- Dormer Labs has discontinued the sale of all cantharidin-containing products into the United States - YCANTH is the only commercially available, FDA approved therapy for molluscum contagiosum and is clinically proven to be safe and effective "We are pleased to announce the expeditious settlement with Dormer Labs, which Verrica believes was the largest supplier of non-FDA approved cantharidin-containing products into the U.S. market," said Ted White, Verrica's President and Chief Executive Officer. "This s ...

- Dormer Labs has discontinued the sale of all cantharidin-containing products into the United States - YCANTH is the only commercially available, FDA approved therapy for molluscum contagiosum and is clinically proven to be safe and effective WEST CHESTER, Pa., July 01, 2024 (GLOBE NEWSWIRE) -- Verrica Pharmaceuticals Inc. ("Verrica") (Nasdaq: VRCA), a dermatology therapeutics company developing medications for skin diseases requiring medical interventions, today announced the settlement of litigation with ...

Verrica Pharmaceuticals, Inc. (NASDAQ:VRCA) Q1 2024 Earnings Conference Call May 13, 2024 8:30 AM ET Company Participants Chris Calabrese - MD, LifeSci Advisors Ted White - President & CEO Joe Bonaccorso - CCO Terry Kohler - CFO Gary Goldenberg - CMO Chris Hayes - Chief Legal Officer Conference Call Participants Stacy Ku - TD Cowen Anish Nikhanj - RBC Capital Markets Glen Santangelo - Jefferies Oren Livnat - H.C. Wainwright Serge Belanger - Needham and Company Kemp Dolliver - Brookline Capital Markets Opera ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38529 Verrica Pharmaceuticals Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 46-3137900 (State or other jur ...

Exhibit 99.1 Verrica Pharmaceuticals Reports First Quarter 2024 Financial Results – Reports YCANTH® revenue of $3.2M for first quarter of 2024 – – Over 228 million lives now covered to date on commercial insurance, managed Medicaid, Tricare and Federal Employee plans – – Preliminary Phase 2 results for VP-315 in the treatment of basal cell carcinoma (BCC) expected in the second quarter of 2024 – – Conference Call Scheduled for Today at 8:30 am ET – Conference ID: 13746100 International Dial-In Number: 1-201 ...

Verrica Pharmaceuticals Inc. (NASDAQ:VRCA) Q4 2023 Earnings Conference Call February 29, 2024 8:30 AM ET Company Participants Kevin Gardner - Managing Director-LifeSci Advisors Ted White - President & Chief Executive Officer Joe Bonaccorso - Chief Commercial Officer Terry Kohler - Chief Financial Officer Gary Goldenberg - Chief Medical Officer Conference Call Participants Stacy Ku - TD Cowen Oren Livnat - H.C. Wainwright Kemp Dolliver - Brookline Capital Markets Operator Good morning, ladies and gentlemen, ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-38529 Verrica Pharmaceuticals Inc. (State or other jurisdiction of incorporation or organization) 44 West Gay Street, Suite 400 West Chester, PA 19380 (Address of princ ...

EXHIBIT 99.1 Verrica Pharmaceuticals Reports Fourth Quarter and Full-Year 2023 Financial Results Conference Call and Webcast Information – Reports YCANTH™ revenue of $1.9M for fourth quarter and $4.7M for full year 2023 – – Over 200 million lives now covered on commercial insurance and managed Medicaid plans – – Conference Call Scheduled for Today at 8:30 am ET – WEST CHESTER, PA –Feb 29, 2024 (GLOBE NEWSWIRE) – Verrica Pharmaceuticals Inc. ("Verrica") (Nasdaq: VRCA), a dermatology therapeutics company deve ...

