Mail Stop 3561
November 18, 2005
Mr. Richard Szefc
Chief Financial Officer, Treasurer, and Secretary
The Knot, Inc.
462 Broadway
6th Floor
New York, New York 10013
Re: The Knot, Inc.
Form 10-K/A for Fiscal Year Ended December 31, 2004
Filed April 20, 2005
Forms 10-Q for Fiscal Quarters Ended
March 31, 2005, June 30, 2005, and September 30, 2005
File No. 0-28271
Dear Mr. Szefc:
We have reviewed your filings and have the following
comments.
Where indicated, we think you should revise your disclosures in
future filings in response to these comments. If you disagree, we
will consider your explanation as to why our comments are
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure. After reviewing this information, we may or may not
raise additional comments.
Please understand that the purpose of our review 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 on any other
aspect
of our review. Feel free to call us at the telephone number
listed
at the end of this letter.
Form 10-K/A for Fiscal Year Ended December 31, 2004
Consolidated Statements of Operations, page 42
1. Please revise to state separately on the face of the statements
of
operations net revenues from sales of tangible products and
revenues
from services. Also similarly disaggregate your cost of revenues
presentation. Refer to Rule 5-03 of Regulation S-X. Please note
that your current footnote disclosure which discloses revenues and
cost of revenues by type does not achieve this objective. In
particular, it appears that net merchandise revenues and
publishing
revenues include revenues from both sales of tangible products and
revenues from services.
Note 2. Summary of Significant Accounting Policies, page 45
Revenue Recognition, page 47
2. Please revise your disclosure to clarify which sales of
merchandise are recorded on a gross basis and which sales of
merchandise are recorded on a net basis. Also disclose your basis
in
GAAP for reporting revenues gross or net in each case. In doing
so,
please refer to EITF 99-19 and ensure you address the terms of the
merchandise sales agreements which support your accounting.
3. You disclose that author royalties are recognized when all
contractual obligations have been met, which typically include the
delivery and acceptance of a final manuscript. As we assume you
earn
royalties based on the number of books sold, it is unclear from
your
disclosure when such revenues are recorded. Please revise your
disclosure to further explain your revenue recognition policy with
respect to book royalties and show us what your revised disclosure
will look like.
Segment Information, page 49
4. Please disclose in future filings the information required by
paragraph 26 of SFAS 131.
* * * *
As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Staff Accountant Sarah Goldberg at (202)
551-
3340, or in her absence, Robyn Manuel at (202) 551-3823 if you
have
questions regarding comments on the financial statements and
related
matters. Please contact me at (202) 551-3843 with any other
questions.
Sincerely,
George F. Ohsiek, Jr.
Branch Chief
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Mr. Szefc
The Knot, Inc.
November 18, 2005
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