<PAGE>
EXHIBIT 99.1
AUSTIN, Texas, Aug.22/PRNewswire/ -- drkoop.com, Inc. (Nasdaq: KOOP), a
leading Internet health network providing information to individuals
worldwide, announced financial results for the second quarter ended
June 30, 2000, in its filing of Form 10-Q with the Securities Exchange
Commission today. The Company also reported:
-- $20 million received in an equity financing
-- A new management team led by Richard Rosenblatt
-- The pending reconfiguration of the of the Board of Directors
The $20 million financing is from a group of investors including Prime
Ventures, JF Shea Ventures, Cramer-Rosenthal-McGlynn, Inc., and RMC Capital.
The new management team and its investor group have invested $3.5 million as
part of this financing. The financing was offered solely to accredited
investors in a private placement of convertible preferred stock, which is
convertible into shares of common stock at $0.35 per share. The newly issued
shares will be restricted securities and, therefore, not freely tradable. The
Company is not obligated to register such securities until May 2001. The
terms of the financing and related transactions were described generally in
the Form 10-Q filed on August 21, 2000. The financing could be increased to
as much as $27.5 million if outstanding overallotment options with identified
investors are exercised.
In conjunction with the financing, the Company has appointed three new
executives: Richard M. Rosenblatt as Chief Executive Officer, Edward A.
Cespedes as President, and Stephen Plutsky as Chief Financial Officer. The
incoming management team currently leads Prime Ventures, LLC, a venture
capital fund investing primarily in technology and Internet companies.
Mr. Rosenblatt co-founded and was the Chairman and Chief Executive Officer of
iMALL, Inc, which was acquired in October, 1999 by Excite@Home in a
transaction valuing iMALL at $565 million. Until March 2000, Mr. Rosenblatt
served as Excite@Home's Senior Vice President of E-Business Services.
The Placement Agent and investors have the right to designate up to four
new directors. Of the current members of the Board of Directors, Dr. C.
Everett Koop will continue to serve as Chairman and Donald Hackett will remain
a director. In connection with his appointment as CEO, Mr. Rosenblatt has
been appointed to the Board of Directors. Designees of the Placement Agent
will be elected to the board once a mandatory notice to stockholders is
prepared and mailed.
The securities issued in the private placement were issued in a
transaction exempt from registration under the federal securities laws and may
not be offered or sold absent registration or an applicable exemption from
registration. This press release is not intended and shall not be construed
as an offer to sell or a solicitation of an offer to buy any securities of the
Company.
Total revenue for the quarter increased to $2.5 million as compared to
$1.0 million for the comparable period of 1999. Loss attributable to common
stockholders for the quarter was $40.6 million, or $1.18 per share, compared
to $17.6 million, or $1.28 per share, for the second quarter of 1999. For the
second quarter, non-cash expenses accounted for approximately $30.0 million of
this loss, due primarily to the amortization of expenses associated with
renegotiated portal agreements and a one-time settlement.
As previously disclosed, drkoop.com has been implementing aggressive cost-
cutting measures, which include the renegotiation of portal agreements, a
substantial reduction in the company's workforce, and a reduction in its
advertising expenses. Cash expenses from operations were approximately
$12.8 million in the second quarter compared to $18.6 million in the prior
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quarter. The Company estimates that cash expenses from operations will be
further significantly reduced to approximately $6.5 million for the quarter
ending September 30, 2000. The foregoing forecast is subject to material
uncertainties as discussed below and also may be impacted by business
decisions to be made by new management.
About drkoop.com, Inc.
drkoop.com is a leading global healthcare Network providing measurable
value to individuals worldwide. Its mission is to empower consumers with the
information and resources they need to become active participants in the
management of their own health.
The drkoop.com Network is built from relationships with other Web sites,
healthcare portals and traditional media outlets, and integrates dynamic,
medically reviewed content, interactive communities and consumer-focused tools
into a complete source of trusted healthcare information. Its strategic
alliance with Shared Medical Systems (SMS) makes drkoop.com a leader in
promoting secure online interaction between patients, insurance companies,
physicians and healthcare organizations. With more than 1.4 million
registered users worldwide, drkoop.com has strategic relationships with online
organizations, including America Online. The Company's content is also
featured on the Web sites of more than 420 healthcare facilities and more than
20 leading television stations nationwide.
