<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

                  For the transition period from______to______

                        Commission File Number _________

                               PLANETRX.COM, INC.
             (Exact name of registrant as specified in its charter)

               Delaware                                      94-3227733
     (State or other jurisdiction                        (I.R.S. Employer
   of incorporation or organization)                    Identification No.)

                             6399 Shelby View Drive
                            Memphis, Tennessee 38134
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (901) 379-2200
                                                           --------------

Indicate by check mark whether the Registrant (1) has filed all reports required
by Section 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: Yes [X] No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

<TABLE>
<CAPTION>
         Class                              Outstanding at April 30, 2001
         <S>                                <C>
         Common Stock, $0.0001 par value           6,127,779
</TABLE>


                                                                          Page 1
<PAGE>   2

                               PLANETRX.COM, INC.

                                Table of Contents

<TABLE>
<CAPTION>
PART I.        FINANCIAL INFORMATION
<S>            <C>
Item 1.        Condensed Financial Statements

               Condensed Balance Sheets at March 31, 2001
               (unaudited) and December 31, 2000

               Condensed Statements of Operations for the Three Months
               Ended March 31, 2001 and 2000
               (unaudited)

               Condensed Statements of Cash Flows for the Three Months Ended
               March 31, 2001 and 2000 (unaudited)

               Notes to Condensed Financial Statements

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

Item 3.        Quantitative and Qualitative Disclosures About Market
               Risk

PART II.       OTHER INFORMATION

Item 1.        Legal Proceedings

Item 2.        Changes in Securities and Use of Proceeds

Item 3.        Defaults Upon Senior Securities

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

Item 5.        Other Information

Item 6.        Exhibits, Financial Statement Schedules, and Reports on
               Form 8-K

Signatures
</TABLE>


                                                                          Page 2
<PAGE>   3

PART I
ITEM 1. FINANCIAL STATEMENTS

                               PLANETRX.COM, INC.
                            Condensed Balance Sheets
              (unaudited, in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                           March 31,           December 31,
                                                                                              2001                  2000
                                                                                          -----------          ------------
<S>                                                                                       <C>                  <C>
ASSETS
Current assets:
     Cash and cash equivalents                                                            $     7,519           $     8,700
     Accounts receivable, net                                                                   1,438                 1,887
     Inventories                                                                                   --                 1,557
     Prepaid expenses and other current assets                                                    781                 1,219
                                                                                          -----------           -----------
         Total current assets                                                                   9,738                13,363
     Property and equipment, held for sale                                                      2,500                 6,633
     Intangible assets, held for sale                                                             336                   515
     Other assets                                                                                 641                   631
                                                                                          -----------           -----------
                                                                                          $    13,215           $    21,142
                                                                                          ===========           ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                                                     $     1,070           $     1,752
     Accrued expenses                                                                             225                   787
     Accrued restructuring charges                                                                179                   179
     Borrowings, current                                                                        5,956                 6,496
     Capital lease obligations, current                                                         1,929                 2,072
                                                                                          -----------           -----------
         Total liabilities                                                                      9,359                11,286

Commitments and contingencies

Stockholders' equity:
     Preferred Stock: issuable in series, $0.0001 par value;
         5,000 shares authorized; none issued and
         outstanding                                                                               --                    --
     Common Stock: $0.0001 par value; 200,000 shares
         authorized; 6,132 and 6,157 shares issued and
         outstanding, respectively                                                                 --                    --
     Additional paid-in capital                                                               428,675               430,690
     Deferred stock-based compensation                                                         (3,204)               (5,888)
     Accumulated deficit                                                                     (421,615)             (414,946)
                                                                                          -----------           -----------
         Total stockholders' equity                                                             3,856                 9,856
                                                                                          -----------           -----------
                                                                                          $    13,215           $    21,142
                                                                                          ===========           ===========
</TABLE>

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


                                                                          Page 3
<PAGE>   4

                               PLANETRX.COM, INC.
                       Condensed Statements of Operations
               (unaudited, in thousands except per share amounts)

<TABLE>
<CAPTION>
                                                                                               Three Months Ended
                                                                                                    March 31,
                                                                                          -----------------------------
                                                                                             2001               2000
                                                                                          -----------------------------
<S>                                                                                       <C>                 <C>
Net revenue:
      e-commerce                                                                          $   3,957           $   7,813
      Sponsorship                                                                             1,743                 960
                                                                                          ---------           ---------
                                                                                              5,700               8,773
                                                                                          ---------           ---------
Cost of net revenue:
      e-commerce                                                                              4,038               6,403
      Sponsorship                                                                                --                 156
                                                                                          ---------           ---------
                                                                                              4,038               6,559
                                                                                          ---------           ---------
Gross profit                                                                                  1,662               2,214
                                                                                          ---------           ---------
Operating expenses:
      Marketing and sales                                                                       513              23,594
      Shipping, handling and related costs                                                    3,594               5,952
      Product development                                                                     1,335               6,595
      General and administrative                                                              1,795               2,327
      Amortization of intangible assets                                                          --              10,215
      Stock-based compensation                                                                  689               4,268
      Impairment loss                                                                         2,191                  --
                                                                                          ---------           ---------
             Total operating expenses                                                        10,117              52,951
                                                                                          ---------           ---------
Operating loss                                                                               (8,455)            (50,737)
Other income                                                                                  1,888                  --
Interest income                                                                                 124               1,316
Interest expense                                                                               (226)               (215)
                                                                                          ---------           ---------

Net loss available to common
 stockholders                                                                             $  (6,669)          $ (49,636)
                                                                                          =========           =========

Basic and diluted net loss per share                                                      $   (1.09)          $   (8.42)
                                                                                          =========           =========

Weighted average shares used to
 compute basic and diluted net
 loss per share                                                                               6,119               5,895
                                                                                          =========           =========
</TABLE>

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


                                                                          Page 4
<PAGE>   5

                               PLANETRX.COM, INC.
                       Condensed Statements of Cash Flows
                            (unaudited, in thousands)

<TABLE>
<CAPTION>
                                                                                               Three Months Ended
                                                                                                    March 31,
                                                                                          ---------           ----------
                                                                                             2001                2000
                                                                                          ---------           ----------
<S>                                                                                       <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                                                             $  (6,669)          $  (49,636)
     Adjustments to reconcile net loss to net cash
      used in operating activities:
          Depreciation and amortization                                                       1,860                1,161
          Stock-based compensation                                                              689                4,268
          Amortization of intangible assets                                                      --               10,215
          Impairment loss                                                                     2,191
          Gain on sale of intangible assets                                                  (1,888)                  --
          Changes in assets and liabilities:
               Accounts Receivable                                                              449               (1,712)
              Inventories                                                                     1,557               (1,285)
               Prepaid expenses and other current                                               438               (4,588)
                assets
               Other assets                                                                     (10)                 (17)
               Accounts payable                                                                (682)               6,785
               Accrued expenses and restructuring charges                                      (562)                  55
                                                                                          ---------           ----------
                     Net cash used in operating
                      activities                                                             (2,627)             (34,754)
                                                                                          ---------           ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property and equipment                                                         --               (7,468)
     Sale of property and equipment                                                              82
     Purchases of short-term investments                                                         --               (9,096)
     Sales of short-term investments                                                             --               61,958
     Proceeds from repayment of employee note                                                    --
     Proceeds from sale of intangible assets                                                  2,067                    1
                                                                                          ---------           ----------
                     Net cash provided by investing activities                                2,149               45,395
                                                                                          ---------           ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Repurchase of unvested Common Stock options                                                (20)                (140)
     Proceeds from notes payable and equipment
      financing                                                                                  --                2,000
     Principal payments on capital lease obligations                                           (143)                 (14)
     Principal payments on borrowings                                                          (540)                  --
                                                                                          ---------           ----------
                     Net cash (used in) provided by financing
                      activities                                                               (703)               1,846
                                                                                          ---------           ----------

