Full Press Release Details
UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION
Defined terms included
below have the same meaning as terms defined and included elsewhere in the Current Report on Form 8-K (the "Form 8-K")
filed with the Securities and Exchange Commission (the "SEC") on February 16, 2021. Unless the context otherwise
requires, the "Combined Company" refers to Butterfly Network, Inc. (f/k/a Longview Acquisition Corp.) and its subsidiaries
after the Closing, "Longview" refers to Longview Acquisition Corp. prior to the Closing, and "Butterfly"
refers to BFLY Operations, Inc. (f/k/a Butterfly Network, Inc.) prior to the Closing.
The following unaudited
pro forma condensed combined balance sheet of the combined company as of September 30, 2020 and the unaudited pro forma condensed
combined statements of operations of the combined company for the nine months ended September 30, 2020 and for the year ended December
31, 2019 present the combination of the financial information of Longview and Butterfly after giving effect to the Business Combination
and related adjustments described in the accompanying notes. In connection with the closing of the Business Combination the registrant
changed its name from Longview Acquisition Corp. to Butterfly Network, Inc.
forma condensed combined statements of operations for the nine months ended September 30, 2020 and for the year ended December
31, 2019 give pro forma effect to the Business Combination as if it had occurred on January 1, 2019. The unaudited pro forma condensed
combined balance sheet as of September 30, 2020 gives pro forma effect to the Business Combination as if it was completed on September
forma condensed combined financial information is based on and should be read in conjunction with:
The unaudited pro forma condensed combined
financial statements have been presented for illustrative purposes only and do not necessarily reflect what the combined company's
financial condition or results of operations would have been had the Business Combination occurred on the dates indicated. Further,
the unaudited pro forma condensed combined financial information also may not be useful in predicting the future financial condition
and results of operations of the combined company. The actual financial position and results of operations may differ significantly
from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma transaction accounting adjustments
represent management's estimates based on information available as of the date of these unaudited pro forma condensed combined
financial statements and are subject to change as additional information becomes available and analyses are performed.
On February 12, 2021,
Butterfly consummated the previously announced Business Combination pursuant to the Business Combination Agreement dated November
19, 2020 between Longview, Merger Sub and Butterfly, under the terms of which Merger Sub, a wholly owned subsidiary of Longview,
merged with and into Butterfly, with Butterfly surviving the Merger as a wholly owned subsidiary of Longview. After giving effect
to the Business Combination, the combined company directly owns all of the issued and outstanding equity interests of Butterfly,
and the pre-Business Combination stockholders of Butterfly hold a portion of the Combined Company Class A common stock and all
of the Combined Company Class B common stock.
forma condensed combined financial statements presented herein reflect the actual redemption of 21,189 shares of Class A common
stock of Longview's stockholders in conjunction with the shareholder vote on the Business Combination contemplated by the
Business Combination Agreement at a meeting held on February 12, 2021.
BUTTERFLY NETWORK, INC.
