##### Table of Contents



UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended: March 31, 2009
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from
to
 Commission File Number: 000-50879
 PLANETOUT INC.
  DELAWARE
    
    94-3391368(State or Other Jurisdiction of Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)
 1355 SANSOME STREET, SAN FRANCISCO,CALIFORNIA
    
    94111(Address of Principal Executive Offices)
    
    (Zip Code)
 (415) 834-6500
 þ o
 o o
  Large accelerated filer
o
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company
þ
 o þ




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##### 



PlanetOut Inc.
INDEX
Form 10-Q
For the Quarter ended March 31, 2009
 PAGEPART I  FINANCIAL INFORMATION
    
    
    1Item 1 Financial Statements
    
    
    1Unaudited Condensed Consolidated Balance Sheets as of December 31, 2008 and March 31, 2009
    
    
    1Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2008 and 2009
    
    
    2Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2008 and 2009
    
    
    3Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    4Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 4T Controls and Procedures
    
    
    20PART II  OTHER INFORMATION
    
    
    20Item 1 Legal Proceedings
    
    
    20Item 1A Risk Factors
    
    
    20Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    28Item 3 Defaults Upon Senior Securities
    
    
    28Item 4 Submission of Matters to a Vote of Security Holders
    
    
    28Item 5 Other Information
    
    
    28Item 6 Exhibits
    
    
    28SIGNATURES
    
    
    30EXHIBIT INDEX
    
    
    31EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
PlanetOut Inc.
 
 Item 1. Financial Statements
 
 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
 December 31,
    
    
    March 31,2008
    
    
    2009ASSETSCurrent assets:Cash and cash equivalents
    
    $
    4,943
    
    
    $
    1,812Restricted cash
    
    
    1,432
    
    
    
    1,126Accounts receivable, net
    
    
    847
    
    
    
    871Prepaid expenses and other
current assets
    
    
    996
    
    
    
    652Total current assets
    
    
    8,218
    
    
    
    4,461Property and equipment, net
    
    
    5,275
    
    
    
    4,611Goodwill
    
    
    2,988
    
    
    
    2,988Other assets
    
    
    397
    
    
    
    280Total assets
    
    $
    16,878
    
    
    $
    12,340LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    695
    
    
    $
    937Accrued expenses and other
liabilities
    
    
    2,927
    
    
    
    1,971Deferred revenue
    
    
    2,830
    
    
    
    2,403Capital lease obligations,
current portion
    
    
    763
    
    
    
    621Deferred rent, current portion
    
    
    320
    
    
    
    340Total current liabilities
    
    
    7,535
    
    
    
    6,272Capital lease obligations, less
current portion
    
    
    117
    
    
    
    82Deferred rent, less current portion
    
    
    949
    
    
    
    856Other long-term liabilities
    
    
    300
    
    
    
    300Total liabilities
    
    
    8,901
    
    
    
    7,510Commitments and contingencies (Note 4)Stockholders equity:Common stock: $0.001 par value, 100,000 shares authorized,
4,089 and 4,089 shares
issued and outstanding at December 31, 2008 and March
31, 2009, respectively
    
    
    40
    
    
    
    40Additional paid-in capital
    
    
    115,170
    
    
    
    115,465Accumulated other comprehensive
loss
    
    
    (94
    )
    
    
    (100
    )Accumulated deficit
    
    
    (107,139
    )
    
    
    (110,575
    )Total stockholders equity
    
    
    7,977
    
    
    
    4,830Total liabilities and
stockholders equity
    
    $
    16,878
    
    
    $
    12,340
  1




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PlanetOut Inc.
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
 Three Months Ended March 31,2008
    
    
    2009Revenue:Advertising services
    
    $
    1,067
    
    
    $
    1,269Subscription services
    
    
    3,694
    
    
    
    2,529Transaction services
    
    
    77
    
    
    
    46Total revenue
    
    
    4,838
    
    
    
    3,844Operating costs and expenses: (*)Cost of revenue
    
    
    2,444
    
    
    
    2,043Sales and marketing
    
    
    1,597
    
    
    
    901General and administrative
    
    
    2,038
    
    
    
    2,736Restructuring
    
    
    
    
    
    
    554Depreciation and amortization
    
    
    1,115
    
    
    
    727Total operating costs and expenses
    
    
    7,194
    
    
    
    6,961Loss from operations
    
    
    (2,356
    )
    
    
    (3,117
    )Interest expense
    
    
    (43
    )
    
    
    (17
    )Other income, net
    
    
    67
    
    
    
    6Loss from continuing operations before income taxes
    
    
    (2,332
    )
    
    
    (3,128
    )Provision for income taxes
    
    
    
    
    
    
    3Loss from continuing operations
    
    
    (2,332
    )
    
    
    (3,131
    )Net income (loss) from and loss on sale of discontinued operations, net of taxes
    
    
    (8,046
    )
    
    
    (305
    )Net loss
    
    $
    (10,378
    )
    
    $
    (3,436
    )Net loss per share from continuing operations 
Basic and diluted
    
    $
    (0.58
    )
    
    $
    (0.77
    )Loss per share from discontinued operations 
Basic and diluted
    
    $
    (1.99
    )
    
    $
    (0.08
    )Net loss per share 
Basic and diluted
    
    $
    (2.56
    )
    
    $
    (0.85
    )Weighted-average shares used to compute loss per share 
Basic and diluted
    
    
    4,048
    
    
    
    4,059(*)        Stock-based compensation is allocated as follows (see Note 6):Cost of revenue
    
    $
    33
    
    
    $
    13Sales and marketing
    
    
    2
    
    
    
    General and administrative
    
    
    92
    
    
    
    278Total stock-based compensation
    
    $
    127
    
    
    $
    291
  2




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PlanetOut Inc.
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Three Months Ended March 31,2008
    
    
    2009Cash flows from operating activities:Net loss
    
    $
    (10,378
    )
    
    $
    (3,436
    )Net loss from discontinued operations, net of tax
    
    
    8,046
    
    
    
    (13
    )Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Depreciation and amortization
    
    
    1,115
    
    
    
    727Non-cash services expense
    
    
    90
    
    
    
    4Provision for doubtful accounts
    
    
    4
    
    
    
    Stock-based compensation, net of cancellation and tax effects
    
    
    127
    
    
    
    291Amortization of deferred rent
    
    
    (57
    )
    
    
    (73
    )Changes in operating assets and liabilities, net of acquisition effects and restructuring:Accounts receivable
    
    
    1,275
    
    
    
    (24
    )Prepaid expenses and other assets
    
    
    15
    
    
    
    461Accounts payable
    
    
    (340
    )
    
    
    242Accrued expenses and other liabilities
    
    
    (420
    )
    
    
    (956
    )Deferred revenue
    
    
    (112
    )
    
    
    (108
    )Net cash used in operating activities of continuing operations
    
    
    (635
    )
    
    
    (2,885
    )Net cash provided by (used in) operating activities of discontinued operations
    
    
    (753
    )
    
    
    13Net cash used in operating activities
    
    
    (1,388
    )
    
    
    (2,872
    )Cash flows from investing activities:Purchases of property and equipment
    
    
    (497
    )
    
    
    (63
    )Adjustment to proceeds from sale of discontinued operations
    
    
    
    
    
    
    (319
    )Changes in restricted cash
    
    
    (1
    )
    
    
    306Net cash used in investing activities
    
    
    (498
    )
    
    
    (76
    )Cash flows from financing activities:Principal payments under capital lease obligations
    
    
    (207
    )
    
    
    (177
    )Net cash used in financing activities
    
    
    (207
    )
    
    
    (177
    )Effect of exchange rate on cash and cash equivalents
    
    
    
    
    
    
    (6
    )Net decrease in cash and cash equivalents
    
    
    (2,093
    )
    
    
    (3,131
    )Cash and cash equivalents, beginning of period
    
    
    8,534
    
    
    
    4,943Cash and cash equivalents, end of period
    
    $
    6,441
    
    
    $
    1,812Supplemental disclosure of noncash flow investing and financing activities:Property and equipment and related maintenance acquired under capital leases
    
    $
    80
    
    
    $
    
  3




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##### Table of Contents



PlanetOut Inc.
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  The Company and Summary of Significant Accounting Policies
 The Company
     Unaudited Interim Financial Information
  Principles of Consolidation and Basis of Presentation
   4




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Reclassifications
  Use of Estimates
  Cash Equivalents
  Restricted Cash
  Fair Value Measurement of Assets and Liabilities
  Property and Equipment
  Internal Use Software and Website Development Costs
 Accounting for Costs of Computer Software Developed or
Obtained for Internal Use Accounting for Web Site Development Costs
 Goodwill
 Goodwill and Other Intangible Assets
 5




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##### Table of Contents



Revenue Recognition
    Advertising
  Stock-Based Compensation
 Share-Based
Payment
 6




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##### Table of Contents



Segment Reporting
 " "
 Disclosures about
Segments of an Enterprise and Related Information
 Income Taxes
 Accounting for Uncertainty in Income Taxes  an Interpretation of FASB
Statement No. 109
   Net Loss Per Share
  7




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##### Table of Contents



Three months ended March 31,2008
    
    
    2009Numerator:Net loss
    
    $
    (10,378
    )
    
    $
    (3,436
    )Denominator for basic and diluted net loss per share:Weighted-average shares used to compute Basic
and Diluted EPS
    
    
    4,048
    
    
    
    4,059Net loss per share  Basic and Diluted
    
    $
    (2.56
    )
    
    $
    (0.85
    )
  Three months ended March 31,2008
    
    
    2009Common stock options and warrants
    
    
    207
    
    
    
    107
 Recent Accounting Pronouncements
  Determining
Fair Value When the Volume and Level of Activity for the Asset or Liability have Significantly
Decreased and Identifying Transactions That Are Not Orderly Recognition and Presentation of
Other-Than-Temporary Impairments, , Interim Disclosures about Fair Value of Financial
Instruments Fair Value Measurements normal intent and ability
 Accounting for Assets Acquired and Liabilities
Assumed in a Business Combination That Arise from Contingencies
 8




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##### Table of Contents



Note 2  Goodwill and Intangible Assets
 Goodwill
    Intangible Assets
  December 31, 2008
    
    
    March 31, 2009Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    CarryingAmount
    
    
    Amortization
    
    
    Amount
    
    
    Amount
    
    
    Amortization
    
    
    AmountCustomer lists and user bases
    
    $
    3,278
    
    
    $
    3,278
    
    
    $
    
    
    
    $
    3,278
    
    
    $
    3,278
    
    
    $
    Tradenames
    
    
    2,340
    
    
    
    2,340
    
    
    
    
    
    
    
    2,340
    
    
    
    2,340
    
    
    
    Other intangible assets
    
    
    726
    
    
    
    726
    
    
    
    
    
    
    
    726
    
    
    
    726
    
    
    
    $
    6,344
    
    
    $
    6,344
    
    
    $
    
    
    
    $
    6,344
    
    
    $
    6,344
    
    
    $
    
   Note 3  Other Balance Sheet Components
 December 31,
    
    
    March 31,2008
    
    
    2009(In thousands)Accounts receivable:Trade accounts receivable
    
    $
    913
    
    
    $
    937Less: Allowance for doubtful accounts
    
    
    (66
    )
    
    
    (66
    )$
    847
    
    
    $
    871
  9




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##### Table of Contents



December 31,
    
    
    March 31,2008
    
    
    2009(In thousands)Property and equipment:Computer equipment and software
    
    $
    9,321
    
    
    $
    9,329Furniture and fixtures
    
    
    875
    
    
    
    875Leasehold improvements
    
    
    1,686
    
    
    
    1,686Website development costs
    
    
    7,738
    
    
    
    7,79319,620
    
    
    
    19,683Less: Accumulated depreciation and amortization
    
    
    (14,345
    )
    
    
    (15,072
    )$
    5,275
    
    
    $
    4,611
  December 31,
    
    
    March 31,2008
    
    
    2009(In thousands)Accrued expenses and other liabilities:Accrued payroll and related liabilities
    
    $
    1,270
    
    
    $
    1,138Other accrued liabilities
    
    
    1,657
    
    
    
    833$
    2,927
    
    
    $
    1,971
 Note 4  Commitments and Contingencies
 Retention and Severance Plan
  Termination Fee
  10




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Contingencies
  Note 5  Stockholders Equity
 Issuance of Warrant
  Replacement of Warrant
   Note 6  Stock-Based Compensation
 Stock Options
  SharesOutstanding at January 1, 2009
    
