Elicio Therapeutics, Inc.ELTX
Elicio Therapeutics, Inc. Debt Disclosure
Debt
Senior Secured Convertible Note Financing
In August 2024, the Company entered into the Securities Purchase Agreement with GKCC pursuant to which the Company issued the 3% Convertible Note in the principal amount of $20.0 million. Unless earlier converted in accordance with the terms of the Convertible Note, the Convertible Note would mature on February 15, 2026. Interest on the Convertible Note accrued and was payable quarterly in cash on the principal amount equal to 3% per annum, with an initial interest payment date of June 30, 2025. The Company received net proceeds of approximately $19.7 million from the Convertible Note Financing, after deducting debt issuance costs.
The Convertible Note included multiple conversion features. The Company evaluated all conversion features included within the Convertible Note, under ASC 815, and determined that the default interest feature met the definition of a derivative, but the value was de minimis. During the years ended December 31, 2025 and 2024, the Company recorded an immaterial amount and $0.1 million of other expense related to the accretion of the discount of Convertible Note debt issuance costs, respectively. During the years ended December 31, 2025 and 2024, the Company recorded accrued interest expense of $0.1 million and $0.2 million related to the interest due on the Convertible Note but not yet payable, respectively.
In March 2025, the Company exercised its right under the Convertible Note to require GKCC to convert the full amount of the Convertible Note, including all accrued and unpaid interest, into shares of the Company’s common stock. In March 2025, the Company issued 3,500,573 shares of its common stock to GKCC in exchange for the principal balance of $20.0 million plus $0.3 million in accrued interest, in satisfaction in full of the Convertible Note.
Senior Secured Promissory Note Financing
In June 2025, the Company issued the June 2025 Promissory Note in the principal amount of $10.0 million to GKCC. The June 2025 Promissory Note will mature on June 3, 2028, or such earlier date as the June 2025 Promissory Note is required or permitted to be repaid in accordance with the terms of the June 2025 Promissory Note and is a senior, secured obligation of the Company and its subsidiaries. Interest will accrue and be payable in cash on the principal amount at the rate of the sum of the Prime Rate (as defined in the June 2025 Promissory Note) plus 5.00%, provided that the maximum interest rate shall not exceed 12.5% per annum, with an initial interest payment date of July 1, 2026. As of December 31, 2025, the interest rate was 12.5% per annum. The first 24 months of the June 2025 Promissory Note is an interest only period, with payments towards the principal commencing on July 1, 2027 as shown in the below future principal payments table. The Company may prepay the June 2025 Promissory Note in full at any time, but the payment must include the principal, all accrued unpaid interest, and a prepayment fee in one aggregate payment. If the prepayment occurs during the first, second, or third year of the June 2025 Promissory Note, the prepayment fee will be equal to the outstanding principal balance prepaid multiplied by 3%, 2%, or 1%,
respectively. The June 2025 Promissory Note is secured by a (i) first priority lien on substantially all assets of the Company and its subsidiaries, pursuant to a security agreement and (ii) first priority lien on intellectual property of the Company, pursuant to an intellectual property security agreement. The June 2025 Promissory Note contains customary terms and covenants and customary events of default. As of December 31, 2025, the Company was in compliance with all covenants.
Additionally, in connection with the June 2025 Promissory Note Financing, the Company issued to GKCC the June 2025 Warrant to purchase an aggregate of 103,225 shares of the Company’s common stock. The June 2025 Warrant has an exercise price of $7.75 per share, is immediately exercisable and expires five years from the date of issuance. GKCC will not have the right to exercise any portion of the June 2025 Warrant if GKCC (together with its affiliates) would beneficially own in excess of 49.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the June 2025 Warrant. The fair value of the June 2025 Warrants, as determined by the Black-Scholes option pricing model, was $0.6 million at the date of issuance, and recorded as a debt discount to the June 2025 Promissory Note.
The Company received net proceeds of $9.9 million from the sale of the June 2025 Promissory Note, after deducting debt issuance costs. The June 2025 Promissory Note included multiple conversion features. The Company evaluated all conversion features included within the June 2025 Promissory Note, under ASC 815, and determined that the default interest feature met the definition of a derivative, but the value was immaterial. The net proceeds were allocated with the June 2025 Warrant using the relative fair value. As of December 31, 2025, the net carrying value of the June 2025 Promissory Note was $9.4 million, which is net of the debt discount of $0.6 million. During the year ended December 31, 2025, the Company recognized $0.2 million in accretion of the debt discount and $0.7 million in accrued interest.
As of December 31, 2025, the future principal payments for the June 2025 Promissory Note were as follows (in thousands):
| Fiscal Period | ($ in thousands) | ||||
2026 | $ | — | |||
2027 | 5,785 | ||||
2028 | 4,215 | ||||
Total principal amount | $ | 10,000 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 12, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
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.