American Public Education (APEI) 8-K Other Events

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

On October 28, 2020, American Public Education, Inc. (“APEI”) entered into a definitive agreement to acquire Rasmussen University, a nursing- and health sciences-focused institution serving over 18,000 students at its 24 campuses across six states and online.

Pursuant to the terms of a Membership Interest Purchase Agreement (the “Agreement”) with FAH Education, LLC (“Seller”), Rasmussen, LLC (“Rasmussen”), and Rasmussen College, LLC (a wholly owned subsidiary of Rasmussen and together with Rasmussen, the “Acquired Companies”), APEI agreed to purchase from Seller all of the units of membership interests in Rasmussen (the “Acquisition”) for $300 million in cash consideration and $29 million in shares of a new series of non-voting preferred stock of APEI (the “Preferred Stock”) to be issued at the closing of the Acquisition (the “Closing”) (or, at APEI’s election, up to an additional $29 million in cash in lieu thereof), subject to customary adjustments, including for net working capital, cash, and debt of the Acquired Companies prior to the Closing. In connection with entering into the Agreement, on October 28, 2020, APEI entered into a senior secured credit facilities commitment letter (the “Commitment Letter”), pursuant to which the commitment lender committed to provide (i) a senior secured term loan facility in the aggregate principal amount of $175 million (the “Term Facility”) and (ii) a senior secured revolving loan facility in an aggregate commitment amount of $20 million. The closing of the Acquisition is subject to the satisfaction or waiver of closing conditions that include, among others, regulatory review by the U.S. Department of Education, approval by the Higher Learning Commission, and approval of or notices to other regulatory and accrediting bodies.

The following Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2020 is based on APEI's consolidated balance sheet as of September 30, 2020 and the consolidated balance sheet of Rasmussen as of September 30, 2020.  The following Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2020 gives pro forma effect to the Acquisition and the incurrence of the Term Facility as if completed on September 30, 2020. The Unaudited Pro Forma Condensed Combined Statements of Income for the year ended December 31, 2019 and nine months ended September 30, 2020 give pro forma effect to the Acquisition and the incurrence of the Term Facility as if completed on January 1, 2019. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X. APEI and Rasmussen have different fiscal year ends. Rasmussen's fiscal year end was not recast because it differs by less than 93 days from APEI's year-end.

The unaudited pro forma condensed combined financial information is based on and should be read in conjunction with the accompanying notes, APEI’s audited and unaudited historical financial statements and the notes thereto in its Annual Report on Form 10-K for the year-ended December 31, 2019 and its Quarterly Report on Form 10-Q for the quarter-ended September 30, 2020, Rasmussen’s audited historical financial statements and the notes thereto for the year ended September 30, 2020 and September 30, 2019, and the disclosures contained in the sections titled  "Management’s Discussion and Analysis of Financial Condition and Results of Operations” of APEI’s Annual Report on Form 10-K for the year-ended December  31, 2019 and its Quarterly Report on Form 10-Q for the quarter-ended September 30, 2020.

The unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and are not necessarily indicative of what APEI's and Rasmussen's combined financial condition or results of operations would have been had the Acquisition occurred or the Term Loan was incurred on the dates indicated. Further, the unaudited pro forma condensed combined financial information also may not be useful in predicting, and do not purport to project the future financial condition and results of operations of APEI. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma adjustments are estimates based on information available as of the date of these unaudited pro forma condensed combined financial statements and are subject to change as additional information becomes available. The pro forma condensed combined financial statements do not include the realization of future cost savings or synergies, integration-related costs to achieve those potential cost savings or restructuring charges that may occur following the Acquisition.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF SEPTEMBER 30, 2020

(In thousands)

