SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

       DIVISION OF
CORPORATION FINANCE

 Mail Stop 3720
October 19, 2007

Ronald J. Packard Chief Executive Officer K12 Inc. 2300 Corporate Park Drive Herndon, VA 20171
 Re: K12 Inc.
  Form S-1/A
  Filed October 9, 2007
  File No. 333-144894
Dear Mr. Packard:

We have reviewed your filing and have the following comments.  Where
indicated, we think you should re vise your document in response to these comments.  If
you disagree, we will consider your explanation as to why our comment is inapplicable or
a revision is unnecessary.  Please be as deta iled as necessary in your explanation.  In
some of our comments, we may ask you to provide us with supplemental information so we may better understand your disclosure.  Af ter reviewing this information, we may or
may not raise additional comments.   Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Management’s Discussion and Analysis of Financial Condition and Results of
Operations, page 29

Key Aspects and Trends of  Our Operations, page 30

Selling, Administrative and Other Operating Expenses, page 33

1. We note your revisions in response to our prior comment two.  Please explain
your statement that “current manageme nt resources and other corporate
infrastructure can scale effectively…”  Clarify what expenses you are referring to

Mr. Ronald J. Packard
K12 Inc.
October 19, 2007 Page 2

and why these expenses are not expected to increase as fast  as other selling,
administrative and other operating expenses as you continue to grow.

Business, page 49

Our Company, page 49

2. We note your revised disclosure in the second paragraph on page 50 in response
to our prior comment five.  However, base d on your revised disclosure, it is not
clear to us what services you provide to  the “additional 27 schools” you mention.
Please further revise to clarify your rela tionship with these additional 27 schools.
 Competition, page 63

 3. We note your response to our prior comment six.  Please revise your disclosure to
briefly describe why you are not able to provide meaningful market share data
with respect to your virtual public school operations.
 Regulation, page 67

 4. Balance your statement on page 67  that you “believe that ne w legislation would
be required in only a few states to expand [your] ability to serve virtual public schools” with disclosure about the difficulty  in generally getting such legislation
enacted.  We note on page 83 that th e achievement of jurisdictional and
enrollment expansion targets typically involves a major initiative (often taking
several years) to secure legislation and regulations permitting virtual public
schools.
Compensation Discussion and Analysis, page 80

 Elements of Compensation, page 81

 5. We note your revised disclosure on page s 81 and 82 in response to our prior
comment eight.  Please further revise to  explain how indivi dual contributions
were measured and discuss how the factor s you cite contributed to difference in
bonus levels.

Employment, Severance and Change in Control Arrangements, page 84

6. We note your revised disclosure on pa ge 84.  If any other individual or
individuals served as your principal executiv e officer or principal financial officer
during your fiscal year ended June  30, 2007, revise your Compensation
Discussion and Analysis and compensation tables to reflect that such other
individuals are named executive officer s.  Refer to Regulation S-K Items
402(a)(3)(i) and (ii) and 402(a)(4).

Mr. Ronald J. Packard
K12 Inc.
October 19, 2007 Page 3

 Audited Financial Statements, F-1

2. Revenue Recognition and Concentration of Revenues, page F-7
 7. We note your policy disclosure concerning your compliance with the guidance in
EITF 99-19.   We also note you disclose on page 58 that “teachers in the virtual
public schools that we serve are genera lly employed by the school, with ultimate
authority over these teache rs residing with the schools governing body.”  Tell us
if you gross-up your revenues for the salari es and other related payroll costs of
any teachers, administrators, or other staff persons employed by the schools.  If
so, please explain your basis for doi ng so under EITF 99-19, including a
comprehensive explanation of how you have analyzed each of the indicators of gross revenue reporting and each of the indicators of net revenue reporting in these arrangements.
 4. Income Taxes, page F-13

 8. We note your response to comment 17, but we continue to question the
reasonableness of your policy of fully re serving your deferred tax assets.  The
reason you give for considering additional evidence, cumulative earnings that is
insignificant when compared to cumulative  revenue, does not appear relevant to
an assessment of the likelihood of realizing deferred tax assets.

Regarding your analysis of additional positive and negative evidence, seasonal fluctuations in operating re sults alone should have no bearing on the necessity of
a deferred tax asset valua tion allowance. We also do not understand why you cite
a cumulative pre-tax loss over the previous  five quarters as evidence, as this
double counts the fourth quart er - your poorest performi ng quarter of your fiscal
year. This seems subjective and unbalance d, and gives the appearance of bias on
the part of management.

Further, you state in your re sponse that “the rapid growth in revenues and related
expansion of infrastructure and marketing reduces the significance of the positive evidence provided by the previous three year s of cumulative earnings.”  It seems a
rapid growth in revenues would be additional positive evidence supporting a reduction in your deferred tax asset valu ation allowance.  An expansion of
infrastructure and marketing seem to  be investments that would only be
undertaken by management with an expect ation of generating future income in
excess of the invested amounts.  It seems inconsistent to rely  upon this as negative
evidence when  a reasonab le person would only undertak e such expenditures after
concluding that it is more likely than not that they will provide a positive return on the amounts expended.

Mr. Ronald J. Packard
K12 Inc.
October 19, 2007 Page 4

The information you provide in the bu llets to your response to comment 17,
described as “other available positive and negative evidence,” appear to be
inconsistent with the factually based evid ence given as examples in paragraphs 23
and 24 of SFAS No. 109.  The possibility of some negative event occurring in the future is not objectively ve rifiable evidence.  Also, you forgot to mention the
benefits of an IPO such as improved li quidity, reduced leve rage, and access to
capital, while citing the costs of being a public company as negative evidence.  In
this regard, we note under Use of Proceed s that it is your intention to repay
outstanding debt which, with the resulting reduction of future interest expense,
should be considered objectively verifiable positive evidence.

