3. Acquisition of New York Code and Design Academy On January 13, 2016, the Company acquired all of the outstanding stock of NYCDA, a provider of non-degree information technology curriculum based in New York City (the Acquisition). The Acquisition supports the Companys strategy to leverage current resources and capabilities to grow into new high demand sectors of the education marketplace. The Company incurred transaction costs of approximately $0.2 million, and these costs are included in general and administrative costs in the 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 and the Earnout could total $25.0 million. The Company estimated the fair values of the assets acquired and liabilities assumed at the date of the Acquisition. During 2016, based on final analyses that supported the underlying estimate, the Company recorded measurement period adjustments of $0.3 million to