Information Technology has made the classroom a more interactive
environment. Touch pads, 'Smart Boards' and streamline video will
undoubtedly mark the future of education resources.  However, as a
newly offered security, I would advise the common stockholder to
beware.  Remember, the early bird gets 'wormed'!  I shall explain.

The education industry is fraught by regulations, asset-allocations,
and stiff budgets.  Even if thousands of students interact with this
company's products/services within their classroom on a daily basis,
there is not the technological power within the 'standard' school to
utilize it.  Meaning, low-speed or faltering internet connections,
automated web-site administration security, and the lack of an in-
house IT gurus for each single building.  Remember, not even most
schools across the country lay within a district that offers
residential homes valued higher than even $150,000.  And remember too,
school budgets are paid for mostly by the property tax of each
individual community.

Here is another way to view this matter... Academic Results.  What does
this mean?  This means that every school (grades K-12), every school
district, and every education department are analyzing and
interpreting data of students' previous academic achievement to obtain
higher results in the future.  This also means that most budgets for
'professional development' are used to improve these results, instead
of teaching a person to use a computer application that will help
their instruction.  Unfortunately, the goal of 'professional
development for teachers' is to advise them how to increase student
test scores.

That unnecessary budget expenses that K12, Inc offers schools may not
be the best alternative right now.  At least until each state required
Standardized Assessment is done completely via the web.  To the day,
state required Standardized Testing is done on paper and every teacher
knows that even if a student analyzes a document, problem or
question..... that student will still ultimately have to perform on
paper.  Look at it this way.... For what ever reason (laziness, strong
belief in communication/oratory skills), a teacher may love to give an
assignment to students that requires them to present their work to the
class.  Ultimately though, the students will still be required to
perform on paper.

Let me not be misunderstood.  K12 has a lot going for them.  I shall
explain below.  But for the mean time, let me say, "K12, Inc. is ahead
of its' time!"

Obviously, technology is the path of the future for education.  I
embrace this.  It offers a new utensil for teachers to bring important
and interesting information to the students.  It will limit students'
loss of intrigue by allowing another pathway of becoming 'informed'.
As for the education industry as a whole, interactive classrooms will
come!  But how fast?

Let's review for a moment the pathways most teachers and schools will
be able to acquire the products offered by K12, Inc.  There is always
more than a few pathways to obtain a goal but here are a few:

1  The school is dubbed 'private', therefore families pay tuition for
students, therefore the money is there.

2  A school district believes highly in IT within their district and
approves such budget.

3  And of course, most commonly- Leave it to the individual teachers
to earn grant money for the cost of purchasing such products.  (If you
are familiar with trends of elementary and secondary education, I am
sure you would agree with this to some extent).  Then we will truly
see who gets' it!

My thoughts are, until large urban school districts (with large
budgets) begin to 'praise' this company and begin purchasing their
products for the district-wide level, the company will only grow as
fast as the education industry as a whole.  If you look at past
records of companies achieving goals past the education industry, you
might agree with this point.

This company might want to start allying with Not for Profit
Organizations, large urban school districts and other IT companies
within the same industry to obtain growth past that of the education
industry.  This then leads me to my next question..... "How fast is the
revenue for the Education Industry growing?"

As for the financial statements of this company...... Investors do your
research!!!!

As for the Founder of K12, Inc........ Who in the education industry makes
more than $1 million.  Surely, not even the Chancellor of the
Education Department of New York City (a person who potentially could
become your biggest client).  Also,..... Activation Fees- How absurd!

Take a pay cut Mr. Founder/CEO!

As always to the common investor, comments are welcome, I started this
discussion to open different points of view.  Let's brain-storm
together.

Disclaimer:  At the time of this post, I do not hold, nor ever have
held, any shares of LRN.  However, if by the founding principles set
forth by Philip Fisher and Benjamin Graham, as well as my own
research, lead me to believe that an investment in this company may be
profitable, I may purchase shares of LRN at that time.

Sincerely,

Maximus Aestimo