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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: center">UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Washington, D.C. 20549</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-transform: uppercase; text-align: center"><B>FORM 8-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-transform: uppercase; text-align: center">CURRENT REPORT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Pursuant to Section 13 or 15(d) of the</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Securities Exchange Act of 1934</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Date of Report (Date of Earliest Event Reported):
<FONT STYLE="color: black">February 2, 2012</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>PEOPLE&rsquo;S LIBERATION, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Exact name of registrant as specified in its
charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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    <TD STYLE="width: 33%; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center">Delaware</TD>
    <TD STYLE="width: 34%; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center">000-16075</TD>
    <TD STYLE="width: 33%; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center">86-0449546</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(State or other jurisdiction<BR>
of incorporation)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(Commission File Number)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">(I.R.S. Employer</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Identification No.)</P></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 2.9pt; text-align: center"><B>1212 S. Flower Street, 5<SUP>th</SUP>
Floor, Los Angeles, CA 90015</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">(Address of Principal Executive
Offices/Zip Code)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(213) 745-2123</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Registrant&rsquo;s telephone number, including
area code)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">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
(<I>see</I> General Instruction A.2. below):</P>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings; background-color: lightgrey">&uml;</FONT></TD><TD>Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 3pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings; background-color: lightgrey">&uml;</FONT></TD><TD>Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 3pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings; background-color: lightgrey">&uml;</FONT></TD><TD>Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 3pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings; background-color: lightgrey">&uml;</FONT></TD><TD>Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">&nbsp;</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 1in">Item 1.01.</TD><TD STYLE="text-align: justify">Entry into a Material Definitive Agreement.</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 1in">Item 2.03</TD><TD STYLE="text-align: justify">Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
of a Registrant.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify"><B><I>Entry into Securities Purchase
Agreement</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">On February 2, 2012,
People&rsquo;s Liberation, Inc. (the &ldquo;<B><I>Company</I></B>&rdquo;) entered into a Securities Purchase Agreement (the &ldquo;<B><I>Purchase
Agreement</I></B>&rdquo;) with TCP WR Acquisition, LLC (&ldquo;<B><I>TCP</I></B>&rdquo;). Pursuant to the Purchase Agreement, the
Company agreed to sell Debentures, Warrants and Series A Preferred Stock to TCP, as further described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">The first of two
closings of the financing occurred on February 3, 2012. At the first closing, the Company sold to TCP $3,000,000 in principal amount
of Debentures, issued to TCP a Warrant to purchase 3,428,571 shares of Common Stock and issued to TCP 3,000 shares of Series A
Preferred Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">The second closing
of the financing is scheduled to occur on February 22, 2012. At the second closing, the Company agrees to sell to TCP a minimum
of $11,000,000 and up to a maximum of $11,500,000 in principal amount of Debentures and issue to TCP additional Warrants and Preferred
Stock. The second closing is subject to customary closing conditions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">The Purchase Agreement
provides TCP with piggyback registration rights with respect to TCP&rsquo;s shares of common stock, requires the Company to seek
approval from its stockholders to amend the Company&rsquo;s certificate of incorporation to increase the authorized number of shares
of the Company&rsquo;s Common Stock to at least 300 million, requires the Company to pay TCP at the second closing a fee of 2.5%
of the aggregate subscription amounts plus all legal and other fees and expenses incurred by TCP in connection with the Purchase
Agreement, and requires the Company to pay TCP an annual monitoring fee of $250,000 at the second closing and on each one year
anniversary of such date so long as TCP has the right under the Stockholders Agreement to nominate one or more directors to the
Company&rsquo;s Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">In addition, the
Purchase Agreement contains negative covenants that prohibit the Company and its subsidiaries from taking certain actions without
TCP&rsquo;s prior consent until the later of February 3, 2014 and the date that TCP&rsquo;s beneficial ownership of Common Stock
is less than 40% of the Company&rsquo;s fully diluted Common Stock. The negative covenants apply to, with certain exceptions, issuing
debt or equity securities; acquiring assets or equity interests of third parties, disposing of assets or equity interests of subsidiaries,
entering into joint ventures, or engaging in other types of mergers and acquisitions transactions; paying or declaring dividends;
settling litigation; entering into transactions with affiliates; dissolving or commencing bankruptcy proceedings; or changing the
Company&rsquo;s principal lines of business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">As a condition to
TCP&rsquo;s obligations under the Purchase Agreement, Colin Dyne entered into a lock-up agreement precluding Mr. Dyne from disposing
of any of his shares of Common Stock or other equity securities of the Company until July 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify"><B><I>Description of Debentures</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">Pursuant to the
terms of the Purchase Agreement, the Company agrees to sell a minimum of $14,000,000 and up to a maximum of $14,500,000 in principal
amount of Variable Rate Senior Secured Convertible Debentures (the &ldquo;<B><I>Debentures</I></B>&rdquo;), convertible into shares