(Decrease) increase in cash and cash equivalents                                             (1,181)              12,487
Cash and cash equivalents at beginning of period                                              8,700               51,629
                                                                                          ---------           ----------
Cash and cash equivalents at end of period                                                $   7,519           $   64,116
                                                                                          =========           ==========
</TABLE>

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


                                                                          Page 5
<PAGE>   6

                               PLANETRX.COM, INC.
                     Notes to Condensed Financial Statements
                                   (unaudited)

Note 1--The Company and Basis of Presentation

The Company

         PlanetRx.com, Inc. ("PlanetRx" or the "Company"), was incorporated in
Delaware on March 31, 1995 and was in the development stage through December 31,
1998. Until March 12, 2001, the Company was an online healthcare destination for
commerce, content and community. On April 5, 2001, the Company's Board of
Directors approved the preparation of a formal plan of liquidation and
dissolution as discussed in Note 6 to these financial statements.

         The accompanying unaudited condensed financial statements reflect all
adjustments, which, in the opinion of management, are necessary for the fair
statement of the results of operations for the periods shown. The results of
operations for such periods are not necessarily indicative of the results to be
expected for the full fiscal year or any future period. These financial
statements should be read in conjunction with the Company's annual report on
Form 10-K for its fiscal year ended December 31, 2000.

Recent accounting pronouncements

         In May 2000, the Emerging Issues Task Force released Issue No. 00-14
("EITF 00-14"), "Accounting for Certain Sales Incentives", which addressed the
recognition, measurement, and income statement classification for sales
incentives offered voluntarily without charge to customers that can be used in,
or that are exercisable by a customer as a result of, a single exchange
transaction. The Company will adopt the pronouncement in the second quarter
ending June 30, 2001.

Note 2 - Liquidity

         The Company has sustained losses since inception of $421.6 million.
Additionally, the Company expects to continue to incur losses for the
foreseeable future.

         The Company ceased retail operations effective March 12, 2001. Given
that the Company will not have any future business operations, this raises
substantial doubt about the Company's ability to continue as a going concern.
Consequently, the Company proposes to liquidate the Company's assets.
Management's plans in regards to the proposed liquidation is discussed in Note 6
to these financial statements.

Note 3 - Impairment of Long-Lived Assets

         Based upon the rapid changes in business conditions, its expected
future cash flows, and the disposal plan for its assets, the Company determined
an impairment of its fixed assets had occurred. Therefore, the Company wrote
down fixed assets of approximately $2.2 million during the first quarter of 2001
and $8.0 million during the fourth quarter ending December 31, 2000. After the
impairment loss, the Company's net book value of fixed assets approximated $2.5
million at March 31, 2001. The fixed assets were written down to their estimated
net realizable value and are currently classified as held for sale.

Note 4--Property and Equipment (in thousands)

<TABLE>
<CAPTION>
                                                                                               March 31,         December 31,
                                                                                                  2001               2000
                                                                                               ---------         ------------
         <S>                                                                                   <C>               <C>
         Computer equipment and software                                                        $  5,941           $  6,941
         Warehouse equipment                                                                       2,472              3,472
         Equipment under capital leases                                                            2,045              2,318
         Furniture and fixtures                                                                      539                539
         Leasehold improvements                                                                      959                959
                                                                                                --------           --------
                                                                                                  11,956             14,229
         Less:  Accumulated depreciation and amortization                                         (9,456)            (7,596)
                                                                                                --------           --------
                                                                                                $  2,500           $  6,633
                                                                                                ========           ========
</TABLE>


                                                                          Page 6
<PAGE>   7

Note 5--Net loss per share

         Basic net loss per share is computed by dividing the net loss available
to common stockholders for the period by the weighted average number of shares
of common stock outstanding during the period. Diluted net loss per share is
computed using the weighted average number of common shares and common
equivalent shares if dilutive. Common equivalent shares consist of the
incremental common shares subject to issuance upon conversion of the convertible
preferred stock (using the if-converted method) and shares issuable upon the
exercise of stock options and warrants (using the treasury stock method), and
the common shares outstanding subject to repurchase. The periods presented below
exclude common equivalent shares as the effect of such shares on a weighted
average basis is anti-dilutive.

         The following table sets forth the computation of basic and diluted net
loss per share for the periods indicated (in thousands, except per share
amounts):

<TABLE>
<CAPTION>
                                                                                                Three Months Ended
                                                                                                    March 31,
                                                                                          ------------------------------
                                                                                             2001                2000
                                                                                          ---------           ----------
<S>                                                                                       <C>                 <C>
Numerator:
  Net loss available to common shareholders                                               $  (6,669)          $  (49,636)

Denominator:
  Weighted average common shares                                                              6,146                6,531
  Weighted average unvested common shares
    subject to repurchase                                                                       (27)                (636)
                                                                                          ---------           ----------
  Denominator for basic and diluted
    calculation                                                                               6,119                5,895
                                                                                          =========           ==========
Net loss per share:
  Basic and diluted                                                                       $   (1.09)          $    (8.42)
                                                                                          =========           ==========
</TABLE>

NOTE 6 - Liquidation Plan

         On April 5, 2001, the Board of Directors approved the preparation of a
formal plan of liquidation and dissolution (the "Plan"). It is anticipated that
the Board of Directors will consider and approve the Plan during the second
quarter of 2001, and that the Plan will be submitted to the stockholders for
approval at a stockholders meeting tentatively scheduled for July, 2001. The
Company currently is not engaging in any business activities except for the
purpose of preserving the value of its assets and prosecuting or defending
lawsuits by or against it. If its Board of Directors and stockholders approve
the Plan, it anticipates that it will file a certificate of dissolution with the
Secretary of State of Delaware, wind up its business affairs, sell and liquidate
its properties and assets, including its intellectual property and other
intangible assets, pay its creditors and make distributions to stockholders in
accordance with the Plan. In conjunction with the liquidation, the Company has
begun implementing steps to sublease and/or negotiate cancellations of its
operating leases. Due to the uncertainty of such steps, the Company is unable to
estimate which amounts, if any, will be paid under outstanding commitments.
There can be no assurances that the Company will be able to recover the reported
value of its assets at March 31, 2001.


