SEC Form SC 13D filed by Verrica Pharmaceuticals Inc.

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934 

(Amendment No. )*

Verrica Pharmaceuticals Inc. 

(Name of Issuer)

Common Stock, $0.0001 par value per share 

(Title of Class of Securities)

92511W108 

(CUSIP Number)

Paul B. Manning 

c/o PBM Capital Group, LLC 

200 Garrett Street, Suite S 

Charlottesville, VA 22902 

(434) 980-8100 

(Name, Address and Telephone Number of Person 

Authorized to Receive Notices and Communications)

July 5, 2022 

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

The class of equity securities to which this statement on Schedule 13D relates is the Common Stock, $0.0001 par value per share (“Common Stock”) of Verrica Pharmaceuticals Inc., a Delaware corporation (the “Issuer”). The address of the principal executive offices of the Issuer is 44 West Gay Street, Suite 400, West Chester, PA 19380. Information given in response to each item shall be deemed incorporated by reference in all other items, as applicable.

On July 5, 2022 Paul and Diane Manning, JTWROS (the “Purchasers”) purchased 4,761,904 shares in a public offering (the “2022 Public Offering”) at an aggregate purchase price of $9,999,998.40.

The funds used by the Purchasers to acquire the securities described above were obtained from the Purchasers’ personal funds.

The Reporting Persons acquired beneficial ownership of the Common Stock reported herein for investment purposes, and such acquisitions were made in the Reporting Persons’ ordinary course of business. The Reporting Persons filed an initial Schedule 13G on February 6, 2019, which filing was amended on February 3, 2020, February 16, 2021 and February 14, 2022 (as amended, the “Schedule 13G”). The Reporting Persons are filing this Schedule 13D to supersede the Schedule 13G.

Except as set forth herein and except that the Reporting Persons or any of their affiliates may, from time to time or at any time, subject to market conditions and other factors, purchase additional Common Stock in the open market, in privately negotiated transactions or otherwise, or sell at any time all or a portion of the Common Stock now owned or hereafter acquired by them to one or more purchasers, as of the date of this Schedule 13D, none of the Reporting Persons has any present plans which relate to or would result in:

Mr. Manning has served on the board of directors of the Issuer since December 2015. As a director of the Issuer, Mr. Manning may have influence over the corporate activities of the Issuer, including activities which may relate to the transactions described in clauses (a) through (j) of this Item 4.

As of the date hereof, PBM is the record owner of 256,634 shares of the Issuer’s common stock. Mr. Manning is the Chief Executive Officer of PBM and has sole voting and dispositive power over the shares held by PBM.

As of the date hereof, BKB is the record owner of 1,481,719 shares of the Issuer’s common stock. Mr. Manning is a co-manager of the manager of BKB and has shared voting and dispositive power over the shares held by BKB.

Each of Mr. Manning, PBM and BKB may be deemed to beneficially own 37.4%, 0.6% and 3.6%, respectively, of the Issuer’s outstanding Common Stock, which percentages are calculated based upon 41,094,053 shares of the Issuer’s common stock outstanding as of July 8, 2022, as reported by the Issuer to the Reporting Persons on July 11, 2022.

Collectively, the Reporting Persons beneficially own an aggregate of 15,389,481 shares of Common Stock, which represents 37.4% of the Issuer's outstanding Common Stock.

Investors’ Rights Agreement

Each of the Reporting Persons is party to that certain Amended and Restated Investors’ Rights Agreement (the “Investors’ Rights Agreement”) by and among the Issuer and certain of its stockholders, dated as of February 20, 2018, which provides the holders of registrable securities (as defined in the Investors’ Rights Agreement) with demand, piggyback and S-3 registration rights. Under the terms of the Investors’ Rights Agreement, holders of registrable securities will have equivalent registration rights with respect to any additional shares of Common Stock acquired by these holders.

The registration rights granted under the Investors’ Rights Agreement will terminate upon the earlier of the fifth anniversary of the closing of the Issuer’s initial public offering or a liquidation event.

The foregoing description of the Investors’ Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the Investors’ Rights Agreement, which is attached hereto as Exhibit B and incorporated herein by reference.

Lock-Up Agreements

In connection with the 2022 Public Offering, each of the Reporting Persons signed a lock-up letter agreement (collectively, the “Lock-Up Agreements”) that prohibits each Reporting Person from disposing of or hedging any shares or any securities convertible into or exchangeable for the Issuer’s Common Stock for a period of 90 days following June 29, 2022 without the prior written consent of RBC Capital Markets, LLC. RBC Capital Markets, LLC in its sole discretion may release any of the securities subject to these Lock-Up Agreements at any time without notice.

The foregoing description of the Lock-Up Agreements does not purport to be complete and is qualified in its entirety by reference to the form of Lock-Up Agreement, which is attached hereto as Exhibit C and incorporated herein by reference.

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Exhibit(s):

EXHIBIT A

JOINT FILING AGREEMENT

Pursuant to Rule 13d-1(k)(1) promulgated pursuant to the Securities Exchange Act of 1934, as amended, the undersigned agree that the attached Schedule 13D is being filed on behalf of each of the undersigned.