Biodesix(BDSX) - 2025 Q2 - Quarterly Report

Special Note Regarding Forward-Looking Statements This report contains forward-looking statements involving substantial risks and uncertainties regarding future financial condition, operations, strategy, and management objectives - This report contains forward-looking statements involving substantial risks and uncertainties, including future financial condition, results of operations, business strategy, and management objectives. These statements are based on current expectations and projections, but actual results may differ materially due to various factors[8][9][10] - Key risks include inability to achieve profitability, difficulties in market acceptance and managing growth, failure to retain personnel or maintain biopharmaceutical relationships, significant fluctuations in operating results, product performance issues, supply chain vulnerabilities, and impacts from external events like pandemics or disasters[9] - Additional risks encompass debt financing restrictions, need for additional capital, acquisition challenges, uncertainty of insurance coverage and reimbursement, future healthcare reforms, compliance with various laws, ability to develop and obtain regulatory approval for new diagnostic tests, potential product recalls, intellectual property litigation, stock price volatility, and reliance on critical accounting policies[14] PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents Biodesix, Inc.'s unaudited condensed financial statements for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, financial instrument fair values, debt, leases, equity, revenue recognition, share-based compensation, income taxes, segment reporting, and commitments and contingencies Condensed Balance Sheets Presents the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates Condensed Balance Sheets (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Assets | | | | Total current assets | $32,445 | $39,484 | | Total non-current assets | $55,295 | $57,760 | | Total assets | $87,740 | $97,244 | | Liabilities | | | | Total current liabilities | $15,160 | $14,317 | | Total non-current liabilities | $71,442 | $62,051 | | Total liabilities | $86,602 | $76,368 | | Stockholders' Equity | | | | Total stockholders' equity | $1,138 | $20,876 | - Total assets decreased by $9.5 million from $97.2 million at December 31, 2024, to $87.7 million at June 30, 2025, primarily driven by a decrease in cash and cash equivalents and accounts receivable[17] - Total stockholders' equity significantly decreased from $20.9 million at December 31, 2024, to $1.1 million at June 30, 2025, largely due to accumulated deficit[17] Condensed Statements of Operations Details the company's revenues, expenses, and net loss over specific reporting periods, including per share data Condensed Statements of Operations (in thousands, except per share data) | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $20,018 | $17,925 | $37,976 | $32,743 | | Total operating expenses | $29,737 | $26,162 | $56,831 | $52,001 | | Loss from operations | $(9,719) | $(8,237) | $(18,855) | $(19,258) | | Total other expense | $(1,749) | $(2,571) | $(3,714) | $(5,164) | | Net loss | $(11,468) | $(10,808) | $(22,569) | $(24,422) | | Net loss per share, basic and diluted | $(0.08) | $(0.08) | $(0.15) | $(0.22) | - Revenues increased by 12% to $20.0 million for the three months ended June 30, 2025, compared to $17.9 million in the prior year, and by 16% to $38.0 million for the six months ended June 30, 2025, compared to $32.7 million in the prior year[19] - Net loss increased by 6% to $11.5 million for the three months ended June 30, 2025, from $10.8 million in the prior year, but decreased by 8% to $22.6 million for the six months ended June 30, 2025, from $24.4 million in the prior year[19] Condensed Statements of Stockholders' Equity (Deficit) Outlines changes in equity components: common stock, additional paid-in capital, and accumulated deficit Condensed Statements of Stockholders' Equity (Deficit) (in thousands) | (in thousands) | Balance - December 31, 2024 | Balance - June 30, 2025 | | :--------------- | :-------------------------- | :---------------------- | | Common Stock | $145 | $146 | | Additional Paid-In Capital | $483,228 | $486,058 | | Accumulated Deficit | $(462,497) | $(485,066) | | Total Stockholders' Equity | $20,876 | $1,138 | - Total stockholders' equity decreased significantly from $20.9 million at December 31, 2024, to $1.1 million at June 30, 2025, primarily due to a net loss of $11.1 million in Q1 2025 and $11.5 million in Q2 2025, partially offset by share-based compensation and warrant reclassifications[22] Condensed Statements of Cash Flows Summarizes the cash inflows and outflows from operating, investing, and financing activities over specific periods Condensed Statements of Cash