                                                                          Page 7
<PAGE>   8

Note 7 - Borrowings

         On March 30, 2001, Comdisco, Inc. notified the Company that events of
default had occurred under the Subordinated Loan and Security Agreement dated as
of January 15, 1999 (the "Loan Agreement"), pursuant to which the Company
borrowed the original principal amount of $7,000,000 secured by a lien on all of
its personal property, and the Master Lease Agreement dated as of January 15,
1999 (the "Lease Agreement"), pursuant to which it leases equipment from
Comdisco. The Company inadvertently failed to make its monthly payments of
principal and interest under the Loan Agreement and rent under the Lease
Agreement for February 2001, and as a result, Comdisco declared that an event of
default had occurred under the Loan Agreement and, by way of such default, under
the Lease Agreement pursuant to its cross-default provision. The notice from
Comdisco also advised that the secured obligations under the Loan Agreement and
obligation to pay rent under the Lease Agreement were accelerated, that
Comdisco's obligation to lease additional equipment to the Company under the
Lease Agreement was cancelled, that the Company's use of cash collateral (as
defined in the Loan Agreement) was restricted, and that its ability to sell
collateral (as defined in the Loan Agreement) was restricted. Comdisco demanded
immediate payment of the obligations due and owing under the Loan and Lease
Agreements and return of the leased equipment. Comdisco also gave notice of its
intent to foreclose under its security interest.

         The Company made the February payments totaling $102,902.50 on April 3,
2001, and requested that Comdisco waive the events of default under the Loan
Agreement and the Lease Agreement and reinstate both agreements. Comdisco has
tentatively agreed to such request on the conditions (a) that the Company pay
Comdisco $6,100,000 (which it paid on April 9, 2001) which will be applied
first, to pay all outstanding obligations under the Lease Agreement, and then
toward repayment of the Loan Agreement, and (b) that the Company agree to terms
amending the Loan Agreement (the "Amendment"). Additionally, during the second
quarter of 2001, the Company made an additional $1.4 million principal payment
towards the Loan Agreement.

         The Company is currently negotiating with Comdisco concerning the terms
of the Amendment; however, there can be no assurance that it will be able to
reach a satisfactory agreement. If the Company fails to reach agreement on the
Amendment, which is a condition to Comdisco's agreement to waive the events of
default under the Loan Agreement and the Lease Agreement, it might be required
to file for protection under the federal bankruptcy laws in order to preserve
and control its assets as it completes its liquidation.

Note 8 - Contingencies

         On March 27, 2001, SDR Investors, LP filed a lawsuit against the
Company, certain underwriters of the Company's initial public offering in
October 1999 (the "IPO"), and certain former and current directors of the
Company. Named as additional defendants in the suit, which was filed in the
United States District Court for the Southern District of New York, are The
Goldman Sachs Group, Inc., BancBoston Robertson Stephens, Inc., Merrill Lynch,
Pierce, Fenner & Smith, Incorporated, and Salomon Smith Barney, Inc., each of
which was an underwriter of the IPO; William J. Razzouk and Christos M.
Cotsakos, who are former directors of the Company; and David M. Beirne and
Michael Moritz, who are current directors of the Company. The suit generally
alleges that the defendants violated federal securities laws by not disclosing
certain actions allegedly taken by the underwriter defendants in connection with
the IPO. The suit alleges specifically that the underwriter defendants, in
exchange for the allocation to their customers of shares of the Company's common
stock sold in the IPO, solicited and received from their customers undisclosed
commissions on transactions in other securities and required their customers to
purchase additional shares of the Company's common stock in the aftermarket at
pre-determined prices that were above the IPO price. The suit seeks unspecified
monetary damages and certification of a plaintiff class consisting of all
persons who acquired shares of the Company's common stock between October 6,
1999, and March 23, 2001. The Company is in the process of reviewing the suit
and intends to respond in a timely manner. As of the date hereof, we are unable
to predict the outcome of the suit and its ultimate effect, if any, on the
Company's financial condition.


                                                                          Page 8
<PAGE>   9

Note 9 - Sponsorship Revenue

         In February 2001, the Company signed a marketing agreement with
drugstore.com. Under the terms of the agreement, the Company launched a new site
and marketed to its customers the drugstore.com website for a flat marketing fee
of $1.5 million. In addition, the Company received a customer acquisition fee
for every customer who purchases something on the drugstore.com site from the
Company's site based upon a sliding scale. The Company did not accept any new
prescription orders after February 12th, did not perform prescription refills
after February 26th, and closed the remainder of its store on March 12th, 2001.
The term of the agreement with drugstore.com was for 3 months.

Note 10 - Intangible Assets

         Based upon the rapid changes in business conditions and its expected
future cash flows, the Company determined an impairment of certain of its domain
name assets had occurred. Therefore, the Company wrote down intangible assets
associated with these domain names of $425,000 during the fourth quarter ending
December 31, 2000.

         Additionally, as part of management's plan to liquidate the company,
PlanetRx.com began to sell domain name assets during the first quarter of 2001.
Associated with the sale of these assets, the Company recorded other income of
approximately $1.9 million for the three months ended March 31, 2001.

Note 11 - Subsequent Events

         On April 27, 2001, the Company sold certain warehouse equipment assets
to a third party for approximately $1.4 million. The net proceeds approximated
the book value of the assets at the time of sale. The proceeds have been used to
make additional principal payments to Comdisco under the Subordinated Loan and
Security Agreement dated as of January 15, 1999.

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

         THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
SECTION 21E OF THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED. THESE
INCLUDE, BUT ARE NOT LIMITED TO STATEMENTS CONCERNING PLANETRX.COM'S
EXPECTATIONS, BELIEFS, INTENTIONS, PLANS, GOALS OR STRATEGIES REGARDING THE
FUTURE. ALL FORWARD-LOOKING STATEMENTS INCLUDED IN THIS DOCUMENT ARE BASED UPON
INFORMATION AVAILABLE TO PLANETRX.COM AS OF THE DATE HEREOF, AND PLANETRX.COM
ASSUMES NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS.
FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES WHICH COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED. THESE INCLUDE, BUT ARE
NOT LIMITED TO, THE RISKS NORMALLY ASSOCIATED WITH A MAJOR CHANGE IN FOCUS OF A
BUSINESS, CHANGES IN ECONOMIC AND MARKET CONDITIONS AFFECTING PLANETRX.COM,
CHANGES IN AVAILABILITY OF CAPITAL TO PLANETRX.COM, THIRD-PARTY RELATIONSHIPS
AND APPROVALS, DECISIONS OF COURTS, REGULATORS AND GOVERNMENTAL BODIES, PRODUCT
DEMAND, COMPETITIVE CONDITIONS, AND OTHER FACTORS OR RISKS RELATING TO
PLANETRX.COM'S BUSINESS AS SET FORTH IN THIS DOCUMENT AND THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000, INCLUDING
(WITHOUT LIMITATION) UNDER THE CAPTIONS "COMPETITION," "GOVERNMENT REGULATIONS"
AND "RISK FACTORS". NOTHING CAN OR SHOULD BE INFERRED ABOUT PLANETRX.COM'S
FUTURE REVENUES OR FINANCIAL RESULTS FROM THE FORWARD-LOOKING STATEMENTS
CONTAINED IN THIS DOCUMENT.

Decision to Liquidate

         On April 5, 2001, the Board of Directors approved the preparation of a
formal plan of liquidation and dissolution for the Company ("the Plan"). We
anticipate that our Board of Directors will consider and approve the Plan during
the second quarter of 2001, and that the Plan will be submitted to our
stockholders for approval at a stockholder meeting tentatively scheduled for
July, 2001. It is anticipated that if the requisite stockholder approval is
received, our officers and directors will initiate the complete liquidation and
dissolution of the Company. We are not engaged in any business activities except
for the purpose of preserving the value of our assets and prosecuting and
defending lawsuits by or against us. If our Board of Directors and stockholders
approve the Plan, we anticipate that we will file a certificate of dissolution
with the Secretary of State of Delaware, wind up our business affairs, sell and
liquidate our properties and assets, including our intellectual property and
other intangible assets, and to the extent possible, pay our creditors and make
distributions to stockholders, all in accordance with the Plan.


