
Impairments		—			—			—			1,390			1,390
Loss (gain) on purchase commitments		—			—			63,993			(3,880	)		60,113
Inventory write-downs		—			—			2,570			—			2,570
Adjusted EBITDA	$	(21,541	)	$	(20,101	)	$	(22,572	)	$	(21,012	)	$	(85,226	)

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