    
    22Forfeited/expired/cancelled
    
    
    (2
    )Outstanding at March 31, 2009
    
    
    20
  11




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##### Table of Contents



Restricted Stock
  SharesUnvested at January 1, 2009
    
    
    29Vested
    
    
    (15
    )Forfeited
    
    
    (13
    )Unvested at March 31, 2009
    
    
    1
  Note 7  Restructuring
  Note 8  Discontinued Operations
     12




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Three months ended March 31, 2008LPI
    
    
    SpecPub
    
    
    RSVP
    
    
    TotalTotal revenue
    
    $
    4,005
    
    
    $
    1,133
    
    
    $
    
    
    
    $
    5,138Operating costs and expenses:Cost of revenue
    
    
    3,488
    
    
    
    952
    
    
    
    (12
    )
    
    
    4,428Sales and marketing
    
    
    1,368
    
    
    
    318
    
    
    
    1
    
    
    
    1,687General and administrative
    
    
    621
    
    
    
    115
    
    
    
    2
    
    
    
    738Depreciation and amortization
    
    
    52
    
    
    
    2
    
    
    
    
    
    
    
    54Impairment of goodwill and intangible assets
    
    
    1,978
    
    
    
    4,294
    
    
    
    
    
    
    
    6,272Total operating costs and expenses
    
    
    7,507
    
    
    
    5,681
    
    
    
    (9
    )
    
    
    13,179Income (loss) from operations
    
    
    (3,502
    )
    
    
    (4,548
    )
    
    
    9
    
    
    
    (8,041
    )Other income (expense), net
    
    
    (6
    )
    
    
    1
    
    
    
    
    
    
    
    (5
    )Net income (loss) from discontinued operations
    
    $
    (3,508
    )
    
    $
    (4,547
    )
    
    $
    9
    
    
    $
    (8,046
    )
  Three months ended March 31, 2009LPI
    
    
    TotalTotal revenue
    
    $
    
    
    
    $
    Operating costs and expenses:Cost of revenue
    
    
    (8
    )
    
    
    (8
    )General and administrative
    
    
    (5
    )
    
    
    (5
    )Total operating costs and expenses
    
    
    (13
    )
    
    
    (13
    )Income from operations
    
    
    13
    
    
    
    13Other income (expense), net
    
    
    
    
    
    
    Income from discontinued operations
    
    
    13
    
    
    
    13Loss on sale of discontinued operations
    
    
    (318
    )
    
    
    (318
    )Net income (loss) from and loss on sale of
discontinued operations
    
    $
    (305
    )
    
    $
    (305
    )
 13




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion should be read in conjunction with the financial statements and
related notes which appear elsewhere in this document. This discussion contains forward-looking
statements that involve risks and uncertainties. In some cases, you can identify forward-looking
statements by terminology including would, could, may, will, should, expect, intend,
plan, anticipate, believe, estimate, predict, potential or continue, the negative of
these terms or other comparable terminology. These statements are only predictions. Forward-looking
statements include statements about our business strategy, future operating performance and
prospects. You should not place undue reliance on these forward-looking statements. Our actual
results could differ materially from those anticipated in these forward-looking statements as a
result of various factors, including those discussed below and elsewhere in this document and in
our Form 10-K filed for the year ended December 31, 2008.
 Overview
  Accounting for the Impairment or Disposal of Long-Lived
Assets
  Executive Operating and Financial Summary
      14




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##### Table of Contents



Results of Operations
 Revenue
 Advertising Services.
  Subscription Services.
  Transaction Services.
  Operating Costs and Expenses
 Cost of Revenue.
  Sales and Marketing.
  General and Administrative.
 15




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##### Table of Contents



Restructuring.
 Depreciation and Amortization.
  Other Income and Expenses
 Other Income, Net.
 Discontinued Operations
    16




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##### Table of Contents



Three months ended March 31, 2008LPI
    
    
    SpecPub
    
    
    RSVP
    
    
    TotalTotal revenue
    
    $
    4,005
    
    
    $
    1,133
    
    
    $
    
    
    
    $
    5,138Operating costs and expenses:Cost of revenue
    
    
    3,488
    
    
    
    952
    
    
    
    (12
    )
    
    
    4,428Sales and marketing
    
    
    1,368
    
    
    
    318
    
    
    
    1
    
    
    
    1,687General and administrative
    
    
    621
    
    
    
    115
    
    
    
    2
    
    
    
    738Depreciation and amortization
    
    
    52
    
    
    
    2
    
    
    
    
    
    
    