Financial Data and Key Metrics Changes - YCANTH revenues were $2.8 million in Q3 2023, driven by the initial order from FFF Enterprises [31] - Net loss on a GAAP basis was $24.8 million, or $0.54 per share, compared to net income of $83,000, or $0.00 per share in Q3 2022 [36] - Non-GAAP net loss was $14.8 million, or $0.32 per share, compared to a non-GAAP net gain of $2.9 million, or $0.07 per share in the same period in 2022 [37] - Cash and cash equivalents as of September 30, 2023, were $84.3 million, sufficient to fund operations into Q1 2025 [38] Business Line Data and Key Metrics Changes - The launch of YCANTH has resulted in significant initial sales, with net product revenues of $2.8 million in Q3 2023 [31] - Collaboration revenues of $125,000 were recognized related to a clinical supply agreement with Torrey Pharmaceuticals [31] - Research and development expenses increased to $6.5 million in Q3 2023 from $2.8 million in the same period in 2022, primarily due to increased clinical costs for VP-315 [34] - Selling, general and administrative expenses were $20 million in Q3 2023, up from $3.9 million in Q3 2022, driven by the launch of YCANTH [35] Market Data and Key Metrics Changes - Over 112 million lives are covered under commercial and managed Medicaid plans, with expectations to grow to approximately 140 million in six months [25][26] - The company has gained formulary acceptance at over a dozen key institutions, including major children's hospitals [27] - The distribution model includes a buy-and-bill basis and a white bag service, with an expected shift towards buy-and-bill as a J-code is anticipated in January 2024 [12][29] Company Strategy and Development Direction - The company is focused on the commercialization of YCANTH and the advancement of VP-315 for basal cell carcinoma [14][40] - Efforts are ongoing to clear the market of unapproved cantharidin products, with actions taken against retailers and compounding pharmacies [20][22] - The company plans to utilize KOLs and white papers to enhance awareness and acceptance of YCANTH among clinicians [51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for YCANTH, noting high awareness and positive reception from healthcare providers [39] - The company anticipates continued growth in demand for YCANTH throughout Q4 2023 and into 2024 [39] - Management is closely aligned with the FDA to address unapproved products and ensure compliance with regulations [40] Other Important Information - The company has a favorable balance sheet, enabling it to support the YCANTH launch and ongoing clinical programs [14] - A C-code has been issued for YCANTH, which is a precursor to the expected J-code [58] Q&A Session Summary Question: Early experience with establishing infrastructure in hospitals - Management noted that many institutions are eager to move away from compounding, which has facilitated quicker adoption of YCANTH [44] Question: Update on cantharidin timing - There are about three or four 503B pharmacies compounding cantharidin, with efforts to clear the market expected to gain traction in 8 to 10 months [46] Question: Average number of treatments trending - It is too early to establish a definitive number for treatments as the company is still monitoring refill patterns [48] Question: Coverage expectations and White Bag service - Coverage is expected to reach a steady state by early Q1 2024, with a current mix of 80% specialty pharmacy to 20% buy-and-bill [53] Question: SG&A costs outlook - SG&A costs are expected to increase as the commercial team is fully onboarded and active in the field [56]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Unaudited Condensed Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Condensed%20Financial%20Statements) This section presents Verrica Pharmaceuticals Inc.'s unaudited condensed financial statements and detailed notes for periods ending September 30, 2023, and December 31, 2022 [Condensed Balance Sheets](index=3&type=section&id=CONDENSED%20BALANCE%20SHEETS) Condensed Balance Sheet Highlights (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | Change (vs. Dec 31, 2022) | Assets (in thousands) | Asset Category | Sep 30, 2023 | Dec 31, 2022 | Change | Liabilities and Stockholders' Equity (in thousands) | Liability/Equity Category | Sep 30, 2023 | Dec 31, 2022 | Change | [Condensed Statements of Operations and Comprehensive Loss](index=4&type=section&id=CONDENSED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20LOSS) Key Financial Performance (Three Months Ended September 30, in thousands) | Metric | Sep 30, 2023 | Sep 30, 2022 | YoY Change | Key Financial Performance (Nine Months Ended September 30, in thousands) | Metric | Sep 30, 2023 | Sep 30, 2022 | YoY Change | - Net loss significantly increased for both the three and nine months ended September 30, 2023, primarily due