Flows (in thousands) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(15,170) | $(33,882) | | Net cash used in investing activities | $(232) | $(2,270) | | Net cash provided by financing activities | $9,886 | $52,087 | | Net decrease (increase) in cash, cash equivalents, and restricted cash | $(5,516) | $15,935 | | Cash, cash equivalents, and restricted cash - end of period | $20,816 | $42,306 | - Net cash used in operating activities decreased significantly to $15.2 million for the six months ended June 30, 2025, from $33.9 million in the prior year, primarily due to favorable changes in net working capital, including a decrease in contingent consideration payments[24][206] - Net cash provided by financing activities decreased to $9.9 million for the six months ended June 30, 2025, from $52.1 million in the prior year, mainly due to $10.0 million from the Tranche C loan and $0.3 million from ESPP, compared to $51.3 million from common stock issuance in the prior year[24][208] Notes to Unaudited Condensed Financial Statements Note 1 – Organization and Description of Business Describes Biodesix, Inc.'s core business: multi-omic lung diagnostic tests and development services - Biodesix, Inc. is a diagnostic solutions company headquartered in Colorado, developing diagnostic tests using a multi-omic approach to improve clinical care for patients[29] - The company derives revenue from two sources: Biodesix Diagnostic Tests (five blood-based lung diagnostic tests) and Biodesix Development Services (diagnostic testing services for biopharmaceutical, life sciences, and diagnostic companies)[29] - Diagnostic tests include Nodify CDT® and Nodify XL2® for nodule management, and GeneStrat® ddPCR, GeneStrat NGS®, and VeriStrat® for lung cancer treatment and monitoring, all offering timely results to guide physician decisions[30][31] Note 2 – Summary of Significant Accounting Policies and Other Information Outlines key accounting principles and practices, including credit and supply chain risks - The unaudited condensed financial statements are prepared in accordance with Form 10-Q and Rule 10-01 of Regulation S-X, reflecting normal recurring adjustments, and should be read with the Annual Report on Form 10-K for the year ended December 31, 2024[32] - The company faces credit risk concentration with cash and cash equivalents held at one major financial institution and supply chain risk from single-source suppliers for key test components[36][37] - Inventory, primarily material supplies, was $1.6 million at June 30, 2025, up from $1.0 million at December 31, 2024, with an insignificant reserve for excess inventory[41] - The company began making discretionary employer matching contributions to its 401(k) retirement plan in 2025, totaling $0.1 million for the three months and $0.4 million for the six months ended June 30, 2025[48] Note 3 - Recently Issued Accounting Standards Discusses recently issued FASB accounting standards and their potential impact on financial statements - The FASB issued ASU 2023-09 (Income Taxes) effective January 1, 2025, for annual periods and January 1, 2026, for interim periods, requiring improved transparency in income tax disclosures[49] - The FASB issued ASU 2024-03 (Disaggregation of Income Statement Expenses) effective January 1, 2027, for annual periods and January 1, 2028, for interim periods, requiring more detailed expense disclosures[50] - The Company is currently evaluating both ASU 2023-09 and ASU 2024-03 to assess their overall impact on its financial statements[49][50] Note 4 - Fair Value Details fair value measurements of financial instruments, including borrowings and warrant liabilities Fair Value of Borrowings (in thousands) | (in thousands) | June 30, 2025 (Carrying Value) | June 30, 2025 (Fair Value) | December 31, 2024 (Carrying Value) | December 31, 2024 (Fair Value) | | :--------------- | :----------------------------- | :------------------------- | :--------------------------------- | :----------------------------- | | Borrowings | $46,798 | $46,866 | $36,429 | $37,484 | - The fair value of borrowings, primarily the Perceptive Term Loan Facility, is classified as Level 2 and approximates its carrying value[51] - Warrant liabilities and contingent value rights, classified as Level 3, were zero as of June 30, 2025, and December 31, 2024. The Tranche C Warrants were reclassified to additional paid-in capital after the Tranche C loan draw in May 2025[54][59] - The Company recorded a gain of $0.1 million and a loss of $0.3 million for the three and six months ended June 30, 2025, respectively, due to changes in the fair value of warrant liabilities[60] - Contingent consideration related to the Indi acquisition was fully paid by September 30, 2024, with no remaining obligations[64] Note 5 – Supplementary Balance Sheet Information Provides additional