SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                              FORM 10-KSB/A (NO.2)

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

     For the fiscal year ended March 31, 2001 Commission file number 1-12850

                                   XDOGS, INC.
                        Formerly known as XDOGS.COM, INC.
                        ---------------------------------
        (Exact name of small business issuer as specified in its charter)

                         126 North 3rd Street, Suite 407
                          MINNEAPOLIS, MINNESOTA 55402
                          ----------------------------
                    (Address of principal executive offices)

Incorporated under the laws of                                84-1168832
the State of Nevada                                 ----------------------------
                                                    I.R.S. Identification Number


(Small Business Issuer's telephone number including area code): (612) 359-9020

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, $.01
PAR VALUE PER SHARE (Title of Class)

Indicate by check mark whether the Company (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months and (2) has been subject to such filing requirements for the
past 90 days.    Yes          No  X
                    -----       -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]

The issuer's revenues for its most recent fiscal year were: $134,963

The aggregate market value of the Company's common stock held by non-affiliates
of the Company on June 30, 2001 was approximately $1,730,000 computed by
reference to the average of the closing bid and ask prices as quoted on that
date.

Check whether the Company has filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Securities Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes  X       No
   -----       -----

The Company has one class of equity securities outstanding: Common Stock, $.01
par value per share. On June 30, 2001, there were 5,589,242 shares outstanding.
As of June 30, 1998, the date of our reorganization in Bankruptcy, our common
shares were subject to a 54 for 1 reverse split. As of August 23, 2000, our
common shares were subject to a 5 for 1 reverse split. All references to our
shares in this Form 10-KSB include the effect of these reverse splits of our
common stock.

<PAGE>


NOTE REGARDING AMENDMENT NO. 2 TO FORM 10-KSB

This Amendment No. 2 to our Form 10-KSB filed July 20, 2001 is being filed
solely with respect to the financial statements for the fiscal year ended March
31, 2001 and the Notes thereto. The amended fiscal year 2001 financial
statements prepared by Cordovano and Harvey, P.C., filed herewith, contain minor
technical changes which in their opinion are not material. Additionally, the
accountant's report of McGladrey & Pullen, LLP on the fiscal year 2000 financial
statements included in our previously filed Form 10-KSB/A on August 20, 2001 was
incorrect and was included without the consent of McGladrey & Pullen, LLP. This
Amendment No. 2 includes the corrected opinion and is being included with the
consent of McGladrey & Pullen, LLP. We have not included or updated any other
information in this document other than the amended fiscal year 2001 financial
statements. For current information on us, please refer to other recent filings
with the Securities and Exchange Commission.


                                  XDOGS, INC.

                 AMENDMENT NO. 2 TO FORM 10-KSB/A ANNUAL REPORT

                    FOR THE FISCAL YEAR ENDED MARCH 31, 2001



                               TABLE OF CONTENTS

(Items 1 through Item 12 are not filed in this Amendment No. 2.
Please see Amendment No. 1 filed August 20, 2001.)


Item 13. Exhibits and Reports on Form 8-K.............................     3

Signatures............................................................     3

Financial Statements..................................................     F-1


References in this document to "us," "we," "the Registrant" or "the Company"
refer to XDOGS, Inc., and its predecessors.

FORWARD-LOOKING STATEMENTS

When used in this Annual Report on Form 10-KSB/A, the words "believes",
"anticipates", "expects", "estimates" and similar expressions are intended to
identify, in certain circumstances, forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements involve known and unknown risks, uncertainties and other factors that
may cause actual results, performance or achievements to differ materially from
the predicted results, performance or achievements. Such factors include, among
others, the following: general economic and business conditions, the ability to
secure financing for working capital and operations, the acceptance in the
marketplace of new products, changes in business strategy or development plans,
availability of qualified personnel, currency fluctuations, changes in
political, social and economic conditions and local regulations, particularly in
Europe, and other factors outlined in the Company's previously filed public
documents, copies of which may be obtained without cost from the Company. Given
these uncertainties, prospective investors are cautioned not to place undue
reliance on such statements. The Company also undertakes no obligation to update
these forward-looking statements


                                       2
<PAGE>


                                   XDOGS, INC.

      FORM 10-KSB/A (NO.2) ANNUAL REPORT FOR THE YEAR ENDED MARCH 31, 2001


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                            Page
                                                                            ----
Independent auditors' reports.............................................   F-2

Consolidated balance sheet, March 31, 2001................................   F-4


Consolidated statements of operations, for the years ended
March 31, 2001 and 2000...................................................   F-5


Consolidated statements of shareholders' deficit, April 1, 1999
through March 31, 2001....................................................   F-6


Consolidated statements of cash flows, for the years ended
March 31, 2001 and 2000...................................................   F-7


Notes to consolidated financial statements................................   F-8


                                      F-1

<PAGE>


INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
XDOGS, Inc.


