UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
12b-25
SEC
File
Number: 000-29230
NOTIFICATION
OF LATE FILING
(Check
One):
| |X| Form 10-K | |_| Form 20-F | |_| Form 11-K | |_| Form 10-Q | |_| Form N-SAR | |_| Form N-CSR |
For
Period Ended: October 31, 2005
[
]
Transition Report on Form 10-K
[
]
Transition Report on Form 20-F
[
]
Transition Report on Form 11-K
[
]
Transition Report on Form 10-Q
[
]
Transition Report on Form N-SAR
For
the
Transition Period Ended: N/A
Nothing
in this form shall be construed to imply that the Commission has verified any
information contained herein.
If
the
notification relates to a portion of the filing checked above, identify the
Item(s) to which the notification relates:
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PART
I-REGISTRANT INFORMATION
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Take-Two
Interactive Software, Inc.
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Full
Name of Registrant
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Former
Name if Applicable
622
Broadway
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Address
of Principal Executive Office (Street and Number)
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New
York, NY 10012
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(City,
State and Zip Code)
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PART
II - RULES
12b-25(b) AND (c)
If
the
subject report could not be filed without unreasonable effort or expense and
the
registrant seeks relief pursuant to Rule 12b-25(b), the following should be
completed. (Check box if appropriate)
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(a)
The reasons described in reasonable detail in Part III of this
form could
not be eliminated without unreasonable effort or expense;
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[X]
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(b)
The subject annual report, semi-annual report, transition report
on Form
10-K, Form 20-F, 11-K , Form N-SAR or Form N-CSR, or portion thereof,
will
be filed on or before the fifteenth calendar day following the
prescribed
due date; or the subject quarterly report or transition report
on Form
10-Q, or portion thereof will be filed on or before the fifth calendar
day
following the prescribed due date; and
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(c)
The accountant's statement or other exhibit required by Rule 12b-25(c)
has
been attached if applicable.
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PART
III -NARRATIVE
State
below in reasonable detail the reasons why Forms 10-K, 20-F, 11-K, 10-Q, N-SAR,
N-CSR or the transition report or portion thereof could not be filed within
the
prescribed time period. (Attach extra sheets if needed.)
PLEASE
SEE ATTACHED SHEET FOR RESPONSE TO PART III.
PART
IV - OTHER INFORMATION
(1)
Name
and
telephone number of person to contact in regard to this notification
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Karl
H. Winters
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646
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536-3002
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||
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(Name)
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(Area
Code)
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(Telephone
Number)
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(2)
Have
all
other periodic reports required under Section 13 or 15(d) of the Securities
Exchange Act of 1934 or Section 30 of the Investment Company Act of 1940 during
the preceding 12 months or for such shorter period that the registrant was
required to file such report(s) been filed? If answer is
no,
identify report(s). |X|
Yes |_|
No
(3)
Is
it
anticipated that any significant change in results of operations from the
corresponding period for the last fiscal year will be reflected by the earnings
statements to be included in the subject report or portion thereof?
|X|
Yes |_|
No
If
so
attach an explanation of the anticipated change, both narratively and
quantitatively, and, if appropriate, state the reasons why a reasonable estimate
of the results cannot be made.
The
Registrant anticipates that the financial results for the year ended October
31,
2005 will be as reflected in its press release dated January 5, 2006.
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Take-Two
Interactive Software, Inc.
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(Name
of
Registrant as Specified in Charter)
has
caused this notification to be signed on its behalf by the undersigned hereunto
duly authorized.
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Date
January 17, 2006
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By/s/
Karl H.
Winters
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Karl
H. Winters, Chief Financial
Officer
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Instruction:
The form may be signed by an executive officer of the registrant or by any
other
duly authorized representative. The name and title of the person signing the
form shall be typed or printed beneath the signature. If the statement is signed
on behalf of the registrant by an authorized representative (other than an
executive officer), evidence of the representative's authority to sign on behalf
of the registrant shall be filed with the form.
ATTENTION
Intentional
misstatements or omissions of fact constitute Federal criminal violations (See
18 U.S.C. 1001).
RESPONSE
TO PART III
Although
the Registrant has dedicated significant resources to completing its Annual
Report on Form 10-K for the fiscal year ended October 31, 2005 (the “Form
10-K”), it has not been able to complete the Form 10-K on a timely basis because
management
is currently finalizing its financial statements and other disclosures for
inclusion in its Form 10-K and the required assessment of its internal control
over financial reporting as of October 31, 2005, as required by Section 404
of
the Sarbanes-Oxley Act of 2002 ("Section 404"). Although
the Registrant has made substantial progress in completing its Form 10-K, there
have been delays primarily attributable to the significant amount of work
imposed by the new requirements under Section 404. The
Registrant currently anticipates filing the Form 10-K on or before the end
of
the extended deadline.