details on property, equipment, intangible assets, and accrued liabilities Supplementary Balance Sheet Information (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Property and equipment, net | $26,135 | $27,828 | | Intangible assets, net | $4,871 | $5,874 | | Accrued liabilities | $9,684 | $10,064 | - Net property and equipment decreased by $1.7 million, and net intangible assets decreased by $1.0 million from December 31, 2024, to June 30, 2025[67][68] - Accrued liabilities decreased slightly from $10.1 million at December 31, 2024, to $9.7 million at June 30, 2025, with compensation-related accruals being the largest component[69] Note 6 – Debt Details debt obligations, including the Perceptive Term Loan Facility, its terms, and covenant compliance Debt Information (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Perceptive Term Loan Facility | $50,000 | $40,000 | | Long-term notes payable | $46,782 | $36,408 | | Total scheduled principal repayments (maturities) | $50,016 | N/A | | - Remainder of 2025 | $10 | N/A | | - 2026 | $6 | N/A | | - 2027 and thereafter | $50,000 | N/A | - The Company drew the $10.0 million Tranche C loan under the Perceptive Term Loan Facility on May 8, 2025, bringing the total facility outstanding to $50.0 million. The loan matures on November 21, 2027, with principal due at maturity[72] - The Perceptive Term Loan Facility accrues interest at an annual rate of one-month term SOFR (or 3.0%) plus 9.0%, resulting in a stated interest rate of approximately 13.3% as of June 30, 2025[73] - The Credit Agreement includes financial covenants requiring a minimum cash balance of $2.5 million and specific minimum net revenue thresholds, which have been amended multiple times. As of June 30, 2025, the Company was in compliance with all covenants[79][88] Note 7 – Leases Outlines lease obligations, including headquarters lease, future minimum payments, and weighted-average terms Lease Obligations (in thousands) | (in thousands) | June 30, 2025 | | :--------------- | :------------ | | Total future minimum lease payments | $42,441 | | Less amount representing interest | $(17,098) | | Total lease liabilities | $25,343 | | Weighted-average remaining lease term | 9.6 years | | Weighted-average discount rate | 11.4% | - The Company relocated its corporate headquarters and laboratory facilities to Louisville, Colorado, in January 2024, under a 12-year lease agreement with two renewal options[91][92] - Operating lease expense for all operating leases was $0.6 million and $1.2 million for the three and six months ended June 30, 2025, respectively[95] Note 8 – Equity Details equity changes, including Nasdaq delisting notice, ATM program, and warrant modifications - On March 24, 2025, the Company received a Nasdaq delisting notice for failing to meet the minimum $1.00 bid price requirement. It has until September 22, 2025, to regain compliance, with options including a reverse stock split[98] - The Company has a 2024 At-The-Market (ATM) Program allowing the issuance and sale of up to $50.0 million in common stock, with $50.0 million remaining available as of June 30, 2025[99][202] - In connection with the Tranche C loan draw in May 2025, the exercise price for the Perceptive Warrant and First Amendment Warrants was modified to $0.4191, resulting in a $0.2 million increase in fair value recorded as a debt issuance cost and increase to Additional Paid-In Capital[106] Note 9 – Revenue and Accounts Receivable Credit Concentration Analyzes revenue by diagnostic tests and development services, highlighting growth and customer concentrations Revenue by Source (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Diagnostic Tests | $17,898 | $16,539 | $34,215 | $30,335 | | Development Services | $2,120 | $1,386 | $3,761 | $2,408 | | Total revenues | $20,018 | $17,925 | $37,976 | $32,743 | - Diagnostic Tests revenue increased by 8% and 13% for the three and six months ended June 30, 2025, respectively, primarily driven by increased Nodify Lung Nodule Risk Assessment testing[113][184] - Development Services revenue increased by 53% and 56% for the three and six months ended June 30, 2025, respectively, due to an expanding book of business and new agreements[113][185] Revenue Concentration by Customer (as % of total revenue) | Customer (as % of total revenue) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United Healthcare | 11% | 13% | 6% | 12% | | Medicare | 33% | 41% | 35% | 41% | Accounts Receivable Concentration by Customer (as % of total accounts receivable) | Customer (as % of total accounts receivable) | June 30, 2025 | December 31, 2024 | | :----------------------------------------- | :------------ | :---------------- | | Medicare | 24% | 21% | | Daiichi Sankyo | —% | 14% | Note 10 – Share-Based Compensation Reports share-based compensation expense, including program