                                                                         Page 9

<PAGE>   10

         We currently expect that a proxy statement for the stockholder meeting
called to approve the Plan (the "Proxy Statement") will be mailed in June 2001.
As will be further described in the Proxy Statement, the Company cannot predict
the per share amount, if any, of money that the Company will distribute in
aggregate pursuant to the Plan.

Overview

         PlanetRx.com has been a leading online healthcare destination for
commerce, content and community. Our e-commerce website, www.PlanetRx.com, which
we launched on March 18, 1999, provided a convenient, private and informative
shopping experience for health and personal care products. Until March 12, 2001,
we offered products in six categories: prescription drugs; non-prescription
drugs; personal care; beauty and spa; vitamins, herbs and nutrition; and medical
supplies. Our healthchannels, located within the PlanetRx.com website,
incorporated content that addressed a variety of health-related topics. In
addition, we own and were operating a network of websites targeting specific
healthcare conditions by providing relevant content and a destination for online
communities. These condition-specific websites, which include diabetes.com,
depression.com, obesity.com, and alzheimers.com, were linked to the PlanetRx.com
website.

         We were incorporated in Delaware on March 31, 1995 and were in the
development stage through December 31, 1998. In March 1999, upon the launch of
our website, we began to recognize our initial revenues. In October 1999, we
completed our initial public offering. From our inception through the launch of
our PlanetRx.com website, we did not generate any sales and our operating
activities consisted mainly of developing our business model, constructing our
websites and transaction processing system, researching and developing
health-related content, recruiting and training employees, gaining necessary
funding, negotiating advertising contracts with several of the major Internet
portals, building our pharmacy and distribution center and establishing the
PlanetRx.com brand name. After launching our Planetrx.com website, we continued
these activities and, in addition, increased the breadth of our product
offerings, expanded our online information resources, and identified and
executed strategic partnerships.

         Based upon the rapid changes in business conditions, its expected
future cash flows, and the disposal plan for its assets, the Company determined
an impairment of its fixed assets had occurred. Therefore, the Company wrote
down fixed assets of approximately $2.2 million during the first quarter of 2001
and $8.0 million during the fourth quarter ending December 31, 2000. After the
impairment loss, the Company's net book value of fixed assets approximated $2.5
million at March 31, 2001. The fixed assets were written down to their net
realizable value and are currently classified as held for sale.

         On April 27, 2001, we sold certain warehouse equipment assets to a
third party for approximately $1.4 million. The net proceeds approximated the
book value of the assets at the time of sale. The proceeds have been used to
make additional principal payments to Comdisco under the Subordinated Loan and
Security Agreement dated as of January 15, 1999.

         On March 30, 2001, Comdisco, Inc. notified us that events of default
had occurred under the Subordinated Loan and Security Agreement dated as of
January 15, 2001, pursuant to which we borrowed the original principal amount of
$7,000,000 secured by a lien on all of our personal property, and the Master
Lease Agreement dated as of January 15, 1999, pursuant to which we lease
equipment from Comdisco. See "Liquidity and Capital Resources - Events of
Default Under Loan Agreement and Lease Agreement with Comdisco" in this Item 2.



                                                                         Page 10

<PAGE>   11

         On March 27, 2001, SDR Investors, LP filed a lawsuit against the
Company, certain underwriters of the Company's initial public offering in
October 1999 (the "IPO"), and certain former and current directors of the
Company. Named as additional defendants in the suit, which was filed in the
United States District Court for the Southern District of New York, are The
Goldman Sachs Group, Inc., BancBoston Robertson Stephens, Inc., Merrill Lynch,
Pierce, Fenner & Smith, Incorporated, and Salomon Smith Barney, Inc., each of
which was an underwriter of the IPO; William J. Razzouk and Christos M.
Cotsakos, who are former directors of the Company; and David M. Beirne and
Michael Moritz, who are current directors of the Company. The suit generally
alleges that the defendants violated federal securities laws by not disclosing
certain actions allegedly taken by the underwriter defendants in connection with
the IPO. The suit alleges specifically that the underwriter defendants, in
exchange for the allocation to their customers of shares of the Company's common
stock sold in the IPO, solicited and received from their customers undisclosed
commissions on transactions in other securities and required their customers to
purchase additional shares of the Company's common stock in the aftermarket at
pre-determined prices that were above the IPO price. The suit seeks unspecified
monetary damages and certification of a plaintiff class consisting of all
persons who acquired shares of the Company's common stock between October 6,
1999, and March 23, 2001. The Company is in the process of reviewing the suit
and intends to respond in a timely manner. As of the date hereof, we are unable
to predict the outcome of the suit and its ultimate effect, if any, on the
Company's financial condition.

         In February 2001, we signed a marketing agreement with drugstore.com.
Under the terms of the agreement, we launched a new site and marketed to our
customers the drugstore.com website for a flat marketing fee of $1.5 million. In
addition, we will also receive a customer acquisition fee for every customer who
purchases something on the drugstore site from the Company's site based upon a
sliding scale. We also did not accept any new prescription orders after February
12th, did not perform any prescription refills after February 26th, and closed
the remainder of our store on March 12th, 2001. The term of the agreement with
drugstore.com was for 3 months.

         Based upon the rapid changes in business conditions and its expected
future cash flows, the Company determined an impairment of certain of its domain
name assets had occurred. Therefore, the Company wrote down intangible assets
associated with these domain names of $425,000 during the fourth quarter ending
December 31, 2000. Additionally, as part of management's plan to liquidate the
company, PlanetRx.com began to sell domain name assets during the first quarter
of 2001. Associated with the sale of these assets, the Company recorded other
income of approximately $1.9 million for the three months ended March 31, 2001.

Results of Operations

         The following table sets forth unaudited quarterly statement of
operations data for the five quarters ended March 31, 2001. This unaudited
quarterly information has been derived from our unaudited financial statements
and reflects all adjustments, which, in the opinion of management, are necessary
for the fair presentation of the results of operations for the periods shown.
The results of operations for such periods are not necessarily indicative of the
results to be expected for the full fiscal year or any future period.


