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DRKOOP.COM HAD RECEIVED WARNING

Drkoop.com Inc. received notice from its outside auditor in June that the accounting firm disagreed with the way in which the company recognized revenue from certain transactions, according to a regulatory filing.

The accounting firm, PricewaterhouseCoopers LLP, also disagreed with the way in which management recorded expense on certain equity instruments, according to a Form 8-K filed with the Securities and Exchange Commission. Drkoop.com is a health-care information Web site co-founded by C. Everett Koop, a former U.S. Surgeon General.

The accounting firm gave notice Sept. 8 that it was quitting as Drkoop.com's auditor, the filing said. However, new management at Drkoop.com persuaded PricewaterhouseCoopers to stay on until the company's third quarter financial statements are completed and filed with the SEC, the filing said.

The accountants and the company resolved their differences about accounting procedure before the filing of Drkoop.com's 1999 financial statements, the company said in the Form 8-K.

The Austin, Texas, company disclosed last month that the SEC is investigating charges made in several lawsuits filed against Drkoop.com. The company has said that the lawsuits are without merit.

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