terminations and unrecognized future expenses Share-Based Compensation Expense (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total share-based compensation expense | $1,039 | $1,218 | $2,011 | $3,858 | - Total share-based compensation expense decreased by 15% for the three months and 48% for the six months ended June 30, 2025, compared to the same periods in 2024[118] - The Bonus-to-Options Program was terminated for fiscal year 2025, resulting in zero expense for the three and six months ended June 30, 2025, compared to $0.2 million and $0.4 million in the prior year periods[122] - As of June 30, 2025, unrecognized share-based compensation expense for options and RSUs was approximately $5.7 million, expected to be amortized over the next 2.3 years[118] Note 11 – Net Loss per Common Share Presents basic and diluted net loss per common share and weighted-average shares outstanding Net Loss per Common Share (in thousands, except per share amounts) | (in thousands, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to common stockholders | $(11,468) | $(10,808) | $(22,569) | $(24,422) | | Weighted-average shares outstanding | 146,656 | 127,168 | 146,328 | 112,167 | | Net loss per share, basic and diluted | $(0.08) | $(0.08) | $(0.15) | $(0.22) | - Basic and diluted net loss per share remained at $(0.08) for the three months ended June 30, 2025 and 2024. For the six months, it improved from $(0.22) in 2024 to $(0.15) in 2025[127] - Outstanding common stock equivalents, including options, ESPP shares, warrants, and restricted stock units, totaling 19.2 million for the six months ended June 30, 2025, were excluded from diluted EPS calculations as their inclusion would be anti-dilutive[127] Note 12 – Income Taxes Discusses income tax position, including net taxable losses, valuation allowance, and recent tax legislation - The Company has incurred net taxable losses since inception and has recorded no provision for income taxes, nor paid any cash for income taxes during the reported periods[128] - The One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, repeals the capitalization requirement for domestic R&E expenditures, includes depreciation and amortization addback for Section 163(j) interest deduction, and extends 100% bonus depreciation[128][130] - Despite the OBBBA, the Company maintains a full valuation allowance against its deferred tax assets, so the act is not expected to materially impact deferred tax balances as of December 31, 2025[130] Note 13 – Segment Reporting Confirms single operating segment, with resource allocation and performance assessed by net income or loss - The Company operates as a single operating segment, with its Chief Executive Officer and Chief Financial Officer acting as the chief operating decision-makers (CODM)[131] - The CODM assesses resource allocation and performance based on net income or loss, as both Diagnostic Tests and Development Services revenue streams utilize the same equipment and resources[131][133] - Substantially all revenue and long-lived assets are derived from or located in the United States[132] Note 14 – Commitments and Contingencies Outlines co-development and license agreements, royalty expenses, and confirms no material legal proceedings - The Company has a co-development agreement with AVEO for ficlatuzumab, where Biodesix is entitled to a 10% royalty of net sales and 25% of license income after opting out of development costs in December 2020. No royalties or expenses were recorded for the reported periods[136][137] - License agreements include a non-exclusive license with Bio-Rad for ddPCR technology (extended to August 2026), a royalty-bearing license with CellCarta for the Nodify XL2 test (0.675% royalty), and a license for the Nodify CDT test (8% royalty on non-screening tests)[138][139][140] - Royalty expenses for CellCarta License were $0.1 million (Q2 2025) and $0.2 million (YTD 2025), and for Nodify CDT test were $0.4 million (Q2 2025) and $0.8 million (YTD 2025)[139][140] - The Company is not currently a party to any legal proceedings that would have a material adverse effect on its business, results of operations, financial condition, or cash flows[141] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Biodesix, Inc.'s financial condition and results of operations for the three and six months ended June 30, 2025, compared to the prior year. It covers the company's business overview, key performance factors, recent financial highlights, detailed analysis of revenue and expenses, liquidity, capital resources, contractual obligations, critical accounting policies, and implications of its emerging growth and smaller reporting company status Overview Describes Biodesix's multi-omic diagnostic solutions for lung diseases and development services - Biodesix is a diagnostic solutions company focused on personalized diagnostics to improve patient care, utilizing a multi-omic approach (genomics, proteomics, radiomics) combined with AI[146][148][155] - The company offers five blood-based lung diagnostic tests: Nodify CDT® and Nodify XL2® for nodule risk assessment, and GeneStrat® ddPCR, GeneStrat NGS®, and VeriStrat® for lung cancer treatment and monitoring (IQLung™ strategy)[149][150][151][153] - Biodesix Development Services provide scientific, technological, and operational capabilities to biopharmaceutical, life sciences, and research institutions, supporting therapeutic clinical trials, diagnostic validation, and discovery[154] Factors Affecting Our Performance Identifies key drivers and challenges influencing performance, including payer coverage, R&D, and customer mix - Revenue and growth are significantly impacted by the ability to obtain and maintain broad coverage and adequate reimbursement from third-party payers (commercial and government), with retrospective adjustments posing a risk[159] - Investment in clinical studies (e.g., INSIGHT, ALTITUDE, CLARIFY) and product innovation is crucial for supporting growth, expanding payer coverage, driving commercial adoption, and securing regulatory approvals[158][161][162][163] - Performance is also affected by testing volume and customer mix, with biopharmaceutical sample testing currently yielding a significantly higher average selling price than clinical tests[159] - The company is collaborating with Memorial Sloan Kettering Cancer Center (MSK) and Bio-Rad on new diagnostic tests, including a novel molecular minimal residual disease (MRD) test, to improve cancer treatment[164] Second Quarter 2025 Financial and Operational Highlights Summarizes key financial and operational achievements for Q2 2025, including revenue and margin improvement Second Quarter 2025 Financial and Operational Highlights | Metric | Q2 2025 | Q2 2024 | Change (%) | | :----- | :------ | :------ | :--------- | | Total revenue | $20.0M | $17.9M | +12% | | Lung Diagnostic Testing revenue | $17.9M | $16.5M | +8% | | Development Services revenue | $2.1M | $1.4M | +53% | | Gross margin | $16.0M (80%) | N/A | +150 bps | | Operating expenses (excl. direct costs) | $25.7M | N/A | +15% | | Net loss | $11.5M | $10.8M | +6% | | Cash and cash equivalents (as of June 30, 2025) | $20.7M | N/A | +$3.1M (from Mar 31, 2025) | - The increase in operating expenses is primarily due to the planned expansion of the sales team to support Lung Diagnostic sales growth and enhance market awareness[171] - Gross margin improved by 150 basis points to 80% in Q2 2025, driven by growth in Lung Diagnostic testing and optimization of testing workflows[171] Components of Operating Results Explains revenue and expense categories constituting operating results and their expected trends - Revenues are derived from Diagnostic Tests (lung diagnostic testing services) and Development Services (diagnostic testing for biopharmaceutical, life sciences, and diagnostic companies)[167] - Direct costs and expenses include materials, labor, benefits, share-based compensation, equipment, infrastructure, and royalty fees, expected to increase with test volume but decrease per test due to efficiencies[170][172][173] - Research and development expenses, a significant portion of operating expenses, include internal and external costs for technology development, clinical trials, and product candidates, expected to increase in dollars but decrease as a percentage of revenue long-term[174][175][176][177][178] - Sales, marketing, general, and administrative expenses are expected to increase in dollars due to sales force expansion, increased market presence, and public company operating costs, but decrease as a percentage of revenue long-term[179][180] Results of Operations Provides a detailed comparative analysis of revenues, expenses, and net loss for the reported periods Results of Operations - Three Months Ended June 30 (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :--------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Revenues | $20,018 | $17,925 | $2,093 | 12% | | Direct costs and expenses | $4,031 | $3,877 | $154 | 4% | | Research and development | $3,269 | $2,558 | $711 | 28% | | Sales, marketing, general and administrative | $22,411 | $19,660 | $2,751 | 14% | | Loss from operations | $(9,719) | $(8,237) | $(1,482) | (18)% | | Net loss | $(11,468) | $(10,808) | $(660) | (6)% | Results of Operations - Six Months Ended June 30 (in thousands) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :--------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Revenues | $37,976 | $32,743 | $5,233 | 16% | | Direct costs and expenses | $7,734 | $7,052 | $682 | 10% | | Research and development | $6,139 | $4,598 | $1,541 | 34% | | Sales, marketing, general and administrative | $42,859 | $40,216 | $2,643 | 7% | | Loss from