What the changes say
- Butterfly Network expanded disclosures around international operations, AI product integration, and corporate governance structures including dual-class stock and smaller reporting company status.
What changed since the prior 10-K
New
- NewRisks Related to Our Business and Operations
If we dedicate significant resources to our international operations and are unable to manage these risks effectively, our business, operating results, and financial condition may be adversely affected
Increased United States tariffs and countermeasures could increase the cost of raw materials and components, disrupt our supply chain, and negatively impact our financial condition.
- NewRisks Related to Government Regulation and Other Legal Compliance Matters
If we, our contract manufacturers or our component suppliers are unable to manufacture our products in compliance with regulatory and quality requirements, the manufacturing and distribution of our devices could be interrupted, and our product sales and operating results could suffer
If we, our contract manufacturers, or component suppliers fail to comply with the FDA's Quality System Regulation, device manufacturing and distribution could be interrupted.
- NewRisks Related to Government Regulation and Other Legal Compliance Matters
Issues relating to the responsible use of our technologies, including AI in our offerings, may result in reputational or financial harm and liability
The use of AI technologies in offerings like Compass AI launched in November 2025 creates legal, ethical, and reputational risks if unintended consequences or copyright issues arise.
- NewRisks Related to Our Securities and to Being a Public Company
We are a smaller reporting company, and any decision on our part to comply only with reduced reporting and disclosure requirements applicable to such companies could make our common stock less attractive to investors
Choosing to comply with reduced reporting and disclosure requirements as a smaller reporting company could make our common stock less attractive to investors.
- NewRisks Related to Our Securities and to Being a Public Company
The dual class structure of our common stock has the effect of concentrating voting power with our founder, which will limit an investor’s ability to influence the outcome of important transactions, including a change in control
Our dual class common stock structure concentrates voting power with our founder Dr. Rothberg, who holds Class B shares with 20 votes per share and controls 71% of voting power.
- NewRisks Related to Our Securities and to Being a Public Company
costs of the actions. These actions may divert management resources, we may incur substantial costs, and any unfavorable outcome may have a material adverse effect on our financial condition, results of operations, and cash flows
We face indemnification obligations and potential financial exposure related to an ongoing civil stockholder class action lawsuit arising from our Business Combination.
Dropped
- DroppedRisks Related to Our Financial Condition and Capital Requirements
We have incurred significant losses since inception. As such, you cannot rely upon our historical operating performance to make an investment decision about us
Historical operating performance and significant losses since inception cannot be relied upon to make investment decisions.
- DroppedRisks Related to Our Business and Operations
We may experience manufacturing problems or delays that could limit the growth of our revenue or increase our losses
- DroppedRisks Related to Our Business and Operations
We rely on limited or sole suppliers for some of the materials and components used in our products, and we may not be able to find replacements or immediately transition to alternative suppliers, which could have a material adverse effect on our business, financial condition, results of operations, and reputation
- DroppedRisks Related to Our Business and Operations
of our future products. Developing and managing a direct sales organization is a difficult, expensive, and time-consuming process
- DroppedRisks Related to Butterfly’s Intellectual Property
from competing. Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries
- DroppedRisks Related to Our Securities and to Being a Public Company
risk of product liability claims may also increase if our products are subject to a product recall, whether voluntary or mandatory, or government seizure. Product liability claims may be brought by individuals or by groups seeking to represent a class
- DroppedRisks Related to Our Securities and to Being a Public Company
We are currently subject to a securities class action lawsuit and stockholder derivative actions, the unfavorable outcomes of which may have a material adverse effect on our financial condition, results of operations, and cash flows
Reworded
- 84% rewrittenRisks Related to Our Securities and to Being a Public Company
We face the risk of product liability claims and may be subject to damages, fines, penalties, and injunctions, among other things
Product liability risk text was reorganized into a new heading format focusing on potential damages, fines, penalties, and injunctions.
- 76% rewrittenRisks Related to Our Business and Operations
If we are unable to continue the development of an adequate sales and marketing organization and/or if our direct sales organization is not successful, we may have difficulty achieving market awareness and selling our products in the future
Added specific language stating that developing and managing a direct sales organization is a difficult, expensive, and time-consuming process.
- 72% rewrittenRisks Related to Our Business and Operations
Any interruption in the operations of our manufacturing facilities, or our suppliers’ or customers’ facilities, may impair our ability to deliver products or provide services
Added specific mention of potential delays or shortfalls caused by outsourced manufacturing suppliers and component suppliers.
- 60% rewrittenRisks Related to Our Business and Operations
Acquisitions, joint ventures, or other strategic transactions, including in connection with our Butterfly Embedded™ program, could disrupt our business, cause dilution to our stockholders, and otherwise harm our business
Updated to specifically mention strategic licensing expansion of the Ultrasound-on-Chip semiconductor platform through Butterfly Embedded.
