UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): November 1, 2005
TAG-IT PACIFIC, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 1-13669 95-4654481
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
21900 BURBANK BLVD., SUITE 270
WOODLAND HILLS, CALIFORNIA 91367
(Address of Principal Executive Offices) (Zip Code)
(818) 444-4100
(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 4.01 CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
This Form 8-K/A of Tag-It Pacific, Inc. amends the Current Report on
Form 8-K dated November 1, 2005, which was filed with the Securities and
Exchange Commission on November 7, 2005.
We previously announced that BDO Seidman, LLP ("BDO") would be
resigning as our independent registered public accounting firm, effective
immediately following the completion of its review of the information to be
included in our Form 10-Q for the quarter ended September 30, 2005.
BDO's resignation was effective as of November 22, 2005.
During the two most recent fiscal years ended December 31, 2004 and
2003 and through November 22, 2005 (the effective date of BDO's resignation),
there were no disagreements between us and BDO on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure which, if not resolved to the satisfaction of BDO, would have caused
BDO to make reference to the subject matter of the disagreement in connection
with its reports.
Other than the items described below, there were no "reportable
events," as defined in Item 304(a)(1)(iv) of Regulation S-K of the Securities
Exchange Act of 1934, as amended.
As previously disclosed in our Annual Report on Form 10-K for the year
ended December 31, 2004 and our Quarterly Report on Form 10-Q for the period
ended March 31, 2005, in the course of conducting its audit of our financial
statements for the fiscal year ended December 31, 2004, BDO informed members of
our senior management and the Audit Committee of our Board of Directors that
they had discovered significant deficiencies in our internal control over
financial reporting that alone and in the aggregate constituted a "material
weakness," which is defined under standards established by the Public Company
Accounting Oversight Board as a deficiency that could result in more than a
remote likelihood that a material misstatement of the annual or interim
financial statements will not be prevented or detected. The deficiencies
identified consisted of the following:
o A material weakness related to the identification of and
physical controls over approximately $1.0 million of our
inventory located in a third party warehouse. We have taken
steps, and will continue to take additional steps, to remedy
this deficiency and believe that this deficiency was limited
to the third party warehouse at which the inventory was
located.
o We recorded post-closing adjustments in our financial
statements for the year ended December 31, 2004 related to the
allowance for doubtful accounts and deferred tax asset, which
were identified by BDO in connection with their audit of the
financial statements, indicating a material weakness in our
quarterly and annual financial statement closing process. In
order to address this material weakness, we implemented
additional review procedures over the selection and monitoring
of appropriate assumptions and estimates affecting these
accounting practices.
As previously disclosed in our Quarterly Reports on Form 10-Q for the
periods ended June 30, 2005 and September 30, 2005, in the course of conducting
its review of our financial statements for the fiscal quarters ended June 30,
2005 and September 30, 2005, BDO informed members of our senior management and
the Audit Committee of our Board of Directors that they had discovered
significant deficiencies in our internal control over financial reporting that
alone and in the aggregate constituted a material weakness. The deficiencies
identified consisted of our recording post-closing adjustments in our financial
statements for the quarters ended June 30, 2005 and September 30, 2005 related
to the allowance for doubtful accounts, reserve for inventory obsolescence, and
deferred tax asset, which were identified by BDO in connection with its review
of the financial statements, indicating a material weakness in our
2
quarterly financial statement closing process. As described above, BDO
identified the same material weakness in our annual financial statement closing
process in connection with its audit of our financial statements for the fiscal
year ended December 31, 2004.
In order to address this material weakness identified in the annual
financial statement closing process, we implemented additional review procedures
over the selection and monitoring of appropriate assumptions and estimates
affecting these accounting practices. There were no post-closing adjustments as
of March 31, 2005, the first quarterly period following implementation of
additional review procedures. The deficiencies, however, were again present in
the closing process for our financial statements for the second and third
quarters of 2005. Management has identified the steps necessary to address the
material weaknesses as described above, and will continue to implement
remediation plans.
We furnished BDO with a copy of this Report on Form 8-K/A prior to
filing with the SEC. We also requested that BDO furnish a letter addressed to
the SEC stating whether it agrees with the statements made in this Report. A
copy of BDO's letter to the SEC is filed with this Report as Exhibit 16.1.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
The following exhibits are filed herewith:
EXHIBIT
NUMBER DESCRIPTION
------- ------------
16.1 Letter from BDO Seidman, LLP
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TAG-IT PACIFIC, INC.
Date: November 29, 2005 By: /S/ AUGUST DELUCA
-----------------------------------------
August DeLuca, Chief Financial Officer
4
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
16.1 Letter from BDO Seidman, LLP
5