| Butterfly | ||||||||||||||||||||||||||
| ASSETS | Longview (Historical) | Butterfly (Historical) | Butterfly Adjustments (Note 3) | Butterfly (Adjusted) | Transaction Accounting Adjustments | Note 4 | Pro Forma | |||||||||||||||||||
| Cash and cash equivalents | $ | 759 | $ | 51,686 | $ | 29,350 | $ | 81,036 | $ | 545,731 | (a),(b) | $ | 627,526 | |||||||||||||
| Accounts receivable, net | - | 2,828 | - | 2,828 | - | 2,828 | ||||||||||||||||||||
| Inventories | - | 14,942 | - | 14,942 | - | 14,942 | ||||||||||||||||||||
| Current portion of vendor advances | - | 236 | - | 236 | - | 236 | ||||||||||||||||||||
| Prepaid expenses and other current assets | 241 | 2,656 | - | 2,656 | - | 2,897 | ||||||||||||||||||||
| Due from related parties | - | 446 | - | 446 | - | 446 | ||||||||||||||||||||
| Total current assets | 1,000 | 72,794 | 29,350 | 102,144 | 545,731 | 648,875 | ||||||||||||||||||||
| Property and equipment, net | - | 6,881 | - | 6,881 | - | 6,881 | ||||||||||||||||||||
| Investments held in Trust Account | 414,222 | - | - | - | (414,222 | ) | (c) | - | ||||||||||||||||||
| Security deposits and non-current portion of vendor advances | - | 48,837 | - | 48,837 | - | 48,837 | ||||||||||||||||||||
| Other assets - related party | - | 1,581 | - | 1,581 | - | 1,581 | ||||||||||||||||||||
| Total assets | $ | 415,222 | $ | 130,093 | $ | 29,350 | $ | 159,443 | $ | 131,509 | $ | 706,174 | ||||||||||||||
| Liabilities, commitments and contingencies and stockholders' equity (deficit) | ||||||||||||||||||||||||||
| Accounts payable | - | 8,330 | - | 8,330 | - | 8,330 | ||||||||||||||||||||
| Deferred revenue, current | - | 5,350 | - | 5,350 | - | 5,350 | ||||||||||||||||||||
| Due to related parties | - | 7 | - | 7 | - | 7 | ||||||||||||||||||||
| Accrued purchase commitments, current | - | 63,376 | - | 63,376 | - | 63,376 | ||||||||||||||||||||
| Accrued expenses and other current liabilities | 310 | 8,879 | - | 8,879 | - | 9,189 | ||||||||||||||||||||
| Total current liabilities | 310 | 85,942 | - | 85,942 | - | 86,252 | ||||||||||||||||||||
| Deferred revenue, non-current | - | 1,099 | - | 1,099 | - | 1,099 | ||||||||||||||||||||
| Convertible debt | - | 21,019 | 30,133 | 51,152 | (51,152 | ) | (d) | - | ||||||||||||||||||
| Loan payable | - | 4,366 | - | 4,366 | (4,366 | ) | (e) | - | ||||||||||||||||||
| Other non-current liabilities | - | 624 | - | 624 | - | 624 | ||||||||||||||||||||
| Deferred underwriting fee payable . . | 14,490 | - | - | - | (14,490 | ) | (b) | - | ||||||||||||||||||
| Total liabilities | 14,800 | 113,050 | 30,133 | 143,183 | (70,008 | ) | 87,975 | |||||||||||||||||||
| Commitments and contingencies | ||||||||||||||||||||||||||
| Class A common stock, subject to possible redemption | 395,422 | - | - | - | (395,422 | ) | (f) | - | ||||||||||||||||||
| Convertible preferred stock | - | 360,937 | - | 360,937 | (360,937 | ) | (f) | - | ||||||||||||||||||
| Stockholders' equity | ||||||||||||||||||||||||||
| Common stock | - | 1 | - | 1 | (1 | ) | (f) | - | ||||||||||||||||||
| Class A common stock | - | - | - | - | 17 | (f) | 17 | |||||||||||||||||||
| Class B common stock | 1 | - | - | - | 2 | (f) | 3 | |||||||||||||||||||
| Additional paid-in capital | 5,390 | 27,969 | - | 27,969 | 969,167 | (f) | 1,002,526 | |||||||||||||||||||
| Accumulated deficit | (391 | ) | (371,864 | ) | (783 | ) | (372,647 | ) | (11,309 | ) | (f) | (384,347 | ) | |||||||||||||
| Total stockholder's equity (deficit) | 5,000 | (343,894 | ) | (783 | ) | (344,677 | ) | 957,876 | 618,199 | |||||||||||||||||
| Total liabilities, commitments and contingencies and stockholders' equity (deficit) | $ | 415,222 | $ | 130,093 | $ | 29,350 | $ | 159,443 | $ | 131,509 | $ | 706,174 |
BUTTERFLY NETWORK, INC.