Was: Acquisitions, joint ventures, or other strategic transactions could disrupt our business, cause dilution to our stockholders, and otherwise harm our business
- 54% rewrittenRisks Related to Our Securities and to Being a Public Company
If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, our ability to operate our business, and investors’ views of us
Retained standard Sarbanes-Oxley Section 404 internal control compliance language with minor stylistic updates.
- 49% rewrittenRisks Related to Butterfly’s Intellectual Property
We may need or may choose to obtain licenses from third parties to advance our research or allow commercialization of our current or future products, and we cannot provide any assurances that we would be able to obtain such licenses
Shifted focus from out-licensing agreements like Forest Neurotech to complex legal and business issues involved in in-licensing intellectual property.
- 43% rewrittenRisks Related to Our Business and Operations
We have and may continue to experience pricing pressures from contract suppliers or manufacturers on which we rely
Updated cost increase context to specify that prior to 2025 raw material cost increases were offset by manufacturing efficiencies and pricing actions, while continuing reliance on TSMC and Benchmark.
- 32% rewrittenRisks Related to Our Business and Operations
We expect to generate an increasing portion of our revenue internationally in the future and may become subject to various additional risks relating to our international activities, which could adversely affect our business, operating results and financial condition
Updated international revenue figures, showing that international customers accounted for approximately 21%, 23%, and 21% of total revenue in 2025, 2024, and 2023 respectively.
- 31% rewrittenRisks Related to Our Business and Operations
Changes in applicable tax laws and regulations could adversely affect our business
- 23% rewrittenRisks Related to Butterfly’s Intellectual Property
If disputes over licensed intellectual property prevent or impair our ability to maintain the licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product, or the dispute may have an adverse effect on our results of operations
- 21% rewrittenRisks Related to Our Business and Operations
The loss of one or more key employees, our inability to attract or develop additional qualified employees, and any delay in hiring key personnel could have a material adverse effect on our business results, cash flows, financial condition, or prospects
- 20% rewrittenRisks Related to Government Regulation and Other Legal Compliance Matters
Broad-based domestic and international government initiatives to reduce spending, particularly those related to healthcare costs, may reduce reimbursement rates for medical procedures, which will reduce the cost-effectiveness of our products and services
All 46 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business and Operations
- 01Our success depends upon market acceptance of our products and services, our ability to develop and commercialize existing and new products and services and generate revenues, and our ability to identify new markets for our technology
- 02Medical device development is costly and involves continual technological change, which may render our current or future medical devices obsolete
- 03We are dependent upon the success of our sales and customer acquisition and retention strategies
- 04Our research and development efforts may not succeed in developing commercially successful products and technologies, which could adversely affect our business
- 05We expect to generate an increasing portion of our revenue internationally in the future and may become subject to various additional risks relating to our international activities, which could adversely affect our business, operating results and financial condition32% rewritten
- 06If we dedicate significant resources to our international operations and are unable to manage these risks effectively, our business, operating results, and financial condition may be adversely affectedNew
- 07If we are unable to attract, recruit, train, retain, motivate, and integrate key personnel, we may not achieve our goals
- 08The loss of one or more key employees, our inability to attract or develop additional qualified employees, and any delay in hiring key personnel could have a material adverse effect on our business results, cash flows, financial condition, or prospects21% rewritten
- 09We rely on a single contract manufacturer, Benchmark, to test, assemble, and supply our finished products. If Benchmark fails to fulfill its obligations under its existing contractual arrangements with us or does not perform satisfactorily, our ability to source our devices could be negatively and adversely affected
- 10We have and may continue to experience pricing pressures from contract suppliers or manufacturers on which we rely43% rewritten
- 11Any interruption in the operations of our manufacturing facilities, or our suppliers’ or customers’ facilities, may impair our ability to deliver products or provide services72% rewritten
- 12Acquisitions, joint ventures, or other strategic transactions, including in connection with our Butterfly Embedded™ program, could disrupt our business, cause dilution to our stockholders, and otherwise harm our business60% rewritten
- 13Foreign transactions involve unique risks in addition to those mentioned above, including those related to our collaborations and integration of operations across different cultures and languages, currency risks, and the particular economic, political, and regulatory risks associated with specific countries
- 14If we are unable to continue the development of an adequate sales and marketing organization and/or if our direct sales organization is not successful, we may have difficulty achieving market awareness and selling our products in the future76% rewritten
- 15If we are unable to continue establishing and maintaining adequate sales and marketing capabilities, or unable to continue entering into and maintaining arrangements with third parties to sell and market our products, our business may be harmed
- 16We operate in highly competitive markets, competition may increase in the future, and our industry may be further disrupted