We have audited the consolidated balance sheets of XDOGS, Inc. as of March 31,
2001, and the related consolidated statements of operations, shareholders'
deficit, and cash flows for the year ended March 31, 2001. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of XDOGS, Inc. as of
March 31, 2001, and the results of their operations and their cash flows for the
year ended March 31, 2001, in conformity with accounting principles generally
accepted in the United States.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in the Summary of
Significant Accounting Policies, the Company has a net capital deficit at March
31, 2001 and has suffered significant operating losses since inception through
March 31, 2001, which raise a substantial doubt about its ability to continue as
a going concern. Management's plans in regard to these matters are also
described in the Summary of Significant Accounting Policies. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.



/s/ Cordovano and Harvey, P.C.
------------------------------
Cordovano and Harvey, P.C.
Denver, Colorado
August 1, 2001


                                       F-2
<PAGE>


                          Independent Auditor's Report



Board of Directors and Stockholders
XDOGS, Inc.
Minneapolis, Minnesota

We have audited the accompanying consolidated statements of operations, changes
in stockholders deficit, and cash flows of XDOGS, Inc. (formerly Xdogs.com and
The Sled Dogs Company) for the year ended March 31, 2000. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects the consolidated results of operations and cash flows of
XDOGS, Inc. (formerly Xdogs.com and The Sled Dogs Company) for the year ended
March 31, 2000 in conformity with accounting principles generally accepted in
the United States of America



                                                     /s/ McGladrey & Pullen, LLP
                                                     ---------------------------
                                                     McGladrey & Pullen, LLP
Minneapolis, Minnesota
June 26, 2000


                                       F-3
<PAGE>
<TABLE>
<CAPTION>


                                                         XDOGS, INC.
                                                 CONSOLIDATED BALANCE SHEETS


                                                                                                                March 31,
                                                                                                                  2001
                                                                                                              ------------

ASSETS
Current assets:
     <S>                                                                                                      <C>
     Cash...................................................................................................  $       --
     Accounts receivable, net of allowance for doubtful accounts of $25,014.................................         2,899
     Inventory, net of allowance for obsolescence of $128,996 (Note C)......................................        13,737
                                                                                                               -----------
                                                                                     Total current assets ..        16,636

     Equipment, at cost, net of accumulated depreciation of $12,776 (Note D)................................        52,517
     Other assets (Note E)..................................................................................          --
                                                                                                               -----------
                                                                                                               $    69,153
                                                                                                               ===========


LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
     Accounts and notes payable:
        Accounts payable and accrued expenses...............................................................     $.646,946
        Indebtedness to related party (Note B)..............................................................        14,433
        Notes payable related party (Note B)................................................................       717,000
        Note payable (Note E)...............................................................................       200,000
        Litigation liabilities (Note I).....................................................................        96,093
                                                                                                               -----------
                                                                                Total current liabilities ..     1,674,472
                                                                                                               -----------

Commitments and contingencies (Note A, H and I) ............................................................          --


Shareholders' deficit (Note F)
        Preferred stock, no par value, 1,000,000 shares authorized, 0 shares
          issued and outstanding ...........................................................................          --
        Common stock, $0.01 par value, 20,000,000 shares authorized,
          4,131,742 shares issued and outstanding...........................................................        41,318
        Additional paidin capital...........................................................................     9,442,478
        Accrued compensation................................................................................     2,400,327
        Common stock paid for but not issued................................................................       159,839
        Retained deficit....................................................................................  (13,6498,281)
                                                                                                               -----------
                                                                              Total shareholders' deficit ..    (1,605,319)
                                                                                                               -----------
                                                                                                               $    69,153
                                                                                                               ===========



                                 See accompanying notes to consolidated financial statements

                                                            F-4
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                                           XDOGS, Inc.
                                               CONSOLIDATED STATEMENTS OF OPERATIONS



                                                                                                          For the Years Ended
                                                                                                                March 31,
                                                                                                       --------------------------
                                                                                                           2001           2000
                                                                                                       -----------    -----------

<S>                                                                                                    <C>            <C>
Net sales...........................................................................................   $   134,963    $     2,342


Cost of goods sold..................................................................................      (195,616)          --
                                                                                                       -----------    -----------
                                                                   Gross margin ....................       (60,653)         2,342
                                                                                                       -----------    -----------




Operating expenses:
    Selling, general and administrative expenses....................................................     1,373,581      1,838,030
    Stock based consulting & compensation expense (Note F)..........................................     3,564,497      3,485,341
    Asset impairment (Note C, D and E)..............................................................       647,570           --
    Loss on litigation (Note I).....................................................................        96,093           --
    Accounts payable settlement.....................................................................        (6,735)          --
    Distribution rights expense (Note F) ...........................................................          --        1,146,343
                                                                                                       -----------    -----------
                                                             Operating expenses ....................     5,675,006      6,469,714
                                                                                                       -----------    -----------

                                                                 Operating loss ....................    (5,735,659)    (6,467,372)


Nonoperating income (expense):
    Interest expense (Note B and E).................................................................       (91,315)      (300,000)
    Other income....................................................................................         6,234         28,555
                                                                                                       -----------    -----------
                                                       Loss before income taxes ....................    (5,820,740)    (6,738,817)


Provision (benefit) for income taxes (Note G) ......................................................          --             --
                                                                                                       -----------    -----------
                                                                       Net loss ....................   $(5,820,740)   $(6,738,817)
                                                                                                       ===========    ===========

Basic and diluted loss per common share.............................................................   $     (2.24)   $     (3.57)
                                                                                                       ===========    ===========
Basic and diluted weighted average
   common shares outstanding (Note F)...............................................................     2,600,663      1,889,041
                                                                                                       ===========    ===========


                                    See accompanying notes to consolidated financial statements

                                                                F-5
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                             XDOGS, Inc.
                          CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
                                April 1, 1999 through March 31, 2001



                                                                                        Additional
                                                                Common Stock             Paid-in
                                                           Shares          Amount        Capital
                                                       ------------    ------------    ------------
                             <S>                         <C>          <C>             <C>
                             Balance, March 31, 1999      6,604,625    $     66,046    $    513,828

Common stock issued for services (Note F) ..........        824,500           8,245       2,402,133

Consulting expense recorded with issuance
   of options and warrants (Note F) ................           --              --              --

Common stock issued, net of commissions of
$60,986 (NoteF) ....................................      2,716,263          27,163       1,893,023

Shares redeemed ....................................       (460,284)         (4,603)           --

Beneficial conversion feature on shareholder
debt (Note  B) .....................................           --              --           300,000

Common stock to be issued ..........................           --              --              --

Net loss ...........................................           --              --              --
                                                       ------------    ------------    ------------
                             Balance, March 31, 2000      9,685,104          96,851       5,108,984


Shares issued from subscription ....................         90,000             900          86,575

Common stock issued for services (Note F) ..........      3,002,862          30,029       2,208,449

Common stock issued for cash (Note F) ..............        157,350           1,574         145,776



Common stock issued for debt (Note E and F) ........        605,000           6,050         447,373

5 to 1 Reverse split (Note F) ......................    (10,832,253)       (108,323)        108,323

Common stock to be issued ..........................           --              --              --

Shares issued from subscription ....................        172,179           1,722         203,516

Common stock issued for services (Note F) ..........      1,251,500          12,515       1,133,482

Consulting expense recorded with issuance
   of options and warrants (Note F) ................           --              --              --

Net loss ...........................................           --              --              --
                                                       ------------    ------------    ------------
                             Balance, March 31, 2001      4,131,742    $     41,318    $  9,442,478
                                                       ============    ============    ============


                    See accompanying notes to consolidated financial statements

                                                F-6
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                                     XDOGS, Inc.
                                  CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
                                        April 1, 1999 through March 31, 2001 (Con't)


                                                                       Common Stock
                                                          Accrued     Paid For, but     Retained
                                                       Compensation    Not Issued         Loss           Total
                                                       ------------   ------------    ------------    ------------
                            <S>                        <C>            <C>             <C>             <C>
                             Balance, March 31, 1999   $       --     $    564,514    $ (1,089,724)   $     54,664

Common stock issued for services (Note F) ..........           --             --              --         2,410,378

Consulting expense recorded with issuance
   of options and warrants (Note F) ................      2,220,306           --              --         2,220,306

Common stock issued, net of commissions of
$60,986 (NoteF) ....................................           --         (564,514)           --         1,355,672

Shares redeemed ....................................           --             --              --            (4,603)

Beneficial conversion feature on shareholder
debt (Note  B) .....................................           --             --              --           300,000

Common stock to be issued ..........................           --          187,725            --           187,725

Net loss ...........................................           --             --        (6,738,817)     (6,738,817)
                                                       ------------   ------------    ------------    ------------
                             Balance, March 31, 2000      2,220,306        187,725      (7,828,541)       (214,675)


Shares issued from subscription ....................           --          (87,475)           --              --

Common stock issued for services (Note F) ..........           --             --              --         2,238,478

Common stock issued for cash (Note F) ..............           --             --              --           147,350



Common stock issued for debt (Note E and F) ........           --             --              --           453,423

5 to 1 Reverse split (Note F) ......................           --             --              --              --

Common stock to be issued ..........................           --          264,827            --           264,827

Shares issued from subscription ....................           --         (205,238)           --              --

Common stock issued for services (Note F) ..........           --             --              --         1,145,997

Consulting expense recorded with issuance
   of options and warrants (Note F) ................        180,021           --              --           180,021

Net loss ...........................................           --             --        (5,820,740)     (5,820,740)
                                                       ------------   ------------    ------------    ------------
                             Balance, March 31, 2001   $  2,400,327   $    159,839    $(13,649,281)   $ (1,605,319)
                                                       ============   ============    ============    ============


                            See accompanying notes to consolidated financial statements

                                                     F-6 (Con't)
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                                    XDOGS, Inc.
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                        For the Years Ended
                                                                                              March 31,

Cash flow from operating activities:                                                      2001           2000
                                                                                      ------------    -----------
    <S>                                                                              <C>             <C>
    Net loss........................................................................  $ (5,820,740)   $(6,738,817)

      Transactions not requiring cash:
        Depreciation and amortization...............................................       115,225         18,224
        Asset impairment............................................................       647,570           --
        Payable settlement gain.....................................................        (6,735)          --
        Noncash expense related to stock issued (Note F)............................     3,335,416      2,410,378
        Noncash expense related to options and warrants issued (Note  F)............       180,021      2,220,306
        Noncash expense related to benenficainal conversion feature (Note B)........          --          300,000


      Changes in operating assets and liabilities:
        Current assets..............................................................      (245,830)       (25,204)
        Accounts payable and other accrued expenses.................................       420,665        472,787
                                                                                       -----------    -----------
                                         Net cash (used in) operating activities ...    (1,374,408)    (1,342,326)
                                                                                       -----------    -----------

Cash flow from investing activities:
      Purchases of equipment........................................................       (10,395)      (104,899)
      Acquisition of distribution rights ...........................................          --         (195,693)
                                                                                       -----------    -----------
                                         Net cash (used in) investing activities ...       (10,395)      (300,592)
                                                                                       -----------    -----------

Cash flow from financing activities:
       Net proceeds from sale of common stock.......................................       412,177      1,538,794
       Payment of notes payable to shareholder (Note B).............................       (11,565)          --
       Proceeds from notes payable to shareholders (Note B).........................       443,403        300,000
                                                                                       -----------    -----------
                                         Net cash provided by financing activities .       844,015      1,838,794
                                                                                       -----------    -----------

                                         Net increase in cash and cash equivalents .      (540,788)       195,876


Cash at beginning of year ..........................................................       282,795         86,919
                                                                                       -----------    -----------

Cash at end of year.................................................................   $  (257,993)   $   282,795
                                                                                       ===========    ===========

Supplemental cash flow information:
      Cash paid for interest........................................................   $    17,645    $      --
                                                                                       ===========    ===========
       Cash paid for income taxes...................................................   $      --      $      --
                                                                                       ===========    ===========

      Noncash investing and financing activities:
          Liability accrued for web site development................................   $   200,000    $      --
                                                                                       ===========    ===========


                           See accompanying notes to consolidated financial statements

                                                       F-7
</TABLE>
<PAGE>


                                   XDOGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS:

The Company was incorporated in Colorado in 1991 as a distributor of SnowRunner
snow skates. Between 1991 and 1994, the Company was restructured, and the name
of the Company was changed several times, including such names as SnowRunner
(USA) Inc., SnowRunners, Inc., and The Sled Dogs Company. The Company filed for
bankruptcy protection in 1997. As a result of the bankruptcy, the Company was
reorganized and in 1999 was renamed XDOGS, Inc. The Company intends to refocus
its efforts from an Internet based distribution model to a traditional wholesale
to retail distribution model which it has been implementing since August 2000.
However, thus far this effort has proven unsuccessful. The Company's ability to
generate revenues from operations and achieve profitability is dependent upon a
number of factors, including acceptance in the United States of the European
products. The ability to sustain future operations is ultimately dependent upon
the Company's ability to obtain additional financing, generate significant
revenues and attain profitability.

BASIS OF PRESENTATION

The Company has a net capital deficit at March 31, 2001 resulting from among
other things; recurring operating losses. In addition, the Company is unable to
meet its obligations as they come due and is in default on certain debt
obligations. The Company's business plan for fiscal 2002, which is described
elsewhere in this Form 10-KSB, contemplates reduced operating expenses,
obtaining additional equity funding and the refinancing or restructuring of its
debt obligations. The Company's ability to achieve the foregoing elements of its
business plan, which may be necessary to permit the realization of assets and
satisfaction of liabilities in the ordinary course of business, is uncertain.

CONSOLIDATION:

The financial statements include the accounts of the Company and its wholly
owned subsidiary, SnowRunner (Properties) Inc., which was established and
incorporated in April 1993. The subsidiary was inactive in fiscal years 2001 and
2000.

CASH:

The Company maintains deposits at banks which, at times, exceed federally
insured limits. The Company has not experienced any losses in such accounts.

INVENTORY:

The Company records inventory at cost. The Company uses the average cost method
to record cost of goods sold.

INTANGIBLE ASSETS:

Intangibles consist of cash paid for a four year distribution agreement and
liabilities incurred and stock issued for the Company's website. The cost is
being amortized over the term of the agreement.

                                      F-8

<PAGE>


                                   XDOGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


ACCOUNTING FOR LONG-LIVED ASSETS:

The Company reviews its long-lived assets periodically to determine if any
potential impairment exists.

REVENUE RECOGNITION:

The Company recognizes revenue when products are shipped.

DEPRECIATION:

The Company depreciates its office equipment using the straight-line method over
a period of five to seven years.

INCOME TAXES:

Deferred taxes are provided on an asset and liability method whereby deferred
tax assets are recognized for deductible temporary differences and operating
loss and tax credit carryforwards, and deferred tax liabilities are recognized
for taxable temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax basis.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.

INCOME (LOSS) PER SHARE:

The Company computes net income (loss) per share based upon the weighted-average
number of common shares outstanding during each year. As described in Note F, at
March 31, 2001, the Company had stock options outstanding to purchase 955,260
shares of common stock. However, because the Company incurred a net loss the
inclusion of those potential common shares in the calculation of diluted loss
per share would have an antidilutive effect. Therefore, basic and diluted loss
per share amounts are the same.

USE OF ESTIMATES:

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.

FAIR VALUE:

The Company's financial instruments consist of cash and short-term debt. The
current carrying amount of cash approximates fair value. The fair value of the
Company's short-term debt is estimated based on the quoted market prices for the
same or similar issues or on the current rates to the Company for debt of the
same remaining maturities with similar collateral requirements.

                                      F-9

<PAGE>


                                   XDOGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


STOCK-BASED COMPENSATION:

SFAS No. 123, "Accounting for Stock-Based Compensation" was issued in October
1995. This accounting standard permits the use of either a "fair value based
method" or the "intrinsic value method" defined in Accounting Principles Board
Opinion 25, "Accounting for Stock Issued to Employees" (APB 25) to account for
stock-based compensation arrangements. Companies that elect to use the method
provided in APB 25 are required to disclose pro forma net income and pro forma
earnings per share information that would have resulted from the use of the fair
value based method. The Company adopted SFAS No. 123 during the period ended
September 30, 1999; however, the Company has elected to continue to determine
the value of stock-based compensation arrangements with employees under the
provisions of APB 25. Pro forma disclosures have been included with the
accompanying consolidated financial statements at Note F.

NOTE B. NOTES PAYABLE, RELATED PARTY

During the year ended March 31, 2001, the Company signed several notes with an
officer/stockholder, for an additional $317,000 in proceeds. These notes were
due in full on September 1, 2000 and December 1, 2000 respectively. These notes
accrue interest at 12 percent per annum. During the year ended March 31, 2001,
the Company made $17,648 in interest payments. These notes are in default as of
March 31, 2001.

During the year ended March 31, 2001, the Company signed a note with an
affiliate, owned by one of the Company's directors, for $100,000. The note was
due in full on December 1, 2000 and accrues interest at 12 percent per annum.
This note is in default as of March 31, 2001.

During the year ended March 31, 2001, the Company received $26,000 in an
interest free advance from an unrelated shareholder collateralized by its
receivables. The Company made $11,567 in principal payments during the year
ended March 31, 2001. The balance of $14,433 has been accrued as indebtedness to
the related party as of March 31, 2001.

On March 10, 2000 the Company signed a $200,000 note with an
officer/stockholder. The note accrues interest at 12 percent and is due in full
on September 1, 2000. Accrued interest on the note is payable in stock and will
be valued at the market price of the stock on the date of payment. This note is
in default as of March 31, 2001.

On March 14, 2000 the Company signed a $100,000 note with a stockholder/advisor.
The note accrues interest at 12 percent and is due in full on September 1, 2000.
Accrued interest on the note is payable in stock and will be valued at the
market price of the stock on the date of payment. This note is in default as of
March 31, 2001 and under litigation. (see Note I)

All of these notes, except for the $26,000 advance, allow the note holders, at
any time during the term of the agreement, to convert the notes into common
stock at a price range between $.50 and $2.00 per share. Because two of the
notes entered into during the year ended March 31, 2000 can be converted to
common stock at a discount from the market price, a "beneficial conversion
feature" of $300,000 was recorded by the Company during the year ended March 31,
2000. The beneficial conversion feature was recorded by increasing additional
paid in capital and charging interest expense with no effect on ending
stockholders' equity.

                                      F-10

<PAGE>


                                   XDOGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE C. INVENTORY OBSOLESCENCE

Due to changing market conditions a thorough review was made of the Company's
apparel inventory. As a result, a provision for inventory losses of $128,996 was
charged against operations in fiscal year 2001. As of March 31, 2001, the
allowance for inventory obsolescence is $128,996.

NOTE D: EQUIPMENT

The Company owns two tradeshow booths for use during regular business
operations. As of March 31, 2001, one of the tradeshow booths is no longer
utilized by the Company for its intended purposes. Accordingly, the Company
recorded an impairment charge of $50,000 and wrote off related accumulated
amortization of $9,524.

The Company incurred $7,290 during fiscal year ended March 31, 2001 for
leasehold improvement. As of March 31, 2001, the Company operates on a monthly
lease and intends to move its headquarter office. Accordingly, the Company
recorded an impairment charge of $7,290 and wrote off related accumulated
depreciation of $156.

NOTE E. INTANGIBLE ASSETS & NOTE PAYABLE

The Company incurred liabilities during 2000 and 2001 for the development of the
Company's web site in the amount of $684,423. The Company entered into a
settlement agreement with its vendor by issuing 600,000 shares of pre split
common stock and entering into a $200,000 note payable on July 31, 2000.

The Company capitalized expenses incurred during fiscal year ended March 31,
2001 for the construction of its web site in the amount of $385,348. As of March
31, 2001, the web site is not operational. Accordingly, the Company recorded an
impairment charge of $385,348.

The $200,000 note accrues interest at "prime rate" announced by Wells Fargo
Bank. The note is secured by all of the Company's assets. Such security interest
is subordinate to the security interest of an officer/shareholder. The Company
agreed to repay $100,000 on September 15, 2000 and $100,000 on July 31, 2001.
The note is in default as of March 31, 2001.

The Company's history of operating losses triggered an impairment review of its
distribution agreements. The Company calculated the present value of expected
cash flows of its Berghaus distribution agreement to determine the fair value of
the assets. Accordingly, at March 31, 2001, the Company recorded an impairment
charge of $195,693 and wrote off the related accumulated amortization of
$12,231.

NOTE F. SHAREHOLDERS' DEFICIT

CONVERTIBLE PREFERRED STOCK

The Company's Board of Directors is authorized to issue 1,000,000 shares of no
par value preferred stock. No stock has been issued under this authorization.

                                      F-11

<PAGE>


                                   XDOGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


COMMON STOCK REVERSE SPLIT

On August 24, 2000, the shareholders approved a reverse split of the Company's
common stock. Weighted average shares outstanding for the fiscal year ended
March 31, 2000 has been adjusted to reflect changes in shares outstanding. The
common stock account was adjusted to reflect the change in the number of
outstanding shares. After the reverse split, the Company is authorized to issue
20,000,000 shares of its $.01 par value common stock.

COMMON STOCK ISSUED FOR COMPENSATION:

During the year ended March 31, 2001, the Company issued 1,852,072 shares of
post split common stock to its officers, directors, various employees and
outside service providers, in exchange for compensation. The value of the stock
issued was recorded at the quoted market price on the date of issuance and
totaled $3,384,476.

During the year ended March 31, 2000, 150,000 shares were issued to an officer
in exchange for compensation. The value of the stock issued was recorded at the
quoted market price on the date of issuance and totaled $492,750.

In addition, the Company issued an additional 674,500 common stock during the
year ended March 31, 2000 in lieu of cash for various expenses. The expenses
recorded were based upon the quoted market price of the stock issued and totaled
$1,918,628.

COMMON STOCK ISSUED IN PRIVATE PLACEMENT:

During fiscal year ended March 31, 2001, the Company issued additional common
stock through a private offering. The total number of post split common stock
issued was 203,649 shares with gross proceeds of approximately $349,293.

In June 2000, the Company completed additional private offerings of common
stock. The total number of shares issued in conjunction with the offerings was
1,532,929, with gross proceeds of approximately $1,030,000, before offering
costs and commissions. $564,514 was received prior to March 31, 1999, net of
commissions of $60,986.

OPTIONS AND WARRANTS - EMPLOYEE GRANTS:

The Company has granted nonqualified options for shares of common stock to
certain officers, directors, and employees of the Company. As permitted under
generally accepted accounting principles, these grants are accounted for
following APB Opinion No. 25 and related interpretations. Accordingly
compensation cost has been recognized for those grants whose exercise price is
less than the fair market value of the stock on the date of grant.

OPTIONS AND WARRANTS--NONEMPLOYEE GRANTS:

The Company also grants options to nonemployees for services and in conjunction
with certain agreements. These grants are accounted for under FASB Statement No.
123 based on the grant date fair values. Total expenses recorded by the Company
related to options and warrants totaled $180,021 and $2,220,306 in the years
ended March 31, 2001 and 2000 respectively.

                                      F-12

<PAGE>
<TABLE>
<CAPTION>


                                   XDOGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Total expenses recorded by the Company related to a warrant granted in
conjunction with a distribution agreement during the fiscal year ended March 31,
2000 totaled approximately $1,146,000. Other options and warrants issued to
non-employees during the fiscal year ended March 31, 2000 totaled $1,074,000.

The rights granted under the warrant vested immediately upon issuance so that
the entire amount of the expense was recorded during the years ended March 31,
2001 and 2000.