	American Public Education, Inc.		Rasmussen, LLC Adjusted (Note 4)		Transaction accounting adjustments			Notes			Other transaction accounting adjustments			Notes			Pro Forma Combined
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash	$	228,009	$	44,242	$	(339,115	)		6(a	)	$	165,375			6(a	)	$	98,511
Accounts receivable, net of allowance of $5,805 in 2020		9,560		5,597		-						-						15,157
Prepaid expenses		7,563		6,293		-						-						13,856
Income tax receivable		2,500		-		1,565			6(b	)		-						4,065
Total current assets		247,632		56,132		(337,550	)					165,375						131,589
Property and equipment, net		70,930		27,161		339			6(c	)		-						98,430
Operating lease assets, net		9,377		-		38,411			6(d	)		-						47,788
Investments		10,500		-		-						-						10,500
Goodwill		26,563		66,526		204,630			6(e	)		(61,956	)		6(e	)		235,763
Other assets, net		5,197		48,719		51,256			6(f	)		-						105,172
Total assets	$	370,199		198,538		(42,914	)					103,419						629,242
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	4,489	$	11,807	$	-					$	-					$	16,296
Accrued compensation and benefits		16,784		-		-						-						16,784
Accrued liabilities		10,555		4,676		5,850			6(g	)		-						21,081
Deferred revenue and student deposits		25,491		5,585		-						-						31,076
Operating lease liabilities, current		2,474		-		8,581			6(h	)		-						11,055
Current portion of long-term debt, net of DFC		-		15,239		-						(6,489	)		6(i	)		8,750
Total current liabilities		59,793		37,307		14,431						(6,489	)					105,042
Operating lease liabilities, long-term		6,997		-		31,961			6(j	)								38,958
Deferred income taxes		5,365		-		-												5,365
Long-term debt, net of current portion and deferred financing costs		-		45,010		-						111,615			6(k	)		156,625
Deferred rent		-		2,131		(2,131	)		6(l	)								-
Fair value of interest rate swap contract		-		1,707		-						(1,707	)		6(m	)		-
Other long-term liabilities		-		493		-												493
Total liabilities		72,155		86,648		44,261						103,419						306,483
Commitments and contingencies
Stockholders'/member's equity
Member's Equity		-		111,890		(111,890	)		6(n	)		-						-
Preferred stock, $0.01 par value; Authorized shares - 10,000; no shares issued or outstanding		-		-		29,000			6(o	)		-						29,000
Common stock, $0.01 par value; Authorized shares - 100,000; 14,809 issued and outstanding in 2020; 15,178 issued and outstanding in 2019		148		-		-						-						148
Additional paid-in capital		193,787		-		-						-						193,787
Retained earnings		104,109		-		(4,285	)		6(p	)		-						99,824
Total stockholders'/member's equity		298,044		111,890		(87,175	)					-						322,759
Total liabilities and stockholders'/member's equity	$	370,199	$	198,538	$	(42,914	)				$	103,419					$	629,242

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

(In thousands, except for per share amounts)

	American Public Education, Inc.			Rasmussen, LLC Adjusted (Note 5)		Transaction accounting adjustments			Notes			Other transaction accounting adjustments					Pro Forma Combined
Revenue	$	235,876		$	191,539	$	-					$	-				$	427,415
Costs and expenses													-
Instructional costs and services		91,058			79,148		-						-					170,206
Selling and promotional		53,765			50,507		-						-					104,272
General and administrative		65,314			28,876		3,000			7(a	)		-					97,190
Loss on disposals of long-lived assets		742			-		-						-					742
Impairment of goodwill		-			-		-						-					-
Depreciation and amortization		9,955			14,967		3,638			7(b	)		-					28,560
Total costs and expenses		220,834			173,498		6,638						-					400,970
Income from operations before interest expense, interest income and income taxes		15,042			18,041		(6,638	)					-					26,445
Interest expense		-			2,750		-						9,467		7(c	)		12,217
Interest income, net		1,002			75		-						-					1,077
Income from operations before income taxes		16,044			15,366		(6,638	)					(9,467	)				15,305
Income tax expense (benefit)		4,291			-		(197	)		7(d	)		-					4,094
Equity investment loss		(2	)		-		-											(2	)
Net income	$	11,751		$	15,366	$	(6,441	)				$	(9,467	)			$	11,209
Net income per common share:
Basic	$	0.79															$	0.75
Diluted	$	0.79															$	0.75
Weighted average number of shares outstanding:
Basic		14,870																14,870
Diluted		15,021																15,021

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2019 (1)

(In thousands, except for per share amounts)