UNAUDITED PRO FORMA CONDENSED
COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED
(in thousands, except share and per share
| Longview (Historical) | Butterfly (Historical) | Transaction Accounting Adjustments | Note 4 | Pro Forma | ||||||||||||||
| Revenue: | ||||||||||||||||||
| Product | $ | - | $ | 25,820 | $ | - | $ | 25,820 | ||||||||||
| Subscription | - | 4,777 | - | 4,777 | ||||||||||||||
| Total revenue | - | 30,597 | - | 30,597 | ||||||||||||||
| Cost of revenue: | ||||||||||||||||||
| Product | - | 99,259 | - | 99,259 | ||||||||||||||
| Subscription | - | 1,260 | - | 1,260 | ||||||||||||||
| Total cost of revenue | - | 100,519 | - | 100,519 | ||||||||||||||
| Gross margin | - | (69,922 | ) | - | (69,922 | ) | ||||||||||||
| Operating expenses: | ||||||||||||||||||
| Research and development | - | 36,427 | - | 36,427 | ||||||||||||||
| Sales and marketing | - | 17,408 | - | 17,408 | ||||||||||||||
| General and administrative | - | 15,651 | 4,292 | (g) | 19,943 | |||||||||||||
| Formation and operational costs. | 584 | - | - | 584 | ||||||||||||||
| Total operating expenses | 584 | 69,486 | 4,292 | 74,362 | ||||||||||||||
| Loss from operations | (584 | ) | (139,408 | ) | (4,292 | ) | (144,284 | ) | ||||||||||
| Interest income | - | 238 | - | 238 | ||||||||||||||
| Interest expense | - | (418 | ) | 418 | (i) | - | ||||||||||||
| Interest earned on marketable securities held in Trust Account | 222 | - | (222 | ) | (j) | - | ||||||||||||
| Other income (expense), net | - | (183 | ) | - | (183 | ) | ||||||||||||
| Loss before provision for income taxes | (362 | ) | (139,771 | ) | (4,096 | ) | (144,229 | ) | ||||||||||
| Provision for income taxes | 29 | 32 | (29 | ) | (j) | 32 | ||||||||||||
| Net loss | $ | (391 | ) | $ | (139,803 | ) | $ | (4,067 | ) | $ | (144,261 | ) | ||||||
| Net loss per share | ||||||||||||||||||
| Weighted average shares outstanding, basic and diluted | 40,617,323 | 5,804,354 | (k) | 191,289,409 | ||||||||||||||
| Basic and diluted net loss per share | 0.00 | (24.09 | ) | (k) | (0.75 | ) |
BUTTERFLY NETWORK, INC.
UNAUDITED PRO FORMA CONDENSED
COMBINED STATEMENT OF OPERATIONS
(in thousands, except share and per share
| Longview (Historical) | Butterfly (Historical) | Transaction Accounting Adjustments | Note 4 | Pro Forma | ||||||||||||||
| Revenue: | ||||||||||||||||||
| Product | $ | - | $ | 25,081 | $ | - | $ | 25,081 | ||||||||||
| Subscription | - | 2,502 | - | 2,502 | ||||||||||||||
| Total revenue | - | 27,583 | - | 27,583 | ||||||||||||||
| Cost of revenue: | ||||||||||||||||||
| Product | - | 47,857 | - | 47,857 | ||||||||||||||
| Subscription | - | 621 | - | 621 | ||||||||||||||
| Total cost of revenue | - | 48,478 | - | 48,478 | ||||||||||||||
| Gross margin | - | (20,895 | ) | - | (20,895 | ) | ||||||||||||
| Operating expenses: | ||||||||||||||||||
| Research and development | - | 48,934 | - | 48,934 | ||||||||||||||
| Sales and marketing | - | 14,282 | - | 14,282 | ||||||||||||||
| General and administrative | - | 18,185 | 24,650 | (g),(h) | 42,835 | |||||||||||||
| Total operating expenses | - | 81,401 | 24,650 | 106,051 | ||||||||||||||
| Loss from operations | - | (102,296 | ) | (24,650 | ) | (126,946 | ) | |||||||||||
| Interest income | - | 2,695 | - | 2,695 | ||||||||||||||
| Other income (expense), net | - | (96 | ) | - | (96 | ) | ||||||||||||
| Loss before provision for income | ||||||||||||||||||
| taxes | - | (99,697 | ) | (24,650 | ) | (124,347 | ) | |||||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||||
| Net loss | $ | - | $ | (99,697 | ) | $ | (24,650 | ) | $ | (124,347 | ) | |||||||
| Net loss per share | ||||||||||||||||||
| Weighted average shares outstanding, | ||||||||||||||||||
| basic and diluted | n/a | 5,622,752 | (k) | 191,289,409 | ||||||||||||||
| Basic and diluted net loss per share | n/a | (17.73 | ) | (k) | (0.65 | ) |
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Note 1 - Description of the Business
On February 12, 2021,
Butterfly consummated the previously announced Business Combination pursuant to the Business Combination Agreement dated November
19, 2020 between Longview, Merger Sub and Butterfly, under the terms of which Merger Sub, a wholly owned subsidiary of Longview,
merged with and into Butterfly, with Butterfly surviving the Merger as a wholly owned subsidiary of Longview. After giving effect
to the Business Combination, the Combined Company directly owns all of the issued and outstanding equity interests of Butterfly,
and the pre-Business Combination stockholders of Butterfly holds a portion of the Combined Company Class A common stock and all
of the Combined Company Class B common stock.
