What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-12 compared with 2025-05-13 · 119 added, 58 removed, 208 unchanged (46% of the section changed)

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Our financial statements have been prepared in accordance with U.S.

Unless otherwise indicated, all information in this Quarterly Report on Form 10-Q gives effect to a 1-for-10 reverse stock split of our common stock that became effective on July 24, 2025, and all references to shares of common stock outstanding and per share amounts give effect to the reverse stock split.

We own various U.S.

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YCANTH (VP-102) - Treatment of Common Warts

We also plan to advance YCANTH (VP-102) for common warts through a separate regulatory approval process and conduct a global phase three program with our partner, Torii.

We anticipate the program may begin as early as mid-2025.

We also plan to advance YCANTH (VP-102) for common warts through a separate regulatory approval process and have begun the Phase 3 Program with our partner, Torii.

We expect to dose the first patient in the Phase 3 Program in the United States in the fourth quarter of 2025.

In the future, we also intend to pursue commercialization for YCANTH (VP-102) for the treatment of molluscum contagiosum, as well as YCANTH (VP-102) for common warts if approved, in additional geographic regions, either alone or together with a strategic partner.

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We are also developing VP-315 for the treatment of BCC and potentially additional dermatological oncology indications.

We held an end-of-Phase 2 meeting with the FDA in the first quarter and expect to report additional data in mid-2025, which we believe will help inform next steps for the advancement of the program into Phase 3 clinical trials.

We held an end-of-Phase 2 meeting with the FDA in the first quarter and expect to report additional data by the end of 2025, which we believe will help inform next steps for the advancement of the program into Phase 3 clinical trials.

Liquidity Overview

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In addition, the Credit Agreement contains a financial covenant that we must maintain a liquidity of at least $10.0 million and that our quarterly and annual financial statements not be subject to any qualification or statement which is of a "going concern" or similar nature.

The qualification of a "going concern" was waived for the annual financial statements for the year ended December 31, 2024 and quarterly financial statements for the quarter ended March 31, 2025.

If the qualification of a "going concern" is not waived for additional future periods or if additional financing is not raised to meet the liquidity test, we may be in default of the debt agreement in the near-term.

The requirement to deliver financial statements that do not include a qualification of a "going concern" was waived for the financial statements for the quarters ending June 30, 2025, September 30, 2025 and the quarter and year ending December 31, 2025.

If the requirement to deliver financial statements that do not include a qualification of a "going concern" is not waived for additional future periods or if additional financing is not raised to meet the liquidity test, we may be in default of the debt agreement in the near-term.

Upon the occurrence of an event of default (subject to notice and grace periods), additional interest of 4% per annum applies and obligations under the Credit Agreement could be accelerated.

As of March 31, 2025, we were in compliance with all covenants under the Credit Agreement as amended.

As of June 30, 2025, we were in compliance with all covenants under the Credit Agreement as amended.

In November 2024, we closed an underwritten offering of 4,551,824 shares of our common stock (and, in lieu of common stock to certain investors that so chose, pre-funded warrants to purchase 223,595 shares of our common stock, or the pre-funded warrants), and in either case, accompanying Series A warrants to purchase 2,387,703 shares of our common stock at an exercise price of $10.68 per share of common stock, or the Series A Warrants, and Series B warrants to purchase 2,387,703 shares of our common stock at an exercise price of $13.35 per share of common stock, or the Series B Warrants, at a combined public offering price of $8.90 per share of common stock and accompanying Series A and Series B Warrants (or $8.899 per Pre-Funded Warrant and accompanying Series A and Series B Warrants).

The offering resulted in net proceeds of $39.6 million, after deducting underwriting discounts and commissions, and offering expenses.

As of March 31, 2025 , we had cash and cash equivalents of $29.6 million.

As of June 30, 2025 , we had cash and cash equivalents of $15.4 million.

Based on our current business plan and current capital resources, combined with the uncertainty regarding the availability of additional funding and considering our debt obligations, including a requirement to maintain cash, cash equivalents and investments of at least $10.0 million at all times, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date these financial statements are issued.

We have incurred substantial operating losses since inception and expect to continue to incur significant losses for the foreseeable future and may never become profitable.

As of March 31, 2025, we had an accumulated deficit of $316.8 million.

