Wolf Popper LLP Files Securities Fraud Class Action Against Tag-It Pacific, Inc.

17 October 2005

Wolf Popper LLP has filed a securities fraud lawsuit against Tag-It Pacific, Inc. ("Tag-It") (Amex: TAG - News) and certain of its officers and directors, on behalf of all persons who purchased Tag-It securities on the open market during the period November 14, 2003 through August 12, 2005. The action was filed in the United States District Court, Central District of California, Civil Action No: 05-7352. The complaint can be obtained from the Court or by contacting Wolf Popper.

The complaint alleges that during the Class Period, defendants caused Tag-It to issue numerous press releases and file quarterly and annual reports with the SEC, materially misstating its financial condition, accounts receivable and inventory, and falsely stating that the Company, notwithstanding the loss of its largest customers, was expanding its customer base, continuing sales growth, and improving gross margins. Unbeknownst to investors, as a result of the loss of its largest customers in 2003, millions of dollars in inventory became obsolete and millions of dollars in accounts receivable became uncollectible.

On August 15, 2005, Tag-It stunned the market when it revealed its true financial condition, informing investors that the Company was going to report a "significant operating loss" due to an increase in reserves for accounts receivable and inventory. On this news, Tag-It's share price plummeted 41.38% to $1.36 from the prior days closing of $2.32. On August 22, 2005, the Company further disclosed that it was required to increase its reserve for doubtful accounts by $6.4 million and increase its reserve for inventory obsolescence by $1.55 million.

Wolf Popper LLP has extensive experience representing shareholders in class actions and has successfully recovered billions of dollars for defrauded shareholders.

Class members who desire to be appointed a lead plaintiff in this action must file a motion with the Court no later than December 15, 2005. Class members who are interested in serving as a lead plaintiff in this action, or other persons who have questions or information regarding the prosecution of this action, are urged to call or write:

Emily DeMuro, Investor Relations (edemuro@wolfpopper.com) or James Kelly- Kowlowitz, Esq. (Jkelly@wolfpopper.com), Wolf Popper LLP, 845 Third Avenue, New York, NY, 10022, Tel.: 212.759.4600, Toll Free: 877.370.7703, Fax: 212.486.2093, Toll Free Fax: 877.370.7704, Email: irrep@wolfpopper.com

Contact: Wolf Popper LLP

Source: PR Newswire

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