The company said it will appeal the decision, bringing it before Nasdaq's Listing and Hearing Review Council. At the same time, Atari is going ahead with previously-announced plans to merge with Infogrames, its majority shareholder, who is also loaning the company $20 million in required capital.

The company received a notice in December 2007 that it had to maintain a market value of $15 million or more for at least 10 business days, which it was unable to do. On March 24th, 2008, the Nasdaq notified Atari that it would be delisted unless it requested a hearing - it did, and that hearing, held on May 1st, failed to swing things Atari's way, and the Nasdaq ruled to proceed with the delisting process.

Full announcement follows the jump.

Atari, Inc. (Nasdaq: ATAR), an interactive entertainment company, announced today that on May 7, 2008 it received a letter from The Nasdaq Stock Market stating that a Nasdaq Listing Qualifications Panel has determined to delist Atari, Inc.'s securities from the Nasdaq Global Market and will suspend trading of Atari, Inc.'s shares effective on the opening of business on May 9, 2008. Atari, Inc. plans to request a review from the Nasdaq Listing and Hearing Review Council, which could alter or dismiss the Panel's determination. However, such a request will not delay the suspension of trading. Atari, Inc. now expects to be quoted on the Pink Sheets, an electronic quotation service maintained by Pink Sheets LLC. The Pink Sheets allow continued trading of securities of delisted companies. Atari, Inc. expects its common stock to be traded on the Pink Sheets under the symbol "ATAR" or "ATAR.PK". Atari, Inc.'s common stock may also be quoted on the OTC Bulletin Board(R), a regulated quotation service for over-the-counter securities, provided one or more market makers apply to quote Atari, Inc.'s securities.

As previously announced, on December 21, 2007, the Nasdaq Listing Qualifications Department notified Atari, Inc. that, pursuant to Nasdaq Marketplace Rule 4450(e)(1), unless the market value of Atari, Inc.'s publicly held shares (which is calculated by reference to Atari, Inc.'s total shares outstanding, less any shares held by officers, directors or beneficial owners of 10% or more) maintained an aggregate market value of $15.0 million or more for a minimum of 10 consecutive business days prior to March 20, 2008, Atari, Inc.'s securities would be subject to delisting. The value of Atari, Inc.'s publicly held shares did not reach that level within the required period, and on March 24, 2008, the Nasdaq Listing Qualifications Department notified Atari, Inc. that the Nasdaq Staff had determined that Atari, Inc.'s securities were subject to delisting unless Atari, Inc. requested a hearing before a Nasdaq Listing Qualifications Panel. Atari, Inc. requested a hearing on March 27, 2008, which stayed the delisting process until the hearing was held and the hearings panel delivered a decision. The hearing was held on May 1, 2008. The Nasdaq hearings panel thereafter ruled to proceed with the delisting process and, effective May 9, 2008, Atari, Inc.'s common stock will no longer trade on The Nasdaq Global Market. Atari, Inc. plans to request that the Nasdaq Listing and Hearing Review Council review the Nasdaq hearings panel decision.

Atari, Inc. announced on April 30, 2008 that it intends to merge with its majority shareholder Infogrames Entertainment S.A. ("Infogrames") which holds approximately 51.4% of Atari, Inc.'s common shares. Atari, Inc. believes that its delisting from The Nasdaq Stock Market will not affect the pending merger transaction.

The past ten years worth of Take-Two financial reports may not be reliable and the company incorrectly granted and documented stock options, a special investigatory committee found.

While the Special Committee, which was established by Take-Two's Board of Directors to investigate post stock option grants and the accounting surrounding them, have yet to determine how much money is involved, they did say that all financial statements, earnings releases and "similar communications" issued from 1997 through April 30, 2006 should not be relied on.

The committee added that they did not find misconduct by the Company's current Executive Officers.

Take-Two also announced that they have met with the NASDAQ Listing Qualifications Panel about the letter they received saying that the company could be delisted for not filing their most recent fiscal statement on time. The company requested an extension of time, but have not heard a response yet.

While it remains to be seen just how much significant the readjustment is going to be for the company, I'd wager a guess that news that a decade's worth of financial reports are now worth about as much as Take-Two's stock is going to do some major damage to the company. Brian Crecente

New York, NY - December 11, 2006 - Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today announced that a Special Committee of its Board of Directors has reported its preliminary findings on the Company's stock option granting practices and procedures to the Board of Directors.

As previously announced, the Special Committee was established by Take-Two's Board of Directors to conduct an independent investigation relating to past stock option grants, the timing of such grants and related accounting matters. The Special Committee consists of three independent members of Take-Two's Board of Directors, and is being assisted in the investigation by outside legal counsel Kasowitz, Benson, Torres & Friedman LLP and independent accountants BDO Seidman, LLP.

The Special Committee conducted a thorough investigation, including a review and analysis of documents and emails, and interviews of current and former officers, directors, employees and advisors to Take-Two. The Special Committee found that there were improprieties in the process of granting and documenting stock options and that incorrect measurement dates for certain stock option grants were used for financial accounting purposes. The Special Committee expects to prepare a final report detailing both its findings and recommendations for remedial actions.

While Take-Two and its independent auditors are currently reviewing the findings of the Special Committee, the Board of Directors and management have concluded that the Company will need to restate historical financial statements to record non-cash charges for compensation expense relating to past stock option grants. Although the amount of such charges and the resulting tax and accounting impact has not yet been determined, all consolidated financial statements, earnings releases and similar communications issued by the Company containing financial information for periods beginning 1997 through April 30, 2006 should no longer be relied upon. Any non-cash stock-based compensation expense recorded will not affect the Company's previously reported cash positions or revenues.

The investigation did not find misconduct by the Company's current Executive Officers, including Paul Eibeler, Take-Two's Chief Executive Officer and President, and Karl Winters, Take-Two's Chief Financial Officer.

Additionally, Take-Two has met with the NASDAQ Listing Qualifications Panel regarding the previously announced NASDAQ Staff Determination letters indicating that the Company is not in compliance with NASDAQ filing requirements because, due to the Special Committee's ongoing stock options investigation, the Company has delayed the filing of its Form 10-Q for the fiscal third quarter ended July 31, 2006, and has delayed the solicitation of proxies and its annual shareholders' meeting for the fiscal year ended October 31, 2005. At the meeting with the NASDAQ Listing Qualifications Panel, Take-Two requested an extension of time to file its Form 10-Q, solicit proxies and hold an annual meeting. The Company's shares will remain listed under the ticker symbol TTWO on The NASDAQ Global Select Market pending a decision by the Panel on the Company's request.

NASDAQ is threatening to delist Take-Two interactive from their stock market for failing to file a quarterly report, as required by their rules, according to an SEC filing.

The company says that filing of their report was delayed by the internal investigation they are conducting into their own stock option grants.

Take-Two plans to request a hearing with the Listing Qualification Panel to review the ruling, until then the company will remain listed.

Wow, I'm no business school grad, but this sure doesn't sound good for Take-Two. I know they say they were expecting this ruling to come, but you can't help wait for the other shoe to drop. Often, this sort of thing is the first step down a long and ugly trail that ends in bankruptcy and people snatching up your IPs from the bowels of a warehouse during a bankruptcy auction.