                                                                         Page 11

<PAGE>   12

                               PlanetRx.com, Inc.
                    Condensed Quarterly Results of Operations
                            (unaudited, in thousands)

<TABLE>
<CAPTION>
                                                                                 Quarter Ended
                                                    --------------------------------------------------------------------------
                                                     March 31,     December 31,   September 30,      June 30,        March 31,
                                                        2001            2000           2000            2000            2000
                                                    --------------------------------------------------------------------------
<S>                                                 <C>            <C>            <C>               <C>             <C>
Net revenue:
    e-commerce                                      $    3,957      $    6,440      $    9,078      $    8,132      $    7,813
    Sponsorship                                          1,743           1,575             864           1,303             960
                                                    ----------      ----------      ----------      ----------      ----------
                                                         5,700           8,015           9,942           9,435           8,773
Cost of net revenue:
    e-commerce                                           4,038           5,937           7,903           6,980           6,403
    Sponsorship                                             --              --               8             209             156
                                                    ----------      ----------      ----------      ----------      ----------
                                                         4,038           5,937           7,911           7,189           6,559
                                                    ----------      ----------      ----------      ----------      ----------
Gross profit                                             1,662           2,078           2,031           2,246           2,214
Operating expenses:
    Marketing and sales                                    513           3,524           7,633          14,538          23,594
    Shipping, handling and related costs                 3,594           5,058           6,519           6,945           5,952
    Product development                                  1,335           2,332           4,117           5,217           6,595
    General and administrative                           1,795           2,027           4,513           2,532           2,327
    Amortization of intangible assets                       --          10,215          10,215          10,215          10,215
    Stock-based compensation                               689          (1,188)            389           2,861           4,268
    Contract termination and
      severance charges                                     --              --              --           4,466              --
    Restructuring charges                                   --             762           2,975              --              --
    Impairment loss                                      2,191         163,712              --              --              --
                                                    ----------      ----------      ----------      ----------      ----------
            Total operating expenses                    10,117         186,442          36,361          46,774          52,951
                                                    ----------      ----------      ----------      ----------      ----------
Operating loss                                          (8,455)       (184,364)        (34,330)        (44,528)        (50,737)
Other income                                             1,888              --
Interest income (expense), net                             142             283             290             615           1,101
                                                    ----------      ----------      ----------      ----------      ----------
Net loss                                            $   (6,669)     $ (184,081)     $  (34,040)     $  (43,913)     $  (49,636)
                                                    ==========      ==========      ==========      ==========      ==========
</TABLE>

Net Revenue

         Net revenues were $5.7 million and $8.8 million for the three months
ended March 31, 2001 and 2000, respectively. E-commerce revenues were $4.0
million and $7.8 million for the three months ended March 31, 2001 and 2000,
respectively. Sponsorship revenues were $1.7 million and $960,000 for the three
months ended March 31, 2001 and 2000, respectively.

Cost of Net Revenue

         Cost of revenues were $4.0 million and $6.6 million for the three
months ended March 31, 2001 and 2000, respectively. We had negative gross
margins on e-commerce of 2% for the three months ended March 31, 2001 and
positive gross margins on e commerce of 18% for the three months ended March 31,
2000. Our sponsorship margin was 100% and 93% for the three months ended March
31, 2001 and 2000, respectively.

Operating Expenses

         Marketing and Sales. For the three months ended March 31, 2001,
marketing and sales expense was approximately $513,000 as compared to $23.6
million for the three months ended March 31, 2000. The decrease is due primarily
to costs relating to marketing and promotional campaigns and decreased
headcount.

         Shipping, Handling and Related Costs. For the three months ended March
31, 2001, shipping, handling and related costs were $3.6 million as compared to
$6.0 million for the three months ended March 31, 2000. This decrease is due
primarily to larger order volume during 2000.

         Product Development. For the three months ended March 31, 2001, product
development expense was $1.3 million as compared to $6.6 million for the three
months ended March 31, 2000. This decrease is related to the higher levels of
maintenance of our websites and internal systems and higher related headcount
during 2000.

         General and Administrative. For the three months ended March 31, 2001,
general and administrative expenses were $1.8 million as compared to $2.3
million


                                                                         Page 12
<PAGE>   13

for three months ended March 31, 2000. This decrease is primarily related to
decreases in headcount and decreases in professional services fees.

         Amortization of Intangible Assets. Amortization of intangible assets
was $10.2 million for the three months ended March 31, 2000. The amortization
recorded in 2000 was attributable to the amortization of intellectual property
related to domain names and intangible assets resulting from the purchase of
selected assets and liabilities of YourPharmacy.com in October 1999.

         Based upon the rapid changes in business conditions and its expected
future cash flows, the Company determined an impairment of the goodwill
associated with the YourPharmacy.com acquisition had occurred and no future
benefit was expected. Therefore, the Company wrote down intangible assets
associated with the YourPharmacy.com goodwill of $146.3 million in the fourth
quarter of 2000. Also based on these factors, the Company determined an
impairment of certain of its domain name assets had occurred. Therefore, the
Company wrote down intangible assets associated with these domain names of
$425,000 in the fourth quarter of 2000.

         Stock-Based Compensation. We recorded the recapture of deferred
stock-based compensation of approximately $2.0 million for three months ended
March 31, 2001, in connection with stock options forfeited during the period.
Our stock-based compensation expense, net totaled $700,000 for the three months
ended March 31, 2001 as compared to $4.3 million for the three months ended
March 31, 2000. The remaining deferred stock compensation balance of
approximately $3.2 million will be amortized through 2004.

         Interest Income and Expense. Interest income consists of earnings on
our cash, cash equivalents, and marketable securities and interest expense
consists of interest associated with our notes payable, borrowings, and capital
lease obligations. Interest income, net of interest expense, for the three
months ended March 31, 2001, decreased over the corresponding period of 2000 due
to lower interest-bearing asset balances in 2001.

Liquidity and Capital Resources

         PlanetRx.com invests excess cash predominantly in debt instruments that
are highly liquid, of high-quality investment grade, and predominantly have
maturities of less than one year with the intent to make such funds readily
available for operating purposes. Prior to our initial public offering, which
closed in October 1999 and provided net proceeds of approximately $101.0
million, we financed our operations primarily through private sales of
convertible preferred stock and common stock. At March 31, 2001, we had cash and
cash equivalents and investments in marketable debt securities totaling $7.5
million compared to $8.7 million at December 31, 2000.

         On April 5, 2001, our Board of Directors approved the preparation of a
plan of liquidation and dissolution for the Company (the "Plan"). We anticipate
that our Board of Directors will consider and approve the Plan during the second
quarter of 2001, and that the Plan will be submitted to our stockholders for
approval at a stockholders meeting tentatively scheduled for July, 2001.
PlanetRx.com currently is not engaging in any business activities except for the
purpose of preserving the value of our assets and prosecuting or defending
lawsuits by or against us. If our Board of Directors and stockholders approve
the Plan, we anticipate that we will file a certificate of dissolution with the
Secretary of State of Delaware, wind up our business affairs, sell and liquidate
our properties and assets, including our intellectual property and other
intangible assets, pay our creditors and make distributions to stockholders in
accordance with the Plan. No assurance can be given that available cash and
amounts received on the sale of assets will be adequate to provide for the
Company's obligations, liabilities, expenses, and claims.

         Net cash used in operating activities was $2.6 million during the three
months ended March 31, 2001, primarily a result of quarterly net losses
partially offset by decreases in accounts receivables, inventories, prepaid
expenses and other assets, accounts payable, and accrued expenses and non-cash
charges for depreciation, amortization and impairment losses. Net cash used in
operating activities was approximately $34.8 million during the three months
ended March 31,

                                                                         Page 13
<PAGE>   14
2000, primarily a result of quarterly net losses as well as increases in prepaid
expenses, accounts receivable and inventories, partially offset by increases in
accounts payable and non-cash charges for depreciation and amortization.

         Net cash provided by investing activities was approximately $2.1
million during the three months ended March 31, 2001, primarily consisting of
proceeds from the sale of intangible assets and property and equipment. Net cash
provided by investing activities was approximately $45.4 million during the
three months ended March 31, 2000, primarily consisting of the sale of
short-term investments partially offset by the acquisition of equipment and
systems, including computer equipment and fixtures and furniture.

