The letter requests that the Company respond to the NASDAQ Listing Qualifications Panel (the "NASDAQ Panel") by January 25, 2007. The Company intends to present the NASDAQ Panel with its plans for regaining compliance with this rule by the required date.
Take-Two anticipated receipt of this notice because, as previously announced, a Special Committee consisting of independent board members has been conducting an internal investigation relating to the Company's past stock option grants, the timing of such grants and related accounting matters, which has delayed the filing of its Form 10-K. The Company previously announced that it had received a NASDAQ Staff Determination letter indicating that the Company was not in compliance with certain filing requirements with respect to its Form 10-Q for the third quarter ended July 31, 2006, and a separate NASDAQ Staff Determination letter indicating non-compliance with certain requirements due to its failure to timely solicit proxies and hold its annual shareholders meeting.
Take-Two also reported today that, following a hearing before the NASDAQ Panel, it has received written notification that the NASDAQ Panel has granted the Company's request for continued listing on The NASDAQ Stock Market, subject to the conditions that the Company file its Form 10-Q for the quarter ended July 31, 2006, and any required restatements, on or before March 19, 2007, that it hold a combined 2005 and 2006 annual meeting of stockholders on or before March 27, 2007, and that it provide the NASDAQ Panel certain information regarding the investigation into the Company's past and present policies, practices and actions relating to its stock option grants, which information has been provided.
The Company also reported today that the advisors to the Special Committee of its Board of Directors have completed and submitted to the Committee their report with respect to Take-Two's stock option granting practices and procedures. The findings and recommendations included in the report are summarized in a Form 8-K filed by the Company today with the SEC, and are consistent with the preliminary findings previously reported on December 11, 2006.
As previously announced, Take-Two will need to restate historical financial statements to record charges for compensation expense relating to certain past stock option grants, and accordingly, all consolidated financial statements, earnings releases and similar communications issued by the Company containing financial information for the periods beginning 1997 through April 30, 2006 should no longer be relied upon. The Company's management and its present and former independent auditors are currently reviewing the findings contained in the Special Committee's report to determine the stock-based compensation charges and the related tax and accounting impact on the Company's financial statements for its fiscal years ended October 31, 1997 through October 31, 2006. Any non-cash stock-based compensation expense recorded will not affect the Company's previously reported cash positions or revenues.
Take-Two plans to file its Form 10-Q for the quarter ended July 31, 2006 and its Form 10-K for the year ended October 31, 2006 with the SEC as soon as practicable. Once these filings are made and Take-Two holds its combined 2005 and 2006 annual shareholders meeting, the Company believes that it will be in compliance with The NASDAQ Stock Market's listing requirements.