While
management has not yet completed its assessment of the Registrant’s internal
control over financial reporting, the Registrant’s management has concluded, as
of the date of this filing, that the following material weaknesses existed
as of
October 31, 2005. A material weakness is a control deficiency, or a combination
of control deficiencies, that results in more than a remote likelihood that
a
material misstatement of the annual or interim financial statements will not
be
prevented or detected.
| · |
The
Registrant did not maintain effective controls over the existence
and
valuation of its accounts payable related to inventory purchases.
Specifically, the Registrant did not maintain effective controls
to
identify, analyze and reconcile amounts related to inventory purchases
included in accounts payable to underlying supporting documentation.
This
control deficiency resulted in audit adjustments to the 2005 annual
consolidated financial statements. In addition, this control deficiency
could result in a misstatement of the accounts payable, inventory
or cost
of goods accounts or related disclosures that would result in a material
misstatement of the annual or interim financial statements that would
not
be prevented or detected. Accordingly, management has determined
that this
control deficiency constitutes a material
weakness.
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| · |
The
Registrant did not maintain effective controls over the accuracy
of the
amortization of its capitalized software development costs. Specifically,
the Registrant did not have effective controls to accurately prepare
and
review inputs to a spreadsheet application used to calculate amortization
expense related to capitalized software development costs. This control
deficiency resulted in audit adjustments to the 2005 annual consolidated
financial statements. In addition, this control deficiency could
result in
a misstatement of the capitalized software development costs or
amortization expense or related disclosures that would result in
a
material misstatement of the annual or interim financial statements
that
would not be prevented or detected. Accordingly, management has determined
that this control deficiency constitutes a material
weakness.
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As
a
result of the existence of these material weaknesses identified above, the
Registrant’s management will conclude that as of October 31, 2005, the
Registrant’s internal control over financial reporting was not effective based
upon the criteria in Internal
Control-Integrated Framework
issued
by the Committee on Sponsoring Organizations of the Treadway Commission (COSO).
Also, as a result of the existence of the material weaknesses, the Registrant’s
management believes that the report of the Registrant's independent registered
public accounting firm will contain an adverse opinion with respect to the
effectiveness of the Registrant’s internal control over financial reporting as
of October 31, 2005. Since the Registrant has not yet completed its assessment
of internal control over financial reporting, the Registrant's management may
ultimately identify additional control deficiencies that may constitute
additional material weaknesses which it would also include in Management's
Report on Internal Control over Financial Reporting in the Form 10-K.
The
Registrant has taken several steps towards remediation of the material
weaknesses identified above and plans to implement appropriate corrective
actions that are required to improve the design and operating effectiveness
of
its internal control over financial reporting, including the enhancement of
its
policies, systems and procedures. A description of the Registrant’s plan and the
action steps for remediating these deficiencies will be included in its Form
10-K for the fiscal year ended October 31, 2005.
It
is
anticipated that the Registrant's results of operations will not change from
its
previously announced preliminary, unaudited revenues or earnings per share
amounts for the fiscal year ended October 31, 2005 reflected in its press
release on January 5, 2006 or any of the previously reported interim or annual
financial statements, as filed.
ATTACHMENT
TO PART IV OF
FORM
12b-25 OF
TAKE-TWO
INTERACTIVE SOFTWARE, INC.
The
Registrant expects to report approximately $1,202,595,000 in net sales for
the
fiscal year ended October 31, 2005 as compared with $1,127,751,000 for the
fiscal year ended October 31, 2004. The expected increase in net sales was
attributable to growth in the Registrant’s publishing business. The Registrant
also expects to report approximately $37,475,000 in net income or $0.53 per
diluted share for fiscal 2005 as compared to $65,378,000 in net income or $0.95
per diluted share in fiscal 2004. This decrease was primarily due to higher
operating expenses resulting from an increase in advertising and promotional
support for the Registrant’s products, increased research and development costs
relating to development studios acquired in fiscal 2005, an increase in
professional fees attributable to Sarbanes-Oxley compliance, process improvement
and legal matters, and additional rent and office expense due to recently
acquired development studios and the opening of a new office for the
Registrant’s 2K publishing labels in fiscal 2005. The decrease in the
Registrant’s income from operations was also due to the adverse impact on sales
of the Grand
Theft Auto: San Andreas
title in
North America during fiscal 2005 as a result of the ESRB’s investigation and
subsequent re-rating of this title from “M” to “AO,” which resulted in a
reduction to income from operations of approximately $18,609,000 primarily
for
product returns and related costs as a result of the re-rating.