SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Soliciting Material Under Rule
[_] Confidential, For Use of the 14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
TAG-IT PACIFIC, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total fee paid:
________________________________________________________________________________
[_] Fee paid previously with preliminary materials:
________________________________________________________________________________
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount previously paid:
________________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
________________________________________________________________________________
3) Filing Party:
________________________________________________________________________________
4) Date Filed:
________________________________________________________________________________
TAG-IT PACIFIC, INC.
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
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TIME............................ 10:00 a.m. Pacific Time on February 11, 2004.
PLACE........................... Tag-It Pacific, Inc.'s Corporate Headquarters
at 21900 Burbank Boulevard, Suite 270,
Woodland Hills, California 91367.
ITEMS OF BUSINESS............... (1) To approve the issuance of 5,728,180
shares of common stock issuable upon
conversion of the outstanding shares of
Series D Preferred Stock.
(2) To transact such other business as may
properly come before the Special Meeting
and any adjournment or postponement.
RECORD DATE..................... You can vote if you were a stockholder of the
Company at the close of business on January
5, 2004.
PROXY VOTING.................... All stockholders are cordially invited to
attend the Special Meeting in person.
However, to ensure your representation at the
Special Meeting, you are urged to vote
promptly by signing and returning the
enclosed Proxy card. IF YOUR SHARES ARE HELD
IN STREET NAME, YOU MUST OBTAIN A PROXY,
EXECUTED IN YOUR FAVOR, FROM THE HOLDER OF
RECORD IN ORDER TO BE ABLE TO VOTE AT THE
SPECIAL MEETING.
Woodland Hills, California Ronda Ferguson
________________, 2004 CHIEF FINANCIAL OFFICER
IN ORDER TO ENSURE YOUR REPRESENTATION AT THE SPECIAL MEETING, PLEASE COMPLETE,
DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE AS
PROMPTLY AS POSSIBLE. IF YOU RECEIVE MORE THAN ONE PROXY CARD BECAUSE YOU OWN
SHARES REGISTERED IN DIFFERENT NAMES OR AT DIFFERENT ADDRESSES, EACH CARD SHOULD
BE COMPLETED AND RETURNED.
TAG-IT PACIFIC, INC.
21900 BURBANK BOULEVARD, SUITE 270
WOODLAND HILLS, CALIFORNIA 91367
(818) 444-4100
PROXY STATEMENT
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These Proxy materials are delivered in connection with the solicitation
by the Board of Directors of Tag-It Pacific, Inc., a Delaware corporation
("Tag-It," the "Company", "we", or "us"), of Proxies to be voted at our 2004
Special Meeting of stockholders and at any adjournments or postponements.
You are invited to attend our Special Meeting of stockholders on
February 11, 2004, beginning at 10:00 a.m. Pacific Time. The meeting will be
held at the Company's corporate headquarters at 21900 Burbank Boulevard, Suite
270, Woodland Hills, California 91367.
STOCKHOLDERS ENTITLED TO VOTE.
Holders of Tag-It common stock and convertible redeemable series C
preferred stock at the close of business on January 5, 2004 are entitled to
receive this notice and to vote their shares at the Special Meeting. As of
January 5, 2004, there were _____________ shares of common stock outstanding.
Holders of our convertible redeemable series C preferred stock have the right to
vote with our common stock based on the number of common shares that the series
C preferred shares could be converted into on the record date. As of January 5,
2004, the outstanding shares of convertible redeemable series C preferred stock
were convertible into 607,288 shares of common stock, which shares are entitled
to vote with our common stock.
MAILING OF PROXY STATEMENTS.
We anticipate mailing this Proxy Statement and the accompanying Proxy
to stockholders on or about January 16, 2004.
PROXIES.