to increased operating expenses related to the commercial launch of YCANTH and higher R&D costs[10](index=10&type=chunk) [Condensed Statements of Stockholders' Equity](index=5&type=section&id=CONDENSED%20STATEMENTS%20OF%20STOCKHOLDERS%27%20EQUITY) Stockholders' Equity Changes (January 1, 2023 to September 30, 2023, in thousands) | Item | Amount | Stockholders' Equity Changes (January 1, 2022 to September 30, 2022, in thousands) | Item | Amount | [Condensed Statements of Cash Flows](index=6&type=section&id=CONDENSED%20STATEMENTS%20OF%20CASH%20FLOWS) Cash Flow Summary (Nine Months Ended September 30, in thousands) | Cash Flow Activity | 2023 | 2022 | Change | - Net cash provided by financing activities significantly increased in 2023 due to proceeds from a new credit agreement and common stock/warrant issuance, offsetting increased cash used in operating activities[16](index=16&type=chunk) [Note 1—Nature of Business](index=7&type=section&id=Note%201%E2%80%94Nature%20of%20Business) - Verrica Pharmaceuticals Inc. is a dermatology therapeutics company, incorporated in Delaware in 2013, focused on developing and selling medications for skin diseases[18](index=18&type=chunk) - The company received FDA approval for YCANTH (VP-102) topical solution for molluscum contagiosum on July 21, 2023, and launched commercial operations in August 2023[18](index=18&type=chunk) - Despite substantial operating losses since inception and an accumulated deficit of **$205.8 million** as of September 30, 2023, the company believes its **$84.3 million** cash and cash equivalents will be sufficient to operate into the first quarter of 2025[19](index=19&type=chunk)[21](index=21&type=chunk) - In July 2023, the company secured a Credit Agreement for up to **$125.0 million** in debt, with an initial borrowing of **$50.0 million** (net proceeds of **$44.1 million**)[20](index=20&type=chunk) [Note 2—Significant Accounting Policies](index=7&type=section&id=Note%202%E2%80%94Significant%20Accounting%20Policies) - The unaudited interim condensed financial statements are prepared in accordance with GAAP, reflecting normal recurring adjustments, and should be read with the 2022 Form 10-K[22](index=22&type=chunk) - Revenue from YCANTH sales is recognized upon physical delivery to the pharmaceutical wholesaler/distributor, with gross product sales reduced by gross-to-net (GTN) estimates for returns, chargebacks, rebates, and fees[33](index=33&type=chunk)[34](index=34&type=chunk)[36](index=36&type=chunk) - Prior to FDA approval in July 2023, approximately **$5.7 million** in YCANTH manufacturing costs were expensed as R&D; these costs will now result in a lower average per unit cost of materials for product revenue over the next nine months[31](index=31&type=chunk)[42](index=42&type=chunk) - Basic and diluted net income (loss) per share calculations include pre-funded warrants as common stock equivalents due to their non-substantive exercise price[44](index=44&type=chunk) [Note 3—Property and Equipment](index=12&type=section&id=Note%203%E2%80%94Property%20and%20Equipment) Property and Equipment, Net (in thousands) | Category | Sep 30, 2023 | Dec 31, 2022 | - Construction in process, primarily for a product assembly and packaging line, remained substantial at **$2.5 million** as of September 30, 2023[48](index=48&type=chunk) [Note 4 - Inventory](index=12&type=section&id=Note%204%20-%20Inventory) Inventory Composition (in thousands) | Category | Sep 30, 2023 | Dec 31, 2022 | - Following FDA approval of YCANTH on July 21, 2023, the company began capitalizing inventory purchases, resulting in **$279 thousand** in total inventory as of September 30, 2023, up from zero at December 31, 2022[49](index=49&type=chunk) [Note 5—Accrued Expenses and Other Current Liabilities](index=12&type=section&id=Note%205%E2%80%94Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued Expenses and Other Current Liabilities (in thousands) | Category | Sep 30, 2023 | Dec 31, 2022 | Change | - Total accrued expenses and other current liabilities increased significantly to **$9.1 million** as of September 30, 2023, from **$2.7 million** at December 31, 2022, primarily driven by new gross-to-net reserves and higher clinical trial and compensation costs[50](index=50&type=chunk) [Note 6—Leases](index=12&type=section&id=Note%206%E2%80%94Leases) - The company leases office space in West Chester, PA (expiring Sep 2027) and Scotch Plains, NJ (expiring Apr 2025), classified as operating leases[51](index=51&type=chunk)[52](index=52&type=chunk) - An automobile fleet lease program for the sales force commenced, with a ROU asset of **$0.1 million** recognized as of September 30, 2023[53](index=53&type=chunk) Lease Expense (in thousands) | Lease Type | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | [Note 7—Debt](index=13&type=section&id=Note%207%E2%80%94Debt) - On