	American Public Education, Inc.			Rasmussen, LLC Successor Adjusted (Note 5)			Rasmussen, LLC Predecessor Adjusted (Note 5)		Transaction accounting adjustments			Notes			Other transaction accounting adjustments						Pro Forma Combined
Revenue	$	286,270		$	128,844		$	113,350	$	-					$	-					$	528,464
Costs and expenses																-
Instructional costs and services		111,916			58,028			54,429								-						224,373
Selling and promotional		60,028			35,384			30,591								-						126,003
General and administrative		78,082			23,042			13,593		9,850			7(a	)		-						124,567
Loss on disposals of long-lived assets		556			-			-								-						556
Impairment of goodwill		7,336			-			-								-						7,336
Depreciation and amortization		15,596			10,688			2,319		11,910			7(b	)		-						40,513
Total costs and expenses		273,514			127,142			100,932		21,760						-						523,348
Income from operations before interest expense, interest income and income taxes		12,756			1,702			12,418		(21,760	)					-						5,116
Interest expense		-			2,796			-		-						12,513			7(c	)		15,309
Interest income, net		3,908			20			279		-						-						4,207
Income from operations before income taxes		16,664			(1,074	)		12,697		(21,760	)					(12,513	)	��				(5,986	)
Income tax expense (benefit)		5,187			-			-		(6,788	)		7(d	)		-						(1,601	)
Equity investment loss		(1,464	)		-			-		-						-						(1,464	)
Net income	$	10,013		$	(1,074	)	$	12,697	$	(14,971	)				$	(12,513	)				$	(5,849	)
Net income per common share:
Basic	$	0.62			-			-													$	(0.36	)
Diluted	$	0.62			-			-													$	(0.36	)
Weighted average number of shares outstanding:
Basic		16,094			-			-														16,094
Diluted		16,255			-			-														16,255

(1) The unaudited pro forma condensed combined statement of income for the 12 months ended December 31, 2019 includes the historical results of Rasmussen, LLC for the fiscal year ended September 30, 2019. We did not recast Rasmussen LLC's fiscal year end because it differs by 93 days or less than APEI's fiscal year end.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(in thousands, except share and per share amounts)

Note 1- Basis of presentation

APEI will account for the Acquisition using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, with APEI being the accounting acquirer. ASC 805 requires, among other things, using the fair value concepts defined in ASC Topic 820, Fair Value Measurements and Disclosures.

The pro forma adjustments reflect preliminary estimates of the fair value of the consideration transferred, the assets acquired and the liabilities assumed, which may change upon finalization of valuation studies. The final adjustments could be materially different from the pro forma adjustments presented herein. The unaudited pro forma consolidated combined statements of income includes certain accounting adjustments related to the Acquisition that are expected to have a continuing impact on the combined results, such as increased amortization of the acquired intangible assets.

Under ASC 805, acquisition-related transaction costs (such as costs of services of legal counsel, investment bankers, and accountants) are not included as a component of consideration transferred or the assets acquired. Such costs are expensed in the statements of income in the periods incurred. Transaction costs incurred prior to September 30, 2020 have been expensed and have not been eliminated in the pro forma condensed combined financial statements. Pro forma adjustments were made for transaction costs that were incurred or are expected to be incurred after September 30, 2020.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(in thousands, except share and per share amounts)

Note 2 - Estimated consideration and preliminary purchase price allocation

Estimated purchase consideration of approximately $329 million consists of $300 million in cash and $29 million in shares of a new series of APEI Preferred Stock to be issued at Closing (or, at APEI’s election, up to an additional $29 million in cash in lieu thereof).  Based on the estimated consideration for the Acquisition, APEI has allocated the purchase price to the following assets based on their estimated fair value. The following table summarizes the components of the estimated consideration along with preliminary purchase price allocation:

Cash	$	300,000
Preferred shares		29,000
Working capital adjustment		(5,127	)
Total estimated consideration to be paid		323,873
Assets acquired:
Accounts receivable		5,597
Furniture, equipment and improvements		27,500
Intangible assets		98,500
Other assets		6,691
Total assets acquired		138,288
Liabilities assumed:
Accounts payable		11,807
Accrued expenses		4,676
Deferred revenue		5,052
Other liabilities		2,080
Total liabilities assumed		23,615
Net assets acquired		114,673
Goodwill	$	209,200

Note 3 - Significant Accounting Policies

The accounting policies used in the preparation of this unaudited pro forma condensed combined financial information are those set out in APEI's audited financial statements as of and for the fiscal year ended December 31, 2019. The pro forma condensed combined financial statements may not reflect all the adjustments necessary to conform the accounting policies of Rasmussen to those of APEI as APEI is still in the process of analyzing the accounting policies of Rasmussen as compared to those of APEI.

