Business Context and Reporting Period
Company: Take-Two Interactive Software, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: May 22, 2002
Event: Acquisition of assets related to the "Max Payne" interactive software game and franchise.
Key Financial Metrics and Transaction Details
This filing reports a specific asset acquisition rather than periodic financial results. Key transaction metrics include:
- Immediate Cash Consideration: $10 million paid from working capital.
- Equity Consideration: Issuance of 969,932 shares of restricted common stock (approximately 2.57% of total common stock).
- Contingent Consideration: Up to $8 million in incentive payments based on timely delivery and future sales of the PC version of Max Payne 2.
- Assets Acquired: All assets associated with Max Payne and a perpetual royalty-free license to underlying technology.
Note: The filing does not provide standard financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity for the reporting period.
Material Changes
The primary material change is the expansion of the Company's intellectual property portfolio through the acquisition of the Max Payne franchise from Apogee Software, Ltd. (d/b/a 3D Realms) and Remedy Entertainment, Ltd. The transaction was completed on May 22, 2002, pursuant to an Asset Purchase Agreement dated May 20, 2002.
Outlook, Risks, and Management Commentary
- Future Obligations: The Company faces potential future cash outflows of up to $8 million contingent on the performance and delivery schedule of Max Payne 2.
- Dilution: The issuance of restricted stock represents a 2.57% increase in the Company's common stock outstanding.
- Valuation: Consideration was determined through arm's length negotiations.
- Financial Statements: The filing explicitly states that no financial statements of the business acquired or pro forma financial information are included in this report.
Investor Verification Checklist
- Verify the impact of the $10 million cash outflow on the Company's current working capital and liquidity position.
- Review the specific milestones required to trigger the up to $8 million in incentive payments.
- Assess the potential dilution effect of the 969,932 newly issued shares on earnings per share.
- Examine the full text of the Asset Purchase Agreement (Exhibit 10.1) for additional covenants or liabilities not summarized in the 8-K.