In the absence of objectively verifiable negative evidence that clearly outweighs
the significant, objectively verifiable positive evidence; we believe you should reduce the amount of your deferred tax valuation allowance.  Revise your
financial statements or provide us an anal ysis that supports y our current policy of
fully reserving your deferred tax assets.

9. It is unclear why you disclose on page 39 that you do not have a history of tax
earnings when, in fact, you have had earnings  before income taxes in each of the
past two years.  Further, it is unclear if a “history of tax earnings” is referring to
taxable income before or after benefiti ng from reversing temporary differences
and loss carryforwards.  Please clarif y this disclosure and advise us.

9. Stock Option Plan, pages F-17 – F-20

 10. We note your response to prior comment 73. We note that you applied a valuation
discount to account for th e probability of completi ng a public offering in your
application of the PWERM a pproach.  With respect to each of your option grants,
disclose the percentage amount of this di scount and explain to readers your basis
for using it.

11. We will defer our final evaluation of th is issue until you provide a reconciliation
between the fair value of the common stock as of the date of each grant for the options during the one year period precedi ng the most recent balance sheet date
and through the date of your response and the estimated IPO price of the common
stock of K-12, Inc.
 12. Expand your disclosures on page F-18, and elsewhere as applicable, to clearly
explain why the expected life of the option term and its forfeiture rate would impact the fair value of your options.  Since these factors are not related to the terms of the instrument or the fair value of the underlying common stock, they seem to have no bearing on the fair value of a stock option.

Mr. Ronald J. Packard
K12 Inc.
October 19, 2007 Page 5

14. Subsequent Events, page F-22
 13. We note in your response to comment 23 that the company has discontinued its
discussions with Socratic related to the le tter of intent.  Update your subsequent
events disclosures on page F-22 and elsewh ere, as applicable, to reflect this
development.
 Segment Disclosure

 14. We are considering your response to co mment 21, your response to comment 70
of your September 26, 2007 letter, and the supplemental information provided in response to comment 22.  We note you stat e that your chief operating decision
maker reviews operating results, including expense and revenue information, at an
aggregate level rather than at  a school or regional level.   It is unclear to us how
an aggregate level evaluation allows him to be sufficiently informed to make
resource allocation decisions and to asse ss performance.  Please note in paragraph
12 of SFAS No. 131 that the term chie f operating decision maker identifies a
function, not necessarily a manager with  a specific title, and it may be a group
consisting of several executives.  E xplain to us why you believe your chief
executive officer is functioning as the chief operating decision maker as
contemplated in SFAS No. 131.  Also, a ddress in your response each of the
following questions so that we may understand who is functioning as your
CODM.
a. Tell us who reviews your operating performance on a regional basis.
b. Tell us who reviews your operating performance at the individual school system level.
c. Tell us who evaluates the performance of your regional managers.  Tell us
what he reviews when performing his performance evaluations.
d. Tell us who makes resource allocation decisions.
e. We note in MD&A that you have sign ificantly increased  your marketing
and selling expenses - tell us who made this decision.
f. Tell us who approves capital expenditures.
g. Tell us who decided to enter into  the virtual high school market.
 15. In regard to the above comment, we not e you state in the third bullet of your
response to comment 21 that you “do not ma intain separate financial statements
for our regional or school-specific oper ations.”  However, we note on page 31 you
disclose that you “closely monitor the fina ncial performance of the virtual public
schools to which we provide turnkey ma nagement services.”  Also, in your
response to comment 62 of your letter dated September 26, 2007 you indicate that
you prepare annual operating budgets for schools and compare operating results
to these budgets during the fiscal year.  Based upon this information, it appears
you do in fact have separate financial in formation for schools and regions, please
explain.

Mr. Ronald J. Packard
K12 Inc.
October 19, 2007
Page 6

Part II
 Item 16.  Exhibits

 16. We note your response to prior comment 25.  We particularly note that each
contract in question accounted for over 10% of your revenues for your last
completed fiscal year.  Your response conf irms that the loss of any one agreement
would have a material effect on the company’s operations and financials
condition.  Due to the materiality of each separate agreement, we believe that
each should be filed as a material  contract of the company.
 17. Please file as an exhibit the Oct ober 5, 2007 amendment to your Credit
Agreement disclosed on page 45.

* * * *

As appropriate, please amend your regist ration statement in response to these
comments.  You may wish to provide us with marked copies of the amendment to expedite our review.  Please furnish a cove r letter with your amendment that keys your
responses to our comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please understa nd that we may have
additional comments after reviewing your amendment and responses to our comments.
You may contact Joseph Cascarano, Staff Accountant, at (202) 551-3376, or
Robert Littlepage, Accountant Branch Chie f, at (202) 551-3810, if you have questions
regarding comments on the financ ial statements and related ma tters.  Please contact John
Harrington, Attorney-Adviser, at (202) 551-3576 , Kathleen Krebs, Special Counsel, at
(202) 551-3810, or me at (202) 551-3810 with any other questions.

        S i n c e r e l y ,                    / s /  L a r r y  S p i r g e l   cc: William P. O’Neill, Esq.  Blaise F. Brennan  Latham & Watkins LLP  Via facsimile at (202) 637-2201