APEI adopted ASC 842, Leases ("ASC 842") on January 1, 2019, while Rasmussen had not adopted ASC 842 as of September 30, 2020, as Rasmussen is a private company. To conform with APEI's accounting policy, pro forma adjustments were made to reflect the impact of adoption and the ongoing effects of the accounting treatment of ASC 842.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(in thousands, except share and per share amounts)

Note 4- APEI and Rasmussen pro forma condensed combined balance sheet reclassification adjustments

During the preparation of the pro forma condensed combined balance sheet, management performed a preliminary analysis of Rasmussen’s financial information to identify differences in accounting policies as compared to those of APEI and differences in financial statement presentation as compared to the presentation of APEI.

The following table summarizes the various reclassification adjustments made to Rasmussen’s balance sheet for the period ended September 30, 2020 to conform to APEI’s presentation.

	Rasmussen, LLC Before Reclassification		Reclassification (1)			Rasmussen, LLC as Reclassified
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash	$	43,680	$	562		$	44,242
Restricted cash		562		(562	)		-
Accounts receivable, net of allowance of $5,805 in 2020		5,597		-			5,597
Prepaid expenses		4,072		2,221			6,293
Other current assets		2,221		(2,221	)		-
Total current assets		56,132		-			56,132
Property and equipment, net		27,161		-			27,161
Goodwill		66,526		-			66,526
Deposits and other assets		398		(398	)		-
Curriculum development costs, net of accumulated amortization of $141		1,077		(1,077	)		-
Other intangible assets, net of accumulated amortization of $19,679		47,244		(47,244	)		-
Other assets, net		-		48,719			48,719
Total assets	$	198,538	$	-		$	198,538
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	11,807	$	-		$	11,807
Accrued liabilities		-		4,676			4,676
Deferred revenue and student deposits		-		5,586			5,586
Accrued expenses		4,676		(4,676	)		-
Due to students under financial aid programs		534		(534	)		-
Prepaid tuition		4,007		(4,007	)		-
Deferred revenue and scholarships		1,045		(1,045	)		-
Current portion of long-term debt, net of DFC		15,239		-			15,239
Total current liabilities		37,308		-			37,308
Long-term debt, net of current portion and deferred financing costs		45,010		-			45,010
Deferred rent		2,131		-			2,131
Fair value of interest rate swap contract		1,707		-			1,707
Other long-term liabilities		493		-			493
Total liabilities		86,648		-			86,648
Member's Equity		111,890		-			111,890
Total stockholders'/member's equity		111,890		-			111,890
Total liabilities and stockholders'/member's equity	$	198,538	$	-		$	198,538

(1) The purpose of these reclassifications is to align Rasmussen's presentation of its balance sheet to that of APEI.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(in thousands, except share and per share amounts)

Note 5- APEI and Rasmussen pro forma condensed combined income statement reclassification adjustments

During the preparation of the pro forma condensed combined financial information, a preliminary analysis of Rasmussen’s financial information was completed in order to identify differences in accounting policies and financial statement presentation when compared to APEI.

Rasmussen was acquired by the Seller on March 15, 2019. The consideration paid by Seller was allocated to the assets acquired and liabilities assumed based on their estimated fair values in accordance with ASC Topic 805, Business Combinations. Due to the impact of ASC Topic 805, Rasmussen’s consolidated financial statements for the fiscal year ended September 30, 2019 were presented in two distinct periods to indicate the application of the different bases of accounting between the periods presented: (1) the period up to the acquisition date, October 1, 2018 through March 15, 2019, labeled “Predecessor” and (2) the period from the acquisition date, March 16, 2019 through September 30, 2019, labeled “Successor”.

The following table illustrates the effect of various reclassification adjustments made to Rasmussen’s income statements for the nine month period ended September 30, 2020, Predecessor period from October 1, 2018 to March 15, 2019, and Successor period from March 16, 2019 to September 30, 2019 to conform to APEI’s presentation.