Your vote is important. If your shares are registered in your name, you
are a share owner of record. If your shares are in the name of your broker or
bank, your shares are held in street name. We encourage you to vote by Proxy so
that your shares will be represented and voted at the meeting even if you cannot
attend. All share owners can vote by written Proxy card. Your submitting the
enclosed Proxy will not limit your right to vote at the Special Meeting if you
later decide to attend in person. IF YOUR SHARES ARE HELD IN STREET NAME, YOU
MUST OBTAIN A PROXY, EXECUTED IN YOUR FAVOR, FROM THE HOLDER OF RECORD IN ORDER
TO BE ABLE TO VOTE AT THE MEETING. If you are a share owner of record, you may
revoke your Proxy at any time before the meeting either by filing with the
Secretary of the Company, at its principal executive offices, a written notice
of revocation or a duly executed Proxy bearing a later date, or by attending the
Special Meeting and expressing a desire to vote your shares in person. All
shares entitled to vote and represented by properly executed Proxies received
prior to the Special Meeting, and not revoked, will be voted at the Special
Meeting in accordance with the instructions indicated on those Proxies. If no
instructions are indicated on a properly executed Proxy, the shares represented
by that Proxy will be voted as recommended by the Board of Directors.
QUORUM.
The presence, in person or by Proxy, of a majority of the votes
entitled to be cast by the stockholders entitled to vote at the Special Meeting
is necessary to constitute a quorum. Abstentions and broker non-votes will be
included in the number of shares present at the Special Meeting for determining
the presence of a quorum. Broker non-votes occur when a broker holding customer
securities in street name has not received voting instructions from the customer
on certain non-routine matters and, therefore, is barred by the rules of the
applicable securities exchange from exercising discretionary authority to vote
those securities.
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VOTING.
Each share of Tag-It common stock is entitled to one vote on each
matter properly brought before the meeting. In addition, each share of
convertible redeemable series C preferred stock is entitled to one vote for each
share of common stock into which it is convertible on each matter properly
brought before the meeting.
APPROVAL OF ISSUANCE OF COMMON STOCK UPON CONVERSION OF SERIES D PREFERRED
STOCK.
The approval of the issuance of up to 5,728,180 shares of our common
stock issuable upon conversion of our outstanding shares of Series D Preferred
Stock will require the affirmative vote of a majority of the shares of common
stock present or represented and entitled to vote at the Special Meeting. For
purposes of the vote to approve the issuance of common stock upon conversion of
the Series D Preferred Stock, abstentions will be counted toward the tabulation
of votes cast on the proposal and will have the same effect as negative votes,
while broker non-votes will not be counted as votes cast for or against such
matters.
VOTING AGREEMENTS.
Sanders Morris Harris Inc., which acted as placement agent for the Company
with respect to the sale of the shares of Series D Preferred Stock, has entered
into voting agreements with certain stockholders of the Company, including
members of management, holding approximately 51% of the Company's outstanding
voting securities (the "Voting Agreements"), pursuant to which such stockholders
have agreed to vote all shares subject to the Voting Agreements in favor of the
proposal to approve issuance of shares of our common stock upon conversion of
the preferred stock. Concurrently with the execution of the Voting Agreements,
each such stockholder also delivered to Sanders Morris Harris an irrevocable
proxy appointing Sanders Morris Harris as proxy to vote the shares in accordance
with the Voting Agreements.
OTHER MATTERS.
At the date this Proxy Statement went to press, we do not know of any
other matter to be raised at the Special Meeting. However, if any other business
shall properly come before the Special Meeting or any adjournment thereof, the
persons named as proxies will have discretionary authority to vote the shares
represented by the accompanying proxy in accordance with their best judgment.
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ITEM 1: APPROVAL OF ISSUANCE OF COMMON STOCK UPON CONVERSION OF SERIES D
PREFERRED STOCK
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Item 1 is the approval of the issuance of up to 5,728,180 shares of our
common stock upon conversion of our outstanding shares of Series D Preferred
Stock. The Board of Directors has approved, contingent upon approval by the
Company's stockholders at the Special Meeting, the issuance of up to 5,728,180
shares of our common stock (the "Series D Conversion Shares") upon conversion of
the Company's outstanding shares of Series D Preferred Stock. The Board of
Directors is submitting the proposal to approve the issuance of the Series D
Conversion Shares to the stockholders for approval at the Special Meeting.
The Series D Conversion Shares, when issued, would become part of the
existing class of common stock and would have the same rights and privileges as
the shares of common stock now issued and outstanding. There are no preemptive
rights relating to the common stock. As of December 15, 2004, there were
11,513,409 shares of our common stock issued and outstanding. If issued, the
Series D Conversion Shares would represent approximately 33% of our issued and
outstanding shares of common stock. Our common stock is listed on the American
Stock Exchange. The continued listing requirements of the American Stock
Exchange prohibit us from issuing shares of common stock in a non-public
offering prior to obtaining stockholder approval if the price per share of the
securities in the offering is less than the greater of book value or market
value of our common stock and the proposed issuance would result in the issuance
of 20% or more of the common stock or voting power of the Company before the
issuance. Assuming immediate conversion of all of the shares of Preferred Stock,
the total number of Series D Conversion Shares would be in excess of the 20%
threshold. Therefore, we may not issue the Series D Conversion Shares unless and
until the issuance has been approved by our stockholders.
PRIVATE PLACEMENT OF SERIES D PREFERRED STOCK.
In December 2003, we entered into Subscription Agreements with certain
investors pursuant to which we sold 572,818 shares of Series D Preferred Stock
(the "Preferred Shares") at a price of $44.00 per share in a private placement
transaction. We received proceeds of approximately $23,200,000 in this
transaction, after payment of placement agent fees and other offering expenses.
We intend to use the proceeds for repayment of debt and general corporate
purposes.
Sanders Morris Harris Inc. acted as placement agent in connection with
the December 2003 private placement financing transaction. For its services as
placement agent, we paid Sanders Morris Harris a fee equal to 7.5% of our gross
proceeds from the financing ($1,890,299). We also paid for the reasonable
out-of-pocket expenses incurred by Sanders Morris Harris and all investors in
the amount of $45,000. In addition, we issued to Sanders Morris Harris a warrant
to purchase 572,818 shares of our common stock at an exercise price of $4.74 per
share. The warrants have a term of 5 years. The warrants vest and become
exercisable in full on June 18, 2004.
We entered into a registration rights agreement with the purchasers of
the Preferred Shares. Pursuant to this registrant rights agreement, we agreed to
file a registration statement on Form S-3 registering the resale by the
investors of the Series D Conversion Shares and to keep the registration
statement effective until the later of one year or until all the Series D
Conversion Shares held by the investors may be sold by them pursuant to Rule 144
promulgated under the Securities Act of 1933. This registration rights agreement
also provides that if we do not register for resale the Series D Conversion
Shares within 60 days of the closing date (or 150 days in the event of a full
review of the registration statement by the Securities and Exchange Commission),
then we must pay each of the investors 1% of the per share purchase price paid
by such investor for each Preferred Share purchased for each month thereafter
that we do not register the shares. The expenses of such registration, other
than selling expenses (including broker's fees and commissions), will be borne
by us.
REASONS FOR THE PRIVATE PLACEMENT.
The proceeds of the private placement financing transaction will
strengthen our working capital and will support the integration and expansion of
our operations to exploit our rights under our TALON trade name and the
expansion of our operations in the Asian and Caribbean markets. This private
placement will also assist us in further developing our waistband technology
under our TEKFIT division. We believe the private placement financing will allow
us to maximize growth opportunities that would otherwise be left in incubation.
We also want
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to continue building and improving our processes in order to exceed the
expectations of our new and existing customers.
TERMS OF SERIES D PREFERRED STOCK.
Except as required by law, the Preferred Shares have no voting rights.
The Preferred Shares accrue dividends, commencing on June 1, 2004, at an annual
rate of 5% of the initial stated value of $44.00 per share, payable quarterly.
In the event of a liquidation, dissolution or winding-up of the Company, the
Preferred Shares will be entitled to receive, prior to any distribution on the
common stock, a distribution equal to the initial stated value of the Preferred
Shares plus all accrued and unpaid dividends.
If the stockholders approve the issuance of the Series D Conversion
Shares, each Preferred Share will be automatically converted into 10 shares of
our common stock (as adjusted for stock dividends, combinations, splits or
similar events), for an aggregate of 5,728,180 shares of common stock. If the
stockholders do not approve the issuance of the conversion shares at the Special
Meeting, the Preferred Shares will not be convertible into common stock.
CERTAIN EFFECTS OF THE PROPOSAL.
The Board of Directors believes that the approval of the issuance of
the Series D Conversion Shares is in the best interests of the Company and the
stockholders. However, the following should be considered by a stockholder in
deciding how to vote upon the proposal.
DILUTION. If the issuance of the Series D Conversion Shares is approved
by the stockholders at the Special Meeting, the holders of the Preferred Shares
would automatically have each Preferred Share converted into 10 shares of common
stock, or an aggregate of 5,728,180 shares of common stock. When issued, the
Series D Conversion Shares would represent approximately 33% of the Company's
outstanding shares of common stock, based upon the 11,513,409 shares of our
common stock outstanding as of December 15, 2003. As a result, following
conversion of the Preferred Shares and issuance of the Series D Conversion
Shares, our stockholders would experience substantial dilution in the percentage
of Company equity they own.
EFFECT OF ISSUANCE OF SERIES D CONVERSION SHARES BELOW MARKET PRICE.
The effective issuance price of the Series D Conversion Shares is $4.40 per
share. The issuance of the Series D Conversion Shares could depress the market
price of, and reduce trading activity in, our common stock by increasing the
number of shares outstanding. Such downward pressure on our stock price could
encourage short sales by certain investors that could place further pressure on
the price of our common stock.
PRINCIPAL EFFECTS OF NON-APPROVAL. If the issuance of the Series D
Conversion Shares is not approved, the Preferred Shares will not be convertible
into common stock. Commencing on June 1, 2004, the holders of the Preferred
Shares will be entitled to receive a dividend at an annual rate of 5%. We cannot
pay a dividend on our common stock unless all accrued dividends on the Preferred
Shares have been paid in full. Additionally, in the event of a voluntary or
involuntary liquidation, dissolution or winding up of the Company, the holders
of the Preferred Shares will be entitled to receive $44.00 per share, plus
accrued and unpaid dividends before any distributions are made to the holders of
our common stock.
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BOARD RECOMMENDATION AND VOTE.
The approval of the issuance of the Series D Conversion Shares will
require the affirmative vote of a majority of the shares present or represented
and entitled to vote at the Special Meeting. The Board of Directors is of the
opinion that the issuance of the Series D Conversion Shares is in the best
interests of the Company and recommends a vote for the approval of the issuance
of the Series D Conversion Shares. All Proxies will be voted to approve the
issuance of the Series D Conversion Shares unless a contrary vote is indicated
on the enclosed Proxy card.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPROVAL
OF ISSUANCE OF UP TO 5,728,180 SHARES OF COMMON STOCK UPON CONVERSION OF THE
SERIES D PREFERRED STOCK.
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PRINCIPAL STOCKHOLDERS
The following table presents information regarding the beneficial
ownership of our common stock as of January 5, 2004:
o each person who is known to us to be the beneficial owner of
more than 5.0% of our outstanding common stock;
o each of our directors;
o the Named Executive Officers; and
o all of our directors and executive officers as a group
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission that deem shares to be beneficially owned by
any person who has or shares voting or investment power with respect to such
shares. Shares of common stock under warrants or options currently exercisable
or exercisable within 60 days of the date of this information are deemed
outstanding for purposes of computing the percentage ownership of the person
holding such warrants or options but are not deemed outstanding for computing
the percentage ownership of any other person. As a result, the percentage of
outstanding shares of any person as shown in this table does not necessarily
reflect the person's actual ownership or voting power with respect to the number
of shares of common stock actually outstanding at January 5, 2004. Unless
otherwise indicated, the persons named in this table have sole voting and sole
investment power with respect to all shares shown as beneficially owned, subject
to community property laws where applicable.
The address of each person listed is in our care, at 21900 Burbank
Boulevard, Suite 270, Woodland Hills, California 91367, unless otherwise set
forth below such person's name.
NUMBER OF PERCENT
NAME OF BENEFICIAL OWNER SHARES OF CLASS
---------------------------------------------------- --------- --------
DIRECTORS:
Colin Dyne (1) ..................................... 1,792,580 14.9%
Mark Dyne (2) ...................................... 1,090,512 9.1%
Kevin Bermeister (3) ............................... 222,217 1.9%
Jonathan Burstein (4) .............................. 262,038 2.2%
Brent Cohen (5) .................................... 70,000 *
Michael Katz (6) ................................... 50,000 *
NON-DIRECTOR NAMED EXECUTIVE OFFICERS:
Jonathan Markiles (7) .............................. 133,248 1.1%
Ronda Ferguson (8) ................................. 108,750 *
5% HOLDERS:
Gerard Guez
3151 East Washington Blvd
Los Angeles, CA 90023 ............................. 1,005,000 8.7%
Todd Kay
3151 East Washington Blvd
Los Angeles, CA 90023 ............................. 1,005,000 8.7%
Harris Toibb
307 21st Street
Santa Monica, CA 90402 (9) ........................ 1,290,498 10.9%
The Estate of Harold Dyne (10) ..................... 707,507 6.1%
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NUMBER OF PERCENT
NAME OF BENEFICIAL OWNER SHARES OF CLASS
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Coats North America Consolidated, Inc.
Two Lake Point Plaza
4135 South Stream Blvd
Charlotte, NC 28217 (11) .......................... 607,288 5.0%
Directors and executive officers as a
group (8 persons) (12) ........................... 3,729,245 28.5%
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* Less than one percent.
(1) Includes 535,000 shares of common stock reserved for issuance upon exercise
of stock options which currently are exercisable, 350,000 shares of common
stock owned by Commerce Investment Group, LLC and 250,000 shares of common
stock held by a trust, all of which are voted by Colin Dyne pursuant to a
voting agreement.
(2) Includes 268,000 shares of common stock reserved for issuance upon exercise
of stock options which currently are exercisable, 83,334 shares of common
stock reserved for issuance upon exercise of warrants which currently are
exercisable and 111,111 shares of common stock reserved for issuance upon
conversion of debt which is currently convertible.
(3) Includes 65,000 shares of common stock reserved for issuance upon exercise
of stock options which currently are exercisable.
(4) Includes 166,250 shares of common stock reserved for issuance upon exercise
of stock options which currently are exercisable.
(5) Consists of 70,000 shares of common stock reserved for issuance upon
exercise of stock options which currently are exercisable.
(6) Consists of 50,000 shares of common stock reserved for issuance upon
exercise of stock options which currently are exercisable.
(7) Includes 80,000 shares of common stock reserved for issuance upon exercise
of stock options which currently are exercisable and 39,235 shares of
common stock reserved for issuance upon exercise of warrants which
currently are exercisable.
(8) Consists of 108,750 shares of common stock reserved for issuance upon
exercise of stock options which are currently exercisable.
(9) Includes 333,332 shares of common stock reserved for issuance upon exercise
of warrants which are currently exercisable.
(10) Harold Dyne served as our President until his death in October 1999. The
estate of Mr. Dyne exercises beneficial ownership over shares which he
previously held. The shares consist of 659,507 shares of common stock held
by H&A Dyne Holdings, LP and 48,000 shares of common stock reserved for
issuance upon exercise of stock options which currently are exercisable.
(11) Consists of 759,494 shares of series C convertible redeemable preferred
stock, convertible into 607,288 shares of common stock. The shares are
convertible at the election of the holder after September 20, 2003 and are
entitled to vote with our common stock based on the number of common shares
that the series C preferred shares could be converted into on the record
date.
(12) Includes 1,343,000 shares of common stock reserved for issuance upon
exercise of stock options which currently are exercisable, 350,000 shares
of common stock owned by Commerce Investment Group, LLC and 250,000 shares
of common stock held by a trust, all of which are voted by Colin Dyne
pursuant to a voting agreement, 111,111 shares of common stock reserved for
issuance upon conversion of debt which is currently convertible and 122,569
shares of common stock reserved for issuance upon exercise of warrants
which currently are exercisable.
The information as to shares beneficially owned has been individually
furnished by the respective directors, named executive officers, and other
stockholders of the company, or taken from documents filed with the Securities
and Exchange Commission.
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STOCKHOLDER PROPOSALS
Any stockholder who intends to present a proposal at the 2004 Annual
Meeting of stockholders for inclusion in the Company's Proxy Statement and Proxy
form relating to such Annual Meeting must submit such proposal to the Company at
its principal executive offices by February 14, 2004. In addition, in the event
a stockholder proposal is not received by the Company by April 16, 2004, the
Proxy to be solicited by the Board of Directors for the 2004 Annual Meeting will
confer discretionary authority on the holders of the Proxy to vote the shares if
the proposal is presented at the 2004 Annual Meeting without any discussion of
the proposal in the Proxy Statement for such meeting.
