OLSHAN
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
PARK AVENUE TOWER
65 EAST 55TH STREET
NEW YORK, NEW YORK 10022
TELEPHONE: 212.451.2300
December 21, 2007 FACSIMILE: 212.451.2222
WWW.OLSHANLAW.COM
DIRECT DIAL: 212-451-2289
EMAIL: AFINERMAN@OLSHANLAW.COM
VIA U.S. MAIL
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Attention: Pamela A. Long; Edward M. Kelly,
Re: WHX Corporation
Pre-effective Amendment to Registration Statement on Form S-1
File No. 333-146803
Dear Ms. Long and Mr. Kelly:
We acknowledge receipt of the letter of comment dated December 11, 2007
from the Division of Corporation Finance (the "Comment Letter") with regard to
the above-referenced matter. We have reviewed the Comment Letter with WHX
Corporation ("WHX" or the "Company") and provide the following supplemental
response on its behalf. Our responses are numbered to correspond to your
comments. Unless otherwise indicated, the page references below are to the
marked version of the enclosed paper copy of the Amendment No. 2. to the
Registration Statement on Form S-1 filed on the date hereof (the "Registration
Statement"). Capitalized terms used herein and not separately defined have the
meaning given to them in the Registration Statement.
GENERAL
1. BASED ON THE RESPONSE TO PRIOR COMMENT 2, REMOVE ALSO THE REFERENCES TO
"ESTIMATES FROM WHX'S ACTUARY" ON PAGE F-10, "CONSULTATION WITH ITS
ACTUARIES" ON PAGE F-24, AND "ADVISED BY COUNSEL" ON PAGES F-46 AND F-109.
The requested change has been made. See pages F-9, F-21, F-36, F-80, F-92
and F-122 of the Registration Statement.
NEW JERSEY OFFICE
744 BROAD STREET, 16TH FLOOR
NEWARK, NJ 07102
TELEPHONE: 973.331.7200
FACSIMILE: 973.331.7222
December 21, 2007
Page 2
PROSPECTUS' FRONT COVER PAGE
2. PLEASE REVISE TO DISCLOSE THE DISTRIBUTION ARRANGEMENTS FOR YOUR OFFERING
THAT HAVE BEEN MADE. REFER TO ITEM 501(B)(8) OF REGULATION S-K.
The Registration Statement has been revised to clarify. See the
Prospectus' Front Cover Page and Table of Contents of the Registration
Statement.
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES, PAGE 7; WHAT ARE THE
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF EXERCISING MY
SUBSCRIPTION RIGHTS?, PAGE 18; MATERIAL UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES, PAGE 137
3. BASED ON A REVIEW OF THE SECTIONS CITED ABOVE, WE ARE UNABLE TO CONCUR
WITH THE RESPONSE TO PRIOR COMMENT 9 THAT WHX MAKES NO REPRESENTATION OF
THE TAX CONSEQUENCES IN THE REGISTRATION STATEMENT. PLEASE FILE THE TAX
OPINION AND RELATED CONSENT AS EXHIBITS TO THE REGISTRATION STATEMENT.
Based on several conversations with Mr. Edward M. Kelly, we understand
that our current disclosure is acceptable to the Division of Corporation
Finance.
EXPIRATION OF THE RIGHTS OFFERING AND EXTENSIONS, AMENDMENTS AND TERMINATION,
PAGE 33
4. PLEASE REVISE HERE AND ELSEWHERE IN YOUR PROSPECTUS TO INDICATE THE LATEST
DATE YOU MAY EXTEND THE OFFERING.
The requested change has been made. See pages 12 and 29 of the
Registration Statement.
5. PLEASE REVISE TO INDICATE THE APPROXIMATE LENGTH OF TIME IT WILL TAKE FOR
MONEY TO BE RETURNED IF THE OFFERING IS TERMINATED.
The requested change has been made. See pages 12, 26, 29 and 30 of the
Registration Statement.
SUBSCRIPTION PRICE, PAGE 35
6. WE NOTE YOUR RESPONSE TO COMMENT 15 OF OUR LETTER DATED NOVEMBER 14, 2007.
PLEASE ALSO DISCLOSE THE MATERIAL DIFFERENCES BETWEEN THE PER SHARE
SUBSCRIPTION PRICE AND THE FAIR VALUE OF THE COMMON STOCK AS OF THE MOST
RECENT DATE PRACTICABLE. WE REISSUE COMMENT 15 IN THIS REGARD.
The requested change has been made, and the difference between the per
share subscription price and the fair value of the common stock will be
finalized when the pricing information for the Rights Offering is available. See
pages 11, 25 and 34 of the Registration Statement.
December 21, 2007
Page 3
FEES AND EXPENSES, PAGE 39
7. PLEASE QUANTIFY AND STATE THE AMOUNT TO HE PAID FOR "ALL OTHER
COMMISSIONS, FEES, TAXES OR OTHER EXPENSES." ALSO INCLUDE THIS AMOUNT IN
YOUR RIGHTS OFFERING SUMMARY BEGINNING ON PAGE 7. WE NOTE YOUR FIRST
SENTENCE ON THE COVER PAGE OF YOUR PROSPECTUS STATES THAT YOU ARE
DISTRIBUTING THE SUBSCRIPTION RIGHTS "AT NO CHARGE."
The Registration Statement has been revised to clarify. See page 38 of the
Registration Statement.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, PAGE 52
8. REFER TO PRIOR COMMENT 16. AS REQUESTED PREVIOUSLY, STATE WHAT THE LIMITS
OF ALL MATERIAL FINANCIAL RATIOS AND TESTS ARE. FOR EXAMPLE, WE NOTE THE
DISCLOSURE IN SECTION 6.16 OF EXHIBIT 4.36 AND SECTION 6.16 OF EXHIBIT
10.37.
The requested change has been made. See pages 17, 67, 73 and 75-78 of the
Registration Statement.
PLAN OF DISTRIBUTION, PAGE 142
9. TO THE EXTENT THAT YOU INTEND TO CONDUCT THE OFFERING THROUGH OFFICERS,
DIRECTORS, OR EMPLOYEES EXPLAIN HOW THEY QUALIFY FOR THE EXEMPTION FROM
REGISTRATION AS BROKER-DEALERS UNDER RULE 3A4-1 OF THE SECURITIES EXCHANGE
ACT.
The Registration Statement has been revised to clarify. See page 136 of
the Registration Statement.
STATEMENTS OF CASH FLOWS, PAGE F-89
10. PLEASE TELL US WHY YOU HAVE PRESENTED TWO LINE ITEMS ENTITLED
"DISCONTINUED OPERATIONS" WITHIN THE OPERATING ACTIVITIES SECTION OF YOUR
CASH FLOW STATEMENT.
The first line entitled "Discontinued Operations" represents the non-cash
gain on disposal of the assets of the discontinued operation. The second line
represents the change in the working capital accounts of the discontinued
operation. We have changed the cash flow statement accordingly. See page F-92 of
the enclosed clean copy of the Registration Statement.
NOTE 8 -- INVENTORIES, PAGE F-98
11. WE HAVE READ YOUR RESPONSE TO PRIOR COMMENT 40. PLEASE CLARIFY FOR US HOW
YOU DETERMINED THAT YOUR ACCOUNTING IS CONSISTENT WITH THE GUIDANCE IN THE
ISSUES PAPER. ALSO, PLEASE CLARIFY HOW YOU DETERMINED THAT THE LIFO
LIQUIDATION IS INVOLUNTARY AND TEMPORARY. IT IS NOT CLEAR WHETHER YOUR
ACCOUNTING METHOD ENABLES COMPARABILITY WITH THE FINANCIAL STATEMENTS OF
OTHER REGISTRANTS.