	Rasmussen, LLC Successor March 16, 2019 to September 30, 2019 Before Reclassification			Reclassification (1)			Rasmussen, LLC Successor Adjusted
Revenue	$	128,844		$	-		$	128,844
Costs and expenses
Instructional costs and services					58,028			58,028
Instructional		58,028			(58,028	)		-
Selling and promotional		-			35,384			35,384
General and administrative		23,042			-			23,042
Admissions		35,384			(35,384	)		-
Depreciation and amortization		10,688			-			10,688
Total costs and expenses		127,142			-			127,142
Income from operations before interest income and income taxes		1,702			-			1,702
Investment income		20			(20	)		-
Interest income		-			20			20
Interest expense		2,796			-			2,796
Net income	$	(1,074	)	$	-		$	(1,074	)

(1) The purpose of these reclassifications is to align Rasmussen's presentation of its income statement to that of APEI.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(in thousands, except share and per share amounts)

	Rasmussen, LLC Predecessor October 1, 2018 to March 15, 2019 Before Reclassification		Reclassification (1)			Rasmussen, LLC Predecessor Adjusted
Revenue	$	113,350	$	-		$	113,350
Costs and expenses
Instructional costs and services				54,429			54,429
Instructional		54,429		(54,429	)		-
Selling and promotional		-		30,591			30,591
General and administrative		13,175		418			13,593
Admissions		30,591		(30,591	)		-
Stock compensation expense		418		(418	)		-
Depreciation and amortization		2,319		-			2,319
Total costs and expenses		100,932		-			100,932
Income from operations before interest and income taxes		12,418		-			12,418
Investment income		279		(279	)		-
Interest income				279			279
Net income	$	12,697	$	-		$	12,697

(1) The purpose of these reclassifications is to align Rasmussen's presentation of its income statement to that of APEI.

	Rasmussen, LLC Nine months ended September 30, 2020		Reclassification (1)			Rasmussen, LLC Adjusted
Revenue	$	191,539	$	-		$	191,539
Costs and expenses
Instructional costs and services		-		79,148			79,148
Instructional		79,148		(79,148	)		-
Selling and promotional		-		50,507			50,507
General and administrative		34,269		(5,393	)		28,876
Admissions		50,507		(50,507	)		-
Depreciation and amortization		9,574		5,393			14,967
Total costs and expenses		173,498		-			173,498
Income from operations before interest and income taxes		18,041		-			18,041
Investment income		75		(75	)		-
Interest income		-		75			75
Interest expense		2,750		-			2,750
Net income	$	15,366	$	-		$	15,366

(1) The purpose of these reclassifications is to align Rasmussen's presentation of its income statement to that of APEI.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(in thousands, except share and per share amounts)

Note 6- Transaction accounting adjustments and other transaction accounting adjustments to the Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2020

This note should be read in conjunction with Note 1- Basis of Presentation, Note 2-Preliminary Purchase Price Allocation; and Note 7-Transaction accounting adjustments and other transaction accounting adjustments to the Unaudited Pro Forma Condensed Combined Statements of Income for the nine month period ended September 30, 2020 and for the year ended December 31, 2019. Adjustments included in the column under the heading 'Transaction Accounting Adjustments' represent the following:

