<PAGE>   1

================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                ----------------

                                    FORM 10-Q

[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

                   For the quarterly period ended March 31, 2001

                                       OR

[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

                        Commission file number 000-26275

                                drkoop.com, Inc.
             (Exact name of registrant as specified in its charter)


           Delaware                                             74-2845054
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                           Identification Number)

                          225 Arizona Avenue, Suite 250
                       Santa Monica, California 90401-1245
                    (Address of principal executive offices)

                                ----------------

       (310) 395-5700 (Registrant's telephone number, including area code)

                                ----------------

        Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days

         (1)      Yes   [X]                   No   [ ]

         (2)      Yes   [X]                   No   [ ]

        As of May 7, 2001 there were 41,948,281 shares of the Registrant's
common stock outstanding, which does not include shares of common stock issuable
upon exercise or conversion of outstanding preferred stock, warrants and
options.

================================================================================



<PAGE>   2
                                drkoop.com, Inc.
                                    FORM 10-Q
                      For the Quarter Ended March 31, 2001
                                      INDEX

<TABLE>
<CAPTION>
                                                                                                     PAGE
                                                                                                     ----
<S>                                                                                                  <C>
PART I.   FINANCIAL INFORMATION

Item 1.  Financial Statements

Condensed Balance Sheets at March 31, 2001 (Unaudited) and December 31, 2000.....................      3

Condensed Statements of Operations for the three-month periods ended  March 31, 2001 and 2000
     (Unaudited).................................................................................      4

Condensed Statement of Changes in Stockholders' Equity for the three-month period ended
     March 31, 2001 (Unaudited)..................................................................      5

Condensed Statements of Cash Flows for the three months ended March 31, 2001 and 2000
     (Unaudited).................................................................................      6

Notes to Condensed Financial Statements (Unaudited)..............................................      7

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations...     11

Item 3.  Quantitative and Qualitative Disclosures about Market Risk..............................     30

PART II.   OTHER INFORMATION

Item 1.   Legal Proceedings......................................................................     30
Item 2.   Changes in Securities and Use of Proceeds..............................................     31
Item 3.   Defaults Upon Senior Securities........................................................     31
Item 4.   Submission of Matters to a Vote of Security Holders....................................     31
Item 5.   Other Information......................................................................     31
Item 6.   Exhibits and Reports on Form 8-K.......................................................     31
SIGNATURES.......................................................................................     32
</TABLE>



                                       2

<PAGE>   3

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                                drkoop.com, Inc.

                                 BALANCE SHEETS

           (DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                               MARCH 31,            DECEMBER 31,
                                            ASSETS                                               2001                  2000
                                                                                               ---------            -----------
<S>                                                                                            <C>                  <C>
Current assets:
     Cash and short term investments (Note 3) .....................................            $   7,093             $  11,464
     Trade accounts receivable, net ...............................................                  839                   447
     Prepaid and other assets .....................................................                2,651                 2,648
                                                                                               ---------             ---------
          Total current assets ....................................................               10,583                14,559
                                                                                               ---------             ---------
Property and equipment, net .......................................................                2,191                 6,297
Other assets ......................................................................                  236                   355
                                                                                               ---------             ---------
          Total assets ............................................................            $  13,010             $  21,211
                                                                                               =========             =========

                             LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Trade accounts payable .......................................................            $   2,676             $   2,488
     Accrued liabilities ..........................................................                2,242                 3,315
     Leases payable ...............................................................                  704                 1,000
     Deferred credit ..............................................................                2,000                 2,000
     Deferred revenue .............................................................                1,015                   895
                                                                                               ---------             ---------
          Total current liabilities ...............................................                8,637                 9,698
                                                                                               ---------             ---------
Leases payable, less current portion ..............................................                  822                   933
Deferred credit ...................................................................                2,500                 3,000
                                                                                               ---------             ---------
          Total liabilities .......................................................               11,959                13,631
                                                                                               ---------             ---------
Commitments and contingencies
Stockholders' equity:
     Series D Convertible preferred stock, par value $.001; 15,000,000 shares
     authorized; liquidation value $41,250; 2,750,000 shares issued and
     outstanding at March 31, 2001 and December 31, 2000 ..........................                    3                     3
     Common stock, par value $.001; 500,000,000 shares authorized at
     March 31, 2001 and December 31, 2000; 39,986,032 and 39,733,410
     shares issued and outstanding at March 31, 2001 and December 31, 2000 ........                   40                    40
Additional paid-in capital ........................................................              211,467               211,265
Deferred stock compensation .......................................................               (6,243)               (6,801)
Accumulated deficit ...............................................................             (204,216)             (196,927)
                                                                                               ---------             ---------
          Total stockholders' equity ..............................................                1,051                 7,580
                                                                                               ---------             ---------
          Total liabilities and stockholders' equity ..............................            $  13,010             $  21,211
                                                                                               =========             =========
</TABLE>


    The accompanying notes are an integral part of the financial statements.



                                       3
<PAGE>   4

                                drkoop.com, Inc.

                            STATEMENTS OF OPERATIONS

                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                         THREE MONTHS ENDED MARCH 31,
                                                                        -----------------------------
                                                                          2001                 2000
                                                                        --------             --------
<S>                                                                     <C>                  <C>
Revenues:
     Content subscription and software license .............            $    492             $    829
     Advertising and sponsorship ...........................                 378                3,914
                                                                        --------             --------
Total revenues .............................................                 870                4,743

Operating expenses:
     Production, content and product development ...........               1,920                6,152
     Sales and marketing ...................................                 567               19,944
     General and administrative ............................               2,721                4,209
     Special charges (Note 10) .............................               3,585                   --
                                                                        --------             --------
          Total operating expenses .........................               8,793               30,305
                                                                        --------             --------
Loss from operations .......................................              (7,923)             (25,562)
Other Income:
     Other income ..........................................                 500                  500
     Interest income, net ..................................                 134                  305
                                                                        --------             --------
          Net loss .........................................            $ (7,289)            $(24,757)
                                                                        ========             ========

Net loss per common share:
     Basic and diluted loss ................................            $  (0.18)            $  (0.80)
                                                                        ========             ========


Basic and diluted weighted average shares outstanding ......              39,986               30,799
                                                                        ========             ========
</TABLE>


    The accompanying notes are an integral part of the financial statements.



                                       4
<PAGE>   5
                                drkoop.com, Inc.

                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                        (DOLLARS AND SHARES IN THOUSANDS)

<TABLE>
<CAPTION>
                                                             PREFERRED STOCK           COMMON STOCK        ADDITIONAL
                                                            ------------------      -------------------      PAID-IN
                                                            SHARES      AMOUNT      SHARES       AMOUNT      CAPITAL
                                                            ------      ------      ------       ------     ----------
<S>                                                         <C>         <C>         <C>          <C>        <C>
Balance at December 31, 2000 ........................        2,750        $3        39,733        $40        $211,265
Issuance of stock under employee plans ..............           --         -           253         --              41
Issuance of stock options pursuant to business
acquisition .........................................           --         -            --         --              44
Deferred stock compensation .........................           --         -            --         --             117
Amortization of deferred stock compensation .........           --         -            --         --              --
Net loss ............................................           --         -            --         --              --
                                                             -----        --        ------        ---        --------
Balance at March  31, 2001 ..........................        2,750        $3        39,986        $40        $211,467
                                                             =====        ==        ======        ===        ========
</TABLE>

<TABLE>
<CAPTION>
                                                             DEFERRED
                                                               STOCK          ACCUMULATED
                                                            COMPENSATION        DEFICIT           TOTAL
                                                            ------------      -----------        -------
<S>                                                         <C>               <C>                <C>
Balance at December 31, 2000 ........................          $(6,801)        $(196,927)        $ 7,580
Issuance of stock under employee plans ..............               --                --              41
Issuance of stock options pursuant to business
acquisition .........................................               --                --              44
Deferred stock compensation .........................             (117)               --              --
Amortization of deferred stock compensation .........              675                --             675
Net loss ............................................               --            (7,289)         (7,289)
                                                               -------         ---------         -------
Balance at March  31, 2001 ..........................          $(6,243)        $(204,216)        $ 1,051
                                                               =======         =========         =======
</TABLE>


    The accompanying notes are an integral part of the financial statements.



                                       5


<PAGE>   6
                                drkoop.com, Inc.

                            STATEMENTS OF CASH FLOWS

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                        THREE MONTHS ENDED MARCH 31,
                                                                                       -----------------------------
                                                                                         2001                 2000
                                                                                       --------             --------
<S>                                                                                    <C>                  <C>
OPERATING ACTIVITIES:
     Net loss .............................................................            $ (7,289)            $(24,757)
     Adjustments to reconcile net loss to net cash used in operating
        activities:
          Depreciation and amortization ...................................                 225                3,767
          Amortization of deferred credit .................................                (500)                (500)
          Amortization of stock-based charges .............................                 675                  652
          Provision for doubtful accounts .................................                  --                  125
          Special charges .................................................               2,947                   --
          Stock issued for services .......................................                  --                  346
Changes in operating assets and liabilities:
     Accounts receivable, net .............................................                (241)               1,684
     Other receivable .....................................................                  --                4,000
     Prepaids and other assets ............................................                 966                2,847
     Accounts payable .....................................................                 188                1,950
     Accrued and other liabilities ........................................              (1,113)              (1,639)
     Related party payables ...............................................                  --                    8
     Deferred revenue .....................................................                 121                  418
                                                                                       --------             --------
               Cash used in operating activities ..........................              (4,021)             (11,099)
                                                                                       --------             --------
INVESTING ACTIVITIES:
     Purchase of short term investments ...................................              (5,106)                  --
     Acquisition of StayfitUSA.com assets .................................                (213)                  --
     Proceeds from sale of property and equipment .........................                 416                   --
     Purchase of property and equipment ...................................                (187)              (1,337)
                                                                                       --------             --------
               Cash used in investing activities ..........................              (5,090)              (1,337)
                                                                                       --------             --------
FINANCING ACTIVITIES:
     Repayments of capital leases .........................................                (407)                  --
     Proceeds from exercise of stock options ..............................                  41                  185
     Proceeds from issuance of common stock, net ..........................                  --                  405
                                                                                       --------             --------
               Cash (used in) provided by financing activities ............                (366)                 590
                                                                                       --------             --------
     Decrease in cash and cash equivalents ................................              (9,477)             (11,846)

     Cash and cash equivalents at beginning of period .....................              11,464               35,706
                                                                                       --------             --------
     Cash and cash equivalents at end of period ...........................            $  1,987             $ 23,860
                                                                                       ========             ========
</TABLE>


    The accompanying notes are an integral part of the financial statements.



                                       6

<PAGE>   7

                                drkoop.com, Inc.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS


1. Description of the Business and Summary of Significant Accounting Policies

        drkoop.com, Inc. (the "Company"), a Delaware corporation, operates an
internet-based consumer health and wellness network that (a) provides
comprehensive information and guidance to consumers worldwide and (b) licenses
content, interactive tools and a secure site to health systems, major employers,
physicians and healthcare providers.

        Certain reclassifications have been made to prior year balances in order
to conform to the current year presentation.


2. Basis of presentation

        The condensed financial statements included herein are unaudited and
reflect all adjustments, which, in the opinion of management, are necessary to
fairly state the Company's financial position, results of operations and cash
flows for the periods presented. These financial statements should be read in
conjunction with the Company's financial statements and notes thereto for the
year ended December 31, 2000, which are contained in the Company's Annual
Report on Form 10-K filed with the Securities and Exchange Commission. The
results of operations for the three month periods ended March 31, 2001 and 2000
are not necessarily indicative of results that may be expected for any other
interim period or for the full fiscal year.

3. Cash and Short Term Investments

        Cash and short term investments include the following (in thousands):

<TABLE>
<CAPTION>
                                                                         March 31,       December 31,
                                                                           2001              2000
                                                                         ---------       ------------
<S>                                                                      <C>             <C>
     Cash and cash equivalents..................................          $1,987            $11,464
     Short term investments.....................................           5,106                 --
                                                                          ------            -------
         Total..................................................          $7,093            $11,464
                                                                          ======            =======
</TABLE>

        Cash and short-term investments include cash on hand, time deposits and
commercial paper. Short-term investments that have an original maturity of three
months or less and are considered cash equivalents. The short-term securities
are carried at fair market value.

        Cash and cash equivalents include $98,000 of restricted cash pledged as
collateral for a capital lease. The lease was fully repaid in March 2001 and the
collateral is expected to be released in June 2001.

4. Accounts Receivable

        Accounts receivable are net of allowance for doubtful accounts of $1.0
million and $1.1 million at March 31, 2001 and 2000, respectively.

5. Prepaid and Other Assets

        Prepaid and other assets are comprised of the following (in thousands):

<TABLE>
<CAPTION>
                                              March 31,        December 31,
                                                2001              2000
                                              --------         ------------
<S>                                           <C>              <C>
     Prepaid warrant expense ......            $1,141            $1,647
     Prepaid content expense ......                --                69
     Assets held for sale .........             1,050               300
     Tax refund receivable ........                32                --
     Other ........................               428               632
                                               ------            ------
         Total ....................            $2,651            $2,648
                                               ======            ======
</TABLE>

6. Property and Equipment, Net

        Property and equipment are comprised of the following (in thousands):

<TABLE>
<CAPTION>
                                                  March 31,       December 31,
                                                    2001             2000
                                                  ---------       ------------
<S>                                               <C>             <C>
     Computer equipment ................            $948            $4,041
</TABLE>



                                       7
<PAGE>   8

<TABLE>
<S>                                                                <C>                 <C>
     Software .........................................              1,632               2,696
     Furniture and fixtures ...........................                 60                 922
     Leasehold improvements ...........................                230               1,932
                                                                   -------             -------
         Total property and equipment, at cost ........              2,870               9,591
     Accumulated Depreciation .........................               (679)             (3,294)
                                                                   -------             -------
         Property and equipment, at net book value ....            $ 2,191             $ 6,297
                                                                   =======             =======
</TABLE>

        Depreciation expense of $225,000 and $3.7 million, for the quarters
ended March 31, 2001 and 2000, respectively, is included in the statements of
operations.

7. Deferred Credit

        On July 1, 1999, the Company entered into a software licensing and
distribution agreement, which requires the delivery of software and other
services over the four-year term of the agreement. Total fees paid to the
Company were $8.0 million, of which $4.0 million was paid in fiscal 1999 and
$4.0 million was paid in fiscal 2000. The Company recorded these fees as a
deferred credit and is amortizing the deferred credit as other income over the
term of the contract. The Company amortized $.5 million for the quarters ended
March 31, 2001 and 2000, respectively.

8. Commitments and Contingencies

Legal Matters

        The Company and certain of its prior officers and prior and current
directors are defendants in a consolidated class action lawsuit (the
"Consolidated Action") in the United States District Court for the Western
District of Texas captioned In re drkoop.com, Inc. Securities Litigation. The
Consolidated Action, which is maintained on behalf of purchasers of the
securities of drkoop.com, Inc., alleges violations of the federal securities
laws. On October 16, 2000, pursuant to statutory procedural requirements, the
Court selected lead plaintiffs for the plaintiff class, and approved lead
plaintiffs' selection of lead plaintiffs' counsel. On or about January 11, 2001,
the lead plaintiffs filed a Consolidated Amended Complaint. The Company's time
to respond to the Consolidated Amended Complaint has not yet expired. The
Company believes that the claims alleged in the Consolidated Action are without
merit and intends to defend the Consolidated Action vigorously.

        The Company's counsel has received a letter from a representative of a
regional office of the United States Securities and Exchange Commission ("SEC")
stating that the SEC is investigating the events and circumstances surrounding
the allegations in the Consolidated Action, and asking that the Company
voluntarily provide the SEC with information regarding such events and
circumstances. The SEC letter states that the SEC's request for information
should not be construed as an indication by the SEC that any violation of the
federal securities laws has occurred. The investigation described in the letter
was commenced by order of the SEC dated August 16, 2000. The Company has
responded to the letter.

        The Company is a nominal defendant, and certain of its prior officers
and directors are defendants, in a derivative action lawsuit (the "Derivative
Action") in the United States District Court for the Western District of Texas
captioned Manju Ahuja v. Georgen-Saad et al. The Derivative Action, which was
filed on January 9, 2001, asserts various claims that the Company allegedly has
against the defendants for alleged breaches of fiduciary duty and other
purported wrongdoing. The time to respond to the complaint has not yet expired.
In accordance with its obligations under applicable law, the Company's board of
directors will evaluate the alleged claims identified in the Derivative Action.

        The Company has separately received a letter demanding that it initiate
a derivative action lawsuit asserting various claims that the letter alleges the
Company has against certain of its prior officers and directors for alleged
breaches of fiduciary duty and other alleged wrongdoing. In accordance with its
obligations under applicable law, the Company's board of directors will evaluate
the alleged claims identified in the demand letter.



                                       8
<PAGE>   9

        The Company and certain of its prior officers and directors are
defendants in a lawsuit in the District Court of Travis County, Texas (53rd
Judicial District) captioned F. Dennis Pryor III v. drkoop.com, Inc. et al. The
lawsuit, which was filed on February 14, 2001, was brought by purchasers of
convertible promissory notes issued by the Company. Plaintiffs assert various
claims based on the allegations that the plaintiffs were misinformed as to the
length of the holding period upon conversion of the notes into common stock of
the Company. The Company believes that the claims alleged in the lawsuit are
without merit and intends to defend the lawsuit vigorously.

        The Company is also a defendent in a lawsuit in the Superior Court for
the State of California and the County of Los Angeles, Central District
captioned Sunrise International Leasing Corporation vs. Drdrew.com, Inc. et al.
The lawsuit, which was filed on March 2, 2001 by Sunrise International Leasing
Corporation, alleges that the Company wrongfully took possession of certain
equipment owned by Sunrise and seeks monetary damages and return of the
equipment.

        The Company cannot predict the outcome of the litigation matters
described above or the extent to which the costs of defense and any settlement
or award will be covered by the Company's insurance policies. An adverse
determination on one or more of these matters could result in a material adverse
effect on our financial condition and results of operations.

        The Company is also involved in other claims and disputes not described
in the notes that are incidental to the regular conduct of our business and are
not presently believed to be material.

9. Related Party Transactions

        In March 2001, the Company entered into a sublease agreement with Prime
Ventures, LLC. This agreement covers approximately 5,000 square feet of office
space for the Company's principal executive offices. The sublease agreement is
effective as of November 1, 2000 and provides for rent of $18,338 per month.
Pursuant to this sublease agreement, Prime Ventures, LLC will continue to use a
portion of the lease space for rent of $4,000 per month. The Company also paid
Prime Ventures, LLC $222,000 in the first quarter of 2001 as a reimbursement of
expenses paid by Prime Ventures, LLC on behalf of the Company.

        The Company entered into a consulting agreement with a stockholder
whereby the Company paid the stockholder $20,000 per month in fiscal 2000. Total
payments to this stockholder were $60,000 and $60,000 for the quarters ended
March 31, 2001 and 2000, respectively.

10. Special Charges

        Special charges are comprised of the following:

<TABLE>
<CAPTION>
                                                          March 31,        March 31,
                                                            2001             2000
                                                          ---------      ------------
<S>                                                       <C>            <C>
     Impairment of long lived assets ...............       $2,947            $ --
     Closing of Austin, Texas office operations ....          638              --
                                                           ------            ----
         Total special charges .....................       $3,585            $ --
                                                           ======            ====
</TABLE>

        The Company recorded a pre-tax charge of approximately $2.9 million
during the quarter ended March 31, 2001 for the write down of certain long-lived
assets, including computers, hardware, software, equipment and leasehold
improvements. After assessment of various factors relevant to these assets,
including use of these assets in the Company's future operations, management
determined it was appropriate to write down the value of these assets and,
accordingly such assets were written down to estimated fair value in accordance
with SFAS 121.

11. Acquisition of StayfitUSA.com, LLC Assets



                                       9
<PAGE>   10
        On March 5, 2001, the Corporation purchased the assets of
StayfitUSA.com, LLC (StayfitUSA). StayfitUSA provides large employers with
supplemental wellness benefits for their employees, such as discounted fitness
center memberships, smoking cessation programs and other programs that keep
employees healthy. The Corporation acquired the net assets of StayfitUSA for
approximately $255,000 in cash and securities, of which $213,000 was cash paid
at closing. The excess of purchase price over the fair value of the net assets
is approximately $100,000 and is being amortized over a period of three years.

12. Supplemental Cash Flows Information

<TABLE>
<CAPTION>
                                                                             Quarter Ended March 31,
                                                                             -----------------------
                                                                             2001              2000
                                                                             -----            ------
<S>                                                                          <C>              <C>
Supplemental Disclosure of Cash and Non-cash Investing and
Financing Activities:
     Cash paid for interest .....................................            $  32            $   58
                                                                             =====            ======
</TABLE>

13. Subsequent Events

        On April 16, 2001, the Company entered into an agreement to purchase the
assets of IVonyx Group Services, Inc. and IVonyx, Inc. (collectively "IVonyx").
The consideration to be paid for IVonyx consists of $3 million in cash and $4.1
million of the Company's common stock, subject to adjustment under certain
circumstances. Also, a payment of $1 million will be due if IVonyx's net income
for the first twelve month period following the closing exceeds $3 million.
IVonyx is a leader in the home health infusion market. The Company anticipates
financing the operations with use of a credit line. The acquisition is expected
to be complete in the third quarter of 2001 and will be accounted for as a
purchase. The acquisition is subject to the satisfaction of numerous closing
conditions.

On April 30, 2001 Company's common stock was delisted from the Nasdaq National
Market due to its failure to comply with Nasdaq's $1.00 minimum bid price
requirement.



                                       10
<PAGE>   11

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

FORWARD-LOOKING STATEMENTS

        The following discussion of the financial condition and results of
operations should be read in conjunction with our condensed financial statements
and the related notes thereto included elsewhere in this report. This document
contains certain forward-looking statements that involve risks and
uncertainties, such as statements of our plans, objectives, expectations and
intentions. When used in this document, the words "expects," "anticipates,"
"intends" and "plans" and similar expressions are intended to identify certain
of these forward-looking statements. The cautionary statements made in this
document should be read as being applicable to all related forward-looking
statements wherever they appear in this document. Our actual results could
differ materially from those discussed in this document. We do not intend to
update any of the forward-looking statements after the date of this filing on
Form 10-Q to conform these statements to actual results.

        Factors that could cause or contribute to such differences include those
discussed below, as well as those discussed in our Form 10K, filed April 2,
2001.

OVERVIEW

        Our company operates drkoop.com, an Internet-based consumer healthcare
network, and certain other websites. Our network consists of a consumer-focused
interactive website that provides users with comprehensive health information
and services, as well as affiliate relationships with other websites, healthcare
organizations and traditional media outlets. Our website, www.drkoop.com, is a
healthcare portal which integrates dynamic health content on a wide variety of
subjects, interactive communities and tools as well as opportunities to purchase
health related products and services on-line.

Revenues

        We derive our revenues primarily from advertising and sponsorship
arrangements and content subscription and software licensing fees. Additionally,
we generate lesser revenues from electronic commerce through alliances with
certain retailers of pharmaceuticals and related products and through providing
insurance companies with the opportunity to sell products and services to our
audience.

        Advertising revenues are derived primarily from short-term advertising
contracts in which we typically guarantee a minimum number of user "impressions"
to be delivered over a specific period of time for a fixed fee. Impressions are
the number of times that users on our website view an advertisement. We
recognize advertising revenues at the lesser of the ratio of impressions
delivered over the guaranteed impressions or the straight-line rate over the
term of the contract, provided that no significant obligations remain and
collection of the resulting receivable is probable. We have utilized a
combination of third party firms and in-house staff for the sales and insertion
of advertisements on our website. Advertising rates, measured on a cost per
thousand impressions basis, are dependent on whether the impressions are for
general rotation throughout our website or for target audiences and properties
within specific areas of our website.

        Sponsorship revenues are derived from long-term contracts generally
ranging from three to fifty months in which we commit to provide sponsors
enhanced promotional opportunities that go beyond traditional banner
advertising. Sponsorships are designed to support broad marketing objectives,
including branding, awareness, product introductions, research and transactions.
Sponsorship arrangements typically include the delivery of a guaranteed minimum
number of impressions and the design and implementation of customized pages on
our website that enhance the promotional objective of the sponsor. Costs
associated with the development of the web pages are minimal and are expensed
when incurred. Sponsorship revenues are recognized at the lesser of the ratio of
impressions delivered over the total



                                       11
<PAGE>   12

guaranteed impressions or the straight-line rate over the term of the contract,
provided that no significant obligations remain and collection of the resulting
receivable is probable. Additionally, dependent upon the complexity of an
advertising or sponsorship revenue arrangement, we may provide initial site
design consulting and engineering services that require the development and
implementation of specific website enhancements prior to launching a co-branded
site. Revenues and related costs for initial site design and engineering
services are recognized under contract accounting.

        Content subscription and software licensing fees are facilitated through
our Community Partnership Program ("CPP") and from the sale of calculators.
Subscriptions to our Community Partnership Program generally vary from one to
two years. Under this program, we develop co-branded Internet pages and software
consisting of visual icons containing embedded links back to our website for
local healthcare organizations, such as hospitals and payor organizations.
Advance billings and collections relating to future services are recorded as
deferred revenue and recognized ratably over the term of the CPP contract,
generally ranging from one to two years. Software licenses are also sold as a
stand-alone product and are recognized as revenue upon shipment of the software.

        Contract research organizations offer comprehensive clinical trial
services, which are the basis for obtaining regulatory approval for drugs and
medical devices. The identification and enrollment of qualified individuals into
these studies is usually a time consuming and expensive process. We created a
Clinical Research Center, a portion of our website designed to educate consumers
about clinical trials, including how to find and enroll in an appropriate trial
if the individual and their physician believe that it is a viable therapy
option. We expect to receive transaction fee revenues for assisting contract
research organizations in the identification and enrollment of qualified
individuals into studies.

        Since inception, we have incurred significant losses and negative cash
flow, and as of March 31, 2001 we had an accumulated deficit of $204.2 million.
We have not achieved profitability and expect to continue to incur operating
losses for the foreseeable future as we fund operating and capital expenditures
in the areas of expansion of our network, advertising, distribution, brand
promotion, content development, sales and marketing, and operating
infrastructure. To date, our business model has assumed that consumers will be
attracted to and use health information and related content available on our
on-line network which will, in turn, allow us the opportunity to sell
advertising designed to reach those consumers. However, to date, this business
model has not been successful. Our expanded business model assumes that we will
be able to generate additional revenues from drkoop.com branded health and
wellness offerings (through on-line and off-line programs), which we have
recently initiated or intend to initiate in the future. This business model is
not yet proven, we have limited financial resources to implement it and we
cannot assure you that we will ever achieve or sustain profitability or that our
operating losses will not increase in the future or conform to expectations of
the public markets.

        During fiscal 2000 we restructured our operations and significantly
reduced staffing levels to better align our operations to the changing business
environment and our revised business model. Staffing levels decreased by 61%,
from 218 employees to 86 employees, in fiscal 2000. Further reductions in the
first quarter of fiscal 2001 reduced staffing levels by an additional 37
employees.

        We have a very limited operating history on which to base an evaluation
of our business and prospects. Our prospects must be considered in light of the
risks, uncertainties, expenses and difficulties frequently encountered by
companies in their early stages of development, particularly companies in new
and rapidly evolving markets such as the Internet market. In view of the rapidly
evolving nature of our business and our limited operating history, we believe
that period-to-period comparisons are not necessarily meaningful and should not
be relied upon as indications of future performance. Please see "Risk Factors
That May Affect Future Results and Safe Harbor Statement" below.

RESULTS OF OPERATIONS

        Comparison of the three months ended March 31, 2001 to the three months
ended March 31, 2000.



                                       12
<PAGE>   13

        Revenues. Revenues decreased to $870,000 for the three months ended
March 31, 2001, as compared to $4.7 million for the comparable period of 2000.
The decrease was primarily attributable to a decrease in recurring revenues from
sponsorship agreements. Revenue also decreased in content subscription and
software licensing primarily attributable to a decrease in the number of
partners of the Community Partner Program.

        Content subscription and software license revenues. Revenue from content
subscription and software licenses for the quarter ended March 31, 2001 totaled
$492,000 or 57% of total revenues, as compared to $833,000 or 18% of total
revenues for the quarter ended March 31, 2000. All content subscription and
software license revenue is considered recurring revenue. This decrease in
content subscription and software license revenue is primarily attributable to a
decrease in the number of partners of the Community Partner Program.

        Advertising and sponsorship revenues. Advertising and sponsorship
revenues totaled $378,000, or 43% of total revenues for the quarter ended March
31, 2001 as compared to $3.9 million, or 83% of total revenues, for the same
period in 2000. Of the decrease of $3.5 million, $2.9 million or 83% of the
total revenue decrease was attributable to a decrease in recurring revenues from
sponsorship agreements for the quarter ended March 31, 2001. The decrease in
advertising and sponsorship revenues was primarily due to a decrease in the
number of advertising arrangements, reflecting the general business conditions
of e-commerce companies combined with a decrease in traffic to our website
resulting in a lower number of impressions delivered.

        Production, content and product development expenses. Production,
content and product development expenses consist primarily of salaries and
benefits, contract labor and consulting fees related to content acquisition and
licensing, software development, application development and website operations
expense. Production, content and product development expense decreased by $4.2
million, or 69%, to $1.9 million for the quarter ended March 31, 2001 from $6.2
million for the quarter ended March 31, 2000. The decrease in production,
content and product development costs was primarily due to the reduction of
personnel and the elimination of development projects. We have outsourced our
server maintenance. The reduction in personnel and development resulted in a
decrease in salaries, contract labor and professional development fees by
approximately $3.0 million. Reductions in content costs, benefits and travel
costs also contributed to the reduction in expenses. We expect that production,
content and development expenses will decrease in the future as we realign our
cost structure with our revised business model. Production, content and product
development expenses include stock-based charges of $352,000 and $548,000 for
the quarters ended March 31, 2001 and 2000, respectively.

        Sales and marketing expenses. Sales and marketing expense consist
primarily of salaries and related costs, portal fees, web-based advertising,
commissions, general advertising and other related expenses. Sales and marketing
expense decreased by $19.4 million, or 97%, to 567,000 from $19.9 million for
the quarters ended March 31, 2001 and 2000, respectively. The primary reasons
for the decreases were elimination of costs associated with the distribution
agreements with major portals totaling $9.0 million for the three months ended
March 31, 2000, as compared to $0 for the same period in 2001. We experienced a
decrease in the number of sales and marketing personnel, resulting in salary and
related expenses of approximately $457,000 for the three months ended March 31,
2001, as compared to $1.6 million the three months ended March 31, 2000, a
reduction of $1.1 million or approximately 69%. We anticipate that sales and
marketing expenses will remain consistent, as our portal agreements, with
America Online and Go.com, have been terminated during April 2000 and as we
continue to realign personnel requirements and expenditures for distribution,
advertising, brand promotion, public relations and other marketing activities.
Sales and marketing expenses include stock-based charges of $221,000 and
$104,000 for the quarters ended March 31, 2001 and 2000, respectively.

        General and administrative expenses. General and administrative expenses
consist primarily of salaries and related costs for general corporate functions,
including executive, finance, accounting, investor relations, human resources,
facilities and fees for professional services. General and administrative
expenses decreased by $1.5 million, or 35%, to $2.7 million from $4.2 million
for the quarters ended March 31, 2001 and 2000, respectively. The primary
reasons for the decreases were, decreased



                                       13
<PAGE>   14

professional fees of approximately $839,000, decreased salaries of approximately
$281,000 and related expenses and the reduction of intangible asset amortization
or approximately $333,000. We anticipate that general and administrative
expenses will continue to decrease as we continue to realign our cost structure
with our revised business plan. General and administrative expenses include
stock-based charges of $608,000 and $0 for the quarters ended March 31, 2001 and
2000, respectively.

        Special charges. We recorded a pre-tax charge of approximately $2.9
million during the quarter ended March 31, 2001 for the write down of certain
long-lived assets, including computers, hardware, software, equipment and
leasehold improvements. After assessment of various factors relevant to these
assets, including use of these assets in our future operations, we determined it
was appropriate to write down the value of these assets and, accordingly we
wrote these assets down to estimated fair value.

        Other income. On July 1, 1999, we entered into a software licensing and
distribution agreement, which requires the delivery of software and other
services over the four-year term of the agreement. Total fees paid to us were
$8.0 million, of which $4.0 million was paid in fiscal 1999 and $4.0 million was
paid in fiscal 2000. We recorded these fees as a deferred credit and are
amortizing this deferred credit as other income over the term of the contract.
We amortized $.5 million of our deferred credit for both quarters ended March
31, 2001 and 2000.

        Net interest income. Net interest income includes interest income from
our cash balances net of interest expenses related to our financing obligations,
particularly on the capital leases of computer equipment. Net interest income
was $134,000 for the three months ended March 31, 2001 as compared to net
interest income of $305,000 for the three months ended March 31, 2000. The
decrease was due to lower average net cash and cash equivalents balances.

LIQUIDITY AND CAPITAL RESOURCES

        As of March 31, 2001, we had current assets of $10.6 million including
cash and short-term investments, of $7.1 million and current cash liabilities of
$6.6 million. Cash used in operating activities was $4 million and $11.1 million
for the quarters ended March 31, 2001 and 2000, respectively. The cash used in
operating activities for these quarters was primarily attributable to funding
net operating losses, which included costs to obtain and create content, develop
products, increase our website traffic and market and promote our brand. Cash
used by financing activities was $366,000 for the quarter ended March 31, 2001
as compared to cash provided by financing activities of $590,000 for the quarter
ended March 31, 2000. Cash used in investing activities was primarily used to
purchase short-term investments in commercial paper to maximize idle cash while
preserving capital. The cash used by financing activities was primarily used to
repay a capital lease pursuant to consolidating and relocating our corporate
office.

        We are required to pay $3 million of cash to acquire the assets of
IVonyx and will incur transaction expenses relating to the IVonyx transaction.
We anticipate that the IVonyx transaction will be consummated in the third
quarter and that we will have sufficient cash at that time to pay the cash
portion of the purchase price. However, if our operating losses prior to the
closing date are higher than anticipated or if the closing date of the IVonyx
transaction is delayed, we may require additional equity or debt financing to
consummate the IVonyx transaction. We may spend funds to invest in various forms
of advertising to increase awareness of drkoop.com and its services. We may also
spend funds to acquire strategic investments in other businesses or
technologies.

        We anticipate that we will require additional debt or equity financing
prior to the end of 2001, the amount and timing of which will depend in large
part on our spending program. If additional funds are raised through the
issuance of equity securities, our stockholders may experience significant
dilution. Furthermore, there can be no assurance that additional financing will
be available when needed or that if available, such financing will include terms
favorable to us or our stockholders. If such financing is not available when
required or is not available on acceptable terms, we may be unable to meet
operating obligations. See "Risk Factors That May Affect Future Results and Safe
Harbor Statement" below. If additional funds are raised through the issuance of
equity securities, our stockholders may experience significant dilution.
Furthermore, there can be no assurance that additional financing will be
available when needed or that if available, such financing will



                                       14
<PAGE>   15
include terms favorable to us or our stockholders. If such financing is not
available when required or is not available on acceptable terms, we may be
unable to meet operating obligations. See "Risk Factors That May Affect Future
Results and Safe Harbor Statement" below.

RISK FACTORS THAT MAY AFFECT FUTURE RESULTS AND SAFE HARBOR STATEMENT

        Investors are cautioned that this Form 10-Q contains forward-looking
statements that involve risks and uncertainties, including the following: (i)
our plans, strategies, objectives, expectations and intentions are subject to
change at any time at the discretion of management and the Board of Directors;
(ii) our plans and results of operations will be affected by our ability to
manage our growth and working capital; (iii) our business is highly competitive
and the entrance of new competitors or the expansion of the operations by
existing competitors in our markets could adversely affect our plans and results
of operations. The risk factors described below are not a comprehensive list of
risk factors that apply to our business. These risk factors include certain
risks that are becoming applicable to our business as we implement our expanded
business model, which includes our pending acquisition of IVonyx and offering
other products and services in the off-line health and wellness market that we
have not previously offered.

RISKS RELATED TO OUR BUSINESS

        We have a limited operating history and have not attained profitability.

        Since inception, we have incurred significant losses and negative cash
flow, and as of March 31, 2001 we had an accumulated deficit of $204.2 million.
We have not achieved profitability and expect to continue to incur operating
losses for the foreseeable future as we fund operating and capital expenditures
in the areas of expansion of our network, advertising, promotion of our brand,
development of the content of our website and other health and wellness
offerings, sales and marketing, and operating infrastructure. Our business model
assumes that consumers will be attracted to and use health information and
related content available on our on-line network which will, in turn, allow us
the opportunity to sell advertising and sponsorship designed to reach those
consumers. We are cognizant of the decline in the Internet advertising market
and are in the process of implementing a new business plan to reduce our
dependence on advertising revenues in the future. Our business model also
assumes that those users will access important healthcare needs through
electronic commerce over the Internet and that local healthcare participants
will affiliate with us. This business model has not proven to be successful and
we cannot assure you that we will ever achieve or sustain profitability or that
our operating losses will not increase in the future or be inconsistent with the
expectations of the public market. We have received a report from our
independent auditors for our fiscal year ended December 31, 2000 containing an
explanatory paragraph that describes the uncertainty as to our ability to
continue as a going concern due to our historical negative cash flow and
because, as of the date they rendered their opinion, we did not have access to
sufficient committed capital to meet our projected operating needs for at least
the next twelve months.

        Our business is difficult to evaluate because we have an extremely
        limited operating history.

        We were incorporated in July 1997 and launched our Internet operations
in July 1998. Accordingly, we have an extremely limited operating history. An
investor in our common stock must consider the risks, uncertainties, expenses
and difficulties frequently encountered by companies in their early stages of
development, particularly companies in new and rapidly evolving markets,
including the Internet market. These risks and difficulties include our ability
to:

        -       attract a larger audience of users to our Internet-based
                consumer health network;

        -       increase awareness of our brand;

        -       strengthen user loyalty and increase the number of registered
                users;

        -       offer compelling on-line content, services and e-commerce
                opportunities;



                                       15
<PAGE>   16

        -       maintain our current, and develop new, affiliate relationships;

        -       attract a large number of advertisers who desire to reach our
                users;

        -       respond effectively to the offerings of competitive providers of
                health information on the Internet;

        -       continue to develop and upgrade our technology;

        -       attract, retain and motivate qualified personnel; and

        -       develop new revenue streams in areas such as physician services,
                market research, licensing of tools and other technology, and
                international opportunities.

        We also depend on the growing use of the Internet for advertising,
commerce and communication, and on general economic conditions. We cannot assure
you that our business strategy will be successful or that we will successfully
address these risks or difficulties. If we fail to address adequately any of
these risks or difficulties, our business would likely suffer. Please see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations.

        Our expanded business model contemplates developing and offering
        products and services that we have not previously developed and offered,
        and we may not be able to derive incremental revenues from these
        offerings.

        Our expanded business model contemplates that we will develop and offer
products and services targeting segments of the health and wellness market, both
on-line and off-line, that we have not previously developed or offered. For
example, through StayfitUSA, we intend to create a significant virtual market
for health and fitness club memberships and are targeting large employers as
purchasers of such memberships for their employees. Through our strategic
alliance with i-Trax, we intend to jointly offer on-line products to physicians
and patients serving a variety of physician and patient needs. Through our
pending acquisition of IVonyx, we intend to offer home infusion services to
consumers. We have not previously developed or offered these types of products
or services, and there can be no assurance that these offerings will be
successful or generate additional revenue. If the implementation of our expanded
business model does not result in significant incremental revenues to us, we
will require additional equity or debt financing to continue our operations.

        Our common stock has been delisted from the NASDAQ National Market and
        our stock price has been volatile.

        On April 30, 2001 our common stock was delisted from the Nasdaq National
Market due to our failure to comply with Nasdaq's $1.00 per share minimum bid
price requirement. Our common stock currently trades on the OTC Bulletin Board
maintained by the National Quotation Bureau, Inc. This is generally considered
to be a less efficient trading market, and our stock price, as well as the
liquidity of our common stock, may be adversely impacted as a result.

        Our pending transaction of IVonyx involves risks.

-       We will partially integrate our business and IVonyx.

        If consummated, our transaction with IVonyx involves the partial
integration of two companies that have previously operated independently.
Our basic operations and those of IVonyx will remain essentially independent,
but portions of the administrative and support aspects of IVonyx's business will
be consolidated with ours. The combination of the companies will require, among
other things, integration of the companies' management staffs, coordination of
the companies sales and marketing efforts, and the identification and
elimination of redundant and/or unnecessary overhead. We intend to retain the
services of G. Peter Molloy, Jr., the President and Chief Executive Officer of
IVonyx Group Services, to become



                                       16
<PAGE>   17

our President upon the closing of the asset purchase transaction. We previously
have not provided home infusion therapy services. No assurance can be given that
we will not encounter difficulties in operating IVonyx or in integrating the
administrative and support functions of the two companies or that the benefits
expected from such operation and integration will be realized. Achieving these
anticipated business benefits will depend in part on whether the operations of
IVonyx can be integrated with our operations in an efficient, effective and
timely manner. There can be no assurance that this will occur. Any delays or
unexpected costs incurred in connection with such operation or integration could
have a material adverse effect on our and/or IVonyx's business, results of
operations or financial condition.

-       The transaction may not be consummated.

        Consummation of the transaction is subject to various conditions and it
is possible that these conditions will not be satisfied or waived. If these
conditions are not satisfied or waived or the transaction is not consummated for
any other reason, we will be required to bear significant expenses incurred in
connection with the negotiation, execution and attempted consummation of the
transaction. A failure to consummate the transaction could have a material
adverse effect on our operations and business.

-       Additional financing may be required.

        We are required to pay $3 million of cash to acquire the assets of
IVonyx and will incur expenses relating to the IVonyx transaction. We anticipate
that the IVonyx transaction will be consummated in the third quarter and that we
will have sufficient cash at that time to pay the cash portion of the purchase
price. However, if our operating losses prior to the closing date are higher
than anticipated or if the closing date of the IVonyx transaction is delayed, we
may require additional equity or debt financing to consummate the IVonyx
transaction.

-       The number of shares we may be required to issue may fluctuate widely.

        The number of shares of our common stock that IVonyx stockholders will
receive is set at a fixed dollar amount, so the number of shares that we will
issue will not be determined until the closing date. Accordingly, the number of
shares of common stock that we will issue is subject to volatility resulting
from fluctuations in the market price of our common stock.

-       Additional shares of our common stock could be issued which could result
        in a decline in the market price of the stock.

        Shares of our common stock eligible for future sale could have a
dilutive effect on the market for our common stock and could adversely affect
the market price. The asset purchase agreement with IVonyx contemplates that any
IVonyx stockholders that receive our stock in the transaction will enter into a
one-year lock-up agreement, which, in most instances, will prevent them from
transferring the shares of our common stock they receive for one year from the
closing date. Sales of substantial amounts of our common stock in the public
market following the asset purchase could adversely affect the market price of
our common stock.

        Acquisitions could harm our business.

        We acquired drDrew.com, Inc., in November of 2000 and StayfitUSA,
L.L.C., in March of 2001, and in April of 2001, we signed the agreement to
purchase the assets of IVonyx, which is subject to numerous closing conditions.
We could experience difficulty in integrating the personnel, products,
technologies or operations of these companies. In addition, assimilating
acquired businesses involves a number of other risks, including, but not limited
to:

-       the potential disruption of our businesses;

-       the potential impairment of relationships with our employees, customers
        and strategic partners;

-       the additional expense associated with a write-off of a portion of
        goodwill and other intangible assets



                                       17
<PAGE>   18

        due to changes in market conditions, the U.S. and global economy or the
        economy in the markets in which we compete or because acquisitions are
        not providing the benefits expected;

-       unanticipated costs or the incurrence of unknown liabilities;

-       the need to manage more geographically-dispersed operations, such as
        StayfitUSA's offices in Georgia and IVonyx's offices in Michigan,
        Illinois, Tennessee, Louisiana and New Jersey;

-       diversion of management resources from other business concerns;

-       the inability to retain the employees of the acquired businesses;

-       adverse effects on existing customer relationships of acquired
        companies;

-       the difficulty of assimilating the operations and personnel of the
        acquired businesses;

-       our inability to incorporate acquired technologies successfully into our
        Internet infrastructure services; and

-       the inability to maintain uniform standards, controls, procedures and
        policies.

        If we are unable to successfully address any of these risks for future
acquisitions, our business could be harmed.

        We currently have litigation pending against us and cannot predict the
        outcome of such litigation.

        We are currently aware of several lawsuits filed against us. Eleven of
these lawsuits consisted of substantially-identical class action lawsuits
alleging violations of federal securities laws which were consolidated into a
single action which is pending in federal court in Austin, TX. We believe that
the claims alleged in these lawsuits are without merit and intend to defend the
lawsuits vigorously. In relation to the class action lawsuits, our counsel has
received a letter from a representative of a regional office of the SEC stating
that the SEC is investigating the events and circumstances surrounding the
allegations raised in the lawsuits and asking that we voluntarily provide the
SEC with information regarding such events and circumstances. The SEC letter
also states that the investigation should not be construed as an indication that
any violations have occurred. In addition, we are a nominal defendant, and
certain of our prior officers and directors are defendants, in a derivative
action lawsuit (the "Derivative Action") in the United States District Court for
the Western District of Texas captioned Manju Ahuja v. Georgen-Saad et al. The
Derivative Action, which was filed on January 9, 2001, asserts various claims
that we allegedly have against the defendants for alleged breaches of fiduciary
duty and other purported wrongdoing. We separately received a letter demanding
that we initiate a derivative action lawsuit asserting various claims that the
letter alleges that we have against certain of our prior officers and directors
for alleged breaches of fiduciary duty and other alleged wrongdoing. In
addition, we and certain of our prior officers and directors are defendants in a
lawsuit in the District Court of Travis County, Texas (53rd Judicial District)
captioned F. Dennis Pryor III v. drkoop.com, Inc. et al. The lawsuit, which was
filed on February 14, 2001 by a purchaser of a convertible promissory note
issued by us, asserts various claims based on the allegation that the plaintiff
was misinformed as to the length of the holding period upon conversion of the
note into our common stock. In addition, the Company is also a defendant in a
lawsuit in the Superior Court for the State of California and the County of Los
Angeles, Central District captioned Sunrise International Leasing Corporation
vs. Drdrew.com, Inc. et al. The lawsuit, which was filed on March 2, 2001 by
Sunrise International Leasing Corporation, alleges that the Company wrongfully
took possession of certain equipment owned by Sunrise and seeks monetary
damages and return of the equipment.

        We cannot predict the outcome of the litigation described above or
extent to which the costs of defense and any settlement or award will be covered
by our insurance policies. An adverse determination on one or more of these
matters could result in a material adverse effect on our financial condition and
results of operations.

        Our business is changing rapidly, which could cause our quarterly
        operating results to vary and our stock price to fluctuate.



                                       18
<PAGE>   19
        Our revenues and operating results may vary significantly from quarter
to quarter due to a number of factors, not all of which are in our control. If
we have a shortfall in revenues in relation to our expenses, or if our expenses
precede increased revenues, then our business would suffer and we may not be
able to finance our growth plans for our business or to pay our expenses in a
timely manner. This would likely affect the market price of our common stock in
a manner which may be unrelated to our long-term operating performance. These
conditions have existed in the quarter ended March 31, 2001.

        Important factors which could cause our results to fluctuate materially
        include:

        -       our ability to attract and retain users;

        -       our ability to implement our expanded business model;

        -       our ability to attract and retain advertisers and sponsors and
                maintain advertiser and sponsor satisfaction;

        -       the availability of sufficient capital to fund our business
                plan;

        -       traffic levels on our Internet site;

        -       our ability to attract and retain customers and maintain
                customer satisfaction for our existing and future e-commerce
                offerings;

        -       new Internet sites, services or products introduced by us or our
                competitors;

        -       the level of Internet and other on-line services usage;

        -       our ability to upgrade and develop our systems and
                infrastructure and attract new personnel in a timely and
                effective manner;

        -       our ability to develop new revenue streams;

        -       our ability to successfully integrate operations and
                technologies from any acquisitions, joint ventures or other
                business combinations or investments;

        -       technical difficulties or system unavailability affecting the
                operation of our website; and

        -       our ability to attract new business partners, many of whom have
                become unsure of our long term viability based on recent adverse
                press coverage.

        Our revenues for the foreseeable future will remain principally
dependent on user traffic levels, and advertising and sponsorship activity, as
well as on our offering of products and services in the health and wellness
market that we have not previously offered. We will also be dependent on the
further development of revenue streams related to e-commerce activities,
physician services, market research, sales of interactive tools and similar
technology products and the level of affiliate subscriptions in our domestic and
international content partner programs. Such future revenues are difficult to
forecast due to, among other things, the involvement of third parties and the
time lag in receiving sales data and because these are all new, developing
businesses. In addition, we plan to increase our sales and marketing operations,
obtain broader distribution for our service, expand and develop content and
upgrade and enhance our technology and infrastructure development in order to
support our growth.

        Many of the expenses associated with these activities--for example,
personnel costs, and technology and infrastructure costs--are relatively fixed
in the short-term. We have endeavored over the past several months to reduce the
cost of operating our business. However, we may be unable to adjust



                                       19
<PAGE>   20

spending quickly enough to offset any unexpected revenue or capital shortfall,
in which case our results of operations and liquidity would suffer materially.

        We must establish, maintain and strengthen our brand in order to attract
        users to our network and generate revenue from existing and new
        businesses.

        In order to expand our audience of users and increase our on-line
traffic, we must establish, maintain and strengthen our brand. For us to be
successful in establishing our brand, healthcare consumers must perceive us as a
trusted source of health information, and advertisers, merchants and
manufacturers must perceive us as an effective marketing and sales channel for
their products and services. In addition, this community must also view us as
financially stable. If our marketing efforts are not productive or if we cannot
strengthen our brand, our website will receive a lower level of user traffic and
we may experience a decline in the number of advertisers, content providers and
sponsors who support our website as a result. In addition, a key element of our
strategy to establish, maintain and strengthen our brand is to encourage
consumers to associate us with Dr. C. Everett Koop. We believe that consumers
consider Dr. C. Everett Koop to be a trustworthy and credible leader in the
healthcare field, although at times he has been at the center of controversy on
various healthcare-related issues. We cannot assure you, however, that Dr. C.
Everett Koop will maintain this reputation, and any damage to his reputation may
reduce the commercial viability of our brand. In addition, if our relationship
with Dr. C. Everett Koop terminates for any reason, we will need to change the
name of our website and our business, and devote substantial resources towards
building a new marketing and brand strategy.

        Key elements of our marketing and brand building strategies are
        dependent on our relationship with Dr. C. Everett Koop.

        A key element of our strategy is to associate our company with former
U.S. Surgeon General, C. Everett Koop, Chairman of the Board of our company and
a person who we believe is viewed by consumers as a trustworthy and credible
leader in the health and wellness fields. We recently entered into a Third
Amended and Restated Name and Likeness Agreement with Dr. Koop, which supersedes
our previous Second Amended and Restated Name and Likeness Agreement dated June
22, 2000, and which permits us to use his image, name and likeness in connection
with our medical and health information network as well as medical, healthcare
and/or wellness-related services, products and/or commerce. Under this
agreement, our use of Dr. Koop's name, image or likeness is subject to his prior
written approval of the resulting products, although he may not unreasonably
withhold his approval. The Dr. Koop agreement is exclusive and for a term of
seven years, subject to automatic renewal for additional five-year terms unless
it is terminated by either party not more than 270 and not less than 180 days
before the end of each term. The agreement further provides that Koop may only
terminate in the event we are in material breach of the contract and do not cure
that material breach within a designated timeframe. If the Dr. Koop agreement is
terminated other than due to a breach or default by us, we will have the right
to use the name, image or likeness of Dr. Koop on a non-exclusive basis,
potentially with other users of his name and likeness. Additionally, we will
have the right to use the name, image or likeness of Dr. C. Everett Koop on an
exclusive basis, without competition from any other users of his name and
likeness, with respect to any products or services involving or related to our
medical and health information network, as well as medical; healthcare and/or
wellness-related services, products, or commerce for a period of five years
after the termination of the Dr. Koop agreement. Furthermore, Dr. Koop's name,
image or likeness may not be licensed or otherwise conveyed to any direct
competitor. If we default in our obligations and do not promptly cure the
default, Dr. Koop may terminate the Dr. Koop agreement, no rebranding period
will apply and we would lose all rights to use Dr. Koop's name, image and
likeness on the 90th day after such termination. Dr. Koop may also terminate the
Dr. Koop agreement under certain circumstances upon a change in control of our
company to which Dr. Koop does not give his prior consent, in which event the
agreement automatically terminates and all rights in the Koop name granted under
the agreement immediately revert to Dr. Koop.

        If our agreement with Dr. Koop were terminated prior to the end of its
current term or not renewed at the end of its current term, we would need to
change the name of our website and of any of other products or services branded
with Dr. Koop's name or likeness that we may offer, and we would need to devote
substantial resources towards building a new marketing and brand strategy.
Without our ability to use Dr. Koop's name and likeness or Dr. Koop's
participation in our business, we may not be able to continue to attract a



                                       20
<PAGE>   21

significant amount of user traffic and advertisers to our website. If Dr. Koop
ends his affiliation with our company, we could suffer a significant loss of
credibility and trust with health consumers as a result. Any development that
would cause Dr. Koop to exercise his right to terminate his relationship with
our company or which otherwise would cause us to lose the benefits of our
affiliation with him would cause our business, results of operation and
financial condition to suffer. We do not maintain "key person" life insurance
for Dr. Koop or any of our personnel.

        We have materially amended our major contracts which may result in
        reduced traffic to our website.

        On April 9, 1999 we entered into agreements with Infoseek Corporation
and the Buena Vista Internet Group, a unit of The Walt Disney Company, under
which we became the exclusive provider of health and related content on three
websites of the GO Network. Additionally, on July 1, 1999 we entered into
agreements with America Online, Inc. under which we became the premier health
content provider across five AOL brands: America Online, CompuServe, AOL.com,
Netscape Netcenter and Digital City. These transactions were premised on the
assumption that the traffic to our website that would be obtained from these
arrangements would permit us to earn revenues greater than the payments made to
them. These assumptions proved to be untrue, and since we were unsuccessful in
generating sufficient revenues to offset these expenditures, we renegotiated
these agreements. Both of these agreements were renegotiated in April 2000, and
each of these agreements has now terminated. As a result, the carriage of our
service on the GO Network and on AOL under these agreements has expired. AOL and
we also remain party to a separate contract for which we were paid $8.0 million
in advance. This contract imposes obligations on us relating to the development
of a personal medical record tool and could be terminated if our carriage
agreement is terminated, resulting in potential financial penalties.

        In order to attract and retain our audience of users, we must provide
        health content, tools and other features, which meet the changing
        demands of those users.

        One of our fundamental business objectives is for our website to be a
trusted source of health information and services. As with any form of media
that depends on consumer usage and interest, we have to provide editorial
content and other features such as interactive tools between a user and our
website that users demand in order to continue to attract and retain our
audience of users. We expect that competitive factors will create a continuing
need for us to retain, improve and add to our editorial content, interactive
tools and other features. We will not only have to expend significant funds and
other resources to continue to improve our network, but we must also properly
anticipate and respond to consumer preferences and demands. Competition for
content has increased the fees charged by high quality content providers and we
expect this trend to continue. The addition of new features will also require
that we continue to improve the technology underlying our website. These
requirements are significant, and we may fail to execute them quickly and
efficiently. If we fail to expand the breadth of our offerings quickly, or these
offerings fail to achieve market acceptance, our business will suffer
significantly as a result of decreased consumer interest in our website and a
reduction in advertising and sponsorship revenues.

        Our business model relies on Internet advertising and sponsorship
        activities, which may not be an effective or profitable marketing media
        and may create a perceived conflict of interest issue.

        Although our revised business plan focuses on sources of revenue in
addition to advertising, our future continues to depend in part on increased use
of the Internet as an advertising medium. We expect to derive a substantial
portion of our revenues from advertising and sponsorships. The Internet
advertising market is new and rapidly evolving, and we cannot yet predict its
effectiveness as compared to traditional media advertising. As a result, demand
and market acceptance for Internet advertising solutions remains uncertain. Most
of our current or potential advertising customers have little or no experience
advertising over the Internet and have allocated only a limited portion of their
advertising budgets to Internet advertising. The adoption of Internet
advertising, particularly by those entities that have historically relied upon
traditional media for advertising, requires the acceptance of a new way of
conducting business, exchanging information and advertising products and
services. Such customers may find Internet advertising to be less effective for
promoting their products and services relative to traditional advertising



                                       21
<PAGE>   22

media. We cannot assure you that the market for Internet advertising will ever
become sustainable. If the market for Internet advertising fails to develop or
develops more slowly than we expect, then our ability to generate advertising
revenues would suffer. Further, our relationship with advertisers and sponsors
could be perceived as a conflict of interest by users regardless of the
safeguards put in place to segregate our editorial and commercial activities. We
are cognizant of the decline in the Internet advertising market and will reduce
our dependence on advertising revenues in the future.

        Companies use various pricing models to sell advertising on the
Internet. For example, some arrangements rely on the display of an "impression"
to a user, while others require that the user gain access to the advertiser's
website by clicking on a direct link located on our website. It is difficult to
predict which, if either will emerge as the industry standard, thereby making it
difficult to project our future advertising rates and revenues. Our advertising
revenues could also suffer in the same way if we are unable to adapt to new
forms of Internet advertising. Moreover, "filter" software programs have become
available in the marketplace that filter, limit or prevent advertising from
being delivered to an Internet user's computer. Widespread adoption of this
software could halt the commercial viability of Internet advertising.

        In order to execute our growth plan we must attract, retain and motivate
        highly skilled employees, and we face significant competition from other
        Internet and new media companies in doing so.

        Our ability to execute our growth plan and be successful also depends on
our continuing ability to attract, retain and motivate highly skilled employees.
In addition to Dr. C. Everett Koop, Chairman of the Board, we depend on the
continued services of key board members, our senior management and other
personnel. Competition for personnel throughout the Internet and related new-
media industry is intense. We have faced particular challenges recently in light
of our well-publicized difficulty obtaining funds and capital, our low stock
price, which has fallen below the exercise price of many of the stock options
granted to employees and a very competitive labor market for high technology
workers. Recently, a significant number of our employees have been terminated in
cost cutting efforts or voluntarily departed to pursue other opportunities. We
may be unable to retain our key employees or attract, assimilate or retain other
highly qualified employees in the future. We have from time to time in the past
experienced, and we expect to continue to experience in the future, difficulty
in hiring and retaining highly skilled employees with appropriate
qualifications. If we do not succeed in attracting new personnel or retaining
and motivating our current personnel, we will experience difficulty in
sustaining the level and quality of our business.

        We depend on third-party relationships, many of which are short-term or
        terminable, to generate advertising and provide us with content.

        We depend, and will continue to depend, on a number of third-party
relationships to increase traffic on www.drkoop.com and www.drdrew.com and
generate advertising and other revenues. Outside parties on which we depend
include unrelated website operators that provide links to our website, providers
of health content and portals which provide us with the ability to operate and
run our websites. Many of our arrangements with third-party Internet sites and
other third-party service providers are not exclusive and are short-term or may
be terminated at any time by either party. We cannot assure you that third
parties regard our relationship with them as important to their own respective
businesses and operations. They may reassess their commitment to us at any time
in the future and may develop their own competitive services or products.

        We intend to produce only a portion of the health content that will be
found on the our network. We will rely on third-party organizations that have
the appropriate expertise, technical capability, name recognition, reputation
for integrity and willingness to syndicate product content for branding and
distribution by others. Our content agreement for our Drug Checker feature on
our website is up for renewal in the next year. Failure to renew existing
content relationships may result in a competitor acquiring a key content
provider on an exclusive basis. This could make our network less attractive or
useful for an end user, which could reduce our advertising and e-commerce
revenues.



                                       22
<PAGE>   23

        We cannot assure you that we will be able to maintain relationships with
third parties that supply us with content, carriage, software or related
products or services that are crucial to our success, or that such content,
software, products or services will be able to sustain any third-party claims or
rights against their use. Also, we cannot assure you that the content, software,
products or services of those companies that provide access or links to our
website will achieve market acceptance or commercial success. As a result, our
existing relationships might not result in sustained business partnerships,
successful product or service offerings or the generation of significant
revenues for us.

        If our ability to expand our network infrastructure is constrained in
        any way we could lose customers and suffer damage to our operating
        results.

        Presently, a relatively limited number of consumers use our website. We
must continue to expand and adapt our network infrastructure to accommodate
additional users, increased transaction volumes and changing consumer and
customer requirements. We may not be able to accurately project the rate or
timing of increases, if any, in the use of our website or to expand and upgrade
our systems and infrastructure to accommodate such increases. Our systems may
not accommodate increased use while maintaining acceptable overall performance.
Service lapses could cause our users to instead use the on-line services of our
competitors.

        Many of our service agreements, such as those with our on-line
community's partners, contain performance standards. If we fail to meet these
standards, our customers could terminate their agreements with us or require
that we refund part or all of the license fees. The loss of any of our service
agreements and/or associated revenues would directly and significantly impact
our business. We may be unable to expand or adapt our network infrastructure to
meet additional demand or our customers' changing needs on a timely basis, at a
commercially reasonable cost, or at all.

        We may have liability for information we provide on our website or which
        is accessed from our website.

        Because users of our website access health content and services relating
to a condition they may have or may distribute our content to others, third
parties may sue us for defamation, negligence, copyright or trademark
infringement, personal injury or other matters. We could also become liable if
confidential information is disclosed inappropriately. These types of claims
have been brought, sometimes successfully, against on-line services in the past.
Privacy concerns have also resulted in recent actions by the Federal Trade
Commission and other government agencies. Others could also sue us for the
content and services that are accessible from our website through links to other
websites or through content and materials that may be posted by our users in
chat rooms or bulletin boards. While our agreements, including those with
content providers, in some cases provide that we will be indemnified against
such liabilities, such indemnification, if available, may not be adequate. Our
insurance may not adequately protect us against these types of claims. Further,
our business is based on establishing the drkoop.com network as a trustworthy
and dependable provider of health information and services. Allegations of
impropriety, even if unfounded, could therefore damage our reputation and our
business.

        Any failure or inability to protect our intellectual property rights
        could adversely affect our ability to establish our brand.

        Our intellectual property is important to our business. We rely on a
combination of copyright, trademark and trade secret laws, confidentiality
procedures and contractual provisions to protect our intellectual property.
Registrations are pending for the trademark "drkoop.com," as well as other
services and trademarks which incorporate the Dr. Koop name. Our right to use
the Dr. Koop name is granted to us under an agreement with Dr. C. Everett Koop.
If we lose our right to use the Dr. Koop name, we would be forced to change our
corporate name and adopt a new domain name. These changes could confuse current
and potential customers and would adversely impact our business. We also rely on
a variety of technologies that are licensed from third parties, including our
database and Internet server software, which is used in our website to perform
key functions. These third-party licenses may not be available to us on
commercially reasonable terms in the future.



                                       23
<PAGE>   24

        We do not expect to pay dividends, and investors should not buy our
        common stock expecting to receive dividends.

        We have never declared or paid any cash dividends on our capital stock.
We presently intend to retain future earnings, if any, to finance the expansion
of our business and do not expect to pay any cash dividends in the foreseeable
future. Investors should not purchase our common stock with the expectation of
receiving cash dividends.

        We are subject to anti-takeover provisions in our charter and in our
        contracts that could delay or prevent an acquisition of our company,
        even if such an acquisition would be beneficial to our stockholders.

        Certain provisions of our certificate of incorporation, our bylaws,
Delaware law and material contracts to which we are party could make it more
difficult for a third party to acquire us, even if doing so might be beneficial
to our stockholders.

        Our business may face additional risks and uncertainties not presently
        known to us, which could cause our business to suffer.

        In addition to the risks specifically identified in this section or
elsewhere in this report, we may face additional risks and uncertainties not
presently known to us or that we currently deem immaterial which ultimately
impair our business, results of operations and financial condition.

RISKS RELATED TO OUR INDUSTRY

        Consumers and the healthcare industry must accept the Internet as a
        source of health content and services for our business model to be
        successful.

        To be successful, we must attract to our network a significant number of
consumers as well as other participants in the health industry. To date,
consumers have generally looked to healthcare professionals as their principal
source for health and wellness information. Our business model assumes that
consumers will use health information available on our network, that consumers
will access important health needs through electronic commerce using our
website, and that local healthcare organizations and other participants in the
healthcare industry will affiliate with us. Our business model also assumes that
the services provided by our network will be supported in part by advertising,
sponsorship and similar activities purchased by companies with commercial
interests in the healthcare industry and that consumers will accept this
practice. Our business model is not yet proven and we have not reached
break-even as to earnings or cash flow.

        The Internet industry is highly competitive and changing rapidly, and we
        may not have the resources to compete adequately.

        The number of Internet websites offering users health content, products
and services is vast and increasing at a rapid rate. These companies compete
with us for users, advertisers, e-commerce transactions and other sources of
on-line revenues. In addition, traditional media and healthcare providers
compete for consumers' attention both through traditional means as well as
through new Internet initiatives. We believe that competition for health
consumers will continue to increase as the Internet develops as a communication
and commercial medium. We compete directly for users, advertisers, e-commerce
merchants, syndication partners and other affiliates with numerous Internet and
non-Internet businesses, including:

        -       health-related on-line services or websites targeted at
                consumers, such as healthcentral.com, healthgate.com,
                intelihealth.com, mayohealth.org; mediconsult.com, onhealth.com,
                thriveonline.com and webmd.com;



                                       24
<PAGE>   25
        -       on-line and Internet portal companies, such as America Online,
                Inc.; Microsoft Network; Yahoo! Inc.; Excite@Home, Inc.; Lycos
                Corporation and GO.com, which commonly distribute multiple
                sources of health data;

        -       electronic merchants and conventional retailers that provide
                health goods and services competitive to those available from
                links on our website;

        -       hospitals, HMOs, managed care organizations, insurance companies
                and other healthcare providers and payors which offer healthcare
                information through the Internet; and

        -       healthcare information technology organizations such as
                Healtheon/WebMD, CareInSite, Cerner, IDX and Eclipsys.

        Many of these potential competitors are likely to enjoy substantial
competitive advantages compared to our company, including:

        -       the ability to offer a wider array of on-line products and
                services;

        -       larger production and technical staffs;

        -       greater name recognition and larger marketing budgets and
                resources;

        -       larger customer and user bases; and

        -       substantially greater financial, technical and other resources.

        To be competitive, we must respond promptly and effectively to the
challenges of technological change, evolving standards and our competitors'
innovations by continuing to enhance our products and services, as well as our
distribution, sales and marketing channels. We must also meet or exceed evolving
consumer expectations and competitive standards regarding medical ethics,
Internet ethics and privacy concerns. Increased competition could result in a
loss of our market share or a reduction in our prices or margins. Competition is
likely to increase significantly as new companies enter the market and current
competitors expand their services or consolidate with each other.

        The health care market is competitive and subject to lawsuits.

        The segments of the off-line health care market in which IVonyx and we
operate are highly competitive and are becoming more competitive. In each of our
lines of business, there are relatively few barriers to entry. Our competitors
include national providers and local providers of health care products. Also,
infusion therapy is being affected by increasing availability in oral form of
medications, which previously were available, only by intravenous infusion.

        In addition, participants in the health care market are subject to
lawsuits based upon alleged malpractice, product liability, negligence or
similar legal theories, many of which involve large claims and significant
defense costs. To date, we have not been subject to a significant lawsuit by a
purchaser of our products or services, but we could be, and the risk increases
once we enter the home infusion therapy market and other sectors of the health
and wellness market. We intend to maintain insurance against professional and
product liability; however, a successful claim substantially in excess of our
coverage limits could have a material adverse effect upon us. Further,
insurance policies are subject to annual renewal, and it may not be possible to
obtain liability insurance in the future on acceptable terms or at all. Also,
claims against us, regardless of their merit or eventual outcome, may have a
material adverse effect upon our reputation.

        Complex laws and regulations are applicable to IVonyx's business and
        future changes in those laws and regulation could have a material
        adverse effect on us.



                                       25
<PAGE>   26
        The healthcare industry, including home infusion therapy services, is
subject to stringent laws and regulations at both the federal and state levels,
requiring compliance with licensing and certification, complex reimbursement,
record-keeping, health information exchange and medical waste, disposal and
safety requirements. We may need permits, licenses and certifications to operate
IVonyx's business, which may be restricted or otherwise difficult to obtain. We
anticipate that we can procure all necessary permits, licenses and
certifications; however, failure to obtain, renew or maintain required
regulatory approvals or licenses could have a material adverse effect on our
business.

        Federal law sets forth health information standards to provide
guidelines for electronic transactions and code sets, unique provider, employer,
health plan and patient identifiers, security and electronic signatures as well
as protecting privacy in the exchange of identifiable health information. The
Department of Health and Human Services ("DHHS") has released two rules
mandating compliance with federal standards. First, if the IVonyx transaction is
consummated, we will be required to implement the uniform standards governing
common healthcare transactions by October 16, 2002 and to comply with new
standards relating to the privacy of the use and disclosure of individually
identifiable health information by April 14, 2003. Rules governing the security
of health information have been proposed but have not yet been issued in final
form.

        At this time, we anticipate that we will be able to comply with the new
federal requirements following our acquisition of IVonyx; however, we cannot
estimate the cost of compliance with the new and proposed requirements, but it
is likely that they will have a significant effect on the manner in which IVonyx
exchanges health information. The cost of compliance, therefore, could have a
material adverse effect on our business, financial condition, results of
operation or cash flow. Our failure to comply with the new federal laws may
result in criminal penalties and civil sanctions.

        Financial relationships between IVonyx and physicians or other referral
sources are subject to strict and ambiguous limitations under Medicare and
Medicaid fraud and abuse laws and under the Stark Law. In addition, the
provision of services, pharmaceuticals and equipment are subject to strict
licensing and safety requirements. Following our acquisition of IVonyx,
violations of these laws and regulations could subject us to severe fines,
facility shutdowns and possible exclusion from participation in federal
healthcare programs such as Medicare and Medicaid. Changes in these healthcare
laws, new interpretations of the existing laws, or changes in payment
methodologies may have a significant effect on our business and results of
operations.

        Pricing and payment pressures could have a material adverse effect on
        us.

        The healthcare industry is currently experiencing market-driven reforms
placing pressure on healthcare providers to reduce healthcare costs. These
market-driven reforms are resulting in industry-wide consolidation. The effect
of the consolidation may create downward pressure on home healthcare margins as
payors such as managed care organizations and suppliers exert pricing pressures
on home healthcare providers. IVonyx's commercial and managed care providers
represented in excess of 80% of IVonyx's annual revenues in 2000. Also, the home
healthcare industry is generally characterized by long collection cycles for
accounts receivables due to the complex and time consuming requirements for
obtaining reimbursement from payors. In connection with the asset acquisition of
IVonyx, we are not acquiring IVonyx's accounts receivable. Accordingly,
following our acquisition of IVonyx, we will have to build up the receivables
base which we can collect from and borrow against. Because we will incur
operating expenses relating to IVonyx's business following consummation of the
acquisition before this receivables base is built up and collected, we expect
that our working capital will initially be negatively impacted. While state
prompt-payment laws and management's collection efforts can help accelerate the
timing of payment, no assurances can be made that these efforts will be
successful in reducing the level of accounts receivables. In addition, few
barriers to entry exist in local home healthcare markets. As a result, we may
face increased competition in the future that may further increase pricing
pressure and limit our ability to maintain or increase our market share. The
ultimate timing and effect of these market-driven reforms cannot be predicted.
These reforms may result in a material adverse effect on our business, results
of operation or financial condition.

        Healthcare reform may materially affect our business.



                                       26

<PAGE>   27

        The healthcare industry is subject to a dynamic regulatory environment.
Changes in the law, new interpretations of existing laws, or changes in
reimbursement methodologies may have a significant effect on the definition of
allowable activities, the costs of doing business and the amount of
reimbursement from government and other third-party payors. Efforts to contain
the federal budget, including the Medicare and Medicaid programs, have brought
about healthcare reform proposals. State legislators have also, from time to
time, considered health care reform proposals. Congress and state legislators
can be expected to continue to review areas ripe for reform in health care
delivery systems and reimbursement methodologies and the public will continue to
debate these issues in the future. The ultimate timing and effect of federal and
state legislative efforts is uncertain. Any such legislation may result in a
material adverse effect on our business, results of operation, cash flow or
financial condition.

        Since we operate an Internet-based network, our business is subject to
        government regulation relating to the Internet, which could impair our
        operations.

        Because of the increasing use of the Internet as a communication and
commercial medium, the government has adopted and may adopt additional laws and
regulations with respect to the Internet covering such areas as user privacy,
pricing, content, taxation, copyright protection, distribution and
characteristics and quality of production and services.

        Since we operate a health network over the Internet, our business is
subject to government regulation specifically relating to medical devices, the
practice of medicine and pharmacology, healthcare regulation, insurance and
other matters unique to the healthcare area.

        Laws and regulations have been or may be adopted with respect to the
provision of health-related products and services online, covering areas such
as:

        -       the regulation of medical devices;

        -       the practice of medicine and pharmacology and the sale of
                controlled products such as pharmaceuticals on-line;

        -       the regulation of government and third-party cost reimbursement;
                and

        -       the regulation of insurance sales.

        FDA Regulation of Medical Devices. The U.S. government considers some
computer applications and software to be medical devices and subject these
medical device applications and software to regulation by the United States Food
and Drug Administration. We do not believe that the FDA will regulate our
current applications or services; however, our applications and services may
become subject to FDA regulation. Additionally, we may expand our application
and service offerings into areas that subject us to FDA regulation. We have no
experience in complying with FDA regulations. We believe that complying with FDA
regulations would be time consuming, burdensome and expensive and could delay or
prevent our introduction of new applications or services.

        Regulation of the Practice of Medicine and Pharmacology. The practice of
medicine and pharmacology requires licensing under applicable state law. We have
endeavored to structure our website and affiliate relationships to avoid
violation of state licensing requirements, but a state regulatory authority may
at some point allege that some portion of our business violates these statutes.
Any such allegation could impact on our business by resulting in lawsuits or
otherwise requiring that we substantially change our business to comply with
those statutes. If we were required to comply with these licensing statutes,
compliance could be costly or not possible. Further, any liability based on a
determination that we engaged in the practice of medicine without a license may
be excluded from coverage under the terms of our current general liability
insurance policy.

        Federal and State Healthcare Regulation. We earn a service fee when
users on our website purchase prescription pharmacy products from certain of our
e-commerce partners. The fee is not based on



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<PAGE>   28

the value of the sales transaction. Federal and state "anti-kickback" laws
prohibit granting or receiving referral fees in connection with sales of
pharmacy products that are reimbursable under federal Medicare and Medicaid
programs and other reimbursement programs. Although there is uncertainty
regarding the applicability of these regulations to our e-commerce revenue
strategy, we believe that the service fees we receive from our e-commerce
partners are for the primary purpose of marketing and do not constitute payments
that would violate federal or state "anti-kickback" laws. However, if our
program were deemed to be inconsistent with federal or state law, we could face
criminal or civil penalties. Further, we would be required either not to accept
any transactions that are subject to reimbursement under federal or state
healthcare programs, or to restructure our compensation to comply with any
applicable "anti-kickback" laws or regulations. In addition, similar laws in
several states apply not only to government reimbursement but also to
reimbursement by private insurers. If our activities were deemed to violate any
of these laws or regulations, it could cause our business, results of operations
and financial condition to suffer.

        State Insurance Regulation. In addition, we market insurance on-line,
offered by unrelated third parties, and receive referral fees from those
providers in connection with this activity. The use of the Internet in the
marketing of insurance products is a relatively new practice. It is not clear
whether or to what extent state insurance licensing laws apply to our
activities. We have not sought or received a license under any state's insurance
laws. If we were required to comply with such licensing laws, compliance could
be costly or not possible.

        There is no established market for the consumer health e-commerce
        transactions we facilitate.

        We plan to develop relationships with retailers, manufacturers and other
providers to offer health products and services through direct links from our
website to their website. Such a strategy involves numerous risks and
uncertainties. There is no established business model for the sale of health
products or services over the Internet. Accordingly, we have limited experience
in the sale of products and services on-line and the development of
relationships with retailers, manufacturers or other providers of such products
and services, and we cannot predict the rate at which consumers will elect to
engage in this form of commerce or the compensation that we will receive for
enabling these transactions.

        Consumers may sue us if any of the products or services that are sold
through our website are defective, fail to perform properly or injure the user,
even if such goods and services are provided by unrelated third parties. Some of
our agreements with manufacturers, retailers and other providers contain
provisions intended to limit our exposure to liability claims. These limitations
may not however prevent all potential claims, and our insurance may not
adequately protect us from these types of claims. Liability claims could require
us to spend significant time and money in litigation or to pay significant
damages. As a result, any such claims, whether or not successful, could
seriously damage our reputation and our business.

        Internet capacity constraints may impair the ability of consumers to
        access our website, which could hinder our ability to generate
        advertising revenues.

        Our success will depend, in large part, upon a robust communications
industry and infrastructure for providing Internet access and carrying Internet
traffic. The Internet may not prove to be a viable commercial medium because of:

        -       inadequate development of the necessary infrastructure such as a
                reliable network backbone;

        -       timely development of complementary products such as high speed
                modems;

        -       delays in the development or adoption of new standards and
                protocols required to handle increased levels of Internet
                activity; or

        -       increased government regulation.



                                       28
<PAGE>   29

        If the Internet continues to experience significant growth in the number
of users and the level of use, then the Internet infrastructure may not be able
to continue to support the demands placed on it.

        Our business is dependent on the continuous, reliable and secure
        operation of our website and related tools and functions we provide as
        well as the Internet generally.

        We rely on the Internet and, accordingly, depend upon the continuous,
reliable and secure operation of Internet servers and related hardware and
software. Recently, several large Internet commerce companies have suffered
highly publicized system failures, which resulted in adverse reactions to their
stock prices, significant negative publicity and, in certain instances,
litigation. There have also been recent incidents involving significant
disruptions to websites and the Internet generally by hackers through computer
viruses, denial of service attacks or similar actions which compromise network
security and reliability or damage the personal computer and networks of users.
We have also suffered service outages from time to time, although to date none
of these interruptions has significantly harmed our business operations or
financial condition. To the extent that our service is interrupted, our users
will be inconvenienced, our commercial customers will suffer from a loss in
advertising or transaction delivery and our reputation may be diminished. Some
of these outcomes could directly result in a reduction in our stock price,
significant negative publicity and litigation. Our computer and communications
hardware are protected through physical and software safeguards. However, they
are still vulnerable to fire, storm, flood, power loss, telecommunications
failures, physical or software break-ins and similar events. We do not have full
redundancy for all of our computer and telecommunications facilities and do not
maintain a back-up data facility. Our business interruption insurance may be
inadequate to protect us in the event of a catastrophe. We also depend on third
parties to provide potential users with web browsers and Internet and on-line
services necessary for access to our website. In the past, our users have
occasionally experienced difficulties with Internet and other on-line services
due to system failures, including failures unrelated to our systems. Any
sustained disruption in Internet access provided by third parties could
adversely impact our business for the same reasons as stated above.

        Growth of Internet businesses, particularly in the healthcare sector,
        may be impacted by privacy or security concerns.

        In February 2000, concerns about access to consumers' private data on
the Internet were raised through published reports regarding whether the
practices of a large third-party ad serving corporation could result in the
identification of individual consumers by their Internet behavior. In response
to these reports, we took immediate action, such as designating a Chief Privacy
Officer; launching a privacy center, which explains to consumers issues
regarding on-line privacy; releasing a more detailed privacy statement; and
severing our business relationship with DoubleClick for the use of its "Dart"
third-party ad server and replaced it with an in-house ad serving solution,
which was subsequently moved to another third-party ad server with whom we have
successfully negotiated a specialized privacy protection agreement. Pursuant to
this agreement, personally identifiable information will not be collected from
consumers without the specific opt-in consent of the consumer for the purpose
intended and furthermore, where such information is voluntarily provided by the
consumer, it will be protected and not shared without a specific request by the
consumer to do so. In December 1999, we helped form a consortium of over a dozen
e-Health companies called Hi-Ethics, which is dedicated to adopting "best
practice standards" for companies in the sector. The group ratified and released
privacy principles related to content, advertising, electronic commerce, and
connectivity in the second quarter of 2000.

        We retain confidential customer information in our database, and there
is no way of determining whether the usage of health websites may be adversely
impacted by such concerns. While our privacy statement makes clear that no
personally identifiable user data will be shared without such individual's
express consent, it is critical that the facilities and infrastructure which
allow us to enforce this policy remain secure and are perceived by consumers to
be secure. Despite the implementation of privacy and security measures, our
infrastructure may be vulnerable to physical break-ins, computer viruses,
programming errors or similar disruptive problems. Security and privacy are
important concerns for our company especially as we develop additional
interactive tools which retain private user data on our system,



                                       29
<PAGE>   30

and any perception that this personal data is not private and secure would
likely be a severe public relations problem for our company and our brand.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

        We are not subject to any meaningful market risks related to currency,
commodity prices or similar matters. We are sensitive to short-term interest
rates fluctuations to the extent that such fluctuations impact the interest
income we receive on investments.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        We and certain of our prior officers and prior and current directors are
defendants in a consolidated class action lawsuit (the "Consolidated Action") in
the United States District Court for the Western District of Texas captioned In
re drkoop.com, Inc. Securities Litigation. The Consolidated Action consolidates
at least eleven substantially-identical class action lawsuits, the first of
which was filed on July 14, 2000. The Consolidated Action, which is maintained
on behalf of purchasers of the securities of drkoop.com, Inc., alleges
violations of the federal securities laws. On October 16, 2000, pursuant to
statutory procedural requirements, the Court selected lead plaintiffs for the
plaintiff class, and approved lead plaintiffs' selection of lead plaintiffs'
counsel. On December 13, 2000, the Court entered a scheduling order providing
for lead plaintiffs to file an amended consolidated complaint, and for us to
respond to the amended consolidated complaint. On or about January 11, 2001, the
lead plaintiffs filed a Consolidated Amended Complaint. Our time to respond to
the Consolidated Amended Complaint has not yet expired. We believe that the
claims alleged in the Consolidated Action are without merit and intend to defend
the Consolidated Action vigorously.

        Our counsel has received a letter from a representative of a regional
office of the United States Securities and Exchange Commission (the "SEC")
stating that the SEC is investigating the events and circumstances surrounding
the allegations in the Consolidated Action, and asking that we voluntarily
provide the SEC with information regarding such events and circumstances. The
SEC letter states that the SEC's request for information should not be construed
as an indication by the SEC that any violation of the federal securities laws
has occurred. The investigation described in the letter was commenced by order
of the SEC dated August 16, 2000. We have responded to the letter.

        We are a nominal defendant, and certain of our prior officers and
directors are defendants, in a derivative action lawsuit (the "Derivative
Action") in the United States District Court for the Western District of Texas
captioned Manju Ahuja v. Georgen-Saad et al. The Derivative Action, which was
filed on January 9, 2001, asserts various claims that we allegedly have against
the defendants for alleged breaches of fiduciary duty and other purported
wrongdoing. Our time to respond to the complaint has not yet expired. In
accordance with our obligations under applicable law, our board of directors
will evaluate the alleged claims identified in the Derivative Action. We
separately have received a letter demanding that we initiate a derivative action
lawsuit asserting various claims that the letter alleges that we have against
certain of our prior officers and directors for alleged breaches of fiduciary
duty and other alleged wrongdoing.

        We and certain of our prior officers and directors are defendants in a
lawsuit in the District Court of Travis County, Texas (53rd Judicial District)
captioned F. Dennis Pryor III v. drkoop.com, Inc. et al. The lawsuit, which was
filed on February 14, 2001 by a purchaser of a convertible promissory note
issued by us, asserts various claims based on the allegation that the plaintiff
was misinformed as to the length of the holding period upon conversion of the
note into our common stock. We believe that the claims alleged in the lawsuit
are without merit and we intend to defend the lawsuit vigorously.






                                       30
<PAGE>   31

        The Company is also a defendant in a lawsuit in the Superior Court for
the State of California and the County of Los Angeles, Central District
captioned Sunrise International Leasing Corporation vs. Drdrew.com, Inc. et al.
The lawsuit, which was filed on March 2, 2001 by Sunrise International Leasing
Corporation, alleges that the Company wrongfully took possession of certain
equipment owned by Sunrise and seeks monetary damages and return of the
equipment.

        We cannot predict the outcome of the litigation matters described above
or the extent to which the costs of defense and any settlement or award will be
covered by our insurance policies. An adverse determination on one or more of
these matters could result in a material adverse effect on our financial
condition and results of operations.

        We are also involved in other claims and disputes which are incidental
to the regular conduct of our business and are not presently believed to be
material.

Item 2.   Changes in Securities and Use of Proceeds.

          Not applicable.

Item 3.   Defaults Upon Senior Securities.

          Not Applicable.

Item 4.   Submission of Matters to a Vote of Security Holders.

          None.

Item 5.   Other Information.

          None.

Item 6.   Exhibits and Reports on Form 8-K.

(a)    Exhibits:

The Exhibit Index attached hereto is hereby incorporated by reference to this
Item.

(b)    Reports on Form 8-K.

        Report on Form 8-K filed April 16, 2001: Describing the Company's
execution of an agreement to acquire the operating assets of IVonyx Group
Services, Inc. (including the purchase agreement as an exhibit thereto).








                                       31
<PAGE>   32
                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                            drkoop.com, Inc.


Date:  May 15, 2001                         /s/   STEPHEN PLUTSKY
                                            ------------------------------------
                                            Name    Stephen Plutsky
                                            Title:  Chief Financial Officer
















                                       32


<PAGE>   33

                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
Number                              Description
------                              -----------
<S>             <C>
1.1*            Form of Underwriting Agreement

3.1*            Restated Certificate of Incorporation of drkoop.com, Inc, a
                Delaware corporation, as currently in effect

3.2*            Bylaws of drkoop.com, Inc., a Delaware corporation, as currently
                in effect

3.3*            Form of Bylaws of drkoop.com, Inc., a Delaware corporation, as
                in effect after the closing of the offering made under this
                registration statement

3.4*            Form of Restated Certificate of Incorporation of drkoop.com,
                Inc., a Delaware corporation, to be filed after the closing of
                the offering made under this registration statement

3.5*            Certificate of Amendment of Restated Certificate of
                Incorporation of drkoop.com, Inc., a Delaware corporation

3.6*****        Certificate of Designation of Series 8% Convertible Preferred
                Stock of drkoop.com, Inc.

4.1*            Specimen common stock certificate

4.2*****        Bridge Warrant to purchase 13,071,107 shares issued to ComVest
                Venture Partner L.P.

4.3*****        Bridge Warrant to purchase 1,714,607 shares issued to
                Commonwealth Associates, L.P.

4.4*****        Bridge Warrant to purchase 6,142,857 shares issued to
                Commonwealth Associates, L.P.

4.5*****        Form of Prime Investor Warrants

4.6*****        Prime Warrants to purchase 3,629,000 shares issued to Prime
                Ventures, LLC

4.7*****        Amended and Restated Registration Rights Agreement dated as of
                August 22, 2000 by and among the company, Commonwealth
                Associates, L.P. and the other signatures thereto

10.1*           Amended and Restated 1997 Stock Option Plan

10.2*           1999 Equity Participation Plan

10.3*           Amended and Restated Registration Rights Agreement, dated as of
                January 29, 1999

10.4*           Employment Agreement dated January 27, 1999 by and between
                Company and Susan M. Georgen-Saad

10.5*           Employment Agreement dated August 1, 1997 by and between Company
                and Donald W. Hackett

10.6*           Employment Agreement dated August 1, 1997 by and between Company
                and Robert C. Hackett, Jr.

10.7*           Employment Agreement dated August 1, 1997 by and between Company
                and Louis A. Scalpati

10.8*           Employment Agreement dated January 15, 1999 by and between
                Company and Dennis J. Upah

10.9+*          Distribution Agreement dated April 9, 1999 by and between
                Company and Infoseek Corporation

10.10+*         Content Agreement dated March 30, 1999 by and between Company
                and the Trustees of Dartmouth College

10.11+*         D.A.R.T. Service Agreement dated November 15, 1998 by and
                between Company and DoubleClick, Inc.

10.12+*         Distribution Agreement dated April 9, 1999 by and between
                Company and Buena Vista Internet Group

10.13*          Software Sale, License and Development Agreement dated January
                29, 1999 by and between Company and HealthMagic, Inc.

10.14+*         Content License and Distribution Agreement dated March 10, 1999
                by and between Company and @Home Network

10.15*          Tradename License Agreement dated January 5, 1999 by and between
                Company and C. Everett Koop, M.D.

10.16*          Consulting Letter Agreement dated October 1, 1997 by and between
                Company and C. Everett Koop, M.D.

10.17+*         License Agreement dated July 13, 1998 by and between Company and
                Multum Information Services, Inc.

10.18+*         Linking Agreement dated February 10, 1999 by and between Company
                and Physicians' Online
</TABLE>



                                       33
<PAGE>   34

<TABLE>
<S>             <C>
10.19+*         Content License Agreement dated December 11, 1998 by and between
                Company and Excite, Inc. (terminated on March 1, 1999)

10.20+*         Interim Linking Agreement dated January 28, 1999 by and between
                Company and Quotesmith.com

10.21+*         First Amendment to License Agreement dated March 25, 1999 by and
                between Company and Multum Information Services, Inc.

10.22*          Tradename License Agreement dated June 1, 1998 by and between
                Company and Nancy Snyderman, M.D.

10.23           Reserved

10.24*          Agreement for Sub-Sublease dated May 20, 1998 by and between
                Company and The Software Atelier L.L.C.

10.25           Reserved

10.26+*         Internet Advertising Sales Agreement dated October 16, 1998 by
                and between Company and WinStar Interactive Media Sales, Inc.

10.27*          Consulting Letter Agreement dated October 1, 1997 by and between
                Company and John Zaccaro

10.28+*         Sponsorship Agreement dated March 11, 1999 by and between
                Company and Vitamin Shoppe Industries, Inc.

10.29+*         Preferred Partner Agreement dated April 1999 by and between
                Company and Salon Internet, Inc.

10.30*          Master Community Partner Program Agreement dated January 29,
                1999 by and between Company and Adventist Health System Sunbelt
                Healthcare Corporation

10.31           Reserved

10.32*          Form of Community Partner Program Agreement

10.33*          Form of Indemnification Agreement

10.34*          1999 Employee Stock Purchase Plan

10.35*          Investment Agreement dated January 29, 1999 by and among
                Company, Adventist Health System Sunbelt Healthcare Corporation
                and HealthMagic, Inc.

10.37*          Letter Agreement dated January 29, 1999 by and among Company,
                Superior Consultant Holdings Corporation, Adventist Health
                System Sunbelt Healthcare Corporation, HealthMagic, Inc. and
                Donald W. Hackett

10.38*          Stock Restriction Agreement dated January 29, 1999 by and among
                Company, HealthMagic, Inc. and Adventist Health System Sunbelt
                Healthcare Corporation

10.39*          Loan Agreement dated December 24, 1998 between Company and Neal
                Longwill

10.40*          Form of Loan Agreement between Company and accredited investors

10.41*          Loan Agreement dated March 3, 1999 between Company and Adventist
                Health System Sunbelt Healthcare Corporation

10.42*          Warrant to Purchase Shares of Common Stock Issued to Infoseek
                Corporation as of April 9, 1999

10.43*          Agreement for Issuance and Sale of Stock between Company and
                Superior Consultant Holdings Corporation dated April 28, 1998

10.44*          Letter of Donald W. Hackett dated April 28, 1998 constituting a
                Voting Agreement between Donald W. Hackett and Superior
                Consultant Holdings Corporation

10.45*          Option and Put Agreement dated April 28, 1998 between Company
                and Superior Consultant Holdings Corporation

10.46*          Service Agreement dated April 29, 1998 between Company and
                Superior Consultant, Inc., a wholly owned subsidiary of Superior
                Consultant Holdings Corporation

10.47*          Warrant to Purchase Shares of Common Stock Issued to Buena Vista
                Interactive Group as of April 9, 1999

10.48**         Netscape Agreement

10.49***        Amended Name & Likeness Agreement by and between Company and C.
                Everett Koop, M.D.

10.50+***       Interactive Services Agreement by and between Company and
                America Online, Inc.

10.51+***       Development and Services Agreement by and between Company and
                America Online, Inc.

10.52***        Registration Rights Agreement by and between Company and America
                Online, Inc.
</TABLE>



                                       34
<PAGE>   35

<TABLE>
<S>             <C>
10.53***        Warrant to Purchase 1,570,932 shares of Common Stock Issued to
                America Online dated July 1, 1999

10.54+***       Performance Warrant to Purchase 1,570,932 shares of Common Stock
                Issued to America Online dated July 1, 1999

10.55+***       Performance Warrant to Purchase 2,749,131 shares of Common Stock
                Issued to America Online dated July 1, 1999

10.56***        Lease Agreement by and between Company and Plaza 7000, Ltd.

10.57+****      First Amendment to Interactive Services Agreement by and between
                the Company and America Online, Inc. effective April 12, 2000

10.58+****      Amendment to Distribution Agreement by and between the Company
                and Buena Vista Internet Group and by and between the Company
                and Infoseek Corporation effective April 15, 2000

10.59****       Warrant to Purchase 820,000 Shares of Common Stock issued to
                Infoseek Corporation dated April 24, 2000

10.60****       Registration Agreement by and between the Company and Adventist
                Health System Sunbelt Healthcare Corporation effective April 18,
                2000

10.61****       Second Amended and Restated Name and Likeness Agreement by and
                between the Company and Dr. C. Everett Koop effective June 22,
                2000

10.62****       Placement Agency Agreement by and between the Company and
                Commonwealth Associates, L.P. dated June 23, 2000

10.63****       General Security Agreement by and among the Company,
                Commonwealth Associates, L.P. and ComVest Venture Partners, L.P.
                dated June 23, 2000

10.64****       Registration Rights Agreement by and among the Company,
                Commonwealth Associates, L.P. and ComVest Capital Management,
                LLC dated June 23, 2000

10.65****       8% Senior Secured Promissory Note by and between the Company and
                ComVest Venture Partners, L.P. dated June 23, 2000

10.66****       8% Senior Secured Promissory Note by and between the Company and
                Commonwealth Associates, L.P. dated June 23, 2000

10.67****       Warrant to Purchase 3,200,000 Shares of Common Stock Issued to
                ComVest Venture Partners, L.P. dated June 23, 2000

10.68****       Warrant to Purchase 800,000 Shares of Common Stock Issued to
                Commonwealth Associates, L.P. dated June 23, 2000

10.69****       Warrant to Purchase 2,500,000 Shares of Common Stock Issued to
                ComVest Venture Partners, L.P. dated June 30, 2000

10.70****       Credit Agreement by and between the Company and Commonwealth
                Associates, L.P. dated June 30, 2000

10.71****       Promissory Note by and between the Company and Commonwealth
                Associates, L.P. dated June 5, 2001

10.72****       Employment Agreement Extension by and between the Company and
                Donald W. Hackett dated June 16, 2000

10.73****       Employment Agreement Extension by and between the Company and
                Louis A. Scalpati dated June 16, 2000

10.74****       Agreement and Complete Release by and between the Company and
                Peter Brumleve dated April 12, 2000

10.75****       Agreement and Complete Release by and between the Company and
                Ian Bagnall dated June 6, 2000

10.76****       Agreement and Complete Release by and between the Company and
                Susan M. Georgen-Saad dated July 5, 2000

10.77****       Agreement and Complete Release by and between the Company and
                John Osborne dated July 7, 2000

10.78****       Agreement and Complete Release by and between the Company and
                Dennis J. Upah dated July 27, 2000

10.79****       Amendment to the Agreement and Complete Release by and between
                the Company and Dennis J. Upah dated July 27, 2000

10.81*****      Amendment to Agency Agreement dated as of August 22, 2000
                between the Company and Commonwealth Associates, L.P.
</TABLE>



                                       35
<PAGE>   36

<TABLE>
<S>             <C>
10.81*****      Letter Agreement dated August 18, 2000 between Commonwealth
                Associates, L.P. and the Company

10.82*****      Letter Agreement dated August 22, 2000 between Prime Ventures,
                LLC and the Company

10.83*****      Form of Lock-up Agreement

10.84*****      Non-Qualified Stock Option Agreement dated as of August 22, 2000
                by and between the Company and Richard M. Rosenblatt

10.85*****      Non-Qualified Stock Option Agreement dated as of August 22, 2000
                by and between the Company and Edward A. Cespedes

10.86*****      Non-Qualified Stock Option Agreement dated as of August 22, 2000
                by and between the Company and Stephen Plutsky

10.87*****      Employment Agreement dated August 22, 2000 by and between the
                Company and Richard M. Rosenblatt

10.88*****      Employment Agreement dated August 22, 2000 by and between the
                Company and Edward Cespedes

10.89*****      Employment Agreement dated August 22, 2000 by and between the
                Company and Stephen Plutsky

10.90*****      Employment Agreement dated October 24, 2000 by and between the
                Company William H. Carlson

10.91*****      Asset Purchase Agreement dated November 1, 2000 by and between
                Sherwood Partners, Inc. and the Company

10.92******     Employment Agreement dated November 14, 2000 between Greg Taylor
                and the Company

10.93******     Option Agreement dated November 14, 2000 between Greg Taylor and
                the Company

10.94******     Financial Advisory Service Agreement dated February 28, 2001
                between the Company and Commonwealth Associates, L.P.

10.95*******    Asset Purchase Agreement, by and among IVonyx Group Services,
                Inc., IVonyx, Inc., the Company, and Infusion Acquisition Sub,
                Inc., dated as of April 13, 2001.

10.96           Third Amended and Restated Name and Likeness Agreement by and
                between the Company and Dr. C. Everett Koop effective
                May 1, 2001.

*               Incorporated by reference from the Company's Form S-1
                (333-73459).

**              Incorporated by reference from the Company's quarterly report on
                Form 10-Q for the quarter and six months ended June 30, 1999,
                filed August 13, 1999.

***             Incorporated by reference from the Company's quarterly report on
                Form 10-Q for the quarter and nine months ended September 30,
                1999, filed November 15, 1999.

****            Incorporated by reference from the Company's quarterly report on
                Form 10-Q for the quarter and six months ended June 30, 2000,
                filed August 21, 2000.

*****           Incorporated by reference from the Company's current report on
                Form 8-K dated August 22, 2000, filed September 1, 2000.

******          Incorporated by reference from the Company's annual report on
                Form 10-K dated December 31, 2000, filed April 2, 2001.

*******         Incorporated by reference from the Company's current report on
                Form 8-K dated April 13, 2001, filed April 16, 2001.

+               Company has requested confidential treatment pursuant to Rule
                406 for a portion of the referenced exhibit and has separately
                filed such exhibit with the Commission.
</TABLE>



                                       36