This excerpt taken from the ATVI 8-K filed Jan 25, 2007.
On January 23, 2007, the Subcommittee, with the assistance of its counsel, reported to the Board on the status of its review of the Companys historical stock option grants over a fifteen year period from the Companys 1992 fiscal year until its 2006 fiscal year. The Subcommittee reported that it has identified a number of instances in which the actual measurement dates for certain stock option grants made during that period differ from the recorded grant dates for such awards.
Based on the information provided by the Subcommittee, the Company believes it will have to record additional non-cash stock-based compensation expense over the period from the Companys 1992 fiscal year through its current fiscal year. Until the Subcommittees review has been finalized, the Company cannot determine the aggregate amount of the additional non-cash compensation expense it will be required to record or the additional expense to be recorded in any particular fiscal period during that period of time. Until the amount of such adjustments has been determined, the Company cannot ascertain the resulting tax and accounting impacts. However, the Company believes that it is more likely than not that the amount of such additional expense relating to one or more fiscal periods from the period of review will be material and, therefore, the Company expects to restate previously issued financial statements relating to such periods.
Accordingly, on January 23, 2007, the audit committee of the Board, after consultation with the Companys management, determined that the Companys financial statements for those periods, as well as earnings releases and similar communications, relating to fiscal periods commencing with the first period under review by the Subcommittee should no longer be relied upon.