This document contains forward-looking statements relating to, among other
things, expense levels, revenue trends, advertising sales trends, growth
plans, future results of operations and general business conditions relating
to drkoop.com. These forward-looking statements are based on our current
expectations and are subject to material risks and uncertainties. Actual
results could differ materially from these forward-looking statements
depending on changes in external competitive market factors, the effectiveness
of our marketing and promotion strategies or our ability to execute our
business strategy. In addition, the Company is in the process of appointing a
new management team. These matters and other business risks to which
drkoop.com is subject are discussed in our periodic reports and registration
statements filed from time to time with the Securities and Exchange
Commission. In particular, investors are urged to review carefully the
information under the caption "Risk Factors" in the Form 10-K for the year
ended December 31, 1999 and the Form 10-Q for the quarter ended June 30, 2000
and the other information contained in those reports. The Forms 10-K and 10-Q
may be obtained by accessing the database maintained by the Securities and
Exchange Commission at http://www.sec.gov or by contacting drkoop.com as noted
above.
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drkoop.com, Inc.
Condensed Statements of Operations
(in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Revenue:
Content subscription and
software license 854 238 1,683 454
Advertising and sponsorship 1,657 781 5,566 962
E-commerce and other 12 --- 17 7
2,523 1,019 7,266 1,423
Operating expenses:
Production, content, and
product development 5,361 2,110 11,147 3,145
Sales and marketing 24,916 8,010 44,281 10,058
General and administrative 4,828 1,740 8,830 2,844
Amortization of deferred
stock compensation 553 592 1,205 1,074
Write-off of investment and
intangible assets 7,444 --- 7,444 ---
Total operating expenses 43,102 12,452 72,907 17,121
Loss from operations (40,579) (11,433) (65,641) (15,698)
Interest income 18 67 323 36
Net Loss (40,561) (11,366) (65,318) (15,662)
Accretion of redeemable
securities to fair value --- (6,319) --- (17,255)
Dividend to preferred stockholders --- --- --- (9,147)
Net Loss attributable to
common stockholders $(40,561) $(17,685) $(65,318) $(42,064)
Basic net loss per share
attributable common
stockholders $ (1.18) $ (1.28) $(2.01) $ (1.40)*
Weighted average shares used in
computing basic net loss per
share attributable to
common stockholders 34,312 13,810 32,555 11,207
</TABLE>
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drkoop.com, Inc.
Condensed Balance Sheets
(in thousands, except per share data)
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
Assets (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,951 $ 35,706
Trade accounts receivable, net 2,975 6,532
Other receivable 0 4,000
Prepaids and other 29,957 22,862
Total current assets 34,883 69,100
Property and equipment, net 11,583 10,435
Investment in HealthMagic 0 5,000
Intangible assets, net 0 2,778
Other assets 836 12,407
Total assets $ 47,302 $ 99,720
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable $ 5,614 $ 8,197
Accrued liabilities 6,334 8,711
Leases payable 1,168 473
Related party payables 49 2
Deferred credit 2,000 2,000
Deferred revenue 2,106 3,415
Notes payable, net of discount 291 0
Total current liabilities 17,562 22,798
Leases payable, less current portion 1,291 605
Deferred credit 4,000 5,000
Total liabilities 22,853 28,403
Stockholders' equity:
Common stock, par value of $.001;
100,000,000 shares authorized; 35 30
34,845,814 and 30,508,324 shares
issued and outstanding at June 30, 2000
and December 31, 1999
Additional paid-in capital 167,578 149,447
Deferred stock compensation (2,133) (2,447)
Accumulated deficit (141,031) (75,713)
Total stockholders' equity 24,449 71,317
Total liabilities and
stockholders' equity $ 47,302 $ 99,720
</TABLE>
Contact:
drkoop.com, Inc.
Media Relations
(512) 583-5276
* As stated in the Company's Amendment No. 1 to Form 10-Q for the Quarter ended
June 30, 2000, the basic and diluted net loss per share for the six months
ended June 30, 1999 should have read $3.75 rather than $1.40.
