SCHEDULE 13D/A: Butterfly Network Founder Initiates Large Scale Stock Sale Plan for Estate Planning

Dr. Jonathan Rothberg, founder of Butterfly Network, Inc., has established a Rule 10b5-1 trading plan to sell up to 6.2 million Class A common shares for estate planning purposes, commencing July 7, 2025.

Summary

• Dr. Jonathan M. Rothberg, founder of Butterfly Network, Inc., has filed an Amendment No. 6 to his Schedule 13D, disclosing changes in beneficial ownership and the establishment of a Rule 10b5-1 trading plan.
• As of February 13, 2025, Dr. Rothberg beneficially owns 9,592,810 shares of Class A common stock, representing 4.4% of the outstanding Class A shares (216,496,214 shares).
• His Class A holdings include 2,641,924 shares held directly, 21,645 shares from exercisable stock options, 6,202,545 shares held by entities owned by trusts for his children, and 726,696 shares held by his spouse.
• Dr. Rothberg also beneficially owns 26,426,937 shares of Class B common stock, representing 100% of the outstanding Class B shares (26,426,937 shares), held through various 4C Holdings LLC entities.
• The Rule 10b5-1 plan, entered into by entities owned by trusts for Dr. Rothberg's children, allows for the sale of up to 6,202,545 shares of Class A common stock.
• The sales period for this plan is scheduled to begin on July 7, 2025, and conclude on July 3, 2026.
• Sales under the plan are subject to minimum price parameters, and there is no guarantee that any shares will be sold.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the disclosure of a large volume of potential insider sales, which could create downward pressure on the stock price. While the reason (estate planning) is benign and the plan is transparent, the sheer volume of shares involved may concern investors.

Positives

• The establishment of a Rule 10b5-1 plan demonstrates a pre-planned, transparent approach to stock disposition, reducing concerns about insider trading based on material nonpublic information.
• The stated purpose of the sales is for estate planning, indicating a personal financial management decision rather than a reflection of negative company outlook.

Negatives

• The potential sale of up to 6,202,545 Class A common shares represents a significant volume of stock, which could exert downward pressure on the share price due to increased supply.
• While for estate planning, large insider sales can sometimes be perceived negatively by the market, potentially signaling a lack of confidence, even if unintended.

Risks

• Sales under the plan may be suspended due to market disruptions, banking moratoriums, trading suspensions, or other crises/calamities.
• Sales may be prohibited by legal, contractual, or regulatory restrictions applicable to the broker, its affiliates, or the seller.
• The broker may suspend sales if they determine it would materially impact the trading price for the stock.
• The plan may be terminated if the seller becomes aware of legal, contractual, or regulatory restrictions that would prohibit sales, such as those related to mergers, acquisitions, or affiliate lock-ups.
• There is no assurance that any shares will be sold under the plan, as sales are subject to minimum price parameters.

Future Outlook

The document outlines a future period from July 7, 2025, to July 3, 2026, during which up to 6,202,545 Class A common shares may be sold under a pre-arranged Rule 10b5-1 trading plan, subject to minimum price parameters and market conditions.

Management Comments

• Dr. Jonathan M. Rothberg, Ph.D., has entered into a Rule 10b5-1 trading plan in connection with estate planning, allowing for the potential sale of Class A common stock by entities owned by trusts created for the benefit of his children.

Industry Context

Rule 10b5-1 trading plans are a common mechanism used by corporate insiders to sell company stock in a pre-arranged manner, providing an affirmative defense against insider trading allegations. Such plans are typically established for personal financial management, including diversification or estate planning, and are widely adopted across various industries to ensure compliance with securities laws.

Related Party Transactions

• Entities owned by trusts created for the benefit of Dr. Jonathan Rothberg's children have entered into the Rule 10b5-1 trading plan to sell Class A common stock.

Stakeholder Impact

• Shareholders: The potential sale of a significant number of Class A shares could increase the supply of shares in the market, potentially impacting the stock price. However, the pre-planned nature of the sales under Rule 10b5-1 provides transparency.

Next Steps

• The Rule 10b5-1 sales plan is scheduled to commence on July 7, 2025.
• Sales under the plan will continue until July 3, 2026, or until the maximum number of shares (6,202,545) are sold, or other termination events occur.

Key Dates

Recommendation

Keywords

Butterfly Network, BFLY, Jonathan Rothberg, Schedule 13D, Rule 10b5-1, Stock Sale Plan, Insider Selling, Class A Common Stock, Class B Common Stock, Beneficial Ownership, Estate Planning, SEC Filing