3. Acquisition of New York Code and Design Academy On January 13, 2016, the Company acquired all of the outstanding stock of New York Code and Design Academy, Inc. (NYCDA), a provider of web and application software development primarily based in the New York City area (the Acquisition). The Acquisition supports the Companys strategy to complement its traditional degree offerings with a broader platform of educational services. The Company incurred transaction costs of approximately $0.2 million, and these costs are included in general and administrative costs in the unaudited consolidated statements of income. The acquisition is accounted for as a business combination. The purchase price included $2.4 million paid up front in cash, plus contingent cash payments of (a) up to $12.5 million payable based on NYCDAs results of operations over a five-year period (the Earnout), and (b) $5.5 million payable based on NYCDAs receipt of state regulatory permits. Pursuant to the Acquisition, $1.0 million of the Earnout may be accelerated upon receipt of one of the state regulatory permits. In April 2016 and August 2016, NYCDA received the state regulatory permits and the Company paid $6.0 and $0.5 million of contingent consideration to the sellers, respectively. In addition, the Company paid a total of $4.6 million to two of NYCDAs founders who are required to remain employed for at least three years from the acquisition date. If either of them terminates employment voluntarily, or is terminated for cause (as defined), he is required to reimburse the Company his respective portion of the retention amount. This amount is classified as prepaid compensation and is amortized to compensation expense over three years. Total potential cash payments for the Acquisition, including the Earnout, could total $25.0 million. The allocation of the purchase price is as follows (in thousands): Purchase Price Allocation Useful Life Cash $ 790 Other assets 1,265 Intangibles: Trade name 5,660 Indefinite Goodwill 13,944 Liabilities as