ST. LOUIS, Aug. 7 /PRNewswire-FirstCall/ -- KV Pharmaceutical Company (the "Company") today announced that the Company notified certain owners of the Company's Class A and Class B Common Stock, as further described below (the "Reporting Persons"), that the stockholder action by written consent purported to have been taken by such Reporting Persons on August 5, 2009 does not comply with the requirements of the Company's By-Laws and is therefore invalid and not effective.
Specifically, on August 5, 2009, the Reporting Persons filed with the U.S. Securities and Exchange Commission (the "SEC") a Schedule 13D disclosing their beneficial ownership of the Company's Class A Common Stock and a Schedule 13D disclosing their beneficial ownership of the Company's Class B Common Stock. Such Reporting Persons included Marc S. Hermelin, the Company's former chief executive officer and a current member of the Company's Board of Directors (the "Board"), David S. Hermelin, a member of the Board and the son of Mr. Marc S. Hermelin, and certain other persons, including various family members and trusts associated with Mr. Marc S. Hermelin.
The Schedules 13D filed by the Reporting Persons, which are available on the SEC's EDGAR website at http://www.sec.gov/, also disclosed that such Reporting Persons have executed and delivered to the Company a purported action by written consent of stockholders relating to the adoption of certain amendments to the Company's By-Laws. A copy of such stockholder written consent was filed as an exhibit to each Schedule 13D. The Company received an executed copy of such stockholder written consent on August 5, 2009.
On August 7, 2009, the Company notified the Reporting Persons by letter that, because the Reporting Persons have failed to comply with Article II, Section 12 of the Company's By-Laws (requiring a stockholder seeking to act by written consent to request that the Board fix a record date with respect to such stockholder action by written consent), the stockholder action by written consent executed and delivered by the Reporting Persons on August 5, 2009 is invalid and not effective.
However, the Company also notified the Reporting Persons that, in the event the Reporting Persons deliver to the Company a written notice, in compliance with Article II, Section 12 of the Company's By-Laws, requesting the Board to fix a record date for stockholder action by written consent, the Board intends to set a record date as provided in the Company's By-Laws.
About KV Pharmaceutical Company
KV Pharmaceutical Company is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary.
For further information about KV Pharmaceutical Company, please visit the Company's corporate Web site at http://www.kvpharmaceutical.com/.
Cautionary Note Regarding Forward-looking Statements
The information in this press release may contain various forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 ("PSLRA") and which may be based on or include assumptions concerning the operations, future results and prospects of the Company. Such statements may be identified by the use of words like "plan," "expect," "aim," "believe," "project," "anticipate," "commit," "intend," "estimate," "will," "should," "could" and other expressions that indicate future events and trends.
All statements that address expectations or projections about the future, including without limitation, product development, product launches, regulatory approvals, market position, acquisitions, sale of assets, revenues, expenditures, resumption of manufacturing and distribution of products and the impact of the recall and suspension of shipments on revenues, and other financial results, are forward-looking statements.
All forward-looking statements are based on current expectations and are subject to risk and uncertainties. In connection with the "safe harbor" provisions, the Company provides the following cautionary statements identifying important economic, political and technological factors, which among others, could cause actual results or events to differ materially from those set forth or implied by the forward-looking statements and related assumptions.
