Verrica Pharmaceuticals Inc.

Rule 10b5-1 Trading Arrangements and Non-Rule 10b5-1 Trading Arrangements

During the three months ended June 30, 2026, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act)adopted, modified orterminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" (as each term is defined in Item 408 of Regulation S-K).

New Credit Agreement

On August 3, 2026 (the "Closing Date"), we entered into a Credit Agreement (the "PD Credit Agreement") with PD Joint Holdings, LLC Series 2016-B (the "Lender"). The PD Credit Agreement provides for a senior secured credit facility in an aggregate principal amount of up to $27.5 million of which $12.5 million was made available on the Closing Date, subject to customary conditions, and up to an additional $15.0 million will be made available subject to the satisfaction of certain milestones, in each case subject to customary conditions. The term loans made under the PD Credit Agreement will mature on December 31, 2030.

Subject to certain exceptions, the obligations under the PD Credit Agreement are to be guaranteed by our material subsidiaries. The obligations under the PD Credit Agreement are secured by all or substantially all of our assets.

During the term of the facility, interest on any outstanding balance shall accrue at a rate per annum equal to the greater of (i) the sum of (x) the SOFR rate (which is the forward-looking term rate for a one-month tenor based on the secured overnight financing rate administered by the CME Group Benchmark Administration Limited, subject to a floor of 4.50% per annum) plus (y) the applicable margin, which is initially 8.00% per annum and may step down to 7.50% or 7.00% per annum upon the achievement of certain revenue milestones, and (ii) 12.50% per annum. During the existence of an event of default, any outstanding amount under the facility will bear interest at a default rate equal to the otherwise applicable rate plus 3.00% per annum. Interest may be paid in kind (PIK) and capitalized into the outstanding principal balance so long as no default has occurred and is continuing.

The PD Credit Agreement provides for the payment of an applicable prepayment premium in connection with certain voluntary prepayments and, following an event of default, upon the acceleration of the loans. The PD Credit Agreement requires mandatory prepayments with the proceeds of certain transactions and events, including (i) excess cash flow, (ii) proceeds from sublicenses, co-development, or strategic partnerships relating to VP-315, (iii) proceeds from commercialization partnerships, licenses or co-promotion agreements for YCANTH outside the United States and Japan, and (iv) the occurrence of certain liquidity events, including, among other things, a change of control, certain asset sales or licenses, a third-party refinancing, or the achievement of certain revenue or cash flow milestones.

Upon the occurrence of certain specified liquidity events, we will pay a final payment equal to the amount, if positive, by which a 16.00% gross internal rate of return on the aggregate principal amount of term loans made under the PD Credit Agreement (calculated from the draw date of each term loan to the date of such liquidity event) exceeds the sum of all interest and fees paid as of such date. Our obligation to pay the Final Payment survives repayment of all other obligations under the PD Credit Agreement and termination of the PD Credit Agreement.

The PD Credit Agreement contains customary financial covenants, including (i) a minimum annual YCANTH revenue covenant (subject to certain equity cure rights) and (ii) a minimum liquidity covenant requiring us to maintain at least $5.0 million of liquidity at all times (tested monthly).

The PD Credit Agreement contains customary events of default, subject in certain cases to customary grace periods and thresholds, including, among others, nonpayment of principal, interest, fees or other amounts; material inaccuracies in representations and warranties; failure to comply with affirmative or negative covenants; cross-defaults with certain other indebtedness; bankruptcy and insolvency events; material monetary judgment defaults; impairment of any Loan Document or collateral document; other material adverse effects; delisting or suspension of our common stock from the Nasdaq Stock Market; and change of control. Upon the occurrence and during the continuance of an event of default, the Lender may terminate its commitments and declare all outstanding obligations under the PD Credit Agreement immediately due and payable.

The PD Credit Agreement and the related security agreement also contain a number of customary representations, warranties, and covenants that, among other things, will limit or restrict our ability to (subject to certain qualifications and exceptions): create liens and encumbrances; incur additional indebtedness; merge, dissolve, liquidate, or consolidate; make acquisitions, investments, advances, or loans; dispose of or transfer assets; pay dividends or make other payments in respect of their capital stock; amend certain material documents; redeem or repurchase certain debt; engage in certain transactions with affiliates; enter into certain restrictive agreements; and make certain capital expenditures.

The foregoing description is only a summary of the terms of the PD Credit Agreement. It does not purport to be complete and is qualified in its entirety by reference to the full text of the PD Credit Agreement, a copy of which is attached to this Quarterly Report on Form 10-Q as Exhibit 10.2.