As of June 30, 2025, we had an accumulated deficit of $316.6 million.

Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

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• incur additional legal, accounting and other expenses while operating as a public company.

Reverse Stock Split

On July 25, 2025, we effected a one-for-ten (1-for-10) reverse stock split (the "Reverse Stock Split").

Pursuant to their terms, a proportionate adjustment was made to the per share exercise price and number of shares issuable under all of the Company’s outstanding options and warrants, and the number of shares authorized for issuance pursuant to the Company’s equity incentive plans have been reduced proportionately.

The Reverse Stock Split did not reduce the number of authorized shares of common stock and did not alter the par value.

All share and per share amounts of common stock presented in this Quarterly Report on Form 10-Q have been retroactively adjusted to reflect the Reverse Stock Split.

Critical Accounting Estimates

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We recognize revenue from sales of YCANTH (VP-102), or the Product, in accordance with ASC Topic 606 – Revenue from Contracts with Customers .

YCANTH (VP-102) became available for commercial sale and shipment for the treatment of patients by a healthcare provider in the United States in the year ended December 31, 2023.

YCANTH (VP-102) is available for commercial sale and shipment for the treatment of patients by a healthcare provider in the United States.

We sell the Product to several pharmaceutical wholesalers and distributors, or the Customers, who in turn sell the Product directly to clinics, hospitals, and federal healthcare programs.

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Variance between actual amounts and estimated amounts may result in prospective adjustments to reported net product revenue.

Collaboration Revenue

Collaboration revenue represents revenue from the Torii Agreement pursuant to which we granted Torii an exclusive license to develop and commercialize our product candidates that contain a topical formulation of cantharidin for the treatment of molluscum contagiosum and common warts in Japan, including YCANTH (VP-102).

License and Collaboration Revenue

License and collaboration revenue represents revenue from the Torii Agreement pursuant to which we granted Torii an exclusive license to develop and commercialize our product candidates that contain a topical formulation of cantharidin for the treatment of molluscum contagiosum and common warts in Japan, including YCANTH (VP-102).

Operating Expenses

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Cost of product revenue includes the cost of inventory sold, which includes direct manufacturing and supply chain costs.

Prior to FDA approval, all product purchased from such suppliers was included as a component of research and development expense, as we were unable to assert that the inventory had future economic benefit until YCANTH (VP-102) received FDA approval.

Pursuant to the supply agreement, we purchased and included in research and development expenses approximately $4.5 million of raw cantharidin and processed active pharmaceutical ingredient, or API.

The raw cantharidin and processed API is sufficient to produce approximately 14 million finished drug product applicators to be used for commercially saleable product and other YCANTH (VP-102) product candidates.

In addition, we purchased other components and services related to YCANTH (VP-102) for commercially saleable product and included approximately $1.2 million in research and development expenses prior to FDA approval.

As a result, cost of product revenue related to YCANTH (VP-102) will initially reflect a lower average per unit cost of materials over approximately the next year as previously expensed inventory is utilized for commercial production and sold to customers.

If we included those costs previously expensed as a component of cost of product revenue, our cost of product revenue for each of the three months ended March 31, 2025 and 2024 would have been $0.7 million, including $0.3 million of obsolete inventory costs in both periods.

March 31, 2025, the amount remaining related to previously expensed inventory would have an immaterial impact in future periods and will no longer be reported as a component of cost of product revenue.

Cost of product revenue also includes period costs related to excess and obsolete inventory write-downs.

Cost of Collaboration Revenue

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We may never succeed in achieving regulatory approval for our product candidates.

We may obtain unexpected results from our clinical trials.

We may obtain

unexpected results from our clinical trials.

We may elect to discontinue, delay or modify clinical trials of our product candidates.

A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate.

For example, if the FDA or other regulatory

authorities were to require us to conduct clinical trials beyond those that we currently anticipate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.

Results of Operations for the Three Months Ended March 31, 2025 and 2024

For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.

Results of Operations for the Three Months Ended June 30, 2025 and 2024

The following table summarizes our results of operations (in thousands):

For the Three Months Ended March 31,

For the Three Months Ended June 30,

Total revenue

Product revenue, net

Collaboration revenue

License and collaboration revenue

Total revenue

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Total operating expenses

Loss from operations

Income (loss) from operations

Other income (expense):

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Total other expense, net

Net income (loss)

Product Revenue, Net

Product revenue, net was $3.4 million for the three months ended March 31, 2025, compared to $3.2 million for the three months ended March 31, 2024.

