100 Cash Flows from Financing Activities Net cash provided by financing activities was $116.5 million for the year ended December 31, 2018, which consisted primarily of $83.8 million of net proceeds from our IPO, $33.0 million of gross proceeds from issuance of convertible notes, offset by $0.1 million of debt issuance costs, $0.1 million of principal payments under a capital lease agreement and $0.1 million of payments related to tenant improvement allowance payable. Net cash provided by financing activities was $9.6 million for the year ended December 31, 2017, which consisted primarily of $10.0 million of gross proceeds from issuance of convertible notes, offset by $0.2 million of debt issuance costs, $0.1 million of principal payments under a capital lease agreement and $0.1 million of payments related to tenant improvement allowance payable. Net cash used in financing activities was $0.1 million for the year ended December 31, 2016, which consisted primarily of principal payments under a capital lease agreement and payments related to tenant improvement allowance payable. Contractual Obligations and Commitments The following table summarizes our contractual obligations as of December 31, 2018: Payments Due by Period Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Total (in thousands) Operating lease obligations(1) .......................................... $ 564 $ 1,179 $ 1,142 $ — $ 2,885 Manufacturing agreements(2)........................................... 2,816 364 14 — 3,194 Tenant improvement obligations(3).................................. 36 80 94 162 372 Total ........................................................................... $ 3,416 $ 1,623 $ 1,250 $ 162 $ 6,451 (1) We lease our facility under a non-cancelable operating lease. In January 2013, we entered into a lease for our current laboratory and office space that commenced in October 2013 and expired in October 2018. In March 2016, we entered into a lease amendment that extended the lease term to October 2023. The minimum lease payments above do not include any related common area maintenance charges or real estate taxes. (2) We have entered into service agreements with a third-party CMO, pursuant to which the CMO agreed to perform activities in connection with the manufacturing process of certain compounds. Such agreements, and related amendments, state that planned activities that are included in some signed work orders are, in some cases, binding and, hence, obligate us to pay the full price of the work order upon satisfactory delivery of products and services. Per the terms of the agreements, we have the option to cancel signed orders at any time upon written notice, which may or may not be subject to payment of a cancellation fee depending on the timing of the written notice in relation to the commencement date of the work, with the maximum cancellation fee equal to the full price of the work order. Although the payment of the cancellation fee will generally be due at the scheduled commencement date, we may record the manufacturing expense and related obligation as an accrued liability at the time of cancellation. (3) We have tenant improvement obligations under our facilities lease agreements, which are required to be paid over the contractually agreed period. We enter into contracts in the normal course of business with third party contract organizations for preclinical and clinical studies and testing, manufacturing, and providing other services and products for operating purposes. These contracts generally provide for termination following a certain period after notice, and therefore we believe that our non-cancelable obligations under these agreements are not material. Critical Accounting Policies, Significant Judgments and Use of Estimates Our consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.