MAIL STOP 3561
March 24, 2006
Mr. Jianquan Li
Chief Executive Officer
Winner Medical Group Inc.
Winner Industrial Park, Bulong Road
Longhua, Shenzhen City, 518109
People`s Republic of China
RE: Winner Medical Group Inc.
Amendment 1 to Registration Statement on Form SB-2
File Number: 333-130473
Filed: March 1, 2006 and February 27, 2006
Dear Mr. Li:
We have reviewed your amended 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. Much of the disclosure in the prospectus, particularly the
"Business" section, appears promotional rather than factual and
should be revised to remove all promotional statements. No
speculative information should be included unless clearly labeled
as
the opinion of management of the company along with disclosure
discussing management`s basis for such opinions. All claims of a
speculative nature not fully supported in the prospectus should be
deleted. For example and without limitation, we note the
following
statements:
* Our factories employ advanced equipments;
* While most of the non-Chinese companies utilize an electrostatic
spraying process . . . Our international competitor`s technology
has
a glue spraying speed of 5 to 6 meters per second with glue waste
at
a 40%-50% level;
* Our efforts to participate in the home health care market for
medication protection products have been relatively successful so
far;
* Our products have met the requirements of major international
medical product quality tests, and we are among the very first
Chinese companies in our industry to have passed ISO9001, EN46002,
and CE.
Cover Page of the Prospectus
2. Please correct the market information hereon; the symbol has
changed, the date and per share price are incorrect. The March
24,
2006 quote was $10.24.
Prospectus Summary, page 1
3. The background and development of the business of Winner Group
Limited, as the predecessor of the registrant, should be added.
Risk Factors, page 6
4. We reissue comment nine in our comment letter dated January 20,
2006. Please do not bundle risks. We note your response that all
risks listed in risk factor are tightly related to the
international
nature of your business. These risks should be discussed, not
merely
listed, and they should be discussed separately under different
subheadings.
Market For Our Common Stock, page 10
5. Update the symbol.
6. Correct the last line of the table; the columns appear to be
reversed.
7. We do not understand the reference to "not approved". Bid and
asked prices for the last two fiscal years are required by Item
201
of Regulation S-B. If the quotes were from the pink sheets, you
should so indicate.
Management`s Discussion and Analysis and Plan of Operation, page
14
8. Please discuss the significant increase in foreign currency
translation expense during the most recent quarter.
9. Please provide the source or the basis of the statement, "we
had a
9.8% market share of all exports from China of these products . .
..."
10. You state that your "market research shows that several
worldwide
medical device distribution companies, including Tyco, Cardinal,
Lohmann, Artsana and White Cross, may have interest purchasing
your
nonwoven cotton spunlace products . . . several large customers
including BSN, Tyco and Dynarex have also expressed purchasing
interest in our new products self-adhesive bandages and elastic
bandages, and we are under negotiations with several other large
customers. . .. Please elaborate on any preliminary talks or any
agreements you have reached with these distributors.
Business, page 30
11. We note your claim that, "[w]e are among the very few Chinese
medical product companies that have its own products registered
with
FDA, which gives us the ability to directly export some of our
products to the United States." The use of the term "registered"
applies only to an obligation to register an establishment, not a
product. Please delete the statement. All foreign establishments
that export devices directly to the United States must "list"
their
products with the FDA pursuant to 21 U.S.C. 359(j)(1). This is
not a
requirement that applies to or has been fulfilled by a "very few
Chinese medical product companies...."
12. Please disclose the extensive and rigorous scope of FDA`s
statutory and regulatory requirements concerning your business and
the medical devices referenced in your submission. In particular,
the submission should explain the following fundamental regulatory
issues:
* administrative and enforcement remedies;
* device classification;
* pre-market submission requirements;
* labeling requirements;
* manufacturing requirements;
* post-market requirements, including medical device reporting
(MDR)
and reports of corrections or removals;
* import and/or export requirements; and
* administrative and enforcement remedies for noncompliance.
Please also disclose that your company`s failure to meet any of
these
requirements may cause FDA to automatically detain the firm`s
products when they are presented for entry into the United States.
13. Please provide the patent application numbers and a
description
of the patents Jianquan LI filed of certain nonwoven fabric
technology.
14. 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."
15. Please explain the term "proxy agent."
Our Facilities, page 41
16. Please provide an update on the liquidation process of
Chongyang
Wenqiang subsidiary and revise the Management`s Discussion and
Analysis section as appropriate.
Executive Compensation, page 46
17. We note that Mr. Li received a dividend of $1,000,527.84 and
the
rest of the dividend in the amount of $856,303.78 and $15,918.38
will
be paid to Mr. Li and Mr. Fang before June 2006. Please clarify
whether dividends were also paid to all other shareholders. We
will
have further comments.
18. Clarify in footnote (3), if true, that Mr. Halter received no
compensation of any kind for the three years.
Selling Stockholders, page 46
19. Please revise the numbers to indicate that Pinnacle China
Fund,
L.P. holds 9.4% of your shares.
Security Ownership of Certain Beneficial Owners and Management,
page
48
20. Indicate the beneficial owner of the shares held by Pinnacle
China Fund L.P.
Financial Statements, page F-1
21. We note your response to prior comment 57. Please revise the
financial statements of Winner Group Limited for the years ended
September 30, 2005 and 2004 for the effect of the reverse merger,
and
remove the stand-alone financial statements of Las Vegas Resorts
Corporation from the filing.
Note 12 - Commitments and Contingencies, page F-30
22. We note your response to prior comment 61. Since the hedged
items are material to your financial statements, we believe that
the
disclosures under paragraphs 44-45 of FAS 133 are required.
Please
revise the financial statements for both the period ended December
31, 2005 and the year ended September 30, 2005 accordingly.
Form 10-QSB for the quarter ended December 31, 2005
23. Please revise the disclosure to comply with the comments
issued
on Form SB-2, as applicable.
Closing Statements
As appropriate, please amend your registration statement in
response to these comments. 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 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.
Fax (202) 654-1804
James Groh
Heritage Management Consultants, Inc.
301 Central Avenue, #381
Hilton Head Island, SC 29926
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Jianquan Li
Winner Medical Group
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03/28/2006