of common stock of the Company, $0.001 par value per share (&ldquo;<B><I>Common Stock</I></B>&rdquo;), at an initial conversion
price of $0.175 per share (the &ldquo;<B><I>Conversion Price</I></B>&rdquo;). The Debentures have an interest rate of LIBOR, and
in the event payment on the Debentures is accelerated as a result of an event of default, the rate of interest will increase to
the lesser of 18% per annum or the maximum amount permitted under applicable law. Interest on the Debentures is payable, at the
Company&rsquo;s option, in cash or in Common Stock upon conversion of a Debenture (with respect to the principal amount then being
converted) and on their maturity date. The Debentures are payable on or before January 31, 2015 and a Debenture may not be prepaid
without the consent of the holder of the Debenture.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">At any time after
their issuance, the Debentures are convertible at the Conversion Price into shares of Common Stock at the option of a Debenture
holder. On the maturity date, the Company may, in whole or in part, convert the then outstanding principal amount of each Debenture
into shares of Common Stock at the Conversion Price. The Conversion Price is subject to adjustment in the case of stock splits,
stock dividends, combinations of shares and similar recapitalization transactions. The Conversion Price is also subject to adjustment
in the event (i) the Company incurs costs in excess of a specified amount in connection with the wind-down of its wholesale and
retail businesses and, (ii) in certain circumstances, in the event a non-appealable monetary judgment is entered by a court against
the Company, its subsidiaries or their assets for more than $1,250,000 (except to the extent covered by insurance) relating to
events or circumstances arising prior to February 3, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify"><B><I>Description of Subsidiary Guarantee
and Security Agreement</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">At the first closing
of the financing, the Company&rsquo;s subsidiaries, Versatile Entertainment, Inc. (&ldquo;<B><I>Versatile</I></B>&rdquo;), Bella
Rose, LLC (&ldquo;<B><I>Bella Rose</I></B>&rdquo;), William Rast Sourcing, LLC (&ldquo;<B><I>William Rast Sourcing</I></B>&rdquo;),
William Rast Licensing, LLC (&ldquo;<B><I>William Rast Licensing</I></B>&rdquo;) and William Rast Retail, LLC (&ldquo;<B><I>William
Rast Retail</I></B>&rdquo;), executed a Subsidiary Guarantee in favor of TCP pursuant to which such subsidiaries guarantee the
Company&rsquo;s obligations under the Debentures (the &ldquo;<B><I>Subsidiary Guarantee</I></B>&rdquo;). In addition, the Company
and the above mentioned subsidiaries entered into a security agreement (the &ldquo;<B><I>Security Agreement</I></B>&rdquo;) with
TCP pursuant to which such parties granted to TCP a first priority security interest in all of their assets to secure the Company&rsquo;s
obligations under the Debentures and such subsidiaries&rsquo; obligations under the Subsidiary Guarantee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify"><B><I>Description of Warrants</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">In connection with
the sale of the Debentures, the Company agreed to issue to TCP warrants to purchase a number of shares of Common Stock equal to
20% of the aggregate number of shares of Common Stock issuable upon conversion of the Debentures (the &ldquo;<B><I>Warrants</I></B>&rdquo;).
The Warrants are exercisable immediately after issuance and have a term of five years. The Warrants may be exercised at an initial
exercise price per share of $0.175, which is subject to adjustment in the case of stock splits, stock dividends, combinations of
shares and similar recapitalization transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify"><B><I>Description of Series A Preferred
Stock</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">Also in connection
with the sale of the Debentures, the Company agreed to issue one share of Series A Preferred Stock, par value $0.001 per share
(&ldquo;<B><I>Series A Preferred Stock</I></B>&rdquo;), for every $1,000.00 of principal amount of Debentures purchased by TCP.
The Series A Preferred Stock is designed to give holders of the Debentures certain voting rights while the Debentures remain outstanding.
The rights, preferences, privileges and restrictions of the Series A Preferred Stock are set forth in the Certificate of Designation
of Preferences, Rights and Limitations of Series A Preferred Stock (the &ldquo;<B><I>Certificate of Designation</I></B>&rdquo;)
described in Item 5.03 of this Current Report on Form 8-K.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify"><B><I>Description of Stockholders Agreement</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">At the second closing
of the financing, the Company, TCP and Colin Dyne, the Company&rsquo;s Chief Executive Officer and a director, intend to enter
into a Stockholders Agreement (the &ldquo;<B><I>Stockholders Agreement</I></B>&rdquo;), pursuant to which:</P>

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<TD STYLE="width: 36pt"></TD><TD STYLE="width: 22.3pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Following the second closing, the board of directors of the Company (the &ldquo;<B><I>Board</I></B>&rdquo;)
shall initially be comprised of six (6) directors and the initial persons serving on the Board shall be William Sweedler and Colin
Dyne, who shall serve as Class I Directors, Matthew D. Eby and Susan White, who shall serve as Class II Directors, and Richard
Gersten and Alvin Gossett, who shall serve as Class III Directors. William Sweedler also will serve as Chairman of the Board. The
maximum size of the Board shall not be increased to greater than seven (7) directors except with the consent of Mr. Dyne and TCP.</TD></TR></TABLE>

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<TD STYLE="width: 36pt"></TD><TD STYLE="width: 22.3pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">In connection with any director nominees to be submitted to holders of Common Stock for election
at a stockholders&rsquo; meeting, TCP shall have the right to nominate a number of nominees for director such that the number of
directors that will be serving on the Board (determined immediately following the election of directors and assuming that the director
nominees designated by TCP are elected to the Board) that have been appointed or nominated by TCP equals three.</TD></TR></TABLE>

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<TD STYLE="width: 36pt"></TD><TD STYLE="width: 22.3pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">In connection with any director nominees to be submitted to holders of Common stock for election
at a stockholders&rsquo; meeting, a committee of the Company&rsquo;s Board comprised solely of directors then serving on the Board