December 21, 2007
Page 4
The AICPA Issues Paper specifies two acceptable methods of computing the
effect of LIFO on an interim basis in paragraph 8-3. WHX uses "approach (a)" as
described in paragraph 8-2 as follows: "specific quarterly calculation of the
LIFO effect based on year to date amounts. Some do this by reviewing quarterly
price changes; others review price changes and inventory level considerations".
The Advisory Conclusion in paragraph 8-7 indicates that "approach (a)" is
acceptable. WHX is able to effectively calculate the specific LIFO effect on its
precious metal inventory on an interim basis because precious metals are a
commodity with a readily-quoted market price, and because it tracks the quantity
of its precious metals in inventory on a daily basis.
WHX also complies with the Advisory Conclusion with respect to the balance
sheet classification issue described in paragraph 8-9: How should the adjustment
be treated for interim balance sheet purposes? WHX follows treatment "(X)"
described in paragraph 8-9 as follows: Record as a deferred credit in the
current liabilities section of the balance sheet the pretax income effect of the
LIFO inventory liquidation, with inventory reflecting the liquidation. WHX does
not include in its balance sheet credit an additional amount necessary to
reinstate the inventory balance to the amount before liquidation, which is
described as treatment "Y" and which was deemed unacceptable to the Task Force.
As to the determination that the LIFO liquidation is temporary, the
following background (as described on page 69 of the Registration Statement) is
provided: H&H accepts precious metal from suppliers and customers, which
quantities are returnable in fabricated or commercial bar form under agreed-upon
terms. To the extent such metals are used by the Company to meet its operating
requirements, the amount of inventory which H&H must own is reduced. In the
first quarter of 2007, the Company received 400,000 ounces of silver from a
customer under an unallocated pool agreement. As a result of this agreement,
along with a reduction in operating needs, the Company was able to reduce its
owned quantity of silver. The unallocated pool agreement with the customer
allows the customer to cancel the agreement upon notice to H&H, and thus, the
Company considered the LIFO liquidation, which arose principally from this
agreement, to be temporary. As of year-end (December 31, 2007), the gain
resulting from LIFO liquidation will be recognized in the statement of
operations to the extent of the decrement of the LIFO inventory at that time.
EXHIBIT 5.1
12. WE NOTE THE STATEMENT "THIS OPINION IS GIVEN AS OF THE DATE HEREOF AND WE
ASSUME NO OBLIGATION TO UPDATE OR SUPPLEMENT SUCH OPINION TO REFLECT ANY
FACTS OR CIRCUMSTANCES THAT MAY HEREAFTER COME TO OUR ATTENTION OR ANY
CHANGES IN FACT OR LAW THAT MAY HEREAFTER OCCUR." PLEASE DELETE.
ALTERNATIVELY, FILE A NEW OPINION IMMEDIATELY BEFORE THE REGISTRATION
STATEMENT'S EFFECTIVENESS BECAUSE THE OPINION MUST SPEAK AS OF THAT TIME.
The requested change has been made. See Exhibit 5.1 to the
Registration Statement.
13. PLEASE CONFIRM THAT THE RIGHTS WILL BE GOVERNED BY DELAWARE LAW.
Exhibit 5.1 to the Registration Statement has been revised to clarify. See
Exhibit 5.1 of the Registration Statement.
December 21, 2007
Page 5
CLOSING
We welcome a further discussion on any of our points addressed within this
response letter. I may be reached at (212) 451-2289.
Very truly yours,
/s/ Adam Finerman, Esq.
-------------------------------------------
Adam Finerman, Esq.
cc: Glen M. Kassan
Chief Executive Officer
WHX Corporation
1133 Westchester Avenue
White Plains, New York 10604
Michael Reiner, Esq.
Breslow & Walker LLP
100 Jericho Quadrangle, Suite 230
Jericho, N& 11753