         Net cash used in financing activities was approximately $700,000 during
the three months ended March 31, 2001 and primarily consisted of principal
payments on borrowings and capital lease obligations and the repurchase of
unvested Common Stock options. Net cash provided by financing activities was
approximately $1.8 million during the three months ended March 31, 2000,
primarily consisted of net proceeds from equipment financing partially offset by
the repurchase of unvested Common Stock options and principal payments on
capital lease obligations.

         As of March 31, 2000, our principal commitments consisted of
obligations outstanding under operating leases aggregating approximately $2.5
million through 2005.

Events of Default under Loan Agreement and Lease Agreement with Comdisco

         On March 30, 2001, Comdisco, Inc. notified us that events of default
had occurred under the Subordinated Loan and Security Agreement dated as of
January 15, 2001 (the "Loan Agreement"), pursuant to which we borrowed the
original principal amount of $7,000,000 secured by a lien on all of our personal
property, and the Master Lease Agreement dated as of January 15, 1999 (the
"Lease Agreement"), pursuant to which we lease equipment from Comdisco. We
inadvertently failed to make our monthly payments of principal and interest
under the Loan Agreement and rent under the Lease Agreement for February 2001,
and as a result, Comdisco declared that an event of default had occurred under
the Loan Agreement and, by way of such default, under the Lease Agreement
pursuant to its cross-default provision. The notice from Comdisco also advised
that the secured obligations under the Loan Agreement and obligation to pay rent
under the Lease Agreement were accelerated, that Comdisco's obligation to lease
additional equipment to us under the Lease Agreement was cancelled, that our use
of cash collateral (as defined in the Loan Agreement) was restricted, and that
our ability to sell collateral (as defined in the Loan Agreement) was
restricted. Comdisco demanded immediate payment of the obligations due and owing
under the Loan and Lease Agreements and return of the leased equipment. Comdisco
also gave notice of its intent to foreclose under its security interest.

         We made the February payments totaling $102,902.50 on April 3, 2001,
and requested that Comdisco waive the events of default under the Loan Agreement
and the Lease Agreement and reinstate both agreements. Comdisco has tentatively
greed to our request on the conditions (a) that we pay Comdisco $6,100,000
(which we paid on April 9, 2001) which will be applied first, to pay all
outstanding obligations under the Lease Agreement, and then toward repayment of
the Loan Agreement, and (b) that we agree to terms amending the Loan Agreement
(the "Amendment"). In April 2001, we made an additional payment of principal
under the Loan Agreement in the approximate amount of $1.4 million.

         We are currently negotiating with Comdisco concerning the terms of the
Amendment; however, there can be no assurance that we will be able to reach a
satisfactory agreement. If we fail to reach agreement on the Amendment, which is
a condition to Comdisco's agreement to waive the events of default under the
Loan Agreement and the Lease Agreement, we may be required to file for
protection under the federal bankruptcy laws in order to preserve and control
our assets as we complete our liquidation.

Recent Accounting Pronouncements

         In May 2000, the Emerging Issues Task Force released Issue No. 00-14
("EITF 00-14"), "Accounting for Certain Sales Incentives", which addressed the
recognition, measurement, and income statement classification for sales
incentives


                                                                         Page 14
<PAGE>   15

offered voluntarily without charge to customers that can be used in, or that are
exercisable by a customer as a result of, a single exchange transaction. The
Company will adopt the pronouncement in the second quarter ending June 30, 2001.

ADDITIONAL FACTORS THAT MAY EFFECT FUTURE RESULTS

         In addition to the factors discussed in the "Overview" and "Liquidity
and Capital Resources" sections of this "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and in our annual report on Form
10-K for our fiscal year ended December 31, 2000, as filed with SEC, the
following factors may affect our future results.

Comdisco Events of Default

         On March 30, 2001, Comdisco, Inc. notified us that events of default
had occurred under a Loan Agreement and a Master Lease Agreement between
PlanetRx.com and Comdisco as a result of our inadvertent failure to make our
monthly payments under the agreements for February 2001. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations-Liquidity and Capital Resources" for more information about these
agreements and the notice of default. We made the February payments on April 3,
2001, and requested that Comdisco waive the events of default and reinstate both
agreements. Comdisco has tentatively agreed to our request subject to certain
conditions, one of which is that we agree to an amendment of the Loan Agreement.
We are currently negotiating with Comdisco concerning the terms of the
amendment; however, there can be no assurance that we will be able to reach a
satisfactory agreement with Comdisco. If we fail to reach agreement on an
amendment to the Loan Agreement and thereby obtain Comdisco's waiver of the
events of default under the Loan Agreement and the Lease Agreement, we might be
required to file for protection under the federal bankruptcy laws in order to
preserve and control our assets as we complete our liquidation.

Risks Relating to Proposed Liquidation and Dissolution

Plan May Not Be Approved by our Stockholders

         On April 5, 2001, the Board of Directors approved the preparation of a
formal plan of liquidation and dissolution (the "Plan"). We anticipate that our
Board of Directors will consider and approve the Plan during the second quarter
of 2001, and that the Plan will be submitted to our stockholders for approval at
a stockholders meeting tentatively scheduled for July, 2001. This followed our
announcement in February 2001 that we intended to evolve our business model to
focus primarily on fulfilling specialty prescriptions, and that we would
discontinue the sale of retail health and beauty products. However, our
negotiations to acquire a specialty pharmacy business failed to produce an
agreement acceptable to PlanetRx.com., and on March 12, 2001 our on-line store
closed.

         PlanetRx.com currently is not engaged in any business activities except
for the purpose of preserving the value of our assets and prosecuting or
defending lawsuits by or against us. If our Board of Directors and stockholders
approve the Plan, we will wind up our business affairs, sell and liquidate our
properties and assets, including our intellectual property and other intangible
assets, and to the extent possible, pay our creditors and make distributions to
stockholders in accordance with the Plan. If our stockholders do not approve the
Plan, our Board of Directors will re-evaluate the Company's business
opportunities. However, there is no assurance that we would be able to
successfully resume our business.

Potential Stockholder Liability to Creditors of the Company

         If the Plan is approved by our Board of Directors and stockholders, the
Company will file a certificate of dissolution with the Secretary of State of
the State of Delaware to dissolve the Company. Under the Delaware General Board
of Directors and Corporation Law (the "DGCL"), the Company will continue to
exist for three years after the dissolution becomes effective (or for such
longer period as the Delaware Court of Chancery shall direct), during which time
the Company will prosecute and defend lawsuits, gradually dispose of its
property, and to the extent


                                                                         Page 15
<PAGE>   16

possible, discharge its liabilities and distribute to its stockholders any
remaining assets.

         The Company will establish a contingency reserve (as described below)
to pay its expenses and liabilities during this three-year period. If the
contingency reserve should be inadequate to pay the Company's expenses and
liabilities, under the DGCL each stockholder could be held liable to the
Company's creditors for payment of the stockholder's pro rata share of amounts
owed to creditors in excess of the contingency reserve. A stockholder's
liability would be limited to the amounts previously received as distributions
from the Company (and from any liquidating trust) pursuant to the dissolution.
If the contingency reserve is inadequate, a stockholder could be required to
return all distributions previously received from the Company pursuant to the
dissolution, in which case a stockholder might receive nothing from the Company
under the Plan. Furthermore, if a stockholder has paid taxes on distributions
previously received pursuant to the dissolution, the requirement to repay all or
part of those distributions could result in a net tax cost to the stockholder if
the repayment does not cause a commensurate reduction in taxes payable.

