THQ 2012 Annual Report Download - page 26

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occurring and thereby protect the value of the NOLs. There can be no assurance, however, that the Section 382 Rights Plan
will prevent an ownership change from occurring or protect the value of the NOLs and there can be no assurance that we will
be able to utilize our NOLs.
We cannot be certain of the future effectiveness of our internal control over financial reporting or the impact of the same on
our operations and the market price for our common stock.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we are required to include in our 10-K our assessment of
the effectiveness of our internal control over financial reporting. Furthermore, our independent registered public accounting
firm is required to report on whether it believes we maintain, in all material respects, effective internal control over financial
reporting. Although we believe that we currently have adequate internal control procedures in place, we cannot be certain that
our internal control over financial reporting will be effective in the future. The realignment of our business that took place
starting in January 2012 could have an adverse impact on the effectiveness of our internal controls in the future. If we cannot
adequately maintain the effectiveness of our internal control over financial reporting, we might be subject to sanctions or
investigation by regulatory authorities, such as the SEC. Any such action could adversely impact our financial results and the
market price of our common stock.
Catastrophic events or geo-political conditions may disrupt our business.
Our net sales are derived from sales of our games, which are developed within a relatively small number of studio
facilities located throughout the world. If a fire, flood, earthquake or other disaster, condition or event such as political
instability, civil unrest or a power outage, adversely affected any of these facilities while personnel were finishing development
of a game, it could significantly delay the release of the game, which could result in a substantial loss of sales in any given
quarter and cause our operating results to differ materially from expectations.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Our principal corporate and administrative office is located in approximately 100,000 square feet of leased space in a building
located at 29903 Agoura Road, Agoura Hills, California. Including this office, the following is a summary of the square
footage of the principal leased offices we maintained as of March 31, 2012:
Pur
p
ose
North
America Euro
p
e Asia Pacific Total
Sales and administrative 105,314 44,402 13,799 163,515
Product develo
p
ment 335,517 6,057 28,548 370,122
Total leased s
q
uare foota
g
e 440,831 50,459 42,347 533,637
We also own 10,820 square feet of space in Phoenix, Arizona, which serves as our data center.
Item 3. Legal Proceedings
From time to time we are involved in ordinary routine litigation incidental to our business. In the opinion of our management,
none of such pending litigation is expected to have a material adverse effect on our financial condition or results of operations.
Item 4. Mine Safety Disclosures
Not applicable.