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December 31, 2013, we recorded a 100% valuation allowance against our deferred tax assets of approximately $49.5 million, as our management believes it is not more
likely than not that they will be realized. If we determine in the future that we will be able to realize all or a portion of our net operating loss carryforwards, an adjustment to our net operating
loss carryforwards would increase net income in the period in which we make such a determination.
Recently Adopted Accounting Standards
We did not adopt any new accounting pronouncements during the year ended December 31, 2013 or six months ended June 30, 2014
that had a material effect on our financial statements.
May 2014, the Financial Accounting Standards Board issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 will
supersede and replace nearly all existing U.S. GAAP revenue recognition guidance, including industry-specific guidance. The guidance is effective for annual reporting periods beginning after
December 15, 2016, including interim periods therein. We are evaluating ASU 2014-09 and have not yet determined what, if any, effect ASU 2014-09 will have on our results of operations or
Quantitative and Qualitative Disclosures about Market Risks
We are exposed to market risk related to changes in interest rates. As of June 30, 2014 and December 31, 2013, we had cash and
cash equivalents and marketable securities of $18.1 million and $32.5 million, respectively, consisting of money market funds, certificates of deposit, and U.S. Treasury notes. Our
primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments are in short-term
marketable securities. Our marketable securities are subject to interest rate risk and will fall in value if market interest rates increase. Due to the short-term duration of our investment portfolio
and the low risk profile of our investments, an immediate 10% change in interest rates would not have a material effect on the fair market value of our portfolio. We have the ability to hold our
marketable securities until maturity, and therefore we would not expect our operating results or cash
flows to be affected to any significant degree by the effect of a change in market interest rates on our investments. We do not currently have any auction rate securities.
contract with research organizations and investigational sites globally. We may be subject to fluctuations in foreign currency rates in connection with these agreements. We do not
hedge our foreign currency exchange rate risk.
long-term debt obligations bear interest at fixed rates. As a result, we have limited exposure to changes in interest rates.
We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and are eligible
to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, only
two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced "Management's Discussion and Analysis of Financial Condition
and Results of Operations" disclosure, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act,
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy or information statements, exemptions from the requirements of holding a non-binding advisory vote on
executive compensation and seeking stockholder approval of any golden parachute payments not previously approved and not being required to adopt certain accounting standards until those standards
would otherwise apply to private companies.
an emerging growth company, we have irrevocably elected to not take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised
accounting standards and, as a result, will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.