3. Helio Vision Acquisition On January 28, 2019 (the Closing Date), the Company acquired Helio Vision, Inc. (Helio). As a result of the acquisition, the Company initially issued an aggregate of 1,160,444 shares of common stock to the former securityholders and an advisor of Helio. The founders of Helio were issued 568,627 shares and non-founders were issued 591,817 shares. The Helio founders shares are subject to vesting based on continued service to the Company over three years from the Closing Date, of which, 61% are vested as of June 30, 2020. The Company recognizes the expense associated with the founders restricted shares as research and development compensation expense on a straight-line basis as the shares vest over the three-year period. The Company, subject to the conditions of the acquisition agreement, is contingently obligated to make additional payments to the former securityholders of Helio as follows: (a) $2.5 million of common stock on the date that is 24 months following the Closing Date (assuming certain technical milestones are met); (b) $10.0 million of common stock following approval by the FDA of a new drug approval application for the prevention and/or treatment of proliferative vitreoretinopathy or a substantially similar label prior to the 10th anniversary of the Closing Date; and (c) $2.5 million of common stock following FDA approval of a new drug application for an indication (other than proliferative vitreoretinopathy) prior to the 12th anniversary of the Closing Date (the shares of common stock issuable pursuant to the preceding clauses (a)  (c) are referred to herein as the Milestone Shares), provided that in no event shall the Company be obligated to issue more than an aggregate of 5,248,885 shares of common stock. Additionally, in the event of certain change of control or divestitures by the Company, certain former convertible noteholders of Helio will be entitled to a tax gross-up payment in an amount not to exceed $1.0 million. The Company determined that liability accounting is not required for the Milestone Shares under FASB ASC Topic 480, Distinguishing Liabilities from Equity (ASC 480). The Company also determined that the Milestone Shares meet the scope exception as a derivative under FASB ASC Topic 815, Derivatives and Hedging (ASC 815), from inception of the Milestone Shares through June 30, 2020. Accordingly, the Milestone Shares are evaluated under FASB ASC Topic 450, Contingencies (ASC 450) and the Company will record a liability related to the Milestone Shares if the milestones are achieved, and the obligation to make additional payment(s) becomes probable. At that time, the Company will record the cost of the Milestone Shares issued to the founders as compensation expense and to the Helio non-founders as IPR&amp;D expense if there is no alternative future use. No milestones related to the Milestone Shares are probable of being achieved as of June 30, 2020. The Company assessed the acquisition of Helio under the FASB ASC Topic 805, Business Combinations (  ASC 805  ). Under ASC 805, the Company determined that the acquired assets did not constitute a business since substantially all the assets acquired were related to ADX-2191 and that the transaction would be accounted for as an asset acquisition. The asset and development program acquired from Helio are at an early stage of development and will require a significant investment of time and capital for development. There is no assurance that the Company will be successful in developing such asset, and a failure to successfully develop such asset could diminish the Companys prospects. Under ASC 805, the asset acquired is considered to have no alternative future uses, since the future economic benefit of the acquired asset at the date of acquisition is highly uncertain. The fair value of the assets was determined using the quoted market price of the Companys common stock on the C losing D ate and was fully expensed as IPR&amp;D . Additionally, the Company assessed the Helio acquisition under ASC Topic 740, Income Taxes (  ASC 740  ). The acquisition resulted in an income tax benefit of $ 1.3 million and a corresponding increase to acquired IPR&amp;D expense. The expense resulted from the reduction in the Companys valuation allowance due to the deferred tax liability created as a result of the book and tax basis difference during the quarter ended March 3 1 , 2019 . During the quarter ended March 31, 2019 , the Company recorded $ 6.6 million of IPR&amp;D expense related to the fair value of consideration given which includes transaction costs and the deferred tax impact of the Helio acquisition .