December 1, 2005
By facsimile to (713) 236-5513 and U.S. Mail
Mr. David L. Hatcher
Chief Executive Officer
KMG Chemicals, Inc.
10611 Harwin Drive, Suite 402
Houston, TX 77036
Re: KMG Chemicals, Inc.
Registration Statement on Form S-3
Filed November 22, 2005
File No. 333-129879
Dear Mr. Hatcher:
We reviewed the filing only for form eligibility and
disclosures
under "Selling Shareholders" and have the comments below. No
further
review of the registration statement has been or will be made.
We urge all persons by statute responsible for the
registration
statement`s adequacy and accuracy to make certain that all
information required under the Securities Act has been included.
We
remind you to consider applicable requirements for the preliminary
prospectus` distribution.
Where indicated, we think that you should revise the document
in
response to the comments. If you disagree, we will consider your
explanation why a comment is inapplicable or a revision is
unnecessary. Be as detailed as necessary in your explanation. To
understand better your disclosure, we may ask you in some comments
to
provide us supplemental information. We may raise additional
comments after reviewing this information.
Our review`s purpose is to assist you in your compliance
with
applicable disclosure requirements and to enhance the overall
disclosure in your document. We look forward to working with you
to
achieve these objectives. We welcome any questions that you may
have
about comments or any other aspect of our review. You may call us
at
the telephone numbers listed at the end of this letter.
General
1. Our records reflect that the annual report on Form 10-K for the
fiscal year ended July 31, 2005 was filed on October 31, 2005.
The
10-K was required to be filed 90 days after the end of the fiscal
year covered by the report. See General Instruction A(2)(b) of
Form
10-K. Thus, KMG Chemicals does not appear to satisfy the
registrant
requirements for use of Form S-3. See General Instruction
I.A.2(b)
of Form S-3, and advise. See also Rules 401(a) and 411 of
Regulation
C under the Securities Act.
If KMG Chemicals is ineligible to use Form S-3 and wishes to
proceed
with the offering, KMG Chemicals should amend the registration
statement on a form whose eligibility requirements it is able to
satisfy. For example, if KMG Chemicals amends the registration
statement on Form S-1, indicate on the cover page that the pre-
effective amendment is a pre-effective amendment on Form S-1 to a
registration statement on Form S-3. The registration statement`s
filing number noted above will remain unchanged. Further, explain
briefly in a cover letter why KMG Chemicals is amending on another
form. Alternatively, KMG Chemicals should withdraw the
registration
statement. See Rule 477 of Regulation C under the Securities Act.
Selling Shareholders, page 11
2. We assume that the numbering of a footnote as footnote (3)
twice
is inadvertent and that the second footnote (3) should be footnote
(4). Please revise.
3. For a beneficial owner such as Boenning & Scattergood, Inc.
that
is not a natural person, identify by footnote or otherwise the
natural person or persons having sole or shared voting and
investment
control over the securities held by the beneficial owner. Refer
to
telephone interpretation 4S. in the Regulation S-K section of the
March 1999 supplement to our "Manual of Publicly Available
Telephone
Interpretations" that is available on the Commission`s website at
http://www.sec.gov, and revise.
4. Indicate the nature of any position, office, or other material
relationship which each selling shareholder has had within the
past
three years with KMG Chemicals or any of its predecessors or
affiliates. See Item 507 of Regulation S-K. Describe also any
continuing relationships with the selling shareholders.
5. Confirm that none of the selling shareholders is a broker-
dealer
or a broker-dealer`s affiliate. If a selling shareholder is a
broker-dealer, tell us whether the selling shareholder acquired
its
securities as compensation for underwriting activities. Unless a
broker-dealer acquired the securities as compensation for
underwriting activities, KMG Chemicals must identify the broker-
dealer as an underwriter in the prospectus. Language such as "may
be
deemed to be" an underwriter is unacceptable if the selling
stockholder is a broker-dealer.
6. If a selling shareholder is a broker-dealer`s affiliate,
include
disclosure that this broker-dealer`s affiliate:
* Purchased in the ordinary course of business the securities to
be
resold.
* Had no agreements or understandings, directly or indirectly,
with
any person to distribute the securities at the time of their
purchase.
If KMG Chemicals is unable to make the representations noted above
in
the prospectus, KMG Chemicals must state in the prospectus that
the
selling shareholder is an underwriter. Language such as "may be
deemed to be" an underwriter is unacceptable if the selling
shareholder is an affiliate of any underwriter that cannot make
these
representations.
7. State that KMG Chemicals will file a prospectus supplement to
name
successors to any named selling shareholders who are able to use
the
prospectus to resell the securities.
Closing
If KMG Chemicals wishes to proceed with the offering, file an
amendment in response to the comments on a form whose eligibility
requirements KMG Chemicals is able to satisfy. To expedite our
review, KMG Chemicals may wish to provide us three marked courtesy
copies of the amendment. Include with the filing any supplemental
information requested and a cover letter tagged as correspondence
that keys the responses to the comments. If KMG Chemicals thinks
that compliance with any of the comments is inappropriate, provide
the basis in the letter. We may have additional comments after
review of the amendment, the responses to the comments, and any
supplemental information.
We urge all persons responsible for the accuracy and adequacy
of
the disclosure in the registration statement reviewed by us to
ensure
that they have provided all information investors require for an
informed decision. Since KMG Chemicals and its management are in
possession of all facts relating to the disclosure in the
registration statement, they are responsible for the adequacy and
accuracy of the disclosures that they have made.
If KMG Chemicals requests acceleration of the registration
statement`s effectiveness, KMG Chemicals should furnish a letter
at
the time of the request, acknowledging that:
* Should the Commission or the staff acting by delegated authority
declare the registration statement effective, it does not
foreclose
the Commission from taking any action on the filing.
* The action of the Commission or the staff acting by delegated
authority in declaring the registration statement effective does
not
relieve KMG Chemicals from its full responsibility for the
adequacy
and accuracy of the disclosure in the filing.
* KMG Chemicals may not assert our comments and the declaration of
the registration statement`s effectiveness as a defense in any
proceeding initiated by the Commission or any person under the
United
States` federal securities laws.
The Commission`s Division of Enforcement has access to all
information that KMG Chemicals provides us in our review of the
registration statement or in response to our comments on the
registration statement.
We will consider a written request for acceleration of the
registration statement`s effectiveness under Rule 461 of
Regulation C
under the Securities Act as confirmation that those requesting
acceleration are aware of their responsibilities under the
Securities
Act and the Exchange Act as they relate to the proposed public
offering of the securities specified in the registration
statement.
We will act on the request and by delegated authority grant
acceleration of the registration statement`s effectiveness.
You may direct questions on comments and other disclosure
issues
to Edward M. Kelly, Senior Counsel, at (202) 551-3728 or me at
(202)
551-3767.
Very truly yours,
Jennifer R. Hardy
Legal Branch Chief
cc: Charles D. Powell, Esq.
Haynes and Boone, LLP
1221 McKinney Street, Suite 2100
Houston, TX 77010
Mr. David L. Hatcher
December 1, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE