SEC Comment Letter for Stride, Inc. (LRN) (CIK 0001157408) (LRN) — Nov 16, 2007
Stride, Inc. (LRN) (CIK 0001157408)
Date: Nov. 16, 2007 · CIK: 0001157408 · Accession: 0000000000-07-056421
AI Filing Summary & Sentiment
File numbers found in text: 333-144894
Letter
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
DIVISION OF CORPORATION FINANCE
Mail Stop 3720 November 16, 2007
Ronald J. Packard Chief Executive Officer K12 Inc. 2300 Corporate Park Drive Herndon, VA 20171 Re: K12 Inc. Form S-1/A Filed November 8, 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.
Prospectus Cover Page
1. Please limit the information on the prospect us cover page to only the information required by Item 501(b) of Regulation S-K. In this regard, remove the references to your Regulation S offering. Prospectus Summary, page 1
The Regulation S Transaction, page 4
2. Identify the investor in y our Regulation S transaction.
Mr. Ronald J. Packard K12 Inc. November 16, 2007 Page 2
Compensation Discussion and Analysis, page 83
Elements of Compensation, page 84
3. We note your revised paragraph on page 85 in response to our prior comment five. Please further revise to identify by name each of the executive officers that you refer to in this paragraph. Summary Compensation Table, page 88
4. We note your response to our prior comme nt six. Please revise your Summary Compensation Table to clarify by footnot e the officers who acted in a similar capacity to that of a principal executive officer throughout fiscal 2007. Principal and Selling Stockholders, page 102
5. To the extent not widely he ld, please identify the na tural person or persons who have voting or investment control over the securities to be sold by each of the “other selling stockholders” listed on pa ge 103. Refer to Interp. 4S of the Regulation S-K section of the March 1999 Supplement to the Manual of Publicly Available Telephone Interpretations. 6. Please confirm in your response letter that no selling stockholders are broker-dealers or affiliates of broker-dealers (other than CV II Entities as discussed in footnote 14 to the table). Shares Eligible for Future Sale, page 112
7. Briefly describe in this section the eligib ility for future sale of the Regulation S shares. For example, describe the lock -up agreement, registration rights, and Regulation S resale provisions. Financial Statements
Revenue Recognition, F-7
8. We note your response to comment 7. It a ppears that your customers are the state school systems and not the students or the 501c3 entities. It also appears that under certain of your arrangements the Company is paid by the public school system to manage the 501c3 virtual p ublic school, including managing employees of the public school system working for the virtual public school. Notwithstanding the extent that you incu r expenses, including teacher staffing costs, prior to your reimbursement by the st ate or district, we remain unclear how you have credit risk in an arrangement where state school systems are funding the
Mr. Ronald J. Packard K12 Inc. November 16, 2007 Page 3
payment of its employees’ salaries through the 501c3 entities. Please revise or further advise us.
4. Income Tax Valuation Allowance, page F-37
9. We do not understand your income tax valu ation allowance rollforward on page F-37. Your rate reconciliation on page F-13 shows that you have reported very little income tax expense in 2006 and 2007 (an effective rate of 0% and 5% respectively) through the realiz ation of fully reserved tax assets and yet your table reports that no benefits were realized. Please clarify this rollforward schedule by separately reporting additions to the va luation allowance and reductions in the valuation allowance/tax assets realized to arrive at your ending balances.
* * * *
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 , L a r r y S p i r g e l cc: William P. O’Neill, Esq. Latham & Watkins LLP Via facsimile at (202) 637-2201
Show Raw Text
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE
Mail Stop 3720
November 16, 2007
Ronald J. Packard Chief Executive Officer K12 Inc. 2300 Corporate Park Drive Herndon, VA 20171
Re: K12 Inc.
Form S-1/A
Filed November 8, 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.
Prospectus Cover Page
1. Please limit the information on the prospect us cover page to only the information
required by Item 501(b) of Regulation S-K. In this regard, remove the references
to your Regulation S offering.
Prospectus Summary, page 1
The Regulation S Transaction, page 4
2. Identify the investor in y our Regulation S transaction.
Mr. Ronald J. Packard
K12 Inc.
November 16, 2007 Page 2
Compensation Discussion and Analysis, page 83
Elements of Compensation, page 84
3. We note your revised paragraph on page 85 in response to our prior comment
five. Please further revise to identify by name each of the executive officers that
you refer to in this paragraph.
Summary Compensation Table, page 88
4. We note your response to our prior comme nt six. Please revise your Summary
Compensation Table to clarify by footnot e the officers who acted in a similar
capacity to that of a principal executive officer throughout fiscal 2007.
Principal and Selling Stockholders, page 102
5. To the extent not widely he ld, please identify the na tural person or persons who
have voting or investment control over the securities to be sold by each of the
“other selling stockholders” listed on pa ge 103. Refer to Interp. 4S of the
Regulation S-K section of the March 1999 Supplement to the Manual of Publicly
Available Telephone Interpretations.
6. Please confirm in your response letter that no selling stockholders are broker-dealers or affiliates of broker-dealers (other than CV II Entities as discussed in footnote 14 to the table).
Shares Eligible for Future Sale, page 112
7. Briefly describe in this section the eligib ility for future sale of the Regulation S
shares. For example, describe the lock -up agreement, registration rights, and
Regulation S resale provisions.
Financial Statements
Revenue Recognition, F-7
8. We note your response to comment 7. It a ppears that your customers are the state
school systems and not the students or the 501c3 entities. It also appears that
under certain of your arrangements the Company is paid by the public school
system to manage the 501c3 virtual p ublic school, including managing employees
of the public school system working for the virtual public school. Notwithstanding the extent that you incu r expenses, including teacher staffing
costs, prior to your reimbursement by the st ate or district, we remain unclear how
you have credit risk in an arrangement where state school systems are funding the
Mr. Ronald J. Packard
K12 Inc.
November 16, 2007
Page 3
payment of its employees’ salaries through the 501c3 entities. Please revise or
further advise us.
4. Income Tax Valuation Allowance, page F-37
9. We do not understand your income tax valu ation allowance rollforward on page
F-37. Your rate reconciliation on page F-13 shows that you have reported very
little income tax expense in 2006 and 2007 (an effective rate of 0% and 5%
respectively) through the realiz ation of fully reserved tax assets and yet your table
reports that no benefits were realized. Please clarify this rollforward schedule by
separately reporting additions to the va luation allowance and reductions in the
valuation allowance/tax assets realized to arrive at your ending balances.
* * * *
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 , L a r r y S p i r g e l cc: William P. O’Neill, Esq. Latham & Watkins LLP Via facsimile at (202) 637-2201