July 26, 2023, the company entered into a new Credit Agreement for a five-year senior secured credit facility of up to **$125.0 million**, with an initial borrowing of **$50.0 million** (net proceeds of **$44.1 million**)[57](index=57&type=chunk)[58](index=58&type=chunk) - The new Loan Facility matures on July 26, 2028, and interest accrues at SOFR (or 4.00%) plus 8.00%, with additional tranches available contingent on revenue targets[58](index=58&type=chunk) - In connection with the new debt, the company issued warrants to purchase 518,551 shares of common stock to the Initial Lender, valued at **$2.0 million**[59](index=59&type=chunk)[60](index=60&type=chunk) Debt Composition (as of September 30, 2023, in thousands) | Item | Amount | [Note 8—Stockholders' Equity](index=14&type=section&id=Note%208%E2%80%94Stockholders%27%20Equity) - In February 2023, the company completed an underwritten offering, generating **$30.3 million** in net proceeds from the sale of common stock and pre-funded warrants[63](index=63&type=chunk) Outstanding Warrants (as of September 30, 2023) | Type of Warrant | Number of Warrants | Exercise Price | Expiration Date | Stock-Based Compensation Expense (in thousands) | Category | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | - Total unrecognized compensation related to unvested stock options was **$13.1 million** as of September 30, 2023, to be recognized over 2.7 years[67](index=67&type=chunk) - Compensation expense of **$8.2 million** was recognized for vested Restricted Stock Units (RSUs) during the three and nine months ended September 30, 2023, with **$2.1 million** remaining unrecognized[70](index=70&type=chunk)[71](index=71&type=chunk) [Note 9—Related Party Transactions](index=16&type=section&id=Note%209%E2%80%94Related%20Party%20Transactions) - The company has a Services Agreement with PBM VP Holdings, an affiliate of its largest stockholder, for advisory and consulting services, incurring **$15,000** and **$45,000** in expenses for the three and nine months ended September 30, 2023, respectively[73](index=73&type=chunk)[74](index=74&type=chunk) - A clinical service agreement with Clinical Enrollment LLC (controlled by a related party) for VP-315 clinical trial recruitment incurred **$0.1 million** in R&D expenses for the nine months ended September 30, 2023[76](index=76&type=chunk) [Note 10—Commitments and Contingencies](index=16&type=section&id=Note%2010%E2%80%94Commitments%20and%20Contingencies) - The company is a defendant in a putative class action lawsuit alleging federal securities law violations related to manufacturing deficiencies for VP-102, which is in early stages of litigation[77](index=77&type=chunk) - The company maintains a supply agreement for crude cantharidin material, with **$0.7 million** in additional purchases agreed upon during Q3 2023[79](index=79&type=chunk)[80](index=80&type=chunk) [Note 11—License and Collaboration Agreements](index=17&type=section&id=Note%2011%E2%80%94License%20and%20Collaboration%20Agreements) - The Torii Agreement grants Torii an exclusive license to develop and commercialize cantharidin product candidates (including VP-102) in Japan, with potential for **$50 million** in additional milestone payments and tiered transfer price payments[81](index=81&type=chunk)[82](index=82&type=chunk) - Collaboration revenue from Torii for clinical supplies and development activity was **$0.1 million** for the three months ended September 30, 2023, and **$0.3 million** for the nine months ended September 30, 2023[84](index=84&type=chunk) - The Lytix Agreement provides an exclusive worldwide license for VP-315 for dermatological oncology indications, with potential milestone payments up to **$111.0 million** and tiered royalties[85](index=85&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operations, YCANTH launch, pipeline development, and liquidity for periods ended September 30, 2023 and 2022 [Overview](index=18&type=section&id=Overview) - Verrica Pharmaceuticals is a dermatology therapeutics company focused on clinician-administered therapies, with YCANTH (VP-102) approved for molluscum contagiosum and three product candidates (VP-102 for warts, VP-315 for oncology, VP-103 for plantar warts)[89](index=89&type=chunk) - YCANTH received FDA approval on July 21, 2023, as the first FDA-approved product for molluscum, and commercial operations launched in August 2023, achieving over **112 million** covered lives[90](index=90&type=chunk) - The company is advancing VP-315 (Phase 2 for basal cell carcinoma, expected completion H1 2024) and evaluating Phase 3 trials for VP-102 in common warts and external genital warts[92](index=92&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) - The company secured a **$125 million** senior secured credit facility in July 2023, with **$50 million** initially drawn, and believes