Item 8.01. Other Information.
On February 21, 2023, Butterfly Network, Inc. (the “Company”) filed a petition (the “Petition”) in the Delaware Court of Chancery under Section 205 of the Delaware General Corporation Law (the “DGCL”) to resolve potential uncertainty with respect to the Company’s authorized share capital. Such uncertainty was introduced by a recent holding in Garfield v. Boxed, Inc., 2022 WL 17959766 (Del. Ch. Dec. 27, 2022) that potentially affects the Company and many other similarly situated companies that became publicly traded through a special purpose acquisition vehicle (“SPAC”). Out of an abundance of caution, the Company has elected to pursue the remedial actions described below. Concurrently with the filing of the Petition, the Company filed a motion to expedite the hearing on the Petition, which was subsequently granted on February 22, 2023, as described below.
Background
On February 12, 2021, Longview Acquisition Corp. (“Longview”), the SPAC predecessor to the Company, held a special meeting of stockholders (the “Longview Special Meeting”) to approve certain matters relating to the business combination between Longview, Clay Merger Sub, Inc. (“Merger Sub”), and Butterfly Network, Inc., (“Legacy Butterfly”). One of these matters was a proposal to amend and restate Longview’s certificate of incorporation in order to, among other things, increase the number of authorized shares of Class A common stock from 200,000,000 to 600,000,000 (such proposal, the “Charter Amendment Proposal”). While the Company currently has fewer than 200,000,000 shares of Class A common stock outstanding, the additional authorized shares in excess of 200,000,000 were approved primarily for future potential use in financing the Company’s business, acquiring other businesses, forming strategic partnerships and alliances and for stock dividends and stock splits. At the Longview Special Meeting, the Charter Amendment Proposal was approved by a majority of the outstanding shares of Class A common stock and Class B common stock of Longview as of the record date for the Longview Special Meeting, voting together as a single class. After the Longview Special Meeting, Longview and Legacy Butterfly closed the business combination pursuant to which the Company became publicly traded, and the Company’s certificate of incorporation, as amended to give effect to the Charter Amendment Proposal, became effective.
The recent ruling by the Delaware Court of Chancery in the Boxed case introduces uncertainty as to whether Section 242(b)(2) of the DGCL would have required the Charter Amendment Proposal to be approved by separate votes of the majority of Longview’s then-outstanding shares of Class A common stock and Class B common stock. The Company has been operating with the understanding that the Charter Amendment Proposal was validly approved at the Longview Special Meeting. In light of this recent ruling, however, to resolve potential uncertainty with respect to the Company’s authorized share capital, the Company has filed a petition in the Delaware Court of Chancery under Section 205 of the DGCL to seek validation of the Charter Amendment Proposal. Section 205 of the DGCL permits the Court of Chancery, in its discretion, to ratify and validate potentially defective corporate acts. If the Company is not successful in the Section 205 proceeding, the uncertainty with respect to the Company’s authorized capitalization could have a material adverse impact on the Company.
Hearing Date
On February 22, 2023, the Court of Chancery granted our motion to expedite and set a hearing date for the Petition to be heard. The hearing has been set for March 14, 2023 at 9:35 a.m. Eastern Time at the Leonard L. Williams Justice Center, 500 North King Street, Wilmington, Delaware 19801. As ordered by the Court of Chancery, the Company is filing the Petition with this Current Report on Form 8-K, a copy of which is attached hereto as Exhibit 99.1. This Form 8-K constitutes notice of the hearing. If any stockholder of the Company wishes to express a position on the Petition, such stockholders of the Company may (i) appear at the hearing or (ii) file a written submission with the Register in Chancery, Leonard L. Williams Justice Center, 500 North King Street, Wilmington, Delaware 19801, referring to the case caption, In re Butterfly Network, Inc., C.A. No. 2023-0225-LWW (Del. Ch.), in advance of the hearing. Any such written submission should also be emailed to the Company’s counsel, Kevin M. Gallagher, of Richards, Layton & Finger, P.A, at Gallagher@rlf.com.