    54Impairment of goodwill and intangible assets
    
    
    1,978
    
    
    
    4,294
    
    
    
    
    
    
    
    6,272Total operating costs and expenses
    
    
    7,507
    
    
    
    5,681
    
    
    
    (9
    )
    
    
    13,179Income (loss) from operations
    
    
    (3,502
    )
    
    
    (4,548
    )
    
    
    9
    
    
    
    (8,041
    )Other income (expense), net
    
    
    (6
    )
    
    
    1
    
    
    
    
    
    
    
    (5
    )Net income (loss) from discontinued operations
    
    $
    (3,508
    )
    
    $
    (4,547
    )
    
    $
    9
    
    
    $
    (8,046
    )
  Three months ended March 31, 2009LPI
    
    
    TotalTotal revenue
    
    $
    
    
    
    $
    Operating costs and expenses:Cost of revenue
    
    
    (8
    )
    
    
    (8
    )General and administrative
    
    
    (5
    )
    
    
    (5
    )Total operating costs and expenses
    
    
    (13
    )
    
    
    (13
    )Income from operations
    
    
    13
    
    
    
    13Other income (expense), net
    
    
    
    
    
    
    Income from discontinued operations
    
    
    13
    
    
    
    13Loss on sale of discontinued operations
    
    
    (318
    )
    
    
    (318
    )Net income (loss) from and loss on sale of
discontinued operations
    
    $
    (305
    )
    
    $
    (305
    )
 Liquidity and Capital Resources
      17




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Off-Balance Sheet Arrangements
  Contractual Obligations
  Payments Due by PeriodRemainder ofTotal
    
    
    2009
    
    
    2010
    
    
    2011-2012Contractual obligations:Capital leases
    
    $
    880
    
    
    $
    550
    
    
    $
    272
    
    
    $
    58Operating leases
    
    
    7,206
    
    
    
    1,856
    
    
    
    2,386
    
    
    
    2,964Total contractual obligations
    
    $
    8,086
    
    
    $
    2,406
    
    
    $
    2,658
    
    
    $
    3,022
 Capital Leases.
 Operating Leases.
 Critical Accounting Policies
   18




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##### Table of Contents



Seasonality and Inflation
   Recent Accounting Pronouncements
  Determining
Fair Value When the Volume and Level of Activity for the Asset or Liability have Significantly
Decreased and Identifying Transactions That Are Not Orderly Recognition and Presentation of
Other-Than-Temporary Impairments, , Interim Disclosures about Fair Value of Financial
Instruments Fair Value Measurements normal intent and ability
 Accounting for Assets Acquired and Liabilities
Assumed in a Business Combination That Arise from Contingencies
 19




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Item 4T. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
 We have a history of significant losses. If we do not regain and sustain profitability, our
financial condition and stock price will continue to suffer.
  While our proposed merger with Here Networks LLC and Regent Entertainment Media Inc. is pending, we
will be subject to business uncertainties and contractual restrictions that could adversely affect
our business.
   Failure to complete the proposed business combination with Here Networks LLC and Regent
Entertainment Media Inc. could negatively affect our business.
  
    
    we may not realize the benefits expected from becoming part of a combined company,
including a potentially enhanced competitive and financial position;
 20




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##### Table of Contents




    
    current and prospective employees may experience uncertainty about their future roles
with us, which may adversely affect our ability to attract and retain key management,
marketing and technical personnel;
    
    in preparation for the proposed business combination, we may take additional actions
with respect to our business that we would not have taken if we were continuing to operate
on a stand-alone basis;
    
    costs related to the proposed business combination which we incur, such as legal,
accounting and some financial advisory fees, must be paid even if the proposed business
combination is not completed; and
    
    we may be required to raise additional capital to continue operating as a stand-alone
company, which could result in substantial dilution to our existing stockholders or
increased interest and other costs, and such additional capital may not be available on
acceptable terms, or at all, especially in view of the current market conditions.
 We may need additional capital and may not be able to raise additional funds on favorable terms or
at all, which could limit our ability to continue operations, dilute the ownership interests of
existing stockholders, cause us to seek business dispositions on unfavorable terms, or cause us to
consider curtailing or ceasing operations.
  If we are unable to generate revenue from advertising or if we were to lose our existing
advertisers, our business will suffer.
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Our success depends, in part, upon the growth of Internet advertising and upon our ability to
accurately predict the cost of customized campaigns.
   If we encounter technical difficulties, such as outages and slow or non-responsive system
performance, with our Gay.com website or if the website lacks the functionality desired by our
users, members and subscribers, our revenue will decline.
 