operations | $(18,855) | $(19,258) | $403 | 2% | | Net loss | $(22,569) | $(24,422) | $1,853 | 8% | - Research and development expenses increased by 28% (QoQ) and 34% (YoY) primarily due to higher employee compensation and benefits from increased headcount and variable compensation, as well as increased external clinical trial costs[187] - Interest expense decreased by $0.9 million (YoY) for the six months ended June 30, 2025, mainly due to the full payment of contingent consideration interest in 2024[190] - A gain of $0.1 million and a loss of $0.3 million were recorded for the three and six months ended June 30, 2025, respectively, due to changes in the fair value of warrant liability, following the Tranche C loan draw and warrant exercise price modification[192][193][194] Liquidity and Capital Resources Assesses ability to meet financial obligations, detailing funding sources and cash flow trends - The Company has funded operations through common stock sales, convertible preferred stock sales, diagnostic testing and services revenue, and indebtedness, and has not yet generated positive cash flows from operations[196] - Key financing activities include drawing the $10.0 million Tranche C loan under the Perceptive Term Loan Facility in May 2025 and having $50.0 million available under the 2024 ATM Program as of June 30, 2025[198][202][204] - On March 24, 2025, the Company received a Nasdaq delisting notice for its common stock trading below $1.00 per share and has until September 22, 2025, to regain compliance, potentially through a reverse stock split[205] - Net cash used in operating activities decreased by $18.7 million for the six months ended June 30, 2025, compared to the prior year, primarily due to favorable changes in net working capital, including reduced contingent consideration payments[206] Contractual Obligations and Commitments Summarizes significant contractual obligations, including borrowings, interest, and lease payments by maturity Contractual Obligations and Commitments (in thousands) | (in thousands) | Total | Less than 1 year | 1 to 3 years | 4 to 5 years | More than 5 years | | :--------------- | :---- | :--------------- | :----------- | :----------- | :---------------- | | Borrowings and interest | $66,364 | $6,774 | $59,590 | $0 | $0 | | Operating lease obligations | $42,441 | $4,033 | $8,196 | $8,500 | $21,712 | | Finance lease obligations | $1,129 | $721 | $408 | $0 | $0 | | Total | $109,934 | $11,528 | $68,194 | $8,500 | $21,712 | - The largest contractual obligations are borrowings and interest, totaling $66.4 million, with the majority ($59.6 million) due in 1 to 3 years, primarily related to the Perceptive Term Loan Facility[209] - Operating lease obligations total $42.4 million, with significant amounts due in more than 5 years ($21.7 million), reflecting the long-term nature of the Louisville, Colorado facility lease[209] Off-Balance Sheet Arrangements Confirms the absence of off-balance sheet arrangements materially impacting financial position - As of June 30, 2025, the Company has not entered into any off-balance sheet arrangements[210] Critical Accounting Policies and Significant Judgments and Estimates Highlights accounting policies requiring significant judgment and estimates, especially revenue recognition - Revenue recognition is a critical accounting policy, requiring significant management judgment in estimating collectible amounts for diagnostic tests based on factors like payer type, payment history, and contract status[212][213] - Development Services revenue is recognized upon delivery of testing results or achievement of contractual milestones, typically from large biopharmaceutical companies where collectability is reasonably assured[215] Implications of Being an Emerging Growth Company and Smaller Reporting Company Explains regulatory exemptions and reduced disclosure requirements for EGC and smaller reporting companies - As an 'emerging growth company' (EGC) under the JOBS Act, Biodesix benefits from exemptions from certain public company reporting requirements, including an audit of internal control over financial reporting and reduced executive compensation disclosures[216] - The Company has elected the extended transition period for complying with new or revised accounting standards, which may affect comparability with other public companies[217] - Biodesix is also a 'smaller reporting company,' allowing for reduced disclosure obligations, such as providing only two years of audited financial statements[219] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses the Company's exposure to market risks, primarily focusing on interest rate risk related to its cash, cash equivalents, and outstanding indebtedness, particularly the Perceptive Term Loan Facility - The Company is exposed to interest rate risk primarily from its cash and cash equivalents, marketable securities, and the $50.0 million outstanding Perceptive Term Loan Facility, which has a variable interest rate[221] - A hypothetical 100 basis point increase in interest rates would result in an estimated $0.5 million impact per year on the Company's financial position and results of operations, based on the current Perceptive Term Loan principal[223] - The Company has not historically used derivative agreements like interest rate caps or swaps to manage its floating interest rate exposure[221] Item 4. Controls and Procedures This section details the evaluation of the Company's disclosure controls and procedures, confirming their effectiveness at a reasonable assurance level as of June 30, 2025, and stating no material changes to internal control over financial reporting during the quarter - The Company's disclosure controls and procedures were evaluated by the CEO and CFO and concluded to be effective at the reasonable assurance level as of June 30, 2025[227] - Disclosure controls are designed to ensure information required for SEC reports is recorded, processed, summarized, and reported timely, providing reasonable, not absolute, assurance[224] - There were no changes to the Company's internal control over financial reporting during the three months ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, these controls[228] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section confirms that the Company is not currently involved in any legal proceedings that would individually or collectively have a material adverse effect on its business, financial condition, results of operations, or cash flows - The Company is not presently a party to any legal proceedings that, if determined adversely, would have a material adverse effect on its business, results of operations, financial condition, or cash flows[231] Item 1A. Risk Factors This section updates the risk factors from the Annual Report on Form 10-K, highlighting new or materially changed risks related to the Company's Nasdaq listing compliance, potential impacts of U.S. trade policies, and the evolving regulatory landscape for laboratory developed tests (LDTs) by the FDA - The Company received a Nasdaq delisting notice on March 24, 2025, for failing to meet the minimum $1.00 bid price requirement and has until September 22, 2025, to regain compliance, with a reverse stock split being a potential option[234] - There is significant uncertainty regarding U.S. trade policies, tariffs, and trade barriers, which could negatively impact global economic conditions, financial markets, and the Company's business[236] - The FDA finalized a rule on May 6, 2024, to phase out its enforcement discretion for laboratory developed tests (LDTs) over four years, potentially subjecting the Company's tests to medical device regulations, including premarket review and quality systems requirements[241][250][251] - A U.S. District Court struck down the FDA's final rule on March 31, 2025, concluding it exceeded FDA's statutory jurisdiction, vacating and remanding it for further consideration. However, new legislation or administrative changes could still impose similar requirements[243][244][253] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section states that there were no unregistered sales of equity securities or use of proceeds during the reporting period - None[257] Item 3. Defaults Upon Senior Securities This section confirms that there were no defaults upon senior securities during the reporting period - None[258] Item 4. Mine Safety Disclosures This section indicates that mine safety disclosures are not applicable to the Company - Not applicable[259] Item 5. Other Information This section states that no directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025 - None of the Company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[260] Item 6. Exhibits This section lists the exhibits filed or furnished with the Quarterly Report on Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer, and XBRL-related documents Exhibits Filed with Form 10-Q | Exhibit Number | Description | | :------------- | :---------- | | 31.1* | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 31.2* | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 32.1** | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | 32.2** | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | 101.INS* | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document | | 101.SCH* | Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | Signature This section contains the signature of the Company's Chief Accounting Officer, Christopher C. Vazquez, certifying the filing of the report on behalf of Biodesix, Inc - The report is signed by Christopher C. Vazquez, Chief Accounting Officer (Principal Accounting Officer) of Biodesix, Inc., on August 7, 2025[267]