Business Description

Organization and Description of Business Operations Verrica Pharmaceuticals Inc. (the "Company") was formed on July 3, 2013 and is incorporated in the State of Delaware. The Company is a therapeutics company developing and commercializing medications for the treatment of dermatologic diseases, including skin cancers. On July 21, 2023, the U.S. Food and Drug Administration ("FDA") approved YCANTH (VP-102) topical solution for the treatment of molluscum in adult and pediatric patients two years of age and older. The Company launched commercial operations in August 2023. Reverse Stock Split At the close of trading on July 24, 2025, the Company effected a reverse stock split at a ratio of 1-for-10 shares of its common stock. As a result, every ten shares of the Company's issued and outstanding common stock were automatically combined into one share. The reverse stock split affected all stockholders uniformly and did not alter any stockholder's percentage ownership interest in the Company. No fractional shares were issued as a result of the reverse stock split and the split did not impact the par value of the Company's common stock. Any fractional shares that would otherwise have resulted from the reverse stock split were rounded down to the next whole share. The accompanying financial statements and notes have been adjusted to reflect the impact of the reverse stock split as though it had occurred in all periods presented. Liquidity and Capital Resources On November 23, 2025, the Company entered into Securities Purchase Agreements (the "Purchase Agreements") with certain investors (the "Purchasers"). The Company agreed to sell and issue to the Purchasers in a private placement transaction (the "Private Placement") an aggregate of (i) 6,499,826 shares of the Company's common stock, (ii) with respect to certain Purchasers, pre-funded warrants to purchase 5,305,164 shares of Common Stock (the "Pre-Funded Warrants") in lieu of Shares and (iii) in either case, accompanying Series C warrants to purchase 2,951,241 shares of Common Stock (the "Series C Warrants"). The purchase price per share of Common Stock and accompanying Series C Warrant is $4.24125 per share (the "Purchase Price") and the purchase price for the Pre-Funded Warrants and accompanying Series C Warrant is the Purchase Price minus $0.0001 per Pre-Funded Warrant. The Company received gross proceeds of approximately $50.0 million from the Private Placement, before deducting fees payable to the placement agent for the Private Placement and offering expenses payable by the Company, and without giving effect to any exercises of the Series C Warrants. On June 27, 2025, the Company entered into the Second Amendment to the Collaboration and License Agreement (the "Second Amendment") with Torii Pharmaceutical Co., Ltd. ("Torii"), amending the Collaboration and License Agreement dated as of March 17, 2021, between the Company and Torii, as amended on May 14, 2024 (as amended, the "Torii Agreement"). The Second Amendment accelerated an $8.0 million milestone payment, which was paid to the Company in July 2025, following Torii's approval of the study plan and execution of the agreement with the clinical research organization ("CRO"). The Company recognized revenue related to this milestone in the second quarter of 2025, when it became probable that the associated performance obligations were met. The milestone payment was initially conditioned upon the dosing of the first patient as part of the Company's global Phase 3 program of VP-102 (TO-208 in Japan) in common warts (the "Program"), which the Company is sponsoring with Torii. See Note 12 for further discussion of the Research and Development ("R&D") funding arrangement related to the Program. In September 2025, Torii paid the Company a $10.0 million milestone payment upon the approval of TO-208, referred to as YCANTH in the U.S., for molluscum in Japan. In addition, the Company will initiate a manufacturing transfer to Torii, expected to take several years, for Torii to be able to produce YCANTH (TO-208) applicators to be sold in Japan. In the interim, the Company will continue to receive from Torii a transfer price for applicators manufactured by the Company's manufacturing partners.…