existing cash (**$84.3 million** as of Sep 30, 2023) will fund operations into Q1 2025[102](index=102&type=chunk)[103](index=103&type=chunk) [Critical Accounting Estimates](index=20&type=section&id=Critical%20Accounting%20Estimates) - The preparation of financial statements requires management to make estimates and assumptions that affect reported amounts, which are evaluated on an ongoing basis[104](index=104&type=chunk) - Additional accounting policies disclosed in Note 2 are crucial for understanding and evaluating financial results[105](index=105&type=chunk) [Components of Results of Operations](index=20&type=section&id=Components%20of%20Results%20of%20Operations) - Product revenue from YCANTH is recognized upon physical delivery to the distributor, with gross sales reduced by gross-to-net (GTN) estimates for returns, chargebacks, Medicaid rebates, patient assistance, and administrative fees[106](index=106&type=chunk)[107](index=107&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - Collaboration revenue primarily stems from the Torii Agreement for the development and commercialization of cantharidin product candidates in Japan[114](index=114&type=chunk) - Selling, general and administrative (SG&A) expenses are expected to increase due to YCANTH commercialization, headcount growth, and public company operational costs[116](index=116&type=chunk) - Research and development (R&D) expenses are anticipated to rise with increased personnel, new clinical trials for VP-102 (warts), VP-315 (oncology), and VP-103 (plantar warts), and regulatory filings[118](index=118&type=chunk) - Cost of product revenue includes direct manufacturing and supply chain costs; however, approximately **$5.7 million** in pre-FDA approval manufacturing costs were expensed as R&D, leading to a temporarily lower per-unit cost of materials[121](index=121&type=chunk) [Results of Operations for the Three Months Ended September 30, 2023 and 2022](index=22&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20September%2030%2C%202023%20and%202022) Financial Performance (Three Months Ended September 30, in thousands) | Metric | 2023 | 2022 | Change | - Product revenue, net was **$2.8 million** in Q3 2023, marking the first revenue from YCANTH's commercial launch, compared to zero in Q3 2022[126](index=126&type=chunk) - Collaboration revenue decreased significantly from **$8.3 million** in Q3 2022 (due to an **$8.0 million** milestone payment) to **$0.1 million** in Q3 2023[127](index=127&type=chunk) - Selling, general and administrative expenses surged by **$16.1 million** to **$20.1 million** in Q3 2023, driven by YCANTH commercial activities, sales force ramp-up, and restricted stock unit vesting[128](index=128&type=chunk) - Research and development expenses increased by **$3.7 million** to **$6.5 million** in Q3 2023, primarily due to higher clinical costs for VP-315, CMC costs, and stock compensation[129](index=129&type=chunk) R&D Expense by Product Candidate (Three Months Ended September 30, in thousands) | Product Candidate/Category | 2023 | 2022 | Change | - Interest income increased to **$0.8 million** in Q3 2023 due to higher cash balances and interest rates, while interest expense rose to **$1.7 million** due to the new OrbiMed Credit Agreement[132](index=132&type=chunk)[133](index=133&type=chunk) [Results of Operations for the Nine Months Ended September 30, 2023 and 2022](index=24&type=section&id=Results%20of%20Operations%20for%20the%20Nine%20Months%20Ended%20September%2030%2C%202023%20and%202022) Financial Performance (Nine Months Ended September 30, in thousands) | Metric | 2023 | 2022 | Change | - Product revenue, net was **$2.8 million** for the nine months ended September 30, 2023, following YCANTH's commercial launch[136](index=136&type=chunk) - Collaboration revenue decreased from **$9.0 million** in 2022 (including an **$8.0 million** milestone) to **$0.3 million** in 2023[137](index=137&type=chunk) - Selling, general and administrative expenses increased by **$16.1 million** to **$30.3 million**, driven by commercial activities for YCANTH, sales force expansion, and restricted stock unit vesting[138](index=138&type=chunk) - Research and development expenses rose by **$5.8 million** to **$15.0 million**, mainly due to increased CMC and clinical costs for VP-102 and VP-315, and higher stock compensation[139](index=139&type=chunk) R&D Expense by Product Candidate (Nine Months Ended September 30, in thousands) | Product Candidate/Category | 2023 | 2022 | Change | - Interest income increased to **$1.9 million** in 2023 due to higher cash balances and interest rates, while interest expense decreased to **$1.7 million** due to the repayment of the Mezzanine Loan Agreement in 2022 and the new OrbiMed Credit Agreement[142](index=142&type=chunk)[143](index=143&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) - The company has historically funded operations through equity sales and borrowings, including **$30.3 million** net proceeds from a February 2023 offering and **$44.1 million** net proceeds from the July 2023 OrbiMed Credit Agreement[145](index=145&type=chunk)[150](index=150&type=chunk) - As of September 30, 2023, cash and cash equivalents totaled **$84.3 million**, projected to support operations into the first quarter of 2025[146](index=146&type=chunk)[158](index=158&type=chunk) Cash Flow Summary (Nine Months Ended September 30, in thousands) | Cash Flow Activity | 2023 | 2022 | - Operating activities used **$24.1 million** cash in 2023 (vs. **$13.7 million** in 2022), primarily due to net loss offset by non-cash stock-based compensation[153](index=153&type=chunk)[154](index=154&type=chunk) - Financing activities provided **$74.2 million** cash in 2023 (vs. used **$16.9 million** in 2022), driven by proceeds from the OrbiMed Credit Agreement and equity issuance[156](index=156&type=chunk)[157](index=157&type=chunk) - Future capital requirements are substantial and depend on YCANTH commercialization, R&D costs, regulatory approvals, and intellectual property protection; additional financing will be needed[157](index=157&type=chunk)[158](index=158&type=chunk) [Contractual Obligations and Commitments](index=28&type=section&id=Contractual%20Obligations%20and%20Commitments) - There have been no material changes to the company's contractual obligations and commitments since the Annual Report on Form 10-K for the fiscal year ended December 31, 2022[162](index=162&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risks](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) No material changes to market risk disclosures have occurred since the December 31, 2022, Annual Report on Form 10-K - No material changes to quantitative and qualitative disclosures about market risk have occurred since the December 31, 2022, Annual Report on Form 10-K[163](index=163&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of September 30, 2023, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2023[164](index=164&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended September 30, 2023[165](index=165&type=chunk) [PART II. OTHER INFORMATION](index=28&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=28&type=section&id=Item.%201%20Legal%20Proceedings) The company discloses a class action lawsuit regarding VP-102 manufacturing deficiencies, asserting no material financial impact from legal proceedings - A putative class action complaint was filed on June 6, 2022, alleging federal securities law violations related to undisclosed manufacturing deficiencies for VP-102[166](index=166&type=chunk) - The litigation is in early stages, and the company intends to vigorously defend against the allegations[166](index=166&type=chunk) - Management believes that the ultimate liabilities from all routine legal proceedings will not materially affect the company's financial position, results of operations, or cash flows[167](index=167&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) Updated risk factors include YCANTH product liability exposure and the company's ability to service debt and borrow under its Loan Facility - The company faces inherent product liability risk from YCANTH commercialization and clinical trials, with potential for substantial liabilities from claims of injury[169](index=169&type=chunk) - Current product liability insurance coverage of **$10 million** may not be adequate, and maintaining sufficient coverage could become expensive[170](index=170&type=chunk) - The Credit Agreement includes affirmative and restrictive covenants (e.g., limits on debt, mergers, dividends) and requires maintaining at least **$10 million** in unrestricted cash[172](index=172&type=chunk) - Failure to meet revenue targets could prevent borrowing additional tranches of the **$125 million** Loan Facility, negatively impacting funding for operations[175](index=175&type=chunk) [Item 6. Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents and certifications - The exhibit index includes key documents such as the Amended and Restated Certificate of Incorporation and Bylaws, Credit Agreement, Pledge and Security Agreement, and Warrant Certificate related to the OrbiMed debt facility[178](index=178&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer, pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, are also included[178](index=178&type=chunk) [Signatures](index=32&type=section&id=Signatures) This section contains the official signatures of the registrant's authorized officers, certifying the report filing on November 9, 2023 - The report is duly signed by Ted White, Chief Executive Officer and President, and P. Terence Kohler Jr., Chief Financial Officer, on November 9, 2023[183](index=183&type=chunk)