Company: VRCA
Filing Date: 2025-03-11
Form Type: 10-K
Source: 0000950170-25-037172
Chunk: 167

Company: Verrica Pharmaceuticals Inc.
Filing Date: 2025-03-11
Form: 10-K
Item: Item 1B
Chunk 167
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 or on attractive terms, the Company would be forced to delay, reduce or eliminate commercialization efforts and development programs.

Note 2—Significant Accounting PoliciesBasis of PresentationThe accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). Use of EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. These estimates and assumptions are based on current facts, historical experience as well as other pertinent industry and regulatory authority information, results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.SegmentsOperating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker "CODM" in making decisions regarding resource allocation and assessing performance.  The Company views its operations and manages its business in one operating segment engaged in developing and selling medications for skin diseases requiring medical intervention.  The Company’s Chief Executive Officer (“CEO”), as the CODM, regularly reviews the entity-wide financial and operational performance as a single unit.  No financial information is disaggregated into separate lines of businesses and the Company does not differentiate the activities of its headquarters from the overall performance of the Company.  The CEO makes resource allocation and business process decisions regarding the overall level of resources available and how to best deploy these resources. The single segment’s principal measure of segment profit and loss is consolidated net loss.  The CEO considers actual and forecasted consolidated revenues, significant expenses, and consolidated net loss when evaluating performance.  Significant expenses are amounts that are regularly provided to the CEO and included in 

99

consolidated net loss and include selling, general and administrative expenses and research and development expenses.  The table below summarizes the significant expense categories regularly reviewed by the CEO for the years ended December 31, 2024 and 2023: