FRAMINGHAM (07/17/2000) - Drkoop.com Inc., another high-profile Internet venture struggling for survival, continues to suffer ill health with further losses, shareholder lawsuits and the resignation of two top executives as the latest symptoms.
In a filing submitted to the U.S. Securities and Exchange Commission (SEC) today, the online medical information company said it expects to report another loss for the second quarter on revenue of just $2.5 million to $3 million.
Drkoop.com also announced that its chief operating officer and chief financial officer both had "voluntarily elected to resign."
The report to the SEC follows the filing of a pair of class-action lawsuits against Drkoop.com on Friday by law firms in Washington and New York on behalf of the company's shareholders. The suits charge that Drkoop.com's board members and some executives gave publicly misleading statements about the financial health of the company.
"A few months back, we actually had a positive view" of Drkoop.com, said Liz Boehm, an analyst at Forrester Research Inc. in Cambridge, Mass. She noted that the company had a good business plan and a good name behind it, referring to former U.S. Surgeon General Dr. C. Everett Koop.
But Drkoop.com "had a lot of trouble turning [its] plans into an actual strategy," Boehm said. Company officials moved too slowly and "didn't diversify their content stream as quickly as they should have," she added.
Resigning from the company are Dennis Upah, who has been its chief operating officer, and Susan Georgen-Saad, its CFO. Drkoop.com said both will continue to be available on a consulting basis, with Georgen-Saad continuing to head the finance department on an acting basis, while replacements are sought.
The company added in the SEC filing that CEO Donald Hackett and Louis Scalpati, its chief architect, both extended their employment contracts for one year at a 15% reduction in their base salaries, which was described as being "consistent with present policy."