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Incorrectly dated options grants force the video game maker to restate financial results for the fourth time in five years.
Stephen Taub, CFO.com | US
December 11, 2006
Video game software maker Take-Two Interactive, best-known for its blockbuster "Grand Theft Auto" series, has become the latest among a long list of companies that will revise prior results after discovering that stock option grants had been assigned dates that differed from the actual date of the grant.
This is not the first restatement for Take-Two — the company restated its financial results three times between December 14, 2001 and February 2004. Those restatements were the result of improper accounting that sparked an SEC investigation, but were not related to stock option grants.
The company said it will restate its results for the past 10 years after a special committee of the board found that there were "improprieties" in the process of granting and documenting stock options and that incorrect measurement dates for certain stock option grants were used for financial accounting purposes.
Take-Two added that the amount of the charges and resulting tax and accounting impact have not yet been determined. However, it assured that any non-cash stock-based compensation expense recorded will not affect the company's previously reported cash positions or revenues.
The company also said that the investigation did not find misconduct by its current executive officers, including chief executive officer and president Paul Eibeler and CFO Karl Winters.
Back in October, Ryan Brant, who founded the company, resigned from a non-executive position. In 2005, he agreed to pay more than $3.6 million while Take-Two agreed to pay $7.5 million to settle a Securities and Exchange Commission complaint that it overstated results from 2000 to 2003. Brant also agreed to be barred from serving as an officer or director of a public company for five years.