Product revenue, net was $4.5 million for the three months ended June 30, 2025, compared to $4.9 million for the three months ended June 30, 2024.

Product revenue, net, related to the delivery of YCANTH (VP-102) to our distribution partners.

Collaboration Revenue

Collaboration revenue was $17,000 for the three months ended March 31, 2025, compared to $0.6 million for the three months ended March 31, 2024.

Collaboration revenue for each of the three months ended March 31, 2025 and 2024 consisted of supplies and development activity with Torii.

For the three months ended June 30, 2024, product revenue, net included an initial one-time stock-in related to the expansion of our specialty distribution network to bring on an additional specialty distributor, which represented approximately 54% of product revenue, net in the period.

License and Collaboration Revenue

License and collaboration revenue was $8.2 million for the three months ended June 30, 2025, compared to $0.3 million for the three months ended June 30, 2024.

Collaboration revenue for the three months ended June 30, 2025 consisted of an $8.0 million milestone payment from Torii as well as supplies and development activity.

Collaboration revenue for the three months ended June 30, 2024 consisted of supplies and development activity with Torii.

Cost of Product Revenue

Cost of product revenue for the three months ended March 31, 2025 and 2024 was $0.4 million and $0.5 million, respectively, consisting of product costs related to the sale of YCANTH (VP-102) and obsolete inventory write-off of $47,000 and $0.3 million, respectively.

Cost of product revenue for the three months ended June 30, 2025 and 2024 was $0.3 million and $0.4 million, respectively, consisting primarily of product costs related to the sale of YCANTH (VP-102).

Cost of Collaboration Revenue

Cost of collaboration revenue was $14,000 for the three months ended March 31, 2025, compared to $0.6 million for the three months ended March 31, 2024.

Cost of collaboration revenue was $0.2 million for the three months ended June 30, 2025 and 2024.

Cost of collaboration revenue consisted of supplies and development activity with Torii.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $8.9 million for the three months ended June 30, 2025, compared to $16.5 million for the three months ended June 30, 2024.

The decrease of $7.7 million was primarily due to lower expenses related to

commercial activities for YCANTH (VP-102), including decreases in compensation, stock compensation, benefits and travel due to reduced sales force of $5.7 million, decreased marketing and sponsorship costs of $1.1 million, and decreased legal costs of $0.9 million.

Research and Development Expenses

Research and development expenses were $1.8 million for the three months ended June 30, 2025, compared to $3.3 million for the three months ended June 30, 2024.

The decrease of $1.5 million was primarily related to decreased chemistry, manufacturing and controls (CMC) and medical affairs costs of $0.6 million, as well as decreased clinical operations costs of $0.8 million, mostly related to the clinical trial for VP-315.

The following table summarizes our research and development expense by product candidate or, for unallocated expenses, by type, for the three months ended June 30, 2025 and 2024.

Unallocated expenses include compensation and other personnel-related costs (in thousands):

For the Three Months Ended

YCANTH (VP-102)

Stock based compensation

Other unallocated expenses

Research and development expense

Interest Income

Interest income was $0.2 million for the three months ended June 30, 2025 compared to $0.4 million for the three months ended June 30, 2024.

The decrease of $0.2 million was primarily due to a lower cash balance.

Interest Expense

Interest expense was $2.1 million for the three months ended June 30, 2025 compared to $2.4 million for the three months ended June 30, 2024 and consisted of interest expense on the OrbiMed Credit Agreement as described in Note 10 to our financial statements for each period.

The decrease of $0.2 million was related to a lower outstanding principal balance under our Credit Agreement with OrbiMed.

Change in Fair Value of Derivative Liability

The change in the fair value of the derivative liability for the three months ended June 30, 2025 and 2024 was $0.6 million and $0 million, respectively, due to principal payments starting in January 2025, relating to the Credit Agreement.