                                          Warrants & Options
                                   ---------------------------------      Weighted Average       Weighted
                                   Number of          Number of            Exercise Price        Average
                                    Shares        Shares Exercisable         Per Share          Fair Value
                                   ----------     ------------------      ----------------      -----------
<S>                                 <C>                <C>                 <C>                  <C>
Balance as of March 31, 1999.....        --                   --            $        --         $       --
  Warrants/Options issused.......   1,476,300                 --                     --                 --
  Warrants/Options exersised ....        --                   --                     --                 --
  Warrants/Options canceled......        --                   --                     --                 --
                                   ----------

Balnace at March 31, 2000........   1,476,300            1,476,300          $       3.39        $      3.28
  Warrants/Options issued             300,00                  --                     --                  --
  Reverse Split..................  (1,421,040)                --                     --                  --
  Warrants/Options issued........     775,000                 --                     --                  --
  Warrants/Options exercised.....        --                   --                     --                  --
  Warrants/Options cancelled.....    (175,000)                --                     --                  --
                                   ----------

Balance at March 31, 2001             955,260              955,260          $       6.15        $      5.28
                                   ----------


The following table summarizes information about stock options and warrants
outstanding at March 31, 2001.

                                        Remaining           Average                         Average
Range of              Number            Contractual         Exercise          Number        Exercise
Exercise Prices     Outstanding         Life (years)        Per Share       Exercisable      Price
                    -----------         ------------        ----------      -----------    ----------

$0.01-$3.00          632,060               2.38             $     0.74        632,060      $     0.74
$5.00-$13.75         134,800               3.95             $    10.74        134,800      $    10.74
$15.00-$20.00        146,400               1.74             $    17.20        146,400      $    17.20
$25-$40               42,000               4.11             $    34.50         42,000      $    34.50
                    --------                                                 --------
                     955,260               2.58             $     6.15        955,260      $     6.15
                    ========                                                 ========


OPTIONS AND WARRANTS--PRO FORMA INFORMATION:

Had compensation cost for all of the stock-based compensation grants and
warrants issued been determined based on grant date fair values of awards,
reported net loss per share would have been increased to the pro forma amounts
shown below.

                                      F-13
</TABLE>
<PAGE>


                                  XDOGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                                  For the Years Ended
                                                        March 31,
                                             -------------------------------
                                                  2001              2000
                                             -------------     -------------
Net loss, as reported................        $  (5,820,740)    $  (6,738,816)
                                             =============     =============
Pro forma net loss...................        $  (5,846,904)    $  (7,666,974)
                                             =============     =============

Basic and diluted loss per commom
   share, as reported................        $       (2.24)    $       (3.57)
                                             =============     =============
Pro forma basic and diluted loss
   per common share..................        $       (2.25)    $       (4.06)
                                             =============     =============


Pro forma information regarding net income and earnings per share is required by
SFAS 123 as if the Company had accounted for its issued warrants/options under
the fair value method of that Statement. The fair value for these warrants was
estimated at the date of issuance using the Black-Scholes option-pricing model
with the following assumptions:

Risk-free interest rate..............................     5.00%
Dividend yeild.......................................     0.00%
Volatility factor....................................    17.00%
Weighted average expected life.......................   5 years

The above pro forma effects on net loss are not likely to be representative of
the effects on reported net loss for future years because options vest over
several years and additional awards are generally made each year.

NOTE G. INCOME TAXES

At March 31, 2001, the Company has accumulated a net operating loss of
approximately $23,960,740, which may be used to reduce future taxable income
through 2021. A valuation allowance has been recognized to completely reserve
for the deferred tax assets related to the loss carryforwards. The reserve has
been established because of the uncertainty of future taxable income, which is
necessary in order to realize the benefits of the net operating loss
carryforwards. Any tax benefits realized in the future from preconfirmation
operating loss carryforwards will be reported as a direct addition to additional
paid-in capital. The Company's ability to utilize these carryforwards to offset
future taxable income is subject to restrictions under Section 382 of the
Internal Revenue Code due to certain changes in the equity ownership of the
Company. Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for tax purposes. Components of the
Company's deferred tax assets are:

                                      F-14

<PAGE>


                                   XDOGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                                           March 31,
                                                -----------------------------
                                                    2001             2000
                                                ------------     ------------

Deferred tax assets from net operating loss
  carryforward................................  $  8,386,259     $  7,260,000

Less valuation allowance......................  $ (8,386,259)    $ (7,260,000)
                                                ------------     ------------
Net deferred tax assets.......................  $       --       $       --
                                                ============     ============


A reconciliation of the U.S. statutory federal income tax rate to the effective
rate is as follows:

                                                        March 31,
                                               --------------------------
                                                  2001            2000
                                               ----------      ----------
U.S. federal statutory graduated rate.........     34.00%          34.00%
State income tax rate,
  net of federal benefit......................      0.00%           0.00%
Net operating loss for which no tax
  benefit is currently available..............    -34.00%         -34.00%
                                               ----------      ----------
                                                    0.00%           0.00%
                                               ==========      ==========


NOTE H: MAJOR SUPPLIERS AND DISTRIBUTORSHIPS

The Company's principal product lines are franchised under different major
distributor sales agreements. These agreements expire at varying times through
December 2005. In addition, these agreements require that certain operating and
product pricing policies of the Company comply with provisions contained within
the agreements.

The Company was an authorized distributor for Berghaus International (Berghaus),
and for Oxbow (Oxbow) during fiscal years ended March 31, 2001 and 2000.
Berghaus and Oxbow manufacture outdoor sporting goods. The Company distributed
products for Berghaus and Oxbow throughout most of North America. Oxbow received
warrants from the Company for signing the distribution agreement (See Note F).
To acquire this territory, the Company agreed to make royalty payments to each
supplier based on a percentage of the Company's net sales. Such royalties have
been accrued as of March 31, 2001.

The Company is an authorized distributor of Lumen Eyeware products for Metzler
Design (Metzler) in the United States, Canada, Mexico and the Caribbean basin.
To acquire this territory, the Company agreed to pay Metzler a set percentage
over cost for products and guaranteed minimum levels of sales for the calendar
years beginning January 1, 2000 through the end of the agreement term in 2005.
At March 31, 2001, such royalties have been accrued.

The Company is an authorized distributor of Axiom sportswear for Gaastra
International Sportswear (Gaastra) in the United States. To acquire this
territory, the Company agreed to pay Gaastra a set percentage over cost for
products and guaranteed minimum levels of sales for the calendar years beginning
June 1, 2000 through the end of the agreement term in 2005. At March 31, 2001,
such royalties have been accrued.

                                      F-15

<PAGE>


                                  XDOGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The Company guaranteed certain purchase levels in connection with all of its
distribution agreements. As of March 31, 2001, the Company had not attained the
guaranteed purchase levels. The distribution suppliers have the right to
terminate the distribution agreements if such guaranteed purchase levels are not
attained. As of March 31, 2001, the Company has not received any termination
notice except for a notice from Berghaus.

On November 29, 2000, Berghaus informed the Company it would continue its
distribution agreement upon payment of $120,000 in three installments with the
first installment due March 1, 2001. The Company has not made the first payment
and no longer sells Berghaus products.

NOTE I. LITIGATION

The Company is a defendant in three lawsuits for claims related to breach of
contract and nonpayment of note. The Company has accrued liabilities from two of
the three lawsuits in the financial statements.

Mr. Henry Furst filed a complaint against the Company, alleging that the Company
breached its contractual obligations to him and seeking $144,000 in damages. The
Company entered into a settlement agreement with Mr. Hurst whereby the Company
agreed to pay Mr. Furst $94,000 in installments and executed a confession of
judgment in favor of Mr. Furst for that amount. A litigation liability of
$96,093 has been recorded. The judgment is in default as of March 31, 2001.

The Company's former adviser consultant and shareholder, Steven Carlson
initiated a legal action against the Company on March 9, 2001 for approximately
$118,000 in non-payment of notes, accrued interest and accrued expenses. The
Company has recorded such claims as of March 31, 2001. (See Note B)

The Company is involved in another lawsuit filed by Millennium Holdings Group.
Millennium Holdings Group alleged claims against the Company for breach of
contract, slander and lost opportunity. Management is not able, at this time, to
predict the ultimate effect the Millennium Holdings Group's claim may have on
the Company's financial position or results of operations, but they will
vigorously defend against them.


                                      F-16


<PAGE>


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits. See Exhibit Index immediately following the signatures on this
     report on Form 10-KSB/A.

(b)  Reports on Form 8-K. We have not filed any reports on Form 8-K other than
     as stated in Amendment No. 1 to Form 10-KSB filed August 20, 2001.



                                   SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the Company has caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Dated: November 13, 2001.                    XDOGS, INC.


                                             /s/ Kent Rodriguez
                                             ------------------
                                             Kent Rodriguez, Chairman, President
                                             and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this

Report has been signed by the following persons on behalf of the Company in the
capacities and on the dates indicated.

Signature and Title                          Date
-------------------                          ----


/s/ Kent Rodriguez                           November 13, 2001
------------------
Kent Rodriguez, Chairman, President,
Chief Executive Officer and
Director (Principal Executive Officer
and Chief Financial Officer)


/s/ Craig Avery                              November 14, 2001
---------------
Craig Avery, Secretary


/s/ Robert Corliss                           November 14, 2001
------------------
Robert Corliss, Director


/s/ Douglas Barton                           November 14, 2001
------------------
Douglas Barton, Director


                                       3
<PAGE>


                                  XDOGS, INC.

                        EXHIBIT INDEX TO AMENDMENT NO. 2

                                 TO FORM 10-KSB

                    FOR THE FISCAL YEAR ENDED MARCH 31, 2001

                          COMMISSION FILE NO. 1-12850





23.1     Consent of McGladrey & Pullen, LLP

23.2     Consent of Cordovano and Harvey, P.C.