MAIL STOP 3561
January 20, 2006
Mr. Jianquan Li
Las Vegas Resorts Corporation
Winner Industrial Park, Bulong Road
Longhua, Shenzhen City, 518109
People`s Republic of China
RE: Las Vegas Resorts Corporation
Registration Statement on Form SB-2
File Number: 333-130473
Filed: December 19, 2005
Dear Mr. Li:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise 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 detailed 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.
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 numbers
listed
at the end of this letter.
General
1. Please revise any language that is promotional in nature
throughout the prospectus. Such promotional tone is inappropriate
for a disclosure document. For example, we note your use of
"leading
Chinese exporters of medical dressings," and "state of the art,"
"experienced management has strong capabilities in leadership and
execution" and etc.
2. We note that on September 12, 2005, you affected a one-for-
fifteen
hundred reverse stock split. Please explain the business purpose
of
the reverse stock split and clarify how the registrant`s
44,636,371
outstanding shares were arrived.
3. Please disclose your address and telephone number in the U.S.
4. Please indicate whether you plan to change your name.
Cover Page of the Prospectus
5. Please clarify the market information hereon. There do not
appear
to have been any actual transactions in the shares; the reference
to
"sales price" should be "quote" or "bid price". In addition, the
last quote on January 20th was $5.50. Please update.
6. Please remove the information on page ii. The statement that
the
information is current only as of its date . . .is not understood.
Material changes to the information in the prospectus are required
to
be updated and distributed in accordance with the undertaking
required pursuant to Item 28 of Part II of the registration
statement.
Table of Contents
7. Correct the page references.
Risk Factors, page 4
8. The disclosure in the first risk factor on page 8 is somewhat
circular. In the first two sentences, you state that high rates
of
inflation have been experienced during the last ten years. Then
in
the fourth sentence, you state that inflation has been more
moderate
since 1995 (e.g. - the last ten years). Please revise.
9. Please do not bundle risks. Separately discuss only material
risks listed in the discussion in the first two risk factors.
10. Risk factor 12 is a generic risk common to all or most
businesses and should be deleted.
11. The 20th risk factor is duplicative. Please delete.
12. The 21st risk factor is not peculiar to the registrant or
medical
products companies in general. Please delete.
13. Please state the negative consequences of the risk in risk
factor
25.
Dividend Policy, page 11
14. Qualify this disclosure for the pending dividend declared in
August, 2005 and for the various stock dividends(splits).
Market for Our Common Stock, page 11
15. The first sentence should replace "traded" with "quoted" as no
transactions appear to have occurred in the shares to date.
Please
include all of the disclosure required by Item 201(a)(ii).
16. We do not understand the reference to the National Quotation
Bureau Inc. Please clarify.
17. It is unclear whether all of the stock price information
presented has been retroactively adjusted for the 1-1,500 reverse
stock split on 10/26/05. Please clarify. If true, indicate under
this caption that all price quotations have been adjusted for the
stock splits.
Management`s Discussion and Analysis and Plan of Operation, page
11
18. Please describe the material terms of the Share Exchange
Agreement and plan of reorganization.
19. Please disclose in detail when and how the merger deal was put
together and any form of compensation or finders fee paid by
either
Winner or LVRC.
20. We note your discussion over the growing concern over
protecting
the environment. Please explain how this trend affects your
business.
21. We bring your attention to the paragraph beginning, "[a]nother
trend in our industry is the use by customers of buying groups."
Please consider whether you should disclose this as a material
risk
factor.
22. Please delete the reference on page 13 to the fiscal years
ended
September 30, 2005 and 2004 being audited. Note that this
reference
could be incorrectly interpreted to mean that Management`s
Discussion
and Analysis has been audited.
23. Please provide the basis for the statement, "[w]e believe that
sales will continue to increase in Europe and America over the
next
several years." Further, please explain how you plan to promotes
sales, enhance your marketing strategies and improving product
quality of your products in these two regions.
24. Please explain the reason for the drastic decrease in
environmental laws compliance costs.
25. Please explain all the contractual obligations, including the
material terms of each factory lease agreements, in detail.
26. We suggest that the chronological order of the tables on pages
14
and 15 be reversed to conform with the financial statements and
other
tabular disclosure in the prospectus.
27. Please discuss the significant increase in foreign currency
translation expense during the 2005 fiscal year.
Business, page 20
28. Please discuss all of your products in greater detail.
29. Please list the subsidiaries of the registrant in the forepart
of
this section.