Results of Operations for the Six Months Ended June 30, 2025 and 2024

The following table summarizes our results of operations (in thousands):

For the Six Months Ended June 30,

Product revenue, net

License and collaboration revenue

Total revenue

Operating expenses:

Cost of product revenue

Cost of collaboration revenue

Selling, general and administrative

Research and development

Total operating expenses

Loss from operations

Other income (expense):

Interest income

Interest expense

Change in fair value of derivative liability

Other expense

Total other expense, net

Product Revenue, Net

Product revenue, net was $8.0 million for the six months ended June 30, 2025, compared to $8.1 million for the six months ended June 30, 2024.

For the six months ended June 30, 2024, product revenue, net included an initial one-time stock-in related to the expansion of our specialty distribution network to bring on an additional specialty distributor, which represented approximately 32% of product revenue, net in the period.

License and Collaboration Revenue

License and collaboration revenue was $8.2 million for the six months ended June 30, 2025, compared to $0.9 million for the six months ended June 30, 2024.

License and collaboration revenue for the six months ended June 30, 2025 consisted of an $8.0 million milestone payment from Torii as well as supplies and development activity.

License and collaboration revenue for the six months ended June 30, 2024 consisted of supplies and development activity with Torii.

Cost of Product Revenue

Cost of product revenue for the six months ended June 30, 2025 and 2024 was $0.8 million and $0.9 million, respectively, consisting primarily of product costs related to the sale of YCANTH (VP-102).

Cost of Collaboration Revenue

Cost of collaboration revenue was $0.2 million for the six months ended June 30, 2025, compared to $0.8 million for the six months ended June 30, 2024.

The decrease of $0.6 million was primarily due to decreased manufacturing supply required to support development and testing services pursuant to the Torii Clinical Supply Agreement.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $8.8 million for the three months ended March 31, 2025, compared to $16.3 million for the three months ended March 31, 2024.

The decrease of $7.5 million was primarily due to lower expenses related to commercial activities for YCANTH (VP-102), including decreases in compensation, stock compensation, recruiting fees, benefits and travel due to reduced sales force of $4.4 million, decreased marketing and sponsorship costs of $2.1 million and other commercial activity of $0.4 million, and decreased legal costs of $0.7 million.

Selling, general and administrative expenses were $17.7 million for the six months ended June 30, 2025, compared to $32.9 million for the six months ended June 30, 2024.

The decrease of $15.2 million was primarily due to lower expenses related to commercial activities for YCANTH (VP-102), including decreases in compensation, stock compensation, recruiting fees, benefits and travel due to reduced sales force of $10.6 million, decreased marketing and sponsorship costs of $3.2 million and decreased legal, general and administrative costs of $1.4 million.

Research and Development Expenses

Research and development expenses were $2.3 million for the three months ended March 31, 2025, compared to $4.9 million for the three months ended March 31, 2024.

Research and development expenses were $4.1 million for the six months ended June 30, 2025, compared to $8.3 million for the six months ended June 30, 2024.

The decrease of $4.1 million was primarily related to decreased clinical trial costs for VP-315 of $2.6 million and decreased regulatory and medical affairs costs of $0.7 million.

The following table summarizes our research and development expense by product candidate or, for unallocated expenses, by type, for the three months ended March 31, 2025 and 2024.

The following table summarizes our research and development expense by product candidate or, for unallocated expenses, by type, for the six months ended June 30, 2025 and 2024.

Unallocated expenses include compensation and other personnel-related costs (in thousands):

For the Three Months Ended

For the Six Months Ended June 30,

YCANTH (VP-102)

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Interest Income

Interest income was $0.3 million for the three months ended March 31, 2025 compared to $0.6 million for the three months ended March 31, 2024.

Interest income was $0.6 million for the six months ended June 30, 2025 compared to $1.0 million for the six months ended June 30, 2024.

The decrease of $0.4 million was primarily due to a lower cash balance.

Interest Expense

Interest expense was $2.2 million for the three months ended March 31, 2025 compared to $2.3 million for the three months ended March 31, 2024 and consisted of interest expense on the OrbiMed Credit Agreement as described in Note 10 to our financial statements for each period.

Interest expense was $4.3 million for the six months ended June 30, 2025 compared to $4.7 million for the six months ended June 30, 2024 and consisted of interest expense on the OrbiMed Credit Agreement as described in Note 10 to our financial statements for each period.

The decrease of $0.4 million was related to a lower outstanding principal balance under our Credit Agreement with OrbiMed.

