8-KFinancial EventsExhibits & Filings

TAKE TWO INTERACTIVE SOFTWARE INC 8-K Report, Financial Restatement (Dec 11, 2006)

Filed December 11, 2006For Securities:TTWO

Summary

Take-Two Interactive Software, Inc. (TTWO) has filed an 8-K report on December 11, 2006, to address significant accounting issues related to past stock option grants. A Special Committee, assisted by external legal and accounting advisors, conducted an independent investigation that revealed improprieties in the granting and documentation of stock options, as well as the use of incorrect measurement dates for financial accounting purposes. As a result, Take-Two's Board of Directors and management have concluded that previously issued financial statements and related communications for periods from 1997 through April 30, 2006, are no longer reliable and will need to be restated. This restatement will involve recording non-cash charges for compensation expense related to these stock option grants. Importantly, the company noted that these charges will not impact its cash position or revenues. The investigation did not find misconduct by current executive officers, including the CEO and CFO.

Key Highlights

  • 1Take-Two is restating historical financial statements due to issues with past stock option grants.
  • 2An independent Special Committee investigation found improprieties in stock option grant processes and measurement dates.
  • 3Financial statements and communications from 1997 through April 30, 2006, are no longer reliable.
  • 4The restatement will include non-cash compensation expense charges related to stock options.
  • 5These charges will not affect the company's reported cash positions or revenues.
  • 6No misconduct was found on the part of current executive officers, including the CEO and CFO.
  • 7The company is working with its independent auditors to determine the exact impact of the restatement.

Frequently Asked Questions

Take-Two filed this 8-K to announce that it will be restating its historical financial statements due to accounting issues identified in past stock option grants. This decision follows an independent investigation by a Special Committee.

All consolidated financial statements, earnings releases, and similar communications containing financial information for periods beginning in 1997 through April 30, 2006, are affected and will no longer be relied upon.

No, the company stated that any non-cash stock-based compensation expense recorded as a result of the restatement will not affect Take-Two's previously reported cash positions or revenues.

The investigation's preliminary findings did not uncover any misconduct by the company's current Executive Officers, including CEO Paul Eibeler and CFO Karl Winters.