who were not nominated or appointed by TCP (the &ldquo;<B><I>Special Committee</I></B>&rdquo;), acting by majority vote, shall
have the right to nominate a number of nominees for director such that the number of directors that will be serving on the Board
(determined immediately following the election of directors and assuming that the director nominees designated by the Special Committee
are elected to the Board) that have been nominated by the Special Committee or who were serving on the Board prior to the closing
of the financing equals three.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 22.3pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">All board nominees other than those described above, if any, to be presented to the Company&rsquo;s
stockholders for election will be designated by the full Board, acting by majority vote.</TD></TR></TABLE>

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<TD STYLE="width: 36pt"></TD><TD STYLE="width: 22.3pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">TCP and Dyne agree to vote all of their Common Stock and voting Preferred Stock, and to take all
other necessary or desirable actions within such stockholder&rsquo;s control, and the Company agrees to take all necessary and
desirable actions within its control, to cause the election, removal and replacement of directors and members of committees as
described in the Stockholders Agreement, including by voting all of such stockholder&rsquo;s shares of Common Stock and voting
Preferred Stock for the election of the Board&rsquo;s nominees for director.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 22.3pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Mr. Dyne will provide TCP with a right of first refusal with respect to any shares of the Company&rsquo;s
voting securities that Mr. Dyne proposes to sell in a negotiated transaction.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 22.3pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">TCP will provide Mr. Dyne with a tag-along right, providing Mr. Dyne with the right to sell his
shares of the Company&rsquo;s voting securities in a transaction where TCP is selling its shares of the Company&rsquo;s voting
securities.</TD></TR></TABLE>

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<TD STYLE="width: 36pt"></TD><TD STYLE="width: 22.3pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The Company will agree to provide TCP with a preemptive right, pursuant to which TCP will have
the right, subject to certain exceptions set forth in the Stockholders Agreement, to acquire in a subsequent issuance of securities
by the Company a number of offered securities that will allow TCP to maintain its percentage ownership of the Company&rsquo;s voting
securities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify"><B>Item 1.02&#9;Termination of a Material
Definitive Agreement</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">The proceeds received
from the first closing of the financing were used in part to repay the following indebtedness of the Company and its subsidiaries:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify"><B><I>Rosenthal Indebtedness </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">All indebtedness
owed by William Rast Sourcing under its factoring facility with Rosenthal &amp; Rosenthal. In connection with the repayment, the
following agreements were terminated: (i) Factoring Agreement effective as of October 7, 2010 by and between Rosenthal &amp; Rosenthal,
Inc. and William Rast Sourcing; (ii) Inventory Security Agreement effective as of October 7, 2010 by William Rast Sourcing in favor
of Rosenthal &amp; Rosenthal, Inc.; (iii) Assignment Agreement effective as of October 7, 2010 by and between William Rast Licensing
and Rosenthal &amp; Rosenthal, Inc.; and (iv) guarantees of the Company, Bella Rose, Versatile and Colin Dyne in favor of Rosenthal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify"><B><I>Mobility Indebtedness </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">All
indebtedness owed by William Rast Licensing to Mobility Special Situations I, LLC (&ldquo;<B><I>Mobility</I></B>&rdquo;),
pursuant to that certain promissory note in the original aggregate principal amount of $750,000 issued to Mobility. Prior to
its repayment, the promissory note was secured by the assets of William Rast Licensing and was guaranteed by the Company,
William Rast Sourcing, William Rast Retail, Bella Rose and Versatile. In connection with the repayment, the following
agreements were terminated (other than with respect to obligations that survive the termination of such agreements): (i) the
Promissory Note entered into on August 13, 2010 by William Rast Licensing in favor of Mobility; (ii) Borrower Security
Agreement entered into on August 13, 2010 by William Rast Licensing in favor of Mobility; (iii) Guarantor Security Agreement
entered into on August 13, 2010 by People&rsquo;s Liberation, Versatile, Bella Rose, William Rast Sourcing and William Rast
Retail in favor of Mobility; (iv) Guaranty dated August 13, 2010 granted in favor of Mobility by People&rsquo;s Liberation,
Versatile, Bella Rose, William Rast Sourcing and William Rast Retail. Mobility is an entity owned in part by Mark Dyne, the
brother of the Company&rsquo;s Chief Executive Officer, Colin Dyne, and New Media Retail Concepts, LLC, an entity owned by
Gerard Guez, a significant beneficial owner of the Company&rsquo;s Common Stock. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify"><B><I>Monto Indebtedness </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">All indebtedness
owed by William Rast Licensing to Monto Holdings (Pty) Ltd. (&ldquo;<B><I>Monto</I></B>&rdquo;), pursuant to that certain promissory
note in the original aggregate principal amount of $1,000,000. Prior to its repayment, the promissory note was secured by the
assets of William Rast Licensing and was guaranteed by the Company, William Rast Sourcing, William Rast Retail, Bella Rose, and
Versatile. In connection with the repayment, the following agreements were terminated (other than with respect to obligations
that survive the termination of such agreements): (i) the Promissory Note entered into on August 18, 2011 by William Rast Licensing
in favor of Monto; (ii) Borrower Security Agreement entered into on August 18, 2011 by William Rast Licensing in favor of Monto;
(iii) Guarantor Security Agreement entered into on August 18, 2011 by People&rsquo;s Liberation, Versatile, Bella Rose, William
Rast Sourcing and William Rast Retail in favor of Monto; (iv) Guaranty dated August 18, 2011 granted in favor of Monto by People&rsquo;s
Liberation, Versatile, Bella Rose, William Rast Sourcing and William Rast Retail.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify"><B>Item 3.02&#9;Unregistered Sales
of Equity Securities</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">Reference is made
to the disclosure provided in response to Item 1.01 of this Form 8-K, with respect to our issuance of Debentures, Warrants and
Series A Preferred Stock, which disclosure is incorporated herein by this reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">In connection with
the financing, TCP represented to us that it is an &ldquo;accredited investor&rdquo; within the meaning of Rule 501 of Regulation
D under the Securities Act of 1933, and that TCP is receiving the securities for investment and not in connection with a distribution
thereof. The issuance and sale of these securities was exempt from the registration and prospectus delivery requirements of the
Securities Act pursuant to Section 4(2) of the Securities Act and Rule 506 thereunder as a transaction not involving any public
offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify"><B>Item 5.01&#9;Changes in Control of
Registrant</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">Reference is made
to the Purchase Agreement and the other transaction documents entered into in connection therewith, and the transactions consummated
pursuant thereto, including the issuance of the Series A Preferred Stock, Debentures and Warrants to TCP, as described in Item
1.01 of this Current Report on Form 8-K, which description is incorporated into this Item 5.01 by this reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">Pursuant to the
Purchase Agreement, at the first closing we issued to TCP a Warrant to purchase 3,428,571 shares of Common Stock and 3,000 shares
of Series A Preferred Stock. At the second closing, the Company will issue up to an additional 11,500 shares of Series A Preferred
Stock to TCP and Warrants to purchase up to 13,142,857 shares of Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">As further described
below, the holders of Series A Preferred Stock vote together as a single class with the holders of Common Stock on all matters
requiring approval of the holders of Common Stock, except that each share of Preferred Stock is entitled to 5,714 votes. Therefore,
after the first closing, TCP has the right to vote an equivalent of 17,142,000 shares of the Company&rsquo;s Common Stock and after
the second closing (assuming TCP makes an additional investment of $11,500,000.00), TCP will have the right to vote 82,853,000
shares of the Company&rsquo;s Common Stock (which excludes any shares obtained upon exercise of the warrants). This represents
32.3% and 69.7% of the Company&rsquo;s outstanding voting securities immediately after the first closing and second closing, respectively.
The issuance of the securities to TCP in the financing will allow TCP to significantly influence (after the first closing) and
control (after the second closing) all matters submitted for approval to the holders of Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">At the second closing,
the Company, TCP and Mr. Dyne will enter into the Stockholders Agreement, the terms of which are described in Item 1.01 of this
Form 8-K. Notwithstanding TCP&rsquo;s anticipated ownership of up to 69.7% of the Company&rsquo;s outstanding voting securities
immediately after the second closing, TCP will agree in the Stockholders Agreement to limit to three, out of an initial total of
six directors, the number of directors TCP has the right to nominate for election to the Board. A Special Committee of the Board
comprised solely of directors then serving on the Board who were not nominated or appointed by TCP shall have the right to nominate
the other three directors. If the size of the Board is increased to seven directors, the additional director will be appointed
to the Board by a majority vote of the entire Board of Directors. Consequently, pursuant to the Stockholders Agreement, and notwithstanding
TCP&rsquo;s ownership of a majority of our voting securities, TCP will not have the right to elect a majority of the directors
serving on the Board.<BR></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Item 3.03&#9;Material Modification to Rights
of Security Holders</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify"><B>Item 5.03&#9;Amendments to Articles
of Incorporation or Bylaws; Change in Fiscal Year.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">Reference is made
to the disclosure provided in response to Item 1.01 of this Form 8-K, with respect to our issuance of Series A Preferred Stock.
On February 3, 2012, we amended our certificate of incorporation by creating a new series of preferred stock designated Series
A Preferred Stock, by filing with the Delaware Secretary of State a Certificate of Designation of Preferences, Rights and Limitations
of Series A Preferred Stock. The Certificate of Designation sets forth the rights, preferences, privileges and restrictions of
the Series A Preferred Stock, which include the following:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The authorized number of shares of Series A Preferred Stock is 19,400, having a par value $0.001
per share and a stated value of $1,000.00 per share (&ldquo;<B><I>Stated Value</I></B>&rdquo;).</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Holders of Series A Preferred Stock are not entitled to dividends or any liquidation preference.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Series A Preferred Stock may only be transferred by a holder of such stock to a transferee if such
transfer also includes a transfer to the transferee of $1,000.00 in principal amount of Debentures for each one share of transferred
Series A Preferred Stock.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The holders of Series A Preferred Stock vote together as a single class with the holders of Common
Stock on all matters requiring approval of the holders of Common Stock, except that each share of Preferred Stock is entitled to
5,714 votes per share (which is the number of shares of Common Stock a Debenture holder would receive if it converted $1,000.00
in principal amount of Debentures into Common Stock at a conversion price of $0.175), which number of votes per share is subject
to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions relating
to the Company&rsquo;s Common Stock.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">As long as any shares of Series A Preferred Stock are outstanding, the Company will not, without
the affirmative vote of the holders of a majority of the then outstanding shares of the Series A Preferred Stock, (a) alter or
change adversely the powers, preferences or rights given to the Series A Preferred Stock or alter or amend the Certificate of Designation,
(b) amend the Company&rsquo;s certificate of incorporation or other charter documents in any manner that adversely affects any
rights of such holders, (c) increase the number of authorized shares of Series A Preferred Stock, or (d) enter into any agreement
with respect to any of the foregoing.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Upon conversion of the principal amount of a Debenture, in whole or in part, into shares of Common
Stock or upon the repayment of the principal amount of a Debenture, in whole or in part, by the Company, the Company has the right
to and will redeem from the Debenture holder at a price of $0.001 per share, a number of shares of Series A Preferred Stock determined
by dividing (i) the outstanding principal amount of the Debenture that has been repaid or converted into Common Stock, as applicable
by (ii) the Stated Value.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">The Certificate
of Designation is attached hereto as Exhibit 3.1.<BR>
<BR>
</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in"><BR>
</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in">Item 9.01.</TD><TD STYLE="text-align: justify">Financial Statements and Exhibits</TD></TR></TABLE>


<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 5%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(d)&nbsp;</FONT></TD>
    <TD STYLE="width: 10%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Exhibits.&nbsp;</FONT></TD>
    <TD STYLE="width: 5%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 80%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">The following exhibit is filed herewith:&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Exhibit&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><U>Number</U>&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><U>Description</U>&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3.1&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Certificate of Designation of Preferences, Rights and Limitations
    of Series A Preferred Stock.&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">SIGNATURE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 24pt; text-align: justify; text-indent: 0.5in">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.&nbsp;</P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">PEOPLE&rsquo;S LIBERATION, INC.</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 50%">Date:&#9;February 8, 2012&nbsp;</TD>
    <TD STYLE="width: 4%">By:&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 46%">/s/ Colin Dyne</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-top: #000000 1px solid">Colin Dyne,
Chief Executive Officer<BR></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 0.5in; text-align: center"><B>EXHIBIT INDEX</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0pt; text-indent: 0pt; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">Exhibit</TD>
    <TD STYLE="width: 85%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-decoration: underline">Number</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; text-decoration: underline">Description</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt; text-align: justify">3.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt; text-align: justify">Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock.</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0pt; text-indent: 0pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"></P>

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[{"type": "8-K", "sequence": "1", "filename": "v301695_8k.htm", "description": "FORM 8-K", "secsgml_size_bytes": 51792}]
{"company-data": {"conformed-name": "PEOPLES LIBERATION INC", "cik": "0000791770", "assigned-sic": "2300", "irs-number": "860449546", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-16075", "film-number": "12583021"}, "business-address": {"street1": "1212 S FLOWER STREET", "street2": "5TH FLOOR", "city": "LOS ANGELES", "state": "CA", "zip": "90015", "phone": "213-745-2123"}, "mail-address": {"street1": "1212 S FLOWER STREET", "street2": "5TH FLOOR", "city": "LOS ANGELES", "state": "CA", "zip": "90015"}, "former-company": {"former-conformed-name": "CENTURY PACIFIC FINANCIAL CORP", "date-changed": "19991101"}}
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
February 2, 2012
PEOPLE'S LIBERATION, INC.
(Exact name of registrant as specified in its
charter)
Delaware
000-16075
86-0449546
(State or other jurisdiction
of incorporation)
(Commission File Number)
(I.R.S. Employer
Identification No.)
1212 S. Flower Street, 5
th
Floor, Los Angeles, CA 90015
(Address of Principal Executive
Offices/Zip Code)
(213) 745-2123
(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 1.01.
Entry into a Material Definitive Agreement.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
of a Registrant.
Entry into Securities Purchase
Agreement
On February 2, 2012,
People's Liberation, Inc. (the "
Company
") entered into a Securities Purchase Agreement (the "
Purchase
Agreement
") with TCP WR Acquisition, LLC ("
TCP
"). Pursuant to the Purchase Agreement, the
Company agreed to sell Debentures, Warrants and Series A Preferred Stock to TCP, as further described below.
The first of two
closings of the financing occurred on February 3, 2012. At the first closing, the Company sold to TCP $3,000,000 in principal amount
of Debentures, issued to TCP a Warrant to purchase 3,428,571 shares of Common Stock and issued to TCP 3,000 shares of Series A
Preferred Stock.
The second closing
of the financing is scheduled to occur on February 22, 2012. At the second closing, the Company agrees to sell to TCP a minimum
of $11,000,000 and up to a maximum of $11,500,000 in principal amount of Debentures and issue to TCP additional Warrants and Preferred
Stock. The second closing is subject to customary closing conditions.
The Purchase Agreement
provides TCP with piggyback registration rights with respect to TCP's shares of common stock, requires the Company to seek
approval from its stockholders to amend the Company's certificate of incorporation to increase the authorized number of shares
of the Company's Common Stock to at least 300 million, requires the Company to pay TCP at the second closing a fee of 2.5%
of the aggregate subscription amounts plus all legal and other fees and expenses incurred by TCP in connection with the Purchase
Agreement, and requires the Company to pay TCP an annual monitoring fee of $250,000 at the second closing and on each one year
anniversary of such date so long as TCP has the right under the Stockholders Agreement to nominate one or more directors to the
Company's Board.
In addition, the
Purchase Agreement contains negative covenants that prohibit the Company and its subsidiaries from taking certain actions without
TCP's prior consent until the later of February 3, 2014 and the date that TCP's beneficial ownership of Common Stock
is less than 40% of the Company's fully diluted Common Stock. The negative covenants apply to, with certain exceptions, issuing
debt or equity securities; acquiring assets or equity interests of third parties, disposing of assets or equity interests of subsidiaries,
entering into joint ventures, or engaging in other types of mergers and acquisitions transactions; paying or declaring dividends;
settling litigation; entering into transactions with affiliates; dissolving or commencing bankruptcy proceedings; or changing the
Company's principal lines of business.
As a condition to
TCP's obligations under the Purchase Agreement, Colin Dyne entered into a lock-up agreement precluding Mr. Dyne from disposing
of any of his shares of Common Stock or other equity securities of the Company until July 31, 2012.
Description of Debentures
Pursuant to the
terms of the Purchase Agreement, the Company agrees to sell a minimum of $14,000,000 and up to a maximum of $14,500,000 in principal
amount of Variable Rate Senior Secured Convertible Debentures (the "
Debentures
"), convertible into shares
of common stock of the Company, $0.001 par value per share ("
Common Stock
"), at an initial conversion
price of $0.175 per share (the "
Conversion Price
"). The Debentures have an interest rate of LIBOR, and
in the event payment on the Debentures is accelerated as a result of an event of default, the rate of interest will increase to
the lesser of 18% per annum or the maximum amount permitted under applicable law. Interest on the Debentures is payable, at the
Company's option, in cash or in Common Stock upon conversion of a Debenture (with respect to the principal amount then being
converted) and on their maturity date. The Debentures are payable on or before January 31, 2015 and a Debenture may not be prepaid
without the consent of the holder of the Debenture.
2
At any time after
their issuance, the Debentures are convertible at the Conversion Price into shares of Common Stock at the option of a Debenture
holder. On the maturity date, the Company may, in whole or in part, convert the then outstanding principal amount of each Debenture
into shares of Common Stock at the Conversion Price. The Conversion Price is subject to adjustment in the case of stock splits,
stock dividends, combinations of shares and similar recapitalization transactions. The Conversion Price is also subject to adjustment
in the event (i) the Company incurs costs in excess of a specified amount in connection with the wind-down of its wholesale and
retail businesses and, (ii) in certain circumstances, in the event a non-appealable monetary judgment is entered by a court against
the Company, its subsidiaries or their assets for more than $1,250,000 (except to the extent covered by insurance) relating to
events or circumstances arising prior to February 3, 2012.
Description of Subsidiary Guarantee
and Security Agreement
At the first closing
of the financing, the Company's subsidiaries, Versatile Entertainment, Inc. ("
Versatile
"), Bella
Rose, LLC ("
Bella Rose
"), William Rast Sourcing, LLC ("
William Rast Sourcing
"),
William Rast Licensing, LLC ("
William Rast Licensing
") and William Rast Retail, LLC ("
William
Rast Retail
"), executed a Subsidiary Guarantee in favor of TCP pursuant to which such subsidiaries guarantee the
Company's obligations under the Debentures (the "
Subsidiary Guarantee
"). In addition, the Company
and the above mentioned subsidiaries entered into a security agreement (the "
Security Agreement
") with
TCP pursuant to which such parties granted to TCP a first priority security interest in all of their assets to secure the Company's
obligations under the Debentures and such subsidiaries' obligations under the Subsidiary Guarantee.
Description of Warrants
In connection with
the sale of the Debentures, the Company agreed to issue to TCP warrants to purchase a number of shares of Common Stock equal to
20% of the aggregate number of shares of Common Stock issuable upon conversion of the Debentures (the "
Warrants
").
The Warrants are exercisable immediately after issuance and have a term of five years. The Warrants may be exercised at an initial
exercise price per share of $0.175, which is subject to adjustment in the case of stock splits, stock dividends, combinations of
shares and similar recapitalization transactions.
Description of Series A Preferred
Stock
Also in connection
with the sale of the Debentures, the Company agreed to issue one share of Series A Preferred Stock, par value $0.001 per share
("
Series A Preferred Stock
"), for every $1,000.00 of principal amount of Debentures purchased by TCP.
The Series A Preferred Stock is designed to give holders of the Debentures certain voting rights while the Debentures remain outstanding.
The rights, preferences, privileges and restrictions of the Series A Preferred Stock are set forth in the Certificate of Designation
of Preferences, Rights and Limitations of Series A Preferred Stock (the "
Certificate of Designation
")
described in Item 5.03 of this Current Report on Form 8-K.
3
Description of Stockholders Agreement
At the second closing
of the financing, the Company, TCP and Colin Dyne, the Company's Chief Executive Officer and a director, intend to enter
into a Stockholders Agreement (the "
Stockholders Agreement
"), pursuant to which:
·
Following the second closing, the board of directors of the Company (the "
Board
")
shall initially be comprised of six (6) directors and the initial persons serving on the Board shall be William Sweedler and Colin
Dyne, who shall serve as Class I Directors, Matthew D. Eby and Susan White, who shall serve as Class II Directors, and Richard
Gersten and Alvin Gossett, who shall serve as Class III Directors. William Sweedler also will serve as Chairman of the Board. The
maximum size of the Board shall not be increased to greater than seven (7) directors except with the consent of Mr. Dyne and TCP.
·
In connection with any director nominees to be submitted to holders of Common Stock for election
at a stockholders' meeting, TCP shall have the right to nominate a number of nominees for director such that the number of
directors that will be serving on the Board (determined immediately following the election of directors and assuming that the director
nominees designated by TCP are elected to the Board) that have been appointed or nominated by TCP equals three.
·
In connection with any director nominees to be submitted to holders of Common stock for election
at a stockholders' meeting, a committee of the Company's Board comprised solely of directors then serving on the Board
who were not nominated or appointed by TCP (the "
Special Committee
"), acting by majority vote, shall
have the right to nominate a number of nominees for director such that the number of directors that will be serving on the Board
(determined immediately following the election of directors and assuming that the director nominees designated by the Special Committee
are elected to the Board) that have been nominated by the Special Committee or who were serving on the Board prior to the closing
of the financing equals three.
·
All board nominees other than those described above, if any, to be presented to the Company's
stockholders for election will be designated by the full Board, acting by majority vote.
·
TCP and Dyne agree to vote all of their Common Stock and voting Preferred Stock, and to take all
other necessary or desirable actions within such stockholder's control, and the Company agrees to take all necessary and
desirable actions within its control, to cause the election, removal and replacement of directors and members of committees as
described in the Stockholders Agreement, including by voting all of such stockholder's shares of Common Stock and voting
Preferred Stock for the election of the Board's nominees for director.
·
Mr. Dyne will provide TCP with a right of first refusal with respect to any shares of the Company's
voting securities that Mr. Dyne proposes to sell in a negotiated transaction.
·
TCP will provide Mr. Dyne with a tag-along right, providing Mr. Dyne with the right to sell his
shares of the Company's voting securities in a transaction where TCP is selling its shares of the Company's voting
securities.
·
The Company will agree to provide TCP with a preemptive right, pursuant to which TCP will have
the right, subject to certain exceptions set forth in the Stockholders Agreement, to acquire in a subsequent issuance of securities
by the Company a number of offered securities that will allow TCP to maintain its percentage ownership of the Company's voting
securities.
4
Item 1.02	Termination of a Material
Definitive Agreement
The proceeds received
from the first closing of the financing were used in part to repay the following indebtedness of the Company and its subsidiaries:
Rosenthal Indebtedness
All indebtedness
owed by William Rast Sourcing under its factoring facility with Rosenthal & Rosenthal. In connection with the repayment, the
following agreements were terminated: (i) Factoring Agreement effective as of October 7, 2010 by and between Rosenthal & Rosenthal,
Inc. and William Rast Sourcing; (ii) Inventory Security Agreement effective as of October 7, 2010 by William Rast Sourcing in favor
of Rosenthal & Rosenthal, Inc.; (iii) Assignment Agreement effective as of October 7, 2010 by and between William Rast Licensing
and Rosenthal & Rosenthal, Inc.; and (iv) guarantees of the Company, Bella Rose, Versatile and Colin Dyne in favor of Rosenthal.
Mobility Indebtedness
All
indebtedness owed by William Rast Licensing to Mobility Special Situations I, LLC ("
Mobility
"),
pursuant to that certain promissory note in the original aggregate principal amount of $750,000 issued to Mobility. Prior to
its repayment, the promissory note was secured by the assets of William Rast Licensing and was guaranteed by the Company,
William Rast Sourcing, William Rast Retail, Bella Rose and Versatile. In connection with the repayment, the following
agreements were terminated (other than with respect to obligations that survive the termination of such agreements): (i) the
Promissory Note entered into on August 13, 2010 by William Rast Licensing in favor of Mobility; (ii) Borrower Security
Agreement entered into on August 13, 2010 by William Rast Licensing in favor of Mobility; (iii) Guarantor Security Agreement
entered into on August 13, 2010 by People's Liberation, Versatile, Bella Rose, William Rast Sourcing and William Rast
Retail in favor of Mobility; (iv) Guaranty dated August 13, 2010 granted in favor of Mobility by People's Liberation,
Versatile, Bella Rose, William Rast Sourcing and William Rast Retail. Mobility is an entity owned in part by Mark Dyne, the
brother of the Company's Chief Executive Officer, Colin Dyne, and New Media Retail Concepts, LLC, an entity owned by
Gerard Guez, a significant beneficial owner of the Company's Common Stock.
Monto Indebtedness
All indebtedness
owed by William Rast Licensing to Monto Holdings (Pty) Ltd. ("
Monto
"), pursuant to that certain promissory
note in the original aggregate principal amount of $1,000,000. Prior to its repayment, the promissory note was secured by the
assets of William Rast Licensing and was guaranteed by the Company, William Rast Sourcing, William Rast Retail, Bella Rose, and
Versatile. In connection with the repayment, the following agreements were terminated (other than with respect to obligations
that survive the termination of such agreements): (i) the Promissory Note entered into on August 18, 2011 by William Rast Licensing
in favor of Monto; (ii) Borrower Security Agreement entered into on August 18, 2011 by William Rast Licensing in favor of Monto;
(iii) Guarantor Security Agreement entered into on August 18, 2011 by People's Liberation, Versatile, Bella Rose, William
Rast Sourcing and William Rast Retail in favor of Monto; (iv) Guaranty dated August 18, 2011 granted in favor of Monto by People's
Liberation, Versatile, Bella Rose, William Rast Sourcing and William Rast Retail.
5
Item 3.02	Unregistered Sales
of Equity Securities
Reference is made
to the disclosure provided in response to Item 1.01 of this Form 8-K, with respect to our issuance of Debentures, Warrants and
Series A Preferred Stock, which disclosure is incorporated herein by this reference.
In connection with
the financing, TCP represented to us that it is an "accredited investor" within the meaning of Rule 501 of Regulation
D under the Securities Act of 1933, and that TCP is receiving the securities for investment and not in connection with a distribution
thereof. The issuance and sale of these securities was exempt from the registration and prospectus delivery requirements of the
Securities Act pursuant to Section 4(2) of the Securities Act and Rule 506 thereunder as a transaction not involving any public
offering.
Item 5.01	Changes in Control of
Registrant
Reference is made
to the Purchase Agreement and the other transaction documents entered into in connection therewith, and the transactions consummated
pursuant thereto, including the issuance of the Series A Preferred Stock, Debentures and Warrants to TCP, as described in Item
1.01 of this Current Report on Form 8-K, which description is incorporated into this Item 5.01 by this reference.
Pursuant to the
Purchase Agreement, at the first closing we issued to TCP a Warrant to purchase 3,428,571 shares of Common Stock and 3,000 shares
of Series A Preferred Stock. At the second closing, the Company will issue up to an additional 11,500 shares of Series A Preferred
Stock to TCP and Warrants to purchase up to 13,142,857 shares of Common Stock.
As further described
below, the holders of Series A Preferred Stock vote together as a single class with the holders of Common Stock on all matters
requiring approval of the holders of Common Stock, except that each share of Preferred Stock is entitled to 5,714 votes. Therefore,
after the first closing, TCP has the right to vote an equivalent of 17,142,000 shares of the Company's Common Stock and after
the second closing (assuming TCP makes an additional investment of $11,500,000.00), TCP will have the right to vote 82,853,000
shares of the Company's Common Stock (which excludes any shares obtained upon exercise of the warrants). This represents
32.3% and 69.7% of the Company's outstanding voting securities immediately after the first closing and second closing, respectively.
The issuance of the securities to TCP in the financing will allow TCP to significantly influence (after the first closing) and
control (after the second closing) all matters submitted for approval to the holders of Common Stock.
At the second closing,
the Company, TCP and Mr. Dyne will enter into the Stockholders Agreement, the terms of which are described in Item 1.01 of this
Form 8-K. Notwithstanding TCP's anticipated ownership of up to 69.7% of the Company's outstanding voting securities
immediately after the second closing, TCP will agree in the Stockholders Agreement to limit to three, out of an initial total of
six directors, the number of directors TCP has the right to nominate for election to the Board. A Special Committee of the Board
comprised solely of directors then serving on the Board who were not nominated or appointed by TCP shall have the right to nominate
the other three directors. If the size of the Board is increased to seven directors, the additional director will be appointed
to the Board by a majority vote of the entire Board of Directors. Consequently, pursuant to the Stockholders Agreement, and notwithstanding
TCP's ownership of a majority of our voting securities, TCP will not have the right to elect a majority of the directors
serving on the Board.
6
Item 3.03	Material Modification to Rights
of Security Holders
Item 5.03	Amendments to Articles
of Incorporation or Bylaws; Change in Fiscal Year.
Reference is made
to the disclosure provided in response to Item 1.01 of this Form 8-K, with respect to our issuance of Series A Preferred Stock.
On February 3, 2012, we amended our certificate of incorporation by creating a new series of preferred stock designated Series
A Preferred Stock, by filing with the Delaware Secretary of State a Certificate of Designation of Preferences, Rights and Limitations
of Series A Preferred Stock. The Certificate of Designation sets forth the rights, preferences, privileges and restrictions of
the Series A Preferred Stock, which include the following:
·
The authorized number of shares of Series A Preferred Stock is 19,400, having a par value $0.001
per share and a stated value of $1,000.00 per share ("
Stated Value
").
·
Holders of Series A Preferred Stock are not entitled to dividends or any liquidation preference.
·
Series A Preferred Stock may only be transferred by a holder of such stock to a transferee if such
transfer also includes a transfer to the transferee of $1,000.00 in principal amount of Debentures for each one share of transferred
Series A Preferred Stock.
·
The holders of Series A Preferred Stock vote together as a single class with the holders of Common
Stock on all matters requiring approval of the holders of Common Stock, except that each share of Preferred Stock is entitled to
5,714 votes per share (which is the number of shares of Common Stock a Debenture holder would receive if it converted $1,000.00
in principal amount of Debentures into Common Stock at a conversion price of $0.175), which number of votes per share is subject
to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions relating
to the Company's Common Stock.
·
As long as any shares of Series A Preferred Stock are outstanding, the Company will not, without
the affirmative vote of the holders of a majority of the then outstanding shares of the Series A Preferred Stock, (a) alter or
change adversely the powers, preferences or rights given to the Series A Preferred Stock or alter or amend the Certificate of Designation,
(b) amend the Company's certificate of incorporation or other charter documents in any manner that adversely affects any
rights of such holders, (c) increase the number of authorized shares of Series A Preferred Stock, or (d) enter into any agreement
with respect to any of the foregoing.
·
Upon conversion of the principal amount of a Debenture, in whole or in part, into shares of Common
Stock or upon the repayment of the principal amount of a Debenture, in whole or in part, by the Company, the Company has the right
to and will redeem from the Debenture holder at a price of $0.001 per share, a number of shares of Series A Preferred Stock determined
by dividing (i) the outstanding principal amount of the Debenture that has been repaid or converted into Common Stock, as applicable
by (ii) the Stated Value.
The Certificate
of Designation is attached hereto as Exhibit 3.1.
7
Item 9.01.
Financial Statements and Exhibits
(d)
Exhibits.
The following exhibit is filed herewith:
Exhibit
Number
Description
3.1
Certificate of Designation of Preferences, Rights and Limitations
    of Series A Preferred Stock.
8
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.
PEOPLE'S LIBERATION, INC.
Date:	February 8, 2012
By:
/s/ Colin Dyne
Colin Dyne,
Chief Executive Officer
9
EXHIBIT INDEX
Exhibit
Number
Description
3.1
Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock.
10