Business Combination Agreement, Butterfly's stockholders and holders of Butterfly convertible notes received an aggregate
number of shares of New Butterfly common stock equal to $1,220,605,980 divided by $10.00.
The following summarizes
the pro forma share of the Combined Company Class A common stock and Class B common stock outstanding after giving effect to the
Business Combination, excluding the potential dilutive effect of the exercise of warrants:
| Shares | Ownership, % | Voting rights, % | ||||||||||
| Butterfly stockholders | 122,060,598 | 63.81 | % | 90.02 | % | |||||||
| Public Stockholders | 41,378,811 | 21.63 | % | 5.97 | % | |||||||
| Initial Stockholders | 10,350,000 | 5.41 | % | 1.49 | % | |||||||
| PIPE Investors | 17,500,000 | 9.15 | % | 2.52 | % | |||||||
| Total | 191,289,409 | 100 | % | 100 | % |
Note 2 - Basis of Presentation
The historical financial
information of Longview and Butterfly has been adjusted in the unaudited pro forma condensed combined financial information to
reflect transaction accounting adjustments related to the Business Combination in accordance with U.S. GAAP.
The Business Combination
is accounted for as a reverse recapitalization because Butterfly has been determined to be the accounting acquirer under Financial
Accounting Standards Board's Accounting Standards Codification Topic 805, Business Combinations ("ASC 805").
The determination is primarily based on the evaluation of the following facts and circumstances taken into consideration:
reverse recapitalization model, the Business Combination will be treated as Butterfly issuing equity for the net assets of Longview,
with no goodwill or intangible assets recorded.
in greater detail in Note 15, Subsequent Events, of the historical unaudited condensed consolidated financial statements of Butterfly
as of and for the nine months ended September 30, 2020, included elsewhere in this Current Report on Form 8-K or in the Proxy Statement,
the equity compensation of the incoming Chief Executive Officer of Butterfly consists of (1) restricted stock units awards granted
in connection with the Business Combination and (2) stock option awards.
pro forma condensed combined statements of operations include compensation expense related to the restricted stock units granted
in connection with the Business Combination (see Note 4(g) Equity awards expenses).
pro forma condensed combined statements of operations do not include any cash and stock options compensation expense related to
the incoming Chief Executive Officer of Butterfly since his hiring is not directly attributable to the Business Combination. The
Company expects to recognize approximately $11,400,000 of expense related to the stock option awards of the incoming Chief Executive
Officer of Butterfly, which vest over 4 years beginning on the start date of his employment.
Note 3 - Adjustments to Balance Sheet of Butterfly
Historical balance sheet of
Butterfly as of September 30, 2020 is adjusted for the following:
Note 4 - Transaction Accounting Adjustments
Adjustments to the Unaudited Pro Forma Condensed Combined
Balance Sheet as of September 30, 2020
The transaction accounting adjustments
included in the unaudited pro forma condensed combined balance sheet as of September 30, 2020 are as follows:
The table below represents
the sources and uses of funds as it relates to the Business Combination:
| (in thousands) | Note | |||||
| Longview cash as of September 30, 2020 - pre Business Combination | 759 | |||||
| Butterfly cash as of September 30, 2020 - pre Business Combination, as adjusted | 81,036 | |||||
| Total cash balance pre Business Combination | 81,795 | |||||
| Business Combination adjustments: | ||||||
| Longview cash held in Trust Account | (1) | 414,222 | ||||
| PIPE Financing | (2) | 175,000 | ||||
| Payment to redeeming Public Stockholders | (3) | (212 | ) | |||
| Payment of deferred underwriting fees | (4) | (14,490 | ) | |||
| Payment of Longview incremental transaction costs | (5) | (14,623 | ) | |||
| Payment of Butterfly incremental transaction costs | (6) | (9,800 | ) | |||
| Payment of PPP loan payable | (7) | (4,366 | ) | |||
| Total Business Combination adjustments | $ | 545,731 | ||||
| Post-Business Combination cash balance | $ | 627,526 |
| Number of Shares | Par Value | |||||||||||||||||||||||||||||||||||
| (in thousands, except share amounts) | Class A common stock | Class B common stock | Class A common stock, subject to possible redemption | Class A common stock | Class B common stock | Class A common stock, subject to possible redemption | Butterfly's convertible preferred stock and common stock | Additional paid-in capital | Accumulated deficit | |||||||||||||||||||||||||||
| Longview common stock as of | ||||||||||||||||||||||||||||||||||||
| September 30,2020 - pre Business Combination | 1,857,799 | 10,350,000 | 39,542,201 | $ | - | $ | 1 | $ | 395,422 | $ | - | $ | 5,390 | $ | (391 | ) | ||||||||||||||||||||
| Butterfly equity as of | ||||||||||||||||||||||||||||||||||||
| September 30,2020 - pre Business Combination, as adjusted | - | - | - | - | - | - | 360,938 | 27,969 | (372,647 | ) | ||||||||||||||||||||||||||
| Equity balance prior to Business Combination | 1,857,799 | 10,350,000 | 39,542,201 | - | 1 | 395,422 | 360,938 | 33,359 | (373,038 | ) | ||||||||||||||||||||||||||
| Business Combination adjustments: | ||||||||||||||||||||||||||||||||||||
| Reclassification of Longview's redeemable shares to Class A common stock | 39,542,201 | - | (39,542,201 | ) | 4 | - | (395,422 | ) | - | 395,418 | - | |||||||||||||||||||||||||
| Less: Redemption of redeemable stock | (21,189 | ) | - | - | - | - | - | - | (212 | ) | - | |||||||||||||||||||||||||
| Initial Stockholders | 10,350,000 | (10,350,000 | ) | - | 1 | (1 | ) | - | - | - | - | |||||||||||||||||||||||||
| PIPE Investors | 17,500,000 | - | - | 2 | - | - | - | 174,998 | - | |||||||||||||||||||||||||||
| Butterfly stockholders | 95,633,661 | 26,426,937 | - | 10 | 3 | - | - | 51,139 | - | |||||||||||||||||||||||||||
| Longview transaction costs | - | - | - | - | - | - | - | (14,623 | ) | - | ||||||||||||||||||||||||||
| Butterfly transaction costs | - | - | - | - | - | - | - | (9,800 | ) | - | ||||||||||||||||||||||||||
| One time equity compensation charge | - | - | - | - | - | - | - | 11,700 | (11,700 | ) | ||||||||||||||||||||||||||
| Elimination of historical accumulated deficit of Longview . | - | - | - | - | - | - | - | (391 | ) | 391 | ||||||||||||||||||||||||||
| Elimination of historical Butterfly convertible preferred stock and common stock | - | - | - | - | - | - | (360,938 | ) | 360,938 | - | ||||||||||||||||||||||||||
| Total Business Combination adjustments | 163,004,673 | 16,076,937 | (39,542,201 | ) | 17 | 2 | (395,422 | ) | (360,938 | ) | 969,167 | (11,309 | ) | |||||||||||||||||||||||
| Post-Business Combination | 164,862,472 | 26,426,937 | - | $ | 17 | $ | 3 | $ | - | $ | - | $ | 1,002,526 | $ | (384,347 | ) |
Adjustments to the Unaudited
Pro Forma Condensed Combined Statements of Operations for the nine months ended September 30, 2020 and the year ended December
The transaction accounting adjustments
included in the unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2020 and