UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549

                                    FORM 10-K

(MARK ONE)
[X]                                           ANNUAL REPORT PURSUANT TO SECTION
                                              13 OR 15(d) OF THE SECURITIES
                                              EXCHANGE ACT OF 1934 FOR THE
                                              FISCAL YEAR ENDED DECEMBER 31,
                                              2002

                                       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: 0-22963

                             BIG DOG HOLDINGS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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

           DELAWARE                                     52-1868665
           --------                                     ----------
(STATE OR OTHER JURISDICTION OF                (I.R.S. EMPLOYER INCORPORATION
       OR ORGANIZATION)                                IDENTIFICATION NO.)

121 GRAY AVENUE, SANTA BARBARA, CALIFORNIA                    93101
------------------------------------------                    -----
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)                  (ZIP CODE)

                                 (805) 963-8727
               (REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE)


SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Common Stock, $0.01
                                                            par value

         Indicate by check mark whether the registrant (1) has 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 (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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act.) Yes               No X
                                          -----             -

         The aggregate market value of Common Stock held by non-affiliates of
the registrant on March 7, 2003 was approximately $4,282,000. All outstanding
shares of Common Stock, other than those held by executive officers, directors
and 10% shareholders, are deemed to be held by non-affiliates.

         On March 7, 2003, the registrant had 8,392,648 shares of Common Stock
outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

         Part III incorporates information by reference from the definitive
Proxy Statement for the 2003 Annual Meeting of Shareholders, to be filed with
the Commission no later than 120 days after the end of the registrant's fiscal
year covered by this Form 10-K.


<PAGE>
























                      (THIS PAGE INTENTIONALLY LEFT BLANK)


<PAGE>


                                     PART I

ITEM 1.  BUSINESS

         Unless the context indicates otherwise, when this Annual Report on Form
10-K refers to "Big Dogs," "we," "us" or "the Company," we are referring to Big
Dog Holdings, Inc. and its subsidiaries on a consolidated basis.

         The following discussion should be read in conjