SCHEDULE: Butterfly Network Founder Plans Major Stock Sale

Butterfly Network's founder, Dr. Jonathan Rothberg, and related entities have established a Rule 10b5-1 trading plan to sell up to 7.8 million shares of Class A and Class B common stock for estate planning purposes.

Summary

• Dr. Jonathan M. Rothberg, founder of Butterfly Network, Inc., and entities associated with his children's trusts, have entered into a Rule 10b5-1 trading plan.
• The plan allows for the sale of up to 2,799,818 shares of Class A common stock and 5,000,000 shares of Class B common stock.
• The total number of shares potentially sold under the plan is 7,799,818.
• Sales under the plan are scheduled to begin on July 14, 2026, and conclude by July 14, 2027.
• The sales are subject to minimum price and volume parameters, and there is no guarantee that any shares will be sold.
• The stated purpose of the plan is estate planning.
• As of March 13, 2026, Dr. Rothberg beneficially owned 3,548,159 shares of Class A common stock (1.6% of the class) and 26,426,937 shares of Class B common stock (100% of the class).

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a moderately negative development. While the 10b5-1 plan provides transparency and the reason is estate planning, the sheer volume of shares intended for sale by the founder and related entities could exert downward pressure on the stock and signal a potential lack of conviction, even if unintended.

Positives

• The establishment of a Rule 10b5-1 plan indicates a pre-arranged, transparent approach to insider selling, reducing concerns about trading on material nonpublic information.
• The stated purpose of estate planning provides a clear, non-performance-related reason for the significant share disposition.

Negatives

• A plan to sell up to 7,799,818 shares by a founder and related entities represents a substantial insider selling event, which could be perceived negatively by the market.
• The sale of 5,000,000 Class B shares, which represent a significant portion of Dr. Rothberg's Class B holdings, could impact his overall control or influence, although he still holds 100% of the Class B shares.

Risks

• Sales under the plan are subject to minimum price and volume parameters, meaning there is no assurance that all or any shares will be sold.
• Broker may suspend sales due to market disruptions, banking moratoriums, trading suspensions, hostilities, or other crises.
• Sales may be suspended if prohibited by legal, contractual, or regulatory restrictions applicable to the broker or seller.
• Sales may be suspended if they would materially impact the trading price for the stock, at the broker's discretion.
• The seller agrees not to enter into or alter any corresponding or hedging transactions with respect to the securities covered by the plan.
• The seller must comply with Rule 144 volume limitations, which could restrict the pace of sales.

Future Outlook

Dr. Rothberg and related entities plan to sell up to 7,799,818 shares of Butterfly Network's Class A and Class B common stock between July 14, 2026, and July 14, 2027, through a pre-arranged Rule 10b5-1 trading plan, subject to market conditions and price parameters.

Management Comments

• Dr. Rothberg and entities owned by trusts created for the benefit of Dr. Rothberg's children have entered into a trading plan pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the 'Plan'), a copy of which is attached hereto as Exhibit 6.
• In connection with estate planning, Dr. Rothberg and entities owned by trusts created for the benefit of Dr. Rothberg's children have entered into a trading plan...
• The sale of shares of Class A common stock and Class B common stock under the Plan is subject to minimum price and volume parameters included in the Plan, and there is no assurance that any shares of Class A common stock or Class B common stock will be sold under the Plan.

Industry Context

StockSavvy.ai notes that Rule 10b5-1 plans are a common mechanism for corporate insiders to sell shares in a pre-scheduled, compliant manner, often for personal financial planning like estate management. While such plans provide transparency, significant insider selling, even for stated personal reasons, can sometimes be interpreted by the market as a lack of confidence, particularly in growth-oriented technology companies like Butterfly Network, which operates in the medical imaging and digital health sector.

Related Party Transactions

• Dr. Jonathan M. Rothberg, the founder, is selling shares directly and on behalf of NVR TR, LLC, JNR TR, LLC, EJR TR, LLC, and GBR TR, LLC.
• These LLCs are owned by trusts created for the benefit of Dr. Rothberg's children.
• 4C Holdings I, LLC, 4C Holdings II, LLC, 4C Holdings III, LLC, 4C Holdings IV, LLC, and 4C Holdings V, LLC hold Class B common stock and are associated with Dr. Rothberg's beneficial ownership.

Stakeholder Impact

• Shareholders: Potential for increased selling pressure on the stock due to the large volume of shares being made available for sale by a significant insider. May lead to concerns about founder's long-term commitment or valuation.
• Employees: No direct impact mentioned, but significant insider selling can sometimes affect employee morale or perception of company stability.
• Customers/Suppliers/Creditors: No direct impact mentioned.

Next Steps

• Commencement of sales under the Rule 10b5-1 plan on July 14, 2026.
• Potential ongoing sales of Class A and Class B common stock through July 14, 2027, subject to plan parameters.
• Broker to provide daily reports of sales to the seller for Section 16 compliance.
• Seller to make all required Section 13(d), 13(g), and 16 filings.

Key Dates

Recommendation

The announcement of a Rule 10b5-1 plan by the founder and related entities to sell up to 7.8 million shares, even for estate planning, represents a substantial insider disposition. This volume could create significant selling pressure on Butterfly Network's stock over the next year. While the plan offers transparency, such a large sale by a key insider often signals a potential ceiling on valuation or a shift in the insider's long-term commitment, prompting a cautious 'sell' recommendation for investors to mitigate potential downside risk from this supply overhang.

Keywords

Butterfly Network, BFLY, Jonathan Rothberg, Rule 10b5-1, Insider Selling, Estate Planning, Class A Common Stock, Class B Common Stock, SEC Filing, Schedule 13D/A, Share Disposition