SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. __ )(1)
TAG-IT PACIFIC, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $0.001
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(Title of Class of Securities)
873774103
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(CUSIP Number)
RONALD L. FEIN, ESQ.
STUTMAN, TREISTER & GLATT
3699 WILSHIRE BOULEVARD, SUITE 900
LOS ANGELES, CALIFORNIA 90010-2739
213-251-5100
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
DECEMBER 28, 2001
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(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [_].
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7 for
other parties to whom copies are to be sent.
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(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following pages)
Page 1 of 6 Pages
CUSIP No.109502 10 4 13D Page 2 of 6 Pages
________________________________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
HARRIS TOIBB, 023-30-6458
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
PF
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 259,000
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
266,666 SHARES OF COMMON STOCK AND 133,332 SHARES OF
OWNED BY COMMON STOCK ISSUABLE UPON EXERCISE OF WARRANTS
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
658,998
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.51%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 2 of 6 Pages
CUSIP No.109502 10 4 13D Page 3 of 6 Pages
________________________________________________________________________________
STATEMENT TO SCHEDULE 13D
ITEM 1. SECURITY AND ISSUER.
This statement on Schedule 13D is filed in respect of Shares of common
stock, $0.001 par value per share ("Common Stock") of Tag-It Pacific,
Inc., a Delaware corporation ("Tag-It"), the principal executive
offices of which are located at 21900 Burbank Boulevard, Suite 270,
Woodland Hills, California 91367.
ITEM 2. IDENTITY AND BACKGROUND.
a. The person filing this statement on Schedule 13D is Harris Toibb.
b. Mr. Toibb's residence address is 307 21st Street, Santa Monica,
California 90402.
c. Mr. Toibb is engaged in real estate development and personal
investments.
d. Mr. Toibb has not, during the last five (5) years, been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
e. Mr. Toibb has not, during the last five (5) years, been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which proceeding he has been or is subject
to a judgment, decree or final order enjoining future violations or,
or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
f. Mr. Toibb is a United States citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS.
Mr. Toibb made a series of open market purchases utilizing personal
funds between June 1997 and June 2001 aggregating a total of 259,000
shares of Common Stock for an aggregate purchase price of
$1,101,066.84 (the "Open Market Purchases"). Mr. Toibb entered into
that certain Stock and Warrant Purchase Agreement by and between
Tag-It and Mr. Toibb as investor (the "Purchase Agreement") dated
December 28, 2001, pursuant to which he purchased 266,666 shares of
Common Stock at a price per share of $3.00 for an aggregate purchase
price of $799,998, and was issued warrants. The warrants, which
consist of 66,666 A Warrants and 66,666 B Warrants, are immediately
exercisable for a term of four (4) years ("Warrants"). The A Warrants
are currently exercisable at $4.34 per share and the B Warrants are
currently exercisable at $4.73 per share. In addition, the Purchase
Agreement contemplates a second closing, subject to certain
conditions, to occur on October 1, 2002, for the purchase of an
additional 400,000 shares at $3.00 per share, and the issuance of
100,000 A Warrants at a price per share of $4.34 and 100,000 B
Warrants at a price per share of $4.73.
Page 3 of 6 Pages
Pursuant to the Purchase Agreement, the shares of Common Stock and the
Warrants were purchased directly from the Issuer in a transaction not
involving a public offering.
ITEM 4. PURPOSE OF TRANSACTION.
Mr. Toibb purchased the Common Stock in the Open Market Purchases for
investment purposes. Mr. Toibb purchased the Stock and the Warrants
for investment purposes and, upon the exercise of the Warrants, in
whole or in part, the Common Stock thereby acquired by Mr. Toibb, Mr.
Toibb presently intends to be, for investment purposes.
Mr. Toibb presently does not have any plans or proposals that would
relate to, or result in, any of the actions set forth in the
instruction for Item 4, subparts (a) through (j).
ITEM 5. INTEREST IN SECURITIES OF ISSUER.
a. Mr. Toibb beneficially owns 658,998 shares of Common Stock. Mr.
Toibb's ownership represents 7.51% of the Common Stock issued and
outstanding.
b. Mr. Toibb has sole voting and dispositive power with respect to
658,998 shares of the Common Stock and has entered into a Stockholders
Agreement described in Item 6 below.
c. Mr. Toibb entered into the Purchase Agreement by and between Tag-It
and Mr. Toibb, which contemplates the purchase by Mr. Toibb from
Tag-It of shares of Common Stock together with Warrants. The agreement
contemplates a second closing, subject to certain conditions, to occur
in October, 2002.
d. None
e. Not Applicable
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
On December 28, 2001, Tag-It and Mr. Toibb entered into a Stockholders
Agreement which included among other terms, a voting limitation and
proxy provision. This agreement does not affect the 259,000 shares
that were preciously purchased by Mr. Toibb in the open market. The
provision sets forth that Mr. Toibb will not, until the first
anniversary of the issue date of the purchased shares of Common Stock
(the "Purchased Shares"), vote the Purchased Shares or the shares
issued upon exercise of the Warrants (the "Warrant Shares") on any
matter to which he is entitled to vote at a meeting of stockholders,
including without limitation, in the election of directors, unless
instructed by the Board of Directors of Tag-It to do so. If so
instructed by the Board of Directors to vote such, Mr. Toibb has
agreed to
Page 4 of 6 Pages
vote only in the manner as so instructed. In addition, Mr. Toibb has
agreed, unless otherwise instructed by the Board of Directors, to
attend or be represented by proxy at all special and annual meetings
such that the Purchased Shares and the Warrant Shares, when issued,
are present at the meeting for determining the presence of a quorum.
ITEM 7. EXHIBITS.
The Stockholders Agreement is attached hereto as an Exhibit.
Page 5 of 6 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
January 9, 2002
/S/ HARRIS TOIBB
----------------------------------
Harris Toibb, an Individual
Attention. Intentional misstatements or omissions of fact constitute federal
criminal violations (see 18 U.S.C. 1001).
Page 6 of 6 Pages
EXHIBIT
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "AGREEMENT") is made and entered into as
of December 28, 2001, by and between TAG-IT PACIFIC, INC., a Delaware
corporation (the "Company") and Harris Toibb ("INVESTOR")
RECITALS
A. The Company and Investor are party to that certain Stock and Warrant
Purchase Agreement, dated as of December 28, 2001 (the "PURCHASE AGREEMENT")
which provides for, among other things, the issuance to the Investor of shares
(the "PURCHASED SHARES") of common stock, par value $.001 per share, of the
Company (the "COMMON STOCK") and Warrants (the "WARRANTS") to purchase
additional shares of Common Stock (the "WARRANT SHARES.")
B. The execution and delivery by the parties of this Agreement is a
condition precedent to the consummation of the transactions contemplated by the
Purchase Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the agreements and
mutual covenants contained herein, the parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, all capitalized terms and
phrases. Including the term, "Securities," not defined herein have the meaning
set forth in the Purchase Agreement.
2. NON-TRANSFER PERIOD. Other than with respect to transfers in compliance
with the transfer provisions of this Agreement (including Section 3 below) and
the Purchase Agreement to an "Affiliate"(as defined below) who or which agrees
to be bound by all of the transfer restrictions and other provisions set out in
this Agreement, the Investor shall not sell, assign, transfer, pledge,
hypothecate, gift, encumber or otherwise dispose of (or enter into any option,
put, call or straddle or other agreement with respect to)(a "TRANSFER") any of
the Securities during the period commencing on the date of issuance to the
Investor of such Security (with respect to a Security, the "ISSUE DATE") and
ending on the first anniversary of the acquisition by Investor from the Company
of that Security (with respect to each such Security, the "NON-TRANSFER
PERIOD"), unless the Transfer is approved in writing by the Company in its sole
discretion. For purposes of this Agreement, "AFFILIATE" shall mean a person that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the first person and, with
respect to the Investor only, the Investor's spouse and the Investor's and the
Investor's spouse's parents, grandparents, brothers, sisters, children,
grandchildren, nieces and nephews. "CONTROL" (including the terms "controlled
by" and "under common control with") shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
policies of a Person, whether through the ownership of voting securities, by
contract, as a trustee or executor, or otherwise. "PERSON" means any individual,
corporation, partnership, limited liability company, trust, incorporated or
unincorporated association, joint venture, joint stock company, government
bureau or agency or other subdivision thereof or other entity of any kind or
nature.
3. PERMITTED TRANSFERS FOLLOWING NON-TRANSFER PERIOD. Following expiration
of the applicable Non-Transfer Period, a Security may not be Transferred unless:
3.1 such Transfer is made in accordance with the provisions of this
Agreement and, as applicable, the Purchase Agreement and the terms of the
applicable Warrant; and
3.2 such Transfer is made pursuant to an effective registration under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and any applicable
state securities laws, or an exemption from such registration, and prior to any
such Transfer the Investor shall give the Company (A) notice describing the
manner and circumstances of the proposed Transfer and (B) if reasonably
requested by the Company, a written opinion of legal counsel, which shall be
reasonably satisfactory to the Company and its counsel, to the effect that the
proposed Transfer of Shares may be effected without registration under the
Securities Act and any applicable state securities laws. The Company shall have
no obligation to register the Shares for resale under the Securities Act.
4. SHARE CERTIFICATES. Each certificate representing the Shares shall be
stamped with legends in substantially the following form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN
ACCORDANCE WITH THE ACT AND THE RULES AND REGULATIONS OF THE SECURITIES
AND EXCHANGE COMMISSION THEREUNDER, AND THE SECURITIES LAWS OF ANY SUCH
STATE."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
TRANSFER LIMITATIONS AND RESTRICTIONS SET FORTH IN A STOCKHOLDERS
AGREEMENT BETWEEN THE COMPANY AND THE HOLDER HEREOF, A COPY OF WHICH IS
ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY."
5. VOTING LIMITATION; PROXY. Until the first anniversary of the Issue Date
of the Purchased Shares, the Investor agrees (i) not to vote the Purchased
Shares or Warrant Shares on any matter to which the Investor is entitled to vote
at a meeting of the stockholders of the Company (or to express consent or
dissent to corporate action in writing without a meeting), including, without
limitation, in the election of directors, unless instructed by the Board of
Directors of the Company to do so and, if so instructed, the Investor agrees to
vote the Purchased Shares or Warrant Shares at the meeting (or express consent
or dissent to corporate action in writing without a meeting) only in the manner
instructed by the Board of Directors of the Company, and (ii) unless otherwise
instructed by the Board of Directors of the Company, to attend or be represented
by proxy at all special and annual meetings of the stockholders of the Company
such that the Purchased Shares, and when issued, the Warrant Shares are present
at the meeting for purposes of determining the presence of a quorum.
Page 2
6. MISCELLANEOUS.
6.1 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed as original but all of which
together shall constitute one and the same instrument.
6.2 SEVERABILITY. Wherever possible each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement and shall be interpreted so as to be
effective and valid.
6.3 ASSIGNMENT. This Agreement shall not be assigned without the prior
written consent of the parties hereto and no rights, or any direct or indirect
interest herein, shall be transferable hereunder without the prior written
consent of the other parties hereto.
6.4 NOTICES. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) hand delivered, (ii) deposited in the
mail, registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by facsimile, addressed as set forth below or to such other address
as such party shall have specified most recently by written notice. Any notice
or other communication required or permitted to be given hereunder shall be
deemed effective (a) upon hand delivery or delivery by facsimile, with accurate
confirmation generated by the transmitting facsimile machine, at the address or
number designated below (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the first business day
following the date of sending by reputable courier service, fully prepaid,
addressed to such address, or (c) upon actual receipt of such mailing, if
mailed. The addresses for such communications shall be the addresses indicated
on Schedule A to the Purchase Agreement or at such address as the Investor or
permitted assignee shall have furnished to the Company in writing. The parties
hereto may from time to time change their address or facsimile number for
notices under this Section 6.4 by giving written notice of such changed address
or facsimile number to the other parties hereto as provided in this Section 6.4.
6.5 CONSTRUCTION AND INTERPRETATION. Should any provision of this Agreement
require judicial interpretation, the parties hereto agree that the court
interpreting or construing the same shall not apply a presumption that the terms
hereof shall be more strictly construed against one party by reason of the rule
of construction that a document is to be more strictly construed against the
party that itself or through its agent prepared the same, it being agreed that
the Company, the Investor and their respective agents have participated in the
preparation hereof.
6.6 ENTIRE AGREEMENT. This Agreement and the other written agreements
between the Company and the Investor represent the entire agreement between the
parties concerning the subject matter hereof, and all oral discussions and prior
agreements are merged herein; PROVIDED, if there is a conflict between this
Agreement and any other document executed
Page 3
contemporaneously herewith with respect to the obligations described herein, the
provision of this Agreement shall control.
6.7 ARBITRATION. Any dispute or controversy other than requests for
immediate equitable relief, arising under, out of, or in connection with or in
relation to this Agreement, and any amendments thereto or the breach thereof,
shall be determined and settled by arbitration to be held in County of Los
Angeles, State of California, in accordance with the rules of the American
Arbitration Association. Any award rendered therein shall be final and binding
on each and all of the Parties and judgment may be entered thereon in any court
of competent jurisdiction.
6.8 COSTS AND ATTORNEYS' FEES. If any action, suit, arbitration or other
proceeding is instituted to remedy, prevent or obtain relief from a default in
the performance by any party to this Agreement of its obligations under this
Agreement, the prevailing party (as determined by the court or other
fact-finder) will be entitled to recover from the losing party all actual costs
incurred in each and every such action, suit, arbitration or other proceeding,
including any and all appeals or petitions therefrom, including, without
limitation, reasonable attorneys' fees and disbursements.
6.9 SPECIFIC PERFORMANCE. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other parties to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereto agrees that in the event of any such breach the aggrieved
parties shall be entitled to the remedy of specific performance of such
covenants and agreements and injunctive and other equitable relief in addition
to any other remedy to which they may be entitled, at law or in equity.
6.10 AMENDMENT AND WAIVER. This Agreement may be amended or modified only
upon the written consent of the Company and the Investor. The obligations of the
Company and the rights of the Investor under the Agreement may be waived only
with the written consent of the Investor.
6.11 GOVERNING LAW. THIS AGREMEENT IS MADE AND ENTERED INTO IN THE STATE OF
CALIFORNIA AND THE LAWS OF SAID STATE SHALL GOVERN THE VALIDITY AND
INTERPRETATION HEREOF AND THE PERFORMANCE BY THE PARTIES HERETO OF THEIR
RESPECTIVE DUTIES AND OBLIGATIONS HEREUNDER.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE]
Page 4
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above-written.
TAG-IT PACIFIC, INC.
By /S/ RONDA SALLMEN
------------------------------------
Ronda Sallmen
Title: Chief Financial Officer
INVESTOR
/S/ HARRIS TOIBB
-------------------------------------------
By: Harris Toibb
Page 5