Company: VRCA
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001660334-25-000006
Chunk: 22

Company: Verrica Pharmaceuticals Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 22
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ivalentsThe Company considers all highly-liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. Cash and cash equivalents include cash held in banks and money market mutual funds.Cash and cash equivalents are financial instruments that are potentially subject to concentrations of credit risk. The Company’s deposits are in accounts at large financial institutions, and amounts may exceed federally insured limits. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the funds are held. The Company has no financial instruments with off-balance sheet risk of loss.Cash and cash equivalents as of September 30, 2025, includes a cash deposit of $0.2 million with Bank of America as required under the Commercial Credit Card Program with a balance equal to the outstanding credit limit on commercial credit cards.Fair Value of Financial Instruments and Credit RiskAs of September 30, 2025, the Company’s financial instruments included cash equivalents, accounts payable notes payable, and a derivative liability. The carrying amount of cash equivalents and accounts payable approximated fair value, given their short-term nature. The carrying value of the Company's long term note payable (Note 10) approximates fair value as the interest rate is reflective of current market rates on debt with similar terms and conditions.Cash equivalents subject the Company to concentrations of credit risk. However, the Company invests its cash in accordance with a policy objective that seeks to ensure both liquidity and safety of principal. The policy limits investments to instruments issued by the U.S. government, certain SEC registered money market funds that invest only in U.S. government obligations and various other low-risk liquid investment options, and places restrictions on portfolio maturity terms.The Company is subject to credit risk from accounts receivable. As of September 30, 2025, one customer represented approximately 90% of the Company's accounts receivable.  Based on the Company's periodic credit evaluations, there have been no historical concerns with this customer.Accounts ReceivableThe Company had $7.0 million in accounts receivable as of September 30, 2025. As of September 30, 2025, the Company had no allowance for credit losses. An allowance for credit losses is determined based on the Company's assessment of the creditworthiness and financial condition of its customers, aging of receivables, as well as the general economic environment. Any allowance would reduce the net receivables to the amount that is expected to be collected. Current payment terms