SEC rules and regulations provide that if the date of the Company's
2004 Annual Meeting is advanced or delayed more than 30 days from the date of
the 2003 Annual Meeting, stockholder proposals intended to be included in the
proxy materials for the 2004 Annual Meeting must be received by the Company
within a reasonable time before the Company begins to print and mail the proxy
materials for the 2004 Annual Meeting. Upon determination by the Company that
the date of the 2004 Annual Meeting will be advanced or delayed by more than 30
days from the date of the 2003 Annual Meeting, the Company will disclose such
change in the earliest possible Quarterly Report on Form 10-Q.
SOLICITATION OF PROXIES
It is expected that the solicitation of Proxies will be by mail. The
cost of solicitation by management will be borne by the Company. The Company
will reimburse brokerage firms and other persons representing beneficial owners
of shares for their reasonable disbursements in forwarding solicitation material
to such beneficial owners. Proxies may also be solicited by certain of the
Company's directors and officers, without additional compensation, personally or
by mail, telephone, telegram or otherwise.
ANNUAL REPORT ON FORM 10-K
THE COMPANY'S ANNUAL REPORT ON FORM 10-K, WHICH HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR ENDED DECEMBER 31, 2002, WILL BE
MADE AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO RONDA
FERGUSON, CHIEF FINANCIAL OFFICER, TAG-IT PACIFIC, INC., 21900 BURBANK
BOULEVARD, SUITE 270, WOODLAND HILLS, CALIFORNIA 91367.
ON BEHALF OF THE BOARD OF DIRECTORS
Ronda Ferguson
Chief Financial Officer
Tag-It Pacific, Inc.,
21900 Burbank Boulevard, Suite 270,
Woodland Hills, California 91367
____________, 2004
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TAG-IT PACIFIC, INC.
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a stockholder of Tag-It Pacific, Inc., a Delaware corporation
(the "Company"), hereby nominates, constitutes and appoints Colin Dyne and Ronda
Ferguson, or either one of them, as proxy of the undersigned, each with full
power of substitution, to attend, vote and act for the undersigned at the
Special Meeting of Stockholders of the Company, to be held on February 11, 2004,
and any postponements or adjournments thereof, and in connection therewith, to
vote and represent all of the shares of the Company which the undersigned would
be entitled to vote with the same effect as if the undersigned were present, as
follows:
A VOTE FOR THE PROPOSAL IS RECOMMENDED BY THE BOARD OF DIRECTORS:
Proposal 1. To approve the issuance of up to 5,728,180 shares of common
stock issuable upon conversion of the outstanding shares of Series
D Preferred Stock.
|_| FOR |_| AGAINST |_| ABSTAIN
The undersigned hereby revokes any other proxy to vote at the Special Meeting,
and hereby ratifies and confirms all that said attorneys and proxies, and each
of them, may lawfully do by virtue hereof. With respect to matters not known at
the time of the solicitation hereof, said proxies are authorized to vote in
accordance with their best judgment.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH ABOVE OR,
TO THE EXTENT NO CONTRARY DIRECTION IS INDICATED, WILL BE TREATED AS A GRANT OF
AUTHORITY TO VOTE FOR ALL PROPOSALS. IF ANY OTHER BUSINESS IS PRESENTED AT THE
SPECIAL MEETING, THIS PROXY CONFERS AUTHORITY TO AND SHALL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF THE PROXIES.
The undersigned acknowledges receipt of a copy of the Notice of Special Meeting
dated January ____, 2004 and the accompanying Proxy Statement relating to the
Special Meeting.
Dated:__________________, 2004
Signature:____________________
Signature:____________________
Signature(s) of Stockholder(s)
(See Instructions Below)
The Signature(s) hereon should
correspond exactly with the
name(s) of the Stockholder(s)
appearing on the Share
Certificate. If stock is held
jointly, all joint owners
should sign. When signing as
attorney, executor,
administrator, trustee or
guardian, please give full
title as such. If signer is a
corporation, please sign the
full corporation name, and
give title of signing officer.
|_| Please indicate by checking this box if you anticipate attending the
Special Meeting.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE