2. Acquisition of Pelican Therapeutics In 2017, the Company consummated the acquisition of 80% of the outstanding equity of Pelican, a related party, and Pelican became a majority owned subsidiary of the Company. During the quarter ended March 31, 2018, cash consideration of approximately $0.3 million was distributed to the participating Pelican stockholders and the remainder of approximately $0.2 million for certain Pelican liabilities not satisfied was recognized as other income in the statements of operations and comprehensive loss for the period. In October 2018, Heat entered into an agreement with the University of Miami (UM) whereby UM exchanged its shares of stock in Heats subsidiaries, Heat I, Inc. and Pelican. The stock exchange resulted in Heat increasing its controlling ownership in Pelican from 80% to 85%. Under the agreement, the Company is also obligated to make future payments based on the achievement of certain clinical and commercialization milestones, as well as low single digit royalty payments and payments upon receipt of sublicensing income: (1) $2,000,000 upon Pelican?s dosing of the first patient in its first Phase 1 trial for an oncology indication; (2) $1,500,000 upon Pelican?s dosing of the first patient in its first Phase 2 trial for an oncology indication; (3) $3,000,000 upon successful outcome of the first Phase 2 trial for an oncology indication; (4) $6,000,000 upon Pelican?s dosing of the first patient in its first Phase 3 trial for an oncology indication; (5) $3,000,000 upon Pelican?s dosing of the first patient in its first Phase 3 trial for a non- oncology indication; (6) $7,500,000 upon successful outcome of the first Phase 3 trial for an oncology indication; (7) $3,000,000 upon successful outcome of the first Phase 3 trial for a non-oncology indication; (8) $7,500,000 upon acceptance of a Biologics License Application (BLA) submission for an oncology indication; (9) $3,000,000 upon acceptance of a BLA submission for a non-oncology indication; (10) $7,500,000 upon first product indication approval in the United States or Europe for an oncology indication; (11) $3,000,000 upon first product indication approval in the United States or Europe for a non-oncology indication. The fair value of these future milestone payments is reflected in the contingent consideration account under current liabilities with the non-current portion under long term liabilities on the balance sheet. The estimated fair value of the contingent consideration was determined using a probability-weighted income approach, at a discount of 6.0% based on the median yield of publicly traded non-investment grade debt of companies in the pharmaceutical industry. The Company estimates the fair value of the contingent consideration on a quarterly basis. The change was approximately $0.1 million and $0.0 million for the quarters ended March 31, 2019 and 2018, respectively. The Company has recorded the assets purchased and liabilities assumed at their estimated fair value in accordance with FASB ASC Topic 805: Business Combinations . The purchase price exceeded the fair value of the net assets acquired resulting in goodwill of approximately $2.2 million. The identifiable indefinite-lived intangible asset consists of in-process R&amp;D of approximately $5.9 million. The estimated fair value of the IPR&amp;D was determined using a probability-weighted income approach, which discounts expected future cash flows to present value. The projected cash flows were based on certain key assumptions, including estimates of future revenue and expenses, taking into account the stage of development of the technology at the acquisition date and the time and resources needed to complete development. The Company utilized corporate bond yield data observed in the bond market to develop the discount rate utilized in the cash flows that have been probability adjusted to reflect the risks of product commercialization, which the Company believes are appropriate and representative of market participant assumptions. Operations of the acquired entity are included in the consolidated statements of operations from the acquisition date. The purchase price has been allocated to the assets and liabilities as follows: Aggregate consideration: Cash consideration $ 500,000 Stock consideration $ 1,052,000 Contingent consideration $ 2,385,000 Total Consideration $ 3,937,000 Purchase price allocation: Cash acquired $ 31,199 In-process R&amp;D $ 5,866,000 Goodwill $ 2,189,338 Deferred tax liability $ (2,111,760 ) Net liabilities assumed $ (1,102,777 ) Fair value of non-controlling interest $ (935,000 ) Total purchase price $ 3,937,000 Goodwill is calculated as the difference between the acquisition-date fair value of the consideration transferred and the fair values of the assets acquired and liabilities assumed. The goodwill resulting from this acquisition arises largely from synergies expected from combining the operations. The goodwill is not deductible for income tax purposes. In-process R&amp;D assets are treated as indefinite-lived until the completion or abandonment of the associated R&amp;D program, at which time the appropriate useful lives will be determined. The Company calculated the fair value of the non-controlling interest acquired in the acquisition as 20% of the equity interest of Pelican, adjusted for a minority interest discount. In May 2016, Pelican was awarded a $15.2 million CPRIT Grant from CPRIT for development of Pelican?s lead product candidate, PTX-35. The CPRIT Grant is expected to allow Pelican to develop PTX-35 through a 70-patient Phase 1 clinical trial. The Phase 1 clinical trial will be designed to evaluate PTX-35 in combination with other immunotherapies. The CPRIT Grant is subject to customary CPRIT funding conditions including a matching funds requirement where Pelican will match $0.50 for every $1.00 from CPRIT. Consequently, Pelican is required to provide $7.6 million in matching funds over the life of the project. Through March 31, 2019, CPRIT has provided $8.3 million of the total $15.2 million grant. The remaining $6.9 million is expected to become available in 2019. Through March 31, 2019, the Company has provided approximately $6.0 million funding to Pelican which includes matching CPRIT funds and the Company has $3.5 million to provide over the remaining contract period.