Change in Fair Value of Derivative Liability

The change in the fair value of the derivative liability for the six months ended June 30, 2025 and 2024 was $0.9 million and $0 million, respectively, due to the principal payments starting in January 2025 relating to the Credit Agreement.

Liquidity and Capital Resources

Since our inception, we have incurred net losses and negative cash flows from our operations.

We have financed our operations since inception primarily through sales of our convertible preferred stock, the sale of our common stock, and $20.0 million from the Torii Agreement.

As of June 30, 2025, we had cash and cash equivalents of $15.4 million.

Since our inception, we have incurred negative cash flows from our operations.

We have financed our operations since inception primarily through sales of our convertible preferred stock, the sale of our common stock, and $28.0 million from the Torii Agreement, which includes $8.0 million received in July 2025.

In November 2024, we closed an underwritten offering of 4,551,824 shares of our common stock and, in lieu of common stock to certain investors that so chose, pre-funded warrants to purchase 223,595 shares of our common stock, and in either case, accompanying Series A Warrants to purchase 2,387,703 shares of our common stock at an exercise price of $10.68 per share of common stock and Series B Warrants to purchase 2,387,703 shares of our common stock at an exercise price of $13.35 per share of common stock, at a combined public offering price of $8.90 per share of common stock and accompanying Series A and Series B Warrants (or $8.899 per Pre-Funded Warrant and accompanying Series A and Series B Warrants).

The offering resulted in net proceeds of $39.6 million, after deducting underwriting discounts and commissions, and offering expenses.

As of March 31, 2025, we had cash and cash equivalents of $29.6 million.

On July 21, 2023, the F DA a pproved YCANTH (VP-102) topical solution for the treatment of molluscum contagiosum in adult and pediatric patients two years of age and older.

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In addition, the Credit Agreement contains a financial covenant that we must maintain a liquidity of at least $10.0 million and also requires that our quarterly and annual financial statements not be subject to any qualification or statement which is of a "going concern" or similar nature.

The qualification of a "going concern" was waived for the annual financial statements for the year ended December 31, 2024 and quarterly financial statements for the quarter ended March 31, 2025.

If the qualification of a "going concern" is not waived for additional future periods or if we don’t raise additional financing, we may be in default of our debt in the near-term.

The requirement to deliver financial statements that are not subject to a qualification of a "going concern" was waived for the financial statements for the quarters ending June 30, 2025, September 30, 2025 and the year ending December 31, 2025.

If the requirement to deliver financial statements that are not subject to a qualification of a "going concern" is not waived for additional future periods or if we don’t raise additional financing, we may be in default of our debt in the near-term.

During the term of the Credit Agreement, interest payable in cash by us will accrue on any outstanding balance due under the Credit Agreement at a rate per annum equal to the higher 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) and (y) 4.00% plus, in either case, 8.00%.

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The following table summarizes our cash flows (in thousands):

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Net cash used in operating activities

Net cash used in investing activities

Net cash used in financing activities

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Operating Activities

During the three months ended March 31, 2025, operating activities used $12.7 million of cash, primarily resulting from a net loss of $9.7 million partially offset by non-cash stock-based compensation of $1.0 million and noncash interest of $0.7 million.

Net cash used by changes in operating assets and liabilities consisted primarily of an increase in accounts receivable of $5.6 million partially offset by an increase in accrued expenses of $1.0 million and a decrease in prepaid expenses and other assets of $0.6 million.

During the three months ended March 31, 2024, operating activities used $19.9 million of cash, primarily resulting from a net loss of $20.3 million partially offset by non-cash stock-based compensation of $2.1 million.

Net cash used by changes in operating assets and liabilities consisted primarily of increases in accounts receivable of $2.8 million and prepaid expenses and other assets of $1.3 million partially offset by an increase in accrued expenses of $1.7 million.

During the six months ended June 30, 2025, operating activities used $22.7 million of cash, primarily resulting from a net loss of $9.5 million partially offset by non-cash stock-based compensation of $1.9 million and noncash interest of $1.4 million.

Net cash used by changes in operating assets and liabilities consisted primarily of an increase in accounts receivable of $9.1 million and billed and unbilled license and collaboration revenue of $8.1 million partially offset by an increase in accounts payable and deferred revenue of $0.9 million and a decrease in prepaid expenses and other assets of $0.8 million.