Such factors include (but are not limited to) the following: (1) the ability to continue as a going concern; (2) changes in the current and future business environment, including interest rates and capital and consumer spending; (3) the difficulty of predicting FDA approvals, including timing, and that any period of exclusivity may not be realized; (4) the possibility of not obtaining FDA approvals or delay in obtaining FDA approvals; (5) acceptance and demand for new pharmaceutical products; (6) the introduction and impact of competitive products and pricing, including as a result of so-called authorized-generic drugs; (7) new product development and launch, including the possibility that any product launch may be delayed or that product acceptance may be less than anticipated; (8) reliance on key strategic alliances; (9) the availability of raw materials and/or products manufactured for the Company under contract manufacturing arrangements with third parties; (10) the regulatory environment, including regulatory agency and judicial actions and changes in applicable law or regulations; (11) fluctuations in revenues; (12) the difficulty of predicting international regulatory approvals, including timing; (13) the difficulty of predicting the pattern of inventory movements by the Company's customers; (14) the impact of competitive response to the Company's sales, marketing and strategic efforts, including the introduction or potential introduction of generic or competing products against products sold by the Company and its subsidiaries; (15) risks that the Company may not ultimately prevail in litigation, including challenges to the Company's intellectual property rights by actual or potential competitors or to the Company's ability to market generic products due to brand company patents and challenges to other companies' introduction or potential introduction of generic or competing products by third parties against products sold by the Company or its subsidiaries, including without limitation the litigation and claims referred to in Note 16 of the Notes to the Consolidated Financial Statements in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 and under the heading "Certain Other Matters" in the Company's Form 8-K filed with the SEC on April 30, 2009; (16) the possibility that the Company's current estimates of the financial effect of certain announced product recalls could prove to be incorrect; (17) whether any product recalls or product introductions result in litigation, agency action or material damages; (18) the possibility that the findings of the Audit Committee inquiry referenced in the Company's Form 10-Q for the quarter ended June 30, 2008, Form 12b-25 filed with the SEC on November 13, 2008, Form 12b-25 filed with the SEC on February 2, 2009, Form 12b-25 filed with the SEC on June 6, 2009, as well as certain other of the Company's SEC filings, could have a material impact on the Company's financial results; (19) the satisfaction or waiver of the other closing conditions in the previously disclosed Gestiva(TM) acquisition agreement; (20) the possibility that the auction rate securities held by the Company may not return to liquidity at their face value or at all; (21) the consent decree between the Company and the FDA and the Company's suspension of the production and shipment of substantially all of the products that the Company manufactures and the related nationwide recall affecting substantially all of the products that the Company manufactures, as well as the expected material adverse effect on the Company's revenue, assets and liquidity and capital resources, all as more fully described in the Company's Form 8-K filed with the SEC on January 26, 2009, the Company's Form 8-K filed with the SEC on February 26, 2009, the Company's Form 8-K filed with the SEC on March 3, 2009 and the Company's Form 8-K filed with the SEC on April 30, 2009; (22) the series of putative class action lawsuits alleging violations of the federal securities laws by the Company and certain individuals, all as more fully described in the Company's Form 8-K filed with the SEC on January 26, 2009, the Company's Form 8-K filed with the SEC on February 26, 2009 and the Company's Form 8-K filed with the SEC on April 30, 2009, as well as certain other of the Company's SEC filings; (23) the possibility that insurance proceeds are insufficient to cover potential losses that may arise from litigation, including with respect to product liability or securities litigation; (24) the informal inquiry initiated by the SEC and any related or additional governmental investigative or enforcement proceedings, including actions by the FDA and the U.S. Department of Justice, all as more fully described in the Company's Form 8-K filed with the SEC on January 26, 2009, the Company's Form 8-K filed with the SEC on February 26, 2009 and the Company's Form 8-K filed with the SEC on February 30, 2009; (25) delays in returning certain or many of the Company's products to market, including loss of market share as a result of the suspension of shipments, and related costs; (26) sale or licensing of certain assets; (27) the ability to monetize the auction rate securities (ARS) currently held by the Company, the amount of proceeds to be received from such monetization and the timing of receipt of proceeds by the Company; (28) the timing and ability to realize and receive expected tax refunds, the actual refund amount to be received by the Company subject to any challenges or otherwise and the timing of receipt of the refund by the Company; (29) the possibility that default on one type or class of the Company's indebtedness could result in cross default under, and the acceleration of, other indebtedness of the Company; and (30) the risks detailed from time-to-time in the Company's filings with the SEC.
This discussion is not exhaustive, but is designed to highlight important factors that may impact the Company's forward-looking statements. The Company is under no obligation to update any of the forward-looking statements after the date of this press release. All forward-looking statements attributable to the Company are expressly qualified in their entirety by the cautionary statements in this "Cautionary Note Regarding Forward-looking Statements" and the risk factors that are included under the heading "Item 1A--Risk Factors" in the Company's Annual Report on Form 10-K for the year ended March 31, 2008, as supplemented by the Company's subsequent SEC filings.
KV Pharmaceutical Company
CONTACT: Michael Anderson, KV Pharmaceutical, +1-314-645-6600
Web Site: http://www.kvpharmaceutical.com/
