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SEC Filings

TAKE TWO INTERACTIVE SOFTWARE INC filed this Form 10-Q on 09/15/1997
Entire Document

during the 12-month period prior to the offering have been included in the
calculation as if they were outstanding for all periods presented, including
years that have losses where the impact of the incremental shares is

Foreign Currency Translation

The functional currency for the Company's foreign operations is the applicable
local currency. Accounts of foreign operations are translated into U.S. dollars
using quarter or year-end exchange rates for assets and liabilities and average
quarterly exchange rates for revenue and expense accounts. Adjustments resulting
from translation are included as a separate component of stockholders' equity.

3.  Business Acquisitions

On July 29, 1997, the Company acquired all the outstanding stock of GameTek UK
Limited, now known as Take-Two Interactive Software Europe Limited ("Take-Two
Europe"), and Alternative Reality Technologies, Inc. ("ART"), and certain
software games including Dark Colony, The Quivering and The Reap. Take-Two
Europe is in the business of distributing computer software games in Europe and
other international markets and ART is a developer of computer software games.
The total cost of the acquisition was $5,226,057, consisting of a cash payment
of $100,000, promissory notes in the amount of $700,000, issuance of 406,553
restricted shares of common stock valued at $3,000,000, assumption of net
liabilities of $1,376,897 and direct transaction costs of $48,162. A Form 8-K
has been filed on August 13, 1997 with the Securities and Exchange Commission in
connection with the acquisition. The allocation of the cost of the acquisition,
financial statements of GameTek UK Limited, and unaudited proforma information
will be filed by amendment within 60 days of the date the Form 8-K was filed.

The acquisition described above has been accounted for as a purchase transaction
in accordance with APB No. 16 and accordingly, the results of operations and
financial position of the acquisition is included in the Company's consolidated
financial statements from the date of acquisition. The purchase price has been
allocated on a preliminary basis pending a final determination of the fair value
of the acquired assets.

On July 31, 1997, the Company acquired all the outstanding stock of Inventory
Management Systems, Inc. ("IMSI") and Creative Alliance Group, Inc. ("CAG").
IMSI and CAG are engaged in the wholesale distribution of interactive software
games. To effect the acquisition, all of the outstanding shares of common stock
of each of IMSI and CAG were converted into an aggregate of 900,000 shares of
restricted common stock of the Company. The acquisition has been accounted for
as a pooling of interests in accordance with APB No. 16 and accordingly, the
accompanying financial statements have been restated to include the results of
operations and financial position of IMSI and CAG for all periods presented
prior to the merger.

Prior to July 31, 1997, IMSI and CAG were S corporations. Distributions of
$202,092 were paid to the S corporation shareholders prior to the acquisition.