During the six months ended June 30, 2024, operating activities used $36.3 million of cash, primarily resulting from a net loss of $37.5 million partially offset by non-cash stock-based compensation of $4.3 million and non-cash interest expense of $1.0 million.

Net cash used by changes in operating assets and liabilities consisted primarily of increases in accounts receivable of $5.8 million and prepaid expenses and other assets of $1.6 million partially offset by a net increase in accounts payable and accrued expenses of $2.7 million.

Investing Activities

During the three months ended March 31, 2025 and 2024, no cash was used in or provided by investing activities.

We did not use any cash in investing activities during the six months ended June 30, 2025.

During the six months ended June 30, 2024 net cash used in investing activities of $11,000 was for the purchase of property and equipment.

Financing Activities

During the three months ended March 31, 2025, net cash used by financing activities of $4.1 million was primarily due to the repayment of debt related to the Credit Agreement.

During the three months ended March 31, 2024, net cash used by financing activities of $0.7 million was primarily due to $0.5 million of debt amendment costs paid related to the Credit Agreement.

During the six months ended June 30, 2025, net cash used by financing activities of $8.2 million was primarily due to the repayment of debt related to the Credit Agreement.

During the six months ended June 30, 2024, net cash used by financing activities of $1.3 million was primarily due to $1.1 million of debt amendment costs paid related to the Credit Agreement.

Funding Requirements

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We have incurred substantial operating losses since inception and expect to continue to incur significant losses for the foreseeable future and may never become profitable.

As of March 31, 2025, we had an accumulated deficit of $316.8 million.

We believe our cash, and cash equivalents of $29.6 million as of March 31, 2025 will be sufficient to support our planned operations into the third quarter of 2025.

Based on our current business plan and current capital resources, combined with the uncertainty regarding the availability of additional funding and considering our debt obligations, including a requirement to maintain cash, cash equivalents and investments of at least $10.0 million at all times, we have concluded there is substantial doubt regarding our ability to continue as a going concern within one year after the date these financial statements are issued.

We plan to address the conditions that raise

substantial doubt regarding our ability to continue as a going concern by, among other things, obtaining additional funding through equity offerings, debt financing and refinancings, collaborations, strategic alliances and/or licensing arrangements.

While beyond our control, the milestone payment of $8.0 million due from Torii upon the first patient dosed in Japan in the Phase 3 program, and/or the exercise of the Series A Warrants issued in conjunction with the November 2024 Equity Financing, which have an exercise price of $1.0680 per share and expire in November 2025 may result in additional liquidity during 2025 and alleviate the substantial doubt regarding our ability to continue as a going concern.

As of June 30, 2025, we had an accumulated deficit of $316.6 million.

We believe our cash, and cash equivalents of $15.4 million as of June 30, 2025 and the $8.0 million milestone payment received from Torii in July 2025 will be sufficient to support our planned operations into the fourth quarter of 2025.

Based on our current business

plan and current capital resources, combined with the uncertainty regarding the availability of additional funding and considering our debt obligations, including a requirement to maintain cash, cash equivalents and investments of at least $10.0 million at all times, we have concluded there is substantial doubt regarding our ability to continue as a going concern within one year after the date these financial statements are issued.

We plan to address the conditions that raise substantial doubt regarding our ability to continue as a going concern by, among other things, obtaining additional funding through equity offerings, debt financing and refinancings, collaborations, strategic alliances and/or licensing arrangements.

While beyond our control, we could receive (A) a $10.0 million milestone payment for regulatory approval of YCANTH (TO-208) in Japan for the treatment of molluscum, which may occur before the end of 2025, and (B) up to $25.0 million upon the exercise of the Series A Warrants issued in conjunction with the November 2024 Equity Financing, which have an exercise price of $10.68 per share and expire in November 2025.

Either of these may result in additional liquidity during 2025 and alleviate the substantial doubt regarding our ability to continue as a going concern.

We cannot predict with certainty that these funds will be received and alleviate the substantial doubt.

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Contractual Obligations and Commitments

As of March 31, 2025, there have been no material changes to our contractual obligations and commitments as previously discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

As of June 30, 2025, there have been no material changes to our contractual obligations and commitments as previously discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Quantitative and Qualitati ve Disclosures About Market Risks

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis