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We plan to continue to enter into collaborationswithpartners toprovide for additional revenue tous andwemay incur
additional cash expenditures related toour obligations under anyof the new agreementswemay enter into.We currently intend touse
our cash, cash equivalents and short-term investments to finance our activities. However, wemay also pursue other financing
alternatives, like issuing additional shares of our common stock, issuingdebt instruments, refinancingour existingdebt, or securing
lines of credit.Whetherwe use our existing capital resources or choose toobtain financingwill dependonvarious factors, including
the future success of our business, the prevailing interest rate environment and the conditionof financialmarkets generally.
Item7A. Quantitative andQualitativeDisclosuresAboutMarketRisk
We are exposed to changes in interest rates primarily fromour long-termdebt arrangements and, secondarily, investments in
certain short-term investments.We primarily invest our excess cash inhighly liquid short-term investments of theU.S. Treasury and
reputable financial institutions, corporations, andU.S. government agencieswith strong credit ratings. We typically holdour
investments for the duration of the termof the respective instrument.We donot utilize derivative financial instruments, derivative
commodity instruments or othermarket risk sensitive instruments, positions or transactions tomanage exposure to interest rate
changes. Accordingly, we believe that, while the securitieswe hold are subject to changes in the financial standingof the issuer of
such securities, we are not subject to anymaterial risks arising from changes in interest rates, foreign currency exchange rates,
commodity prices, equity prices or othermarket changes that affectmarket risk sensitive instruments.
Item8. Financial Statements andSupplementaryData
We filedour consolidated financial statements and supplementarydata requiredby this item as exhibits hereto, and listed
themunder Item15(a)(1) and (2), and incorporate themhereinby reference.
Item9. Changes inandDisagreementsWithAccountants onAccountingandFinancial Disclosure
There have beenno reported disagreements on anymatter of accountingprinciples or procedures or financial statement
disclosure in2013withour Independent RegisteredPublicAccountingFirm.
Item9A. Controls andProcedures
DisclosureControls andProcedures
Wemaintain disclosure controls andprocedures that are designed to ensure that informationwe are required to disclose in
our ExchangeAct reports is recorded, processed, summarized and reportedwithin the time periods specified in theSEC’s rules and
forms, and that such information is accumulated and communicated toourmanagement, includingour Chief ExecutiveOfficer and
Chief FinancialOfficer, as appropriate, to allow timelydecisions regarding requireddisclosure.We designed and evaluate our
disclosure controls andprocedures recognizing that any controls andprocedures, nomatter howwell designed andoperated, can
provide only reasonable assurance and not absolute assurance of achieving the desired control objectives.
As of the endof the period coveredby this report onForm10-K, we carriedout an evaluationof our disclosure controls and
procedures (as defined inRules 13a-15(e) and15d-15(e) under theSecuritiesExchangeAct of 1934, as amended, or ExchangeAct)
under the supervisionof, andwith the participation of ourmanagement, includingour Chief ExecutiveOfficer andChief Financial
Officer. Basedonour evaluation, our Chief ExecutiveOfficer andChief FinancialOfficer concluded that our disclosure controls and
procedureswere effective as ofDecember 31, 2013.
Management’sReport on InternalControl overFinancialReporting
Ourmanagement is responsible for establishing andmaintaining adequate internal control over financial reporting, as defined
inExchangeAct Rules 13a-15(f). Our internal control over financial reporting is a process designedunder the supervisionof our
Chief ExecutiveOfficer andChief Financial Officer toprovide reasonable assurance regarding the reliability of financial reporting
and the preparationof our financial statements for external purposes in accordancewithUnitedStates generally accepted accounting
principles.
As ofDecember 31, 2013, we assessed the effectiveness of our internal control over financial reportingbasedon the criteria
for effective internal control over financial reporting established in the 1992 “Internal Control—IntegratedFramework,” issuedby the
Committee of SponsoringOrganizations, orCOSO, of theTreadwayCommission, under the supervisionof, andwith the participation
of ourmanagement, includingour Chief ExecutiveOfficer andChief FinancialOfficer. Basedon that assessment, ourmanagement
concluded thatwemaintained effective internal control over financial reporting as ofDecember 31, 2013.