			Transaction accounting adjustments			Other transaction accounting adjustments
Assets
	(6a)	Adjustments to cash, cash equivalents, and restricted cash to reflect the flow of funds related to the Acquisition:
		Adjustment for new debt to finance the acquisition	$	-		$	175,000
		Adjustment for deferred financing costs on new debt		-			(9,625	)
		Removal of Rasmussen's cash balance at close		(44,242	)
		Issuance of preferred stock		29,000
		Purchase price less working capital adjustment		(323,873	)
				(339,115	)		165,375
	(6b)	Adjustment to reflect the income tax effect of the estimated, non-recurring transaction costs expected to be incurred in order to close the Acquisition		1,565			-
	6(c)	Adjustment to step-up the value Rasmussen's property and equipment		339			-
	6(d)	Adjustment to reflect Rasmussen's adoption of ASC 842		38,411			-
	6(e)	Adjustments to goodwill:
		To eliminate Rasmussen's historical goodwill		(66,526	)		(61,956	)
		To record goodwill determined as the preliminary acquisition consideration paid to effect the Acquisition in excess of the estimated fair value of the net assets acquired		271,156			-
				204,630			(61,956	)
	6(f)	Adjustments to other assets, net
		To eliminate Rasmussen's intangible assets		(47,244	)		-
		Record intangible assets acquired (1)		98,500			-
				51,256			-
		Total adjustments to assets	$	(42,914	)	$	103,419
Liabilities
	6(g)	Estimated transaction costs expected to be incurred in order to close the Acquisition	$	5,850		$	-
	6(h)	Establish Rasmussen's operating lease liabilities, current to reflect adoption of ASC 842		8,581			-
	6(i)	Adjustments to the current portion of long-term debt, net of DFC
		Removal of the current portion of Rasmussen's debt		-			(15,239	)
		Adjustment for new debt to fund the Acquisition		-			8,750
				-			(6,489	)
	6(j)	Establish Rasmussen's operating lease liabilities, long-term to reflect adoption of ASC 842		31,961
	6(k)	Adjustments to long-term debt
		Removal of Rasmussen's long-term debt		-			(45,010	)
		Adjustment for new debt to fund the Acquisition ($175,000 less the current portion of $8,750)		-			166,250
		Adjustment for deferred financing costs on the new debt		-			(9,625	)
				-			111,615
	6(l)	Removal of Rasmussen's historical deferred rent		(2,131	)		-
	6(m)	Removal of Rasmussen's interest rate swap		-			(1,707	)
		Total adjustments to liabilities	$	44,261		$	103,419
Stockholders' Equity
	6(n)	To eliminate Rasmussen's historical equity	$	(111,890	)	$	-
	6(o)	To record the preferred stock of APEI issued at Closing		29,000			-
	6(p)	Reduce retained earnings for after tax transaction costs		(4,285	)		-
		Total adjustments to stockholders' equity	$	(87,175	)	$	-

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(in thousands, except share and per share amounts)

Note 7 - Transaction accounting adjustments and other transaction accounting adjustments to the Unaudited Pro Forma Condensed Combined Statements of Income for the nine month period ended September 30, 2020 and for the year ended December 31, 2019

This note should be read in conjunction with Note 1- Basis of Presentation, Note 2-Preliminary Purchase Price Allocation; and Note 6-Transaction accounting adjustments to the Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2020. Adjustments included in the column under the heading 'Transaction Accounting Adjustments' represent the following:

			Nine months ended September 30, 2020			Year ended December 31, 2019
Expenses
	7(a)	Transaction accounting adjustments to general and administrative expenses:
		Represents the estimated compensation expense of employees of the Seller that will be retained by APEI post acquisition	$	3,000		$	4,000
		Represents the non-recurring transaction costs incurred by APEI subsequent to September 30, 2020 and expected to be incurred in order to close the Acquisition		-			5,850
		Total adjustments to general and administrative expenses	$	3,000		$	9,850
	7(b)	Transaction accounting adjustments to depreciation and amortization expense
		Elimination of Rasmussen's amortization on intangibles	$	(9,574	)	$	(6,914	)
		Amortization of Rasmussen's intangibles at stepped up value		14,563			19,417
		Elimination of Rasmussen's depreciation expense on property and equipment		(5,393	)		(5,983	)
		Depreciation expense of Rasmussen's property and equipment at stepped up value		4,042			5,390
		Total adjustments to depreciation and amortization expense	$	3,638		$	11,910
	7(c)	Other transaction accounting adjustments to interest expense:
		Elimination of interest expense on Rasmussen's debt	$	(2,892	)	$	(2,796	)
		Interest expense on new debt (1)		11,156			14,875
		Elimination of deferred financing costs-outstanding on Rasmussen's debt		-			(1,170	)
		Amortization of new debt issuance costs		1,203			1,604
		Total adjustments to interest income (expense), net	$	9,467		$	12,513
	7(d)	Transaction accounting adjustments to income tax expense:
		To adjust for pro forma income tax expense that was calculated using APEI's effective tax rate of 26.75%	$	(197	)	$	(6,788	)

(1)    Interest expense was calculated to be 8.5% (adjusted LIBOR plus 7.5%, adjusted LIBOR not being less than 1%). If the interest rate was increased or decreased by 100 bps, pro forma net income for the nine months ended September 30, 2020 would change by $961 and pro forma net income for the year ended December 31, 2019 would change by $1,281.