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.