Mail Stop 3561
November 8, 2005
August DeLuca
Chief Financial Officer
Tag-It Pacific, Inc.
21900 Burbank Blvd., Suite 270
Woodland Hills, CA 91367
RE: Tag-It Pacific, Inc.
Item 4.01 Form 8-K filed November 7, 2005
Form 10-K for the Year Ended December 31, 2004
Forms 10-Q for the Quarters Ended March 31, 2005 and
June
30, 2005
File No. 1-13669
Dear Mr. DeLuca:
We have reviewed your filings and have the following
comments. We have limited our review of your Form 10-K and Forms
10-
Q to the matters mentioned in this letter. Where indicated, we
think
you should revise your documents in response to these comments.
If
you disagree, we will consider your explanation as to why our
comments are 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 more information so we may
better
understand your disclosure. After reviewing this information, we
may
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 any other aspect
of
our review. Feel free to contact us at the telephone numbers
listed
at the end of this letter.
Form 8-K
1. We note that your auditors will resign at a future date.
Please
file an amendment to this Form 8-K when BDO has completed all work
as
your principal accountant. We would expect you to disclose that
there were no disagreements through November 1, 2005, and that
there
are still no disagreements through BDO`s last day as your
principal
accountant, if true. Your existing disclosure in the second
paragraph simply says that there were no disagreements in the
subsequent interim period. We believe you should revise that
disclosure to define when that subsequent interim period ends.
Please revise as necessary.
August DeLuca
Tag-It Pacific, Inc.
November 8, 2005
Page 2
2. We note that you have not yet selected new auditors. Please
file
a new Item 4.01 Form 8-K when you engage new auditors.
3. Supplementally, please provide us with any letter or written
communication to and from BDO regarding the significant
deficiencies
that constituted a material weakness as disclosed in the filing.
If
they did not advise you of the deficiencies in writing, please
tell
us how this information was communicated to you.
4. To the extent not already disclosed in your Form 8-K and Form
10-
K, please tell us in reasonable detail, the nature of each
material
weakness and the amounts involved, if any. Also, tell us:
* in what period each material weakness and accounting error or
misapplication of GAAP occurred;
* the amount of any accounting error or misapplication of GAAP;
* the reason(s) for each error or misapplication of accounting;
* whether or not you intend to restate any prior period for any
adjustments. If not, tell us why not; and
* in detail, all the steps you have taken (or plan to take) and
procedures you have implemented (or plan to implement) to correct
each concern.
5. Please provide us with a schedule of your 2004 fiscal year end
fourth quarter adjustments to close the books, or adjustments
recorded in connection with or as a result of the audit. Clearly
explain the reason for each adjustment. For each adjustment, show
us
the impact on pre-tax net loss. Quantify the net effect of all
adjustments on pre-tax net income (loss). Also, tell us why none
of
the adjustments relate to a prior period. Explain in detail why
you
believe the timing of each adjustment is appropriate.
Form 10-K
6. We note that your chief executive officer and chief financial
officer concluded that your disclosure controls and procedures are
effective "with the exceptions noted above." It is not
appropriate
to indicate your disclosure controls and procedures are effective
subject to certain limitations. Please amend your Form 10-K to
delete the qualification with respect to your disclosure controls
and
procedures and clearly state whether or not they are effective.
Also, if applicable, disclose the reasons why the disclosure
controls
and procedures are ineffective.
August DeLuca
Tag-It Pacific, Inc.
November 8, 2005
Page 3
Forms 10-Q
7. Your Forms 10-Q for both the first and second quarters of 2005
report that there were no material changes in your internal
controls
over financial reporting. Please tell us why you believe this is
appropriate in view of the material weaknesses disclosed and the
changes in management`s evaluation of your disclosure controls and
procedures between December 31, 2004 and each quarter end in 2005.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing 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.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosures in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
? the company may not assert this action 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.
As appropriate, please amend your filings and respond
to
these comments within five business days or tell us when you will
respond. Please file your response to these comments as an EDGAR
correspondence file.
If you have any questions, please call Robert Burnett at
(202)
551-3330, or in his absence, you may call me at (202) 551-3843.
Sincerely,
George Ohsiek
Branch Chief
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