CASTLE BIOSCIENCES INCCSTL
CASTLE BIOSCIENCES INC Debt Disclosure
Long-Term Debt
Our long-term debt consisted of the following (in thousands):
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Term debt | $ | 10,200 | $ | 10,200 | |||||||
| Unamortized discount | (143) | (177) | |||||||||
| Total debt, net | 10,057 | 10,023 | |||||||||
| Less: Current portion of long-term debt | (417) | (278) | |||||||||
| Total long-term debt | $ | 9,640 | $ | 9,745 | |||||||
Future maturities of principal amounts on long-term debt as of December 31, 2025 were as follows (in thousands):
| Years Ending December 31, | |||||
| 2026 | $ | 417 | |||
| 2027 | 5,000 | ||||
| 2028 | 4,583 | ||||
| Total | $ | 10,000 | |||
2024 Loan and Security Agreement
On March 26, 2024 (the “Closing Date”), we entered into a Loan and Security Agreement, as amended in April 2025 (the “2024 LSA”), by and between us, our wholly owned subsidiary, Castle Narnia Real Estate Holding 1, LLC and Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (the “Lender”). The 2024 LSA provides for a term loan in the principal amount of $10.0 million, which was drawn on the Closing Date (the “2024 Term Loan”) and provided for a $25.0 million line of credit that was available at our option from the Closing Date through September 30, 2025, with the same interest rate and maturity as the 2024 Term Loan (the “2024 Credit Line”).
The Consent and First Amendment executed on April 4, 2025, modified certain terms of the 2024 LSA, including the extension of the draw period for the 2024 Credit Line from March 31, 2025 to September 30, 2025, which expired on September 30, 2025, the 2024 Credit Line expired as discussed below.
The obligations under the 2024 LSA are secured by substantially all of our assets, excluding intellectual property, the real property held by the Company, and are subject to certain other exceptions and limitations. We have the right to prepay the 2024 LSA in whole, subject to a prepayment fee of approximately 1.50% if paid prior to March 26, 2026. Amounts repaid may not be reborrowed.
The 2024 LSA contains customary conditions of borrowing, events of default and covenants, including covenants that restrict our ability to dispose of assets, merge with or acquire other entities, incur indebtedness and make distributions to holders of our capital stock. Should an event of default occur, including the occurrence of a material adverse change, we could be liable for immediate repayment of all obligations under the 2024 LSA. Should we seek to further amend the terms of the 2024 LSA, the consent of the Lender would be required. As of December 31, 2025, we were in compliance with all of the covenants.
The 2024 LSA bears interest at a floating rate equal to the greater of (a) the WSJ Prime Rate plus 0.25% or (b) 6.00% per annum. The 2024 Term Loan was interest-only from the Closing Date through November 30, 2025, subject to extension under the Interest-Only Extension Milestone provision (as defined in the 2024 LSA). On August 26, 2025, we elected to extend the interest-only period to December 1, 2026. Beginning in December 2026, the principal payments will be made in equal monthly installments through the maturity date of November 1, 2028.
In addition, we are required to make a final payment equal to 2.00% of the aggregate original principal amounts of the 2024 Term Loan, due at maturity or upon full repayment.
2024 Term Loan
On the Closing Date, we drew $10.0 million under the 2024 Term Loan. We are obligated to make a final payment of $0.2 million under the terms of the 2024 LSA final payment provisions. A discount on debt equal to this obligation was recorded on the draw date and is being amortized as additional interest expense using the effective interest method over the term of the debt. As of December 31, 2025, no principal payments have been made and the weighted-average effective interest rate for all outstanding debt under the 2024 Term Loan was 7.69%.
2024 Credit Line
We had a $25.0 million line of credit under the 2024 Line of Credit, from the Closing Date through September 30, 2025. The 2024 Credit Line expired on September 30, 2025 and no amounts were drawn during the term.
Interest Expense on Long-Term Debt
Interest expense on long-term debt consisted of the following (in thousands):
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Interest expense on long-term debt | $ | 807 | $ | 685 | |||||||
| Less: Capitalized interest | (758) | (180) | |||||||||
| Total | $ | 49 | $ | 505 | |||||||
There was no interest expense on long-term debt or capitalized interest for the year ended December 31, 2023.
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.