30. You state that your efforts to participate in the home health
care market for medication protection products have been
relatively
successful so far. Please explain your participation in the home
health care market and the basis that it has been relatively
successful. Please also provide the basis for the statement,
"[w]e
expect growth in high value added products will increase our
profitability with a corresponding increase in enterprise value."
Otherwise, please delete.
31. Please describe in greater detail the distribution methods of
your products.
32. Please describe the status of your new products of nonwoven
cotton spunlace products, self-adhesive bandages, and elastic
bandages.
33. Please provide the patent number for your currently issued
patent, the patent application numbers for your patent
applications,
and a description of the patent.
34. Please provide the basis for the statement, "[w]ith this new
technology, we can produce green nonwoven medical dressings at a
lower cost." Further, please explain the new technology and
"nonwoven medical dressings."
35. Some of your products are regulated as medical products by
agencies such as the FDA. Please discuss which of your products
need
FDA approval for sale in the U.S. and whether you have received
that
approval. Please also address this issue with your products in
the
EU and the Japan markets.
36. Please provide an estimate of the amount spent during each of
the
last two fiscal years on research and development activities.
See
Item 101(b)(10) of Regulation S-B.
37. We bring your attention to the statement on page 28, "[w]e
contributed $1,466 and $604 to this scheme in the fiscal year 2005
and 2004, respectively." Please verify the accuracy of the
numbers.
Our Facilities, page 29
38. Disclose the location of the principal plants and other
property
and describe the condition of the property. If you have to pay a
mortgage or a fee to use the lands, please disclose the fees.
39. Describe in greater detail the construction of a new
manufacturing facility in Chongyang County. Please disclose the
status of the construction and how the construction is financed.
Please revise the Management`s Discussion and Analysis section as
appropriate.
40. You state that in a few cases, the lessors have not been able
to
provide copies of documentation evidencing their rights to use the
property leased to you. Please discuss any related risks.
41. Please provide an update on the liquidation process of
Chongyang
Wenqiang subsidiary and revise the Management`s Discussion and
Analysis section as appropriate.
Management, page 30
42. We note the reference that Timothy Halter serves as a director
until the 10th day following the mailing of an information
statement.
Our record shows that an information statement was mailed on or
about
December 19, 2005. Please update the disclosure throughout.
43. Please update footnotes (1) and (3) and correct the
duplication
of number (3).
Executive Compensation, page 32
44. On page 34, you disclose your intention to pay a dividend of
$1.873 million to your officers/principal stockholders. This
should
also be discussed in the executive compensation section on page
32.
Certain Relationships and Related Transactions, page 33
45. For each of the transactions where equity interests were
given,
please disclose the value of the shares issued and describe how
the
shares were valued.
46. When do you plan to pay the dividends declared in August 2005.
Breakdown the dollar amount for each person.
47. Please clarify that this disclosure includes the required
transactions for both predecessor companies and all subsidiaries
of
those companies.
48. Clarify Timothy Halter`s affiliation with Halter Financial
Investments; ie., principal shareholder, executive officer, etc.
49. Consideration to Mr. Li, if any, for the license agreement
should
be disclosed.
Selling Stockholders, page 35
50. Please identify the stockholders who are your affiliates or
employees or suppliers of yours or your affiliates. See Item 507
of
Regulation S-B.
51. Please disclose the control person(s) of Torch Import & Export
Co., LTD and Pinnacle China Fund.
Security Ownership of Certain Beneficial Owners, page 37
52. Addresses of all beneficial owners are required.
53. Pinnacle China Fund LLP owns 9.5% of the outstanding shares
and
should be include in the table.
Plan of Distribution, page 40
54. Regarding the reference to "donees, pledgees, transferees or
other successors-in-interest", please note that all persons using
this prospectus must be named as selling shareholders and all
disclosure pursuant to Item 507 of Regulation S-B must be included
in
the prospectus. This may be accomplished in an effective
registration statement by means of a prospectus supplement filed
under Rule 424(b) of Regulation C.
55. Estimate and state the dollar amount of costs and fees to be
paid
by the company on behalf of the selling security holders.
Financial Statements, page F-1
56. We note that only the financial statements for Winner Group
Limited are included in the registration statement. Since the
reverse acquisition had not been consummated as of the balance
sheet
date, the registration statement should also include the financial
statements of Las Vegas Resorts Corporation as the primary
registrant, as required by Item 310 of Regulation S-B.
57. Please provide a currently dated consent in any amendment and
ensure the financial statements are updated as required by Item
310(g) of Regulation S-B. Note that when the financial statements
are updated to include periods subsequent to the merger date, the
financial statements of Winner Group Limited should be
retroactively
restated to combine the historical results of operations for
Winner
Group Limited with the capital structure of Las Vegas Resorts
Corporation, and at that point the standalone financial statements
of
Las Vegas Resorts Corporation would no longer need to be included
in
the filing.
Note 2 - Summary of Significant Accounting Policies, page F-6
58. Please expand your disclosures regarding revenue recognition
to
address each of the four primary criteria in Staff Accounting
Bulletin No. 104 as they relate to your business. In addition,
please expand your disclosures to address revenue recognition with
respect to distributor sales. Revise your disclosures regarding
revenue recognition in critical accounting policies on page 19 to
describe the significant estimates and assumptions made by
management. Refer to Section V of Release 33-8350, which is
available at: http://www.sec.gov/rules/interp/33-8350.htm, and
revise
your disclosures accordingly.
59. We note your disclosure on page 5 that sales to a Japanese
distributor account for approximately 25% of your total revenue.
Please tell us whether revenue is recognized upon shipment to this
customer, and if so, why you believe that revenue recognition upon
shipment is appropriate, to the extent that any product return
rights
exist. As applicable, please address each of the specific
criteria
in paragraphs 6 and 8 of FAS 48 in your response.
60. Please tell us whether you have entered into volume purchasing
agreements with the major customer described on page 5. If so,
please file the agreements as material contract exhibits in
accordance with Item 601 of Regulation S-B, or tell us why you
believe that the agreements are not required to be filed.
61. We note your disclosure regarding derivative financial
instruments on pages F-7 and F-13. Revise the financial
statements
to provide all of the disclosures required by paragraphs 44-45 of
FAS
133, or tell us why you believe that no revisions are required.
Note 5 - Credit Facilities and Pledged Assets, page F-9
62. Please expand your disclosure regarding bank loans to
separately
disclose the material terms of each outstanding obligation. Based
on
your disclosure on page 18, it would appear that some of the debt
obligations are in default at September 30, 2005. If this is the
case, disclose the consequences of the defaults and how you intend
to
resolve them with the lenders.
Subsequent Events
63. We note your disclosure on page 18 regarding the private
placement of $9.6 million in December 2005. Please file the
investment agreement(s) as material contract exhibits in
accordance
with Item 601 of Regulation S-B. Disclose the material terms of
the
financing agreement(s) in the financial statements for periods
subsequent to the closing of the transaction, including the
material
terms of any related registration rights agreements.
Part II
Recent Sales of Unregistered Securities
64. If true, please make the representation that there was no
general
solicitation or advertising for the Regulation D private
offerings.
Signatures
65. Please include the signatures required by Form SB-2.
Specifically, one of the officers must act and sign in the
capacity
of the principal accounting officer and chief financial officer.
Form 10-KSB for the year ended July 31, 2005 and Form 10-QSB for
the
quarter ended October 31, 2005
66. We note your disclosure that your management "concluded that
the
Company`s disclosure controls and procedures are effective."
Revise
to clarify, if true, that your officers concluded that your
disclosure controls and procedures are effective to ensure that
information required to be disclosed in the reports that you file
or
submit under the Exchange Act is accumulated and communicated to
your
management, including your chief executive officer and chief
financial officer, to allow timely decisions regarding required
disclosure and that the Company`s disclosure controls and
procedures
are effective to give reasonable assurance that the information
required to be disclosed by the Company in reports that it files
under the Exchange act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms
of
the SEC. See Exchange Act Rule 13a-15(e).
Closing Statements
As appropriate, please amend your registration 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
cover 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
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 filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed 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.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert staff comments and the declaration of
effectiveness 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 connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Carlton Tartar at (202) 551-3387 or Terence
O`Brien at (202) 551-3355 if you have questions regarding comments
on
the financial statements and related matters. Please contact H.
Yuna
Peng at (202) 551-3391 or Don Rinehart, who supervised the review
of
your filing, at (202) 551-3235 with any other questions.
Sincerely,
John Reynolds, Assistant Director
Office of Emerging Growth Companies
cc: Louis A. Bevilacqua, Esq.
Joseph R. Tiano
Fax (202) 654-1804 & (202) 508-4321
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Mr. Jianquan Li
Las Vegas Resorts Corporation
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