KV Pharmaceutical Company Reports Results of Special Independent Committee Review of Stock Opt...(ptember 30 and December 31 2006 Form 10-...),Health

Commenting on the report, Mr. Hermelin stated, "The Company does not take lightly the improper dating of options, and we are gratified with the Committee's finding that there was no intentional misconduct. We remain committed to the highest standards of corporate compliance and governance."

As previously disclosed, derivative suits against certain current and former directors and officers of the Company alleging inappropriate dating of option grants are pending in U.S. District Court for the Eastern District of Missouri. All such cases have been consolidated in a single proceeding. With plaintiffs' agreement, the Court has extended the time to answer or otherwise file pleadings in the action to permit the Special Committee investigation to be completed and to permit assessment by the parties as to the impact of the Special Committee's findings and conclusions on the action. The Company continues to cooperate with the informal inquiry of the Securities and Exchange Commission (SEC) related to this matter.

Consistent with the additional stock-based compensation and tax expense previously outlined, the consolidated financial statements issued by the Company for the fiscal periods from 1996 through 2006 should no longer be relied upon. In addition, management's assessment of internal controls over financial reporting and the auditors' report on internal control over financial reporting for the year ended March 31, 2006 should also no longer be relied upon. In addition, the Company's earnings and press releases and other communications should no longer be relied upon to the extent they relate to these consolidated financial statements. Adjustments to the consolidated financial statements included in the Company's annual report on Form 10-K for the period ended March 31, 2007 are subject to audit. In addition, the Company intends to restate its fi
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