         There can be no assurance that the contingency reserve established by
the Company will be adequate to cover any expenses and liabilities. See
"Contingency Reserves" for more information.

Personnel Risks

         The success of the Plan will depend in large part upon the Company's
ability to retain the services of certain of its current personnel or to attract
qualified replacements for them. The retention and attraction of qualified
personnel is particularly difficult under the Company's current circumstances.

Restrictions on Transfer of Shares; Closing of Stock Transfer Books

         The Company intends to close its stock transfer books and discontinue
recording transfers of its common stock at the close of business on the record
date set by our Board for filing the certificate of dissolution (the "Final
Record Date"). After the Final Record Date, certificates representing our common
stock will not be assignable or transferable on the books of the Company except
by will, intestate succession or operation of law. The proportionate interests
of each stockholder will be determined on the basis of their stock holdings at
the close of business on the Final Record Date. After the Final Record Date, any
distributions made by the Company will be made solely to the stockholders of
record at the close of business on the Final Record Date, except as necessary to
reflect transfers recorded on the books of the Company as a result of any
assignments by will, intestate succession or operation of law.

Timing of Distributions

         Although our Board of Directors has not established a firm timetable
for distributions to stockholders if the Plan is approved and assets are
available for such distributions, we plan, subject to contingencies inherent in
winding up the Company's business, to make distributions, if any, as promptly as
practicable. We expect the liquidation to be concluded within three years of
filing the certificate of dissolution by a final liquidating distribution,
either directly to the stockholders or to a liquidating trust. We are, however,
currently unable to predict the nature, amount or timing of this distribution or
any other distributions made under the Plan, if any. If the Plan is approved by
our Board of Directors and stockholders, our Board of Directors will determine
the actual nature, amount and timing of all distributions, in the Board's sole
discretion, which will depend on, among other factors, the Company's ability to
convert its remaining assets into cash and the amount of cash and other assets
available for distribution, if any.

Amount of Distributions

         Uncertainties as to the net value of the Company's non-cash assets and
the ultimate amount of its liabilities make it impracticable to predict the
aggregate net value that ultimately will be distributed to stockholders, if any.
Claims, liabilities and expenses from operations (including operating costs,
salaries,


                                                                         Page 16
<PAGE>   17

income taxes, payroll and local taxes, legal and accounting fees and
miscellaneous office expenses), although currently declining, will continue to
be incurred following approval of the Plan. These expenses will reduce the
amount of or possibly eliminate assets available for ultimate distribution to
stockholders. No assurances can be given that available cash and amounts
received on the sale of assets will be adequate to provide for the Company's
obligations, liabilities, expenses and claims and to make cash distributions to
stockholders. If they are not, distributions of cash and other assets to the
Company's stockholders will be reduced or eliminated.

Sales of the Company's Assets

         The Plan, if approved, will give our Board of Directors the authority
to sell all of the Company's assets. However, the Company may enter into
agreements to sell assets prior to the stockholders meeting tentatively
scheduled for July, 2001, contingent upon the approval of the Plan by our
stockholders at the meeting, in which case approval of the Plan will constitute
approval of such agreements and sales.

         The Company's assets will be sold on terms approved by our Board of
Directors. Sales may be conducted by competitive bidding, public sales or
privately negotiated transactions. We do not anticipate amending or
supplementing the proxy statement to be distributed to our stockholders
concerning the Plan to reflect any such agreement or sale, unless required by
applicable law.

         The prices at which the Company will be able to sell its assets will
depend largely on factors beyond our control, including, without limitation, the
condition of financial markets, the availability of financing to prospective
purchasers of the assets, regulatory approvals, public market perceptions, and
limitations on transferability of certain assets. In addition, the Company may
not be able to obtain as high a price for a particular asset as it might if the
Company were not in liquidation.

         The Company's sale of an appreciated asset will result in the
recognition of taxable gain by the Company to the extent the fair market value
of such asset exceeds the Company's tax basis in such asset.

Activities of the Company After Adoption of the Plan

         Our Board of Directors and management have taken steps to reduce the
Company's operations. Our management and any other continuing employees will
receive compensation for performing their duties, as determined by the Board.
The Board has not yet established guidelines for determining such compensation,
but we expect that the determinations will be made by evaluating all relevant
factors, including, without limitation, the efforts of such individuals in
successfully implementing the Plan and a review of compensation payable to
individuals exercising similar authority and bearing similar responsibilities.

Reporting Requirements

         Whether or not the Plan is approved, we have an obligation to continue
to comply with the applicable reporting requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), even though compliance with such
reporting requirements is economically burdensome. If the Plan is approved, in
order to curtail expenses, we will seek relief from the Securities and Exchange
Commission ("SEC") from the reporting requirements under the Exchange Act after
our certificate of dissolution is filed. We anticipate that, if such relief is
granted, we would continue to file current reports on Form 8-K to disclose
material events relating to our liquidation and dissolution along with any other
reports that the SEC might require.

Contingency Reserve

         The DGCL requires the Company to provide for payment of all of its
liabilities and obligations in connection with the dissolution. After our Board
of Directors and stockholders approve the Plan, we will pay all expenses and
other known liabilities. We will make (i) provision to pay all liabilities,
including all contingent, conditional or unmatured contractual claims known to
the Company, (ii)


                                                                         Page 17
<PAGE>   18

provisions that will be reasonably likely to be sufficient to provide
compensation for any claim against the Company which is the subject of a pending
action, suit or proceeding to which the Company is a party, and (iii) provisions
that will be reasonably likely to be sufficient to provide compensation for
claims that have not been made known to the Company or that have not arisen but
that, based on facts known to the Company, are likely to arise or become known
to the Company within ten years. We will do this by establishing a contingency
reserve containing cash and other assets in an amount we believe to be adequate
to make such payments. We are currently unable to estimate the amount of any
contingency reserve that may be required. Any cash and assets that are set aside
for a contingency reserve, and any cash contributed to a liquidating trust, if
one is used, will be deducted before we determine the amounts available for
distribution to stockholders, if any.

         The actual amount of any contingency reserve will be based upon
estimates and opinions of management and the Board of Directors, which will be
derived from consultations with outside experts and review of the Company's
estimated operating expenses and future estimated liabilities, including,
without limitation, anticipated compensation payments, estimated legal and
accounting fees, operating lease expenses, payroll and other taxes payable,
miscellaneous office expenses, expenses accrued in the Company's financial
statements, and reserves for litigation expenses. There can be no assurance that
any contingency reserve in fact will be sufficient to pay all of the
liabilities, expenses and obligations for which it is established.

         If the Company fails to create an adequate contingency reserve to pay
its expenses and liabilities, or if the contingency reserve and the assets held
by any liquidating trust are insufficient to pay the amount of our expenses and
liabilities as ultimately determined, the DGCL provides that each stockholder
could be held liable for the payment to creditors of his pro rata share of such
remaining liability, limited to the amounts such stockholder has received from
the Company or from the liquidating trust pursuant to the dissolution. If the
Company were held by a court to have failed to make adequate provision for its
expenses and liabilities, or if the contingency reserve and the assets held by
any liquidating trust are insufficient to pay the amount of our expenses and
liabilities as ultimately determined, a creditor of the Company could seek an
injunction against the Company making distributions under the Plan on the ground
that the amounts to be distributed were needed to provide for the payment of the
Company's expenses and liabilities. Any such action could delay or substantially
diminish the cash distributions to be made to stockholders under the Plan.

         The Company intends to distribute to stockholders any remaining portion
of the contingency reserve after all the liabilities, expenses and obligations
for which it was established have been satisfied in full. However, there can be
no assurances that any such assets will be available for distribution to
stockholders.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We have assessed our vulnerability to certain market risks, including
interest rate risk associated with financial instruments included in cash, cash
equivalents and short-term investments. Due to the short-term nature of these
investments and our investment policies and our procedures, we have determined
that the risk associated with interest rate fluctuations related to these
financial instruments does not pose a material risk to us.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

         On March 27, 2001, SDR Investors, LP filed a lawsuit against
PlanetRx.com, certain underwriters of the Company's initial public offering in
October 1999 (the "IPO"), and certain former and current directors of the
Company. Named as additional defendants in the suit, which was filed in the
United States District Court for the Southern District of New York, are The
Goldman Sachs Group, Inc., BancBoston Robertson Stephens, Inc., Merrill Lynch,
Pierce, Fenner & Smith, Incorporated, and Salomon Smith Barney, Inc., each of
which was an underwriter of the IPO; William J. Razzouk and Christos M.
Cotsakos, who are former directors of the Company; and David


                                                                         Page 18
<PAGE>   19

M. Beirne and Michael Moritz, who are current directors of the Company. The suit
generally alleges that the defendants violated federal securities laws by not
disclosing certain actions allegedly taken by the underwriter defendants in
connection with the IPO. The suit alleges specifically that the underwriter
defendants, in exchange for the allocation to their customers of shares of the
Company's common stock sold in the IPO, solicited and received from their
customers undisclosed commissions on transactions in other securities and
required their customers to purchase additional shares of the Company's common
stock in the aftermarket at pre-determined prices that were above the IPO price.
The suit seeks unspecified monetary damages and certification of a plaintiff
class consisting of all persons who acquired shares of the Company's common
stock between October 6, 1999, and March 23, 2001. The Company is in the process
of reviewing the suit and intends to respond in a timely manner. As of the date
hereof, we are unable to predict the outcome of the suit and its ultimate
effect, if any, on the Company's financial condition.

         The Company also is party to routine legal proceedings incidental to
its business. We do not expect the outcome of such routine pending litigation to
have a material adverse effect on the Company's consolidated financial position
or results of operations.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

         On March 30, 2001, Comdisco, Inc. notified us that events of default
had occurred under the Subordinated Loan and Security Agreement dated as of
January 15, 2001, pursuant to which we borrowed the original principal amount of
$7,000,000 secured by a lien on all of our personal property, and the Master
Lease Agreement dated as of January 15, 1999, pursuant to which we lease
equipment from Comdisco. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources." As of
the date of this report, management believes that the loan arrearage has been
cured.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)      Exhibits

         See Exhibit Index.

(b)      Reports on Form 8-K

         A Form 8-K was filed by the Company on March 30, 2001, reporting that
         the Company's Board of Directors had authorized the preparation of a
         plan of liquidation and dissolution which would be submitted to the
         Company's stockholders for approval. A Form 8-K was filed by the
         Company on April 3, 2001, reporting the filing of a lawsuit by SDR
         Investors, LP.

                                   SIGNATURES

         Pursuant to the requirements 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.

                                       PLANETRX.COM, INC.
                                       (Registrant)



                                       By: /s/  Michael Beindorff
                                          -------------------------------------
                                          Michael Beindorff
                                          Chairman of the Board of Director
                                          and Chief Executive Officer

Date: May 15, 2001


                                                                         Page 19
<PAGE>   20
                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
Exhibit
Number                Description
-------               -----------
<S>          <C>
2.1*         Asset Contribution and Reorganization Agreement between
             PlanetRx.com, Inc., PRX Holdings, Inc., PRX Acquisition Corp.,
             YourPharmacy.com, Inc. and Express Scripts, Inc., dated August 31,
             1999.

3.1*         Certificate of Incorporation of the registrant, as amended.

3.2*         Bylaws of the registrant

3.3****      Certificate of Amendment to Restated Certificate of Incorporation
             of the registrant.

4.1          Reference is made to Exhibits 3.1, 3.2 and 3.5

4.2*         Amended and Restated Investors' Rights Agreement

4.3*         Specimen Common Stock Certificate

4.4**        Registration Rights Agreement between registrant and Alpha Venture
             Capital, Inc. dated July 25, 2000.

10.1*        Form of Indemnification Agreement.

10.2*        1999 Equity Incentive Plan.

10.3*        Employee Stock Purchase Plan.

10.4*        1999 Director Stock Option Plan.

10.5*        Form of Warrant for the purchase of Preferred Stock.

10.6*        Real Property Lease between registrant and Belz Devco, LP, dated
             October 16, 1998.

10.7*        Real Property Sublease between registrant and Radar Companies,
             dated May 5, 1999.

10.8*        Real Property Sublease between registrant and Cellegy
             Pharmaceuticals, Inc., dated November 6, 1998.

10.9*        Asset Acquisition Agreement between registrant and NetHealth.com,
             Inc., dated June 30, 1999.

10.10*       Series C Preferred Stock Purchase Agreement between registrant and
             the Investors named on Schedule thereto, dated June 3, 1999.

10.11*       Series D Preferred Stock Purchase Agreement between registrant and
             the Investors named on Schedule thereto, dated September 3, 1999.

10.12+*      Agreement between registrant and Express Scripts, Inc., dated
             August 31, 1999.

10.13+**     Agreement between registrant and Express Scripts, Inc. dated June
             19, 2000.

</TABLE>


                                                                         Page 20
<PAGE>   21

<TABLE>
<S>          <C>
10.14**      Common Stock Purchase Agreement between registrant and Alpha
             Venture Capital, Inc. dated July 25, 2000.

10.15***     Master Lease Agreement between registrant and Comdisco, Inc. dated
             January 15, 1999, Equipment Schedules VL-1 and VL-2 dated January
             20, 1999, and Addendum dated January 20, 1999.

10.16***     Subordinated Loan and Security Agreement between registrant and
             Comdisco, Inc. dated as of January 15, 2001. The exhibits to this
             document have been omitted from this filing. The Company will
             furnish, as supplementary information, copies of the omitted
             materials to the Securities and Exchange Commission upon request.

</TABLE>

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

*        Incorporated herein by reference to Form S-1 as declared effective on
         October 7, 1999 (File No. 333-82485).

**       Incorporated herein by reference to report on Form 10-Q, for the
         quarterly period ended June 30, 2000 filed on August 14, 2000.

***      Incorporated herein by reference to annual report on Form 10-K, for the
         fiscal year ended December 31, 2000, filed on April 17, 2001.

****     Incorporated herein by reference to Form 10-K/A, for the fiscal year
         ended December 31, 2000, filed on April 30, 2001.

+        Confidential treatment has been requested for certain portions which
         have been blacked out in the copy of the exhibit filed with the
         Securities and Exchange Commission. The omitted information has been
         filed separately with the Securities and Exchange Commission pursuant
         to the application for confidential treatment.


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