 If our efforts to attract and retain subscribers are not successful, our revenue will decrease.
    If we do not regain and maintain compliance with Nasdaq minimum market value of publicly held
shares requirement or other listing requirements, our common stock may be delisted.
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We expect our operating results to fluctuate, which may lead to volatility in our stock price.
  Recent and potential future divestitures could result in operating difficulties and unanticipated
liabilities.
  
    
    potential goodwill write downs associated with acquisitions of businesses where the previously
anticipated synergies of the combined entities have not been realized. For example, during
fiscal 2007, we recorded goodwill impairment charges of $21.1 million and $4.0 million in
discontinued operations due to lower revenue than expected related to our Publishing and Travel
and Events businesses, respectively, and during fiscal 2008, we recorded additional goodwill
impairment charges of $4.1 million related to our Publishing business;
    
    the potential diversion of significant management attention and significant financial resources
from the ongoing development of our business during the implementation of a divestiture;
    
    the potential impairment of relationships with and difficulty in attracting and retaining
employees as a result of the divestiture of certain businesses;
    
    the potential impairment of relationships with our subscribers, advertisers, customers and
partners as a result of the divestiture of certain businesses; and
    
    the difficulty in attracting and retaining qualified management to lead the retained businesses.
  If we do not continue to attract and retain qualified personnel, our business may suffer.
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##### Table of Contents



Any significant disruption in service on our websites or in our computer and communications
hardware and software systems could harm our business.
  If we are unable to compete effectively, we may lose market share and our revenue may decline.
   If we are unable to protect our domain names, our reputation and brand could be harmed if third
parties gain rights to, or use, these domain names in a manner that would confuse or impair our
ability to attract and retain customers.
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##### Table of Contents



If we fail to adequately protect our trademarks and other proprietary rights, or if we get involved
in intellectual property litigation, our revenue may decline and our expenses may increase.
   Existing or future government regulation in the United States and other countries could limit our
growth and result in loss of revenue.
  The risks of transmitting confidential information online, including credit card information, may
discourage customers from subscribing to our services or purchasing goods from us.
  If we are unable to provide satisfactory customer service, we could lose subscribers.
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##### Table of Contents



We may be the target of negative publicity campaigns or other actions by advocacy groups that could
disrupt our operations because we serve the LGBT community.
  Adult content in our online service may be the target of negative publicity campaigns or subject us
to restrictive or costly regulatory compliance.
  If one or more states or countries successfully assert that we should collect sales or other taxes
on the use of the Internet or the online sales of goods and services, our expenses will increase,
resulting in lower margins.
    In the event of an earthquake, other natural or man-made disaster, or power loss, our operations
could be interrupted or adversely affected, resulting in lower revenue.
  In the event we are unable to satisfy regulatory requirements relating to internal control over
financial reporting, or if these internal controls are not effective, our business and our stock
price could suffer.
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##### Table of Contents



Our stock price may be volatile and you may lose all or a part of your investment.
   The sales of common stock by our stockholders could depress the price of our shares.
  Our Stockholder Rights Plan, along with provisions in our charter documents and under Delaware law,
could discourage a takeover that stockholders may consider favorable.
  
    
    authorize our board of directors, without stockholder approval, to issue up to 5,000,000 shares of undesignated
preferred stock;
    
    provide for a classified board of directors;
    
    prohibit our stockholders from acting by written consent;
    
    establish advance notice requirements for proposing matters to be approved by stockholders at stockholder meetings; and
    
    prohibit stockholders from calling a special meeting of stockholders.
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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  (c) Total Number
    
    
    (d) Maximum Number(a) Total
    
    
    
    
    
    
    of
    
    
    (or ApproximateNumber of
    
    
    (b) Average
    
    
    Shares Purchased
    
    
    Dollar Value) ofShares
    
    
    Price Paid
    
    
    as Part of Publicly
    
    
    Shares that MayPurchased
    
    
    per
    
    
    Announced
    
    
    Yet Be Purchased UnderPeriod
    
    (1)
    
    
    Share
    
    
    Plans or Programs
    
    
    the Plans or ProgramsJanuary 1, 2009  January 31, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    February 1, 2009  February 29, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    March 1, 2009  March 31, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    
 
 (1)
    
    PlanetOut does not have any publicly announced plans or programs to repurchase shares of its
common stock. 
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 (a) Exhibits
 ExhibitNumber
    
    Description of Documents2.6
    
    Agreement and Plan of Merger by and among PlanetOut Inc., Here Media Inc., HMI
Merger Sub, the HMI Owners and the HMI Entities Referred to in the Agreement dated
as of January 8, 2009 (filed as Exhibit 2.1 to our Current Report on Form 8-K, File
No. 000-50879, filed on January 14, 2009 and incorporated herein by reference).2.7
    
    First Amendment to Agreement and Plan of Merger, dated as of April 27, 2009, by and
among PlanetOut Inc., Here Media Inc., HMI Merger Sub, the HMI Owners and the HMI
Entities (filed as Exhibit 2.1 to our Current Report on Form 8-K, File
No. 000-50879, filed on May 1, 2009, and incorporated herein by reference).3.1
    
    Amended and Restated Certificate of Incorporation, as amended by Certificate of
Amendment, dated October 1, 2007 and as currently in effect (filed as Exhibit 3.1
to our Current Report on Form 8-K, File No. 000-50879, filed on October 4, 2007,
and incorporated herein by reference).3.2
    
    Amended and Restated Bylaws, as currently in effect (filed as Exhibit 3.4 to our
Registration Statement on Form S-1, File No. 333-114988, initially filed on
April 29, 2004, declared effective on October 13, 2004, and incorporated herein by
reference).4.1
    
    Specimen of Common Stock Certificate (filed as Exhibit 4.1 to our Current Report on
Form 8-K, File No. 000-50879, filed on October 4, 2007, and incorporated herein by
reference).4.4
    
    Rights Agreement dated as of January 4, 2007 among PlanetOut Inc. and Wells Fargo
Bank, N.A. (filed as Exhibit 99.2 to our Current Report on Form 8-K, File No.
000-50879, filed on January 8, 2007 and incorporated herein by reference).
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##### Table of Contents



ExhibitNumber
    
    Description of Documents4.5
    
    Form of Rights Certificate (filed as Exhibit 99.3 to our Current Report on Form
8-K, File No. 000-50879, filed on January 8, 2007 and incorporated herein by
reference).4.6
    
    Warrant Certificate issued to Allen & Company, LLC dated May 15, 2007 (filed as
Exhibit 99.1 to our Current Report on Form 8-K, File No. 000-50879, filed on
May 18, 2007 and incorporated herein by reference). Replaced and superseded by
Exhibit 4.8.4.7
    
    Amendment to Rights Agreement among PlanetOut Inc. and Wells Fargo Bank, N.A. dated
June 28, 2007 (filed as Exhibit 4.7 to our Quarterly Report on Form 10-Q, File No.
000-50879, filed on August 3, 2007 and incorporated herein by reference)4.8
    
    Common Stock Warrant to Allen & Company, LLC dated January 14, 2008 (filed as
Exhibit 99.1 to our Current Report on Form 8-K, File No. 000-50879, filed on
January 17, 2008 and incorporated herein by reference). Replaced and superseded by
Exhibit 4.9.4.9
    
    Common Stock Warrant issued to Allen & Company, LLC dated January 8, 2009 (filed as
Exhibit 99.1 to our Current Report on Form 8-K, File No. 000-50879, filed on
January 14, 2009 and incorporated herein by reference).4.10
    
    Amendment to Rights Agreement among PlanetOut Inc. and Wells Fargo Bank, N.A. dated
January 8, 2009 (filed as Exhibit 4.10 to our Annual Report on Form 10-K, File No.
000-50879, filed on March 4, 2009 and incorporated herein by reference).4.11
    
    Amendment to Rights Agreement among PlanetOut Inc. and Wells Fargo Bank, N.A. dated
March 20, 2009 (filed as Exhibit 4.1 to our Current Report on Form 8-K, File No.
000-50849, filed on March 25, 2009 and incorporated herein by reference).31.1
    
    Certification of Chief Executive Officer pursuant to the Securities Exchange Act
Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to the Securities Exchange Act
Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer pursuant to Section 18 U.S.C section 1350.32.2
    
    Certification of Chief Financial Officer pursuant to Section 18 U.S.C. section 1350.
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##### Table of Contents



SIGNATURES
  PLANETOUT INC.Date: May 15, 2009
    By:
    /s/ DANIEL E. STEIMLEDaniel E. SteimleChief Executive Officer and Chief Financial Officer
(Principal Financial and Accounting Officer) 30




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description of Documents2.6
    
    Agreement and Plan of Merger by and among PlanetOut Inc., Here Media Inc., HMI
Merger Sub, the HMI Owners and the HMI Entities Referred to in the Agreement dated
as of January 8, 2009 (filed as Exhibit 2.1 to our Current Report on Form 8-K, File
No. 000-50879, filed on January 14, 2009 and incorporated herein by reference).2.7
    
    First Amendment to Agreement and Plan of Merger, dated as of April 27, 2009, by and
among PlanetOut Inc., Here Media Inc., HMI Merger Sub, the HMI Owners and the HMI
Entities (filed as Exhibit 2.1 to our Current Report on Form 8-K, File
No. 000-50879, filed on May 1, 2009, and incorporated herein by reference).3.1
    
    Amended and Restated Certificate of Incorporation, as amended by Certificate of
Amendment, dated October 1, 2007 and as currently in effect (filed as Exhibit 3.1
to our Current Report on Form 8-K, File No. 000-50879, filed on October 4, 2007,
and incorporated herein by reference).3.2
    
    Amended and Restated Bylaws, as currently in effect (filed as Exhibit 3.4 to our
Registration Statement on Form S-1, File No. 333-114988, initially filed on
April 29, 2004, declared effective on October 13, 2004, and incorporated herein by
reference).4.1
    
    Specimen of Common Stock Certificate (filed as Exhibit 4.1 to our Current Report on
Form 8-K, File No. 000-50879, filed on October 4, 2007, and incorporated herein by
reference).4.4
    
    Rights Agreement dated as of January 4, 2007 among PlanetOut Inc. and Wells Fargo
Bank, N.A. (filed as Exhibit 99.2 to our Current Report on Form 8-K, File No.
000-50879, filed on January 8, 2007 and incorporated herein by reference).4.5
    
    Form of Rights Certificate (filed as Exhibit 99.3 to our Current Report on Form
8-K, File No. 000-50879, filed on January 8, 2007 and incorporated herein by
reference).4.6
    
    Warrant Certificate issued to Allen & Company, LLC dated May 15, 2007 (filed as
Exhibit 99.1 to our Current Report on Form 8-K, File No. 000-50879, filed on
May 18, 2007 and incorporated herein by reference). Replaced and superseded by
Exhibit 4.8.4.7
    
    Amendment to Rights Agreement among PlanetOut Inc. and Wells Fargo Bank, N.A. dated
June 28, 2007 (filed as Exhibit 4.7 to our Quarterly Report on Form 10-Q, File No.
000-50879, filed on August 3, 2007 and incorporated herein by reference).4.8
    
    Common Stock Warrant to Allen & Company, LLC dated January 14, 2008 (filed as
Exhibit 99.1 to our Current Report on Form 8-K, File No. 000-50879, filed on
January 17, 2008 and incorporated herein by reference). Replaced and superseded by
Exhibit 4.9.4.9
    
    Common Stock Warrant issued to Allen & Company, LLC dated January 8, 2009 (filed as
Exhibit 99.1 to our Current Report on Form 8-K, File No. 000-50879, filed on
January 14, 2009 and incorporated herein by reference).4.10
    
    Amendment to Rights Agreement among PlanetOut Inc. and Wells Fargo Bank, N.A. dated
January 8, 2009 (filed as Exhibit 4.10 to our Annual Report on Form 10-K, File No.
000-50879, filed on March 4, 2009 and incorporated herein by reference).4.11
    
    Amendment to Rights Agreement among PlanetOut Inc. and Wells Fargo Bank, N.A. dated
March 20, 2009 (filed as Exhibit 4.1 to our Current Report on Form 8-K, File No.
000-50849, filed on March 25, 2009 and incorporated herein by reference).31.1
    
    Certification of Chief Executive Officer pursuant to the Securities Exchange Act
Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to the Securities Exchange Act
Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer pursuant to Section 18 U.S.C section 1350.32.2
    
    Certification of Chief Financial Officer pursuant to Section 18 U.S.C. section 1350.
 31