- 17Unfavorable global economic conditions could adversely affect our business, financial condition, or results of operations
- 18Changes in applicable tax laws and regulations could adversely affect our business31% rewritten
- 19Our ability to use net operating losses and certain other tax assets to offset future income may be subject to certain limitations
- 20We could be adversely affected by violations of the FCPA and other worldwide anti-bribery laws by us or our agents
Risks Related to Government Regulation and Other Legal Compliance Matters
- 21We are subject to extensive government regulation, which could restrict the development, marketing, sale, and distribution of our products and could cause us to incur significant costs
- 22If we, our contract manufacturers or our component suppliers are unable to manufacture our products in compliance with regulatory and quality requirements, the manufacturing and distribution of our devices could be interrupted, and our product sales and operating results could sufferNew
- 23In addition, any of our products shipped internationally are also required to comply with the International Organization for Standardization (“ISO”) quality system standards as well as EU Regulations and norms in order to produce products for sale in the EU
- 24Our current or future medical devices may be subject to product recalls even after receiving FDA clearance or approval. A recall of such products, either voluntarily or at the direction of the FDA, or the discovery of serious safety issues with such products, could have a significant adverse impact on us
- 25We may be subject to enforcement action if we engage in improper or off-label marketing or promotion of our medical devices, including fines, penalties, and injunctions
- 26In some instances in our advertising and promotion, we may make claims regarding our medical devices as compared to competing products, which may subject us to heightened regulatory scrutiny, enforcement risk, and litigation risks
- 27Increased cybersecurity requirements, vulnerabilities, threats, and more sophisticated and targeted computer crimes pose a risk to our systems, networks, products, solutions, services, and data, as well as our reputation, which could adversely affect our business
- 28Issues relating to the responsible use of our technologies, including AI in our offerings, may result in reputational or financial harm and liabilityNew
- 29Broad-based domestic and international government initiatives to reduce spending, particularly those related to healthcare costs, may reduce reimbursement rates for medical procedures, which will reduce the cost-effectiveness of our products and services20% rewritten
- 30Healthcare industry cost-containment measures could result in reduced sales of our products and services
Risks Related to Butterfly’s Intellectual Property
- 31If we are unable to protect our intellectual property, our ability to maintain any technological or competitive advantage over our competitors and potential competitors would be adversely impacted, and our business may be harmed
- 32Our wafer bonding technology for ultrasound applications is licensed to us by Stanford. Any loss of our rights to this technology could prevent us from selling our products
- 33If we breach any of these obligations, Stanford may have the right to terminate the licenses, which could result in us being unable to develop, manufacture, and sell products using the licensed technology. Termination of our license agreements with Stanford would have a material adverse effect on our business
- 34We may need or may choose to obtain licenses from third parties to advance our research or allow commercialization of our current or future products, and we cannot provide any assurances that we would be able to obtain such licenses49% rewritten
- 35If disputes over licensed intellectual property prevent or impair our ability to maintain the licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product, or the dispute may have an adverse effect on our results of operations23% rewritten
- 36Changes in patent laws or patent jurisprudence could diminish the value of patents in general, thereby impairing our ability to protect our products
- 37If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected
- 38We may use third-party open source software components in future products, and failure to comply with the terms of the underlying open source software licenses could restrict our ability to sell such products
- 39We use third-party software that may cause errors or failures of our products that could lead to lost customers or harm to our reputation
Risks Related to Our Securities and to Being a Public Company
- 40If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, our ability to operate our business, and investors’ views of us54% rewritten
- 41We are a smaller reporting company, and any decision on our part to comply only with reduced reporting and disclosure requirements applicable to such companies could make our common stock less attractive to investorsNew
- 42The dual class structure of our common stock has the effect of concentrating voting power with our founder, which will limit an investor’s ability to influence the outcome of important transactions, including a change in controlNew
- 43Delaware law and provisions in our certificate of incorporation and bylaws could make a takeover proposal more difficult
- 44We face the risk of product liability claims and may be subject to damages, fines, penalties, and injunctions, among other things84% rewritten
- 45costs of the actions. These actions may divert management resources, we may incur substantial costs, and any unfavorable outcome may have a material adverse effect on our financial condition, results of operations, and cash flowsNew
- 46The price of our common stock historically has been volatile, which may affect the price at which you could sell any shares of our common stock
Other Butterfly Network 10-Ks
- FY2024 10-K risk factors47 risks
Butterfly Network relies heavily on third-party manufacturers like TSMC and Benchmark for its point-of-care ultrasound devices.
Filed Feb 28, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.