SEC Filing | Verrica Pharmaceuticals

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 1, 2019, the registrant had 25,775,164 shares of common stock, $0.0001 par value per share, outstanding.

The accompanying notes are an integral part of these condensed financial statements.

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018
Operating expenses:
Research and development	$	3,049		$	3,467		$	11,464		$	7,909
General and administrative		3,494			2,865			10,626			5,781
Total operating expenses		6,543			6,332			22,090			13,690
Loss from operations		(6,543	)		(6,332	)		(22,090	)		(13,690	)
Other income (expense):
Interest income		453			427			1,523			621
Other expense		—			(1	)		(3	)		(1	)
Total other income (expense)		453			426			1,520			620
Net loss	$	(6,090	)	$	(5,906	)	$	(20,570	)	$	(13,070	)

Net loss per share, basic and diluted	$	(0.24	)	$	(0.24	)	$	(0.83	)	$	(1.16	)
Weighted average common shares outstanding, basic and diluted		24,893,036			24,847,512			24,875,589			11,230,401

Net loss	$	(6,090	)	$	(5,906	)	$	(20,570	)	$	(13,070	)
Other comprehensive gain (loss):
Unrealized gain (loss) on marketable securities		(11	)		(7	)		44			(7	)
Comprehensive loss	$	(6,101	)	$	(5,913	)	$	(20,526	)	$	(13,077	)

The accompanying notes are an integral part of these condensed financial statements.

																																	Accumulated
	Series A Convertible						Series B Convertible						Series C Convertible																				Other			Total
	Preferred Stock						Preferred Stock						Preferred Stock						Common Stock				Additional			Accumulated			Treasury Stock				Comprehensive			Stockholders’
	Shares			Amount			Shares			Amount			Shares			Amount			Shares Issued		Amount		Paid-in Capital			Deficit			Shares		Cost		Gain (Loss)			Equity
January 1, 2019		—		$	—			—		$	—			—		$	—			25,809,900	$	3	$	122,526		$	(33,083	)		105,144	$	—	$	(17	)	$	89,429
Stock-based compensation		—			—			—			—			—			—			—		—		780			—			—		—		—			780
Exercise of stock options		—			—			—			—			—			—			3,729		—		3			—			—		—		—			3
Unrealized gain on marketable securities		—			—			—			—			—			—			—		—		—						—		—		28			28
Net loss		—			—			—			—			—			—			—		—		—			(7,479	)		—		—		—			(7,479	)
Adoption of ASU 2018-07 (See Note 2)		—			—			—			—			—			—			—		—		(98	)		98			—		—		—			—
March 31, 2019		—			—			—			—			—			—			25,813,629		3		123,211			(40,464	)		105,144		—		11			82,761
Stock-based compensation		—			—			—			—			—			—			—		—		846			—			—		—		—			846
Exercise of stock options		—			—			—			—			—			—			31,812		—		212			—			—		—		—			212
Unrealized gain on marketable securities		—			—			—			—			—			—			—		—		—			—			—		—		27			27
Net loss		—			—			—			—			—			—			—		—		—			(7,001	)		—		—		—			(7,001	)
June 30, 2019		—			—			—			—			—			—			25,845,441		3		124,269			(47,465	)		105,144		—		38			76,845
Stock-based compensation		—			—			—			—			—			—			—		—		905			—			—		—		—			905
Exercise of stock options		—			—			—			—			—			—			4,500		—		4			—			—		—		—			4
Unrealized loss on marketable securities		—			—			—			—			—			—			—		—		—			—			—		—		(11	)		(11	)
Net loss		—			—			—			—			—			—			—		—		—			(6,090	)		—		—		—			(6,090	)
September 30, 2019		—		$	—			—		$	—			—		$	—			25,849,941	$	3	$	125,178		$	(53,555	)		105,144	$	—	$	27		$	71,653

January 1, 2018		21,302,972		$	10,508			1,937,984		$	5,000			—		$	—			3,804,643	$	—	$	5,394		$	(12,435	)		105,144	$	—	$	—		$	(7,041	)
Stock-based compensation		—			—			—			—			—			—			—		—		135			—			—		—		—			135
Series C convertible preferred stock		—			—			—			—			4,606,267			21,000			—		—		—			—			—		—		—			—
Issuance costs for Series C preferred stock		—			—			—			—			—			(7	)		—		—		—			—			—		—		—			—
Net loss		—			—			—			—			—			—			—		—		—			(1,847	)		—		—		—			(1,847	)
March 31, 2018		21,302,972			10,508			1,937,984			5,000			4,606,267			20,993			3,804,643		—		5,529			(14,282	)		105,144		—		—			(8,753	)
Stock-based compensation		-			—			—			—			—			—			—		—		779			—			—		—		—			779
Conversion of preferred stock into common stock		(21,302,972	)		(10,508	)		(1,937,984	)		(5,000	)		(4,606,267	)		(20,993	)		16,246,872		2		36,499			—			—		—		—			36,501
Issuance of common stock in connection with IPO, net of offering costs		—			—			—			—			—			—			5,750,000		1		78,380			—			—		—		—			78,381
Net loss		—			—			—			—			—			—			—		—		—			(5,317	)		—		—		—			(5,317	)
June 30, 2018		—			—			—			—			—			—			25,801,515		3		121,187			(19,599	)		105,144		—		—			101,591

Delaware	46-3137900
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
10 North High Street, Suite 200 West Chester, PA	19380
(Address of principal executive offices)	(Zip Code)

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 3.	Quantitative and Qualitative Disclosures About Market Risks	18

Item 4.	Controls and Procedures	18

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	19

Item 1A	Risk Factors	19

Item 2.	Recent Sales of Unregistered Securities and Use of Proceeds	19

Item 3.	Defaults Upon Senior Securities	19

Item 4.	Mine Safety Disclosures	19

Item 5.	Other Information	19

Item 6.	Exhibits	19

Signatures		21

	September 30,			December 31,
	2019			2018
ASSETS
Current assets:
Cash and cash equivalents	$	10,600		$	10,271
Marketable securities		60,478			79,538
Prepaid expenses and other assets		2,962			1,343
Total current assets		74,040			91,152
Property, plant and equipment, net		1,822			255
Operating lease right-of-use asset		178			—
Deposits		34			499
Total assets	$	76,074		$	91,906
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,010		$	922
Accrued expenses		3,193			1,517
Due to related party		—			38
Operating lease liability		127			—
Total current liabilities		4,330			2,477
Operating lease liability		91			—
Total liabilities		4,421			2,477
Commitments and Contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of September 30, 2019 and December 31, 2018		—			—
Common stock, $0.0001 par value; 200,000,000 authorized as of September 30, 2019 and December 31, 2018; 25,849,941 shares issued and 25,744,797 shares outstanding as of September 30, 2019 and 25,809,900 shares issued and 25,704,756 shares outstanding as of December 31, 2018		3			3
Treasury stock, at cost, 105,144 shares as of September 30, 2019 and December 31, 2018		—			—
Additional paid-in capital		125,178			122,526
Accumulated deficit		(53,555	)		(33,083	)
Accumulated other comprehensive gain (loss)		27			(17	)
Total stockholders’ equity		71,653			89,429
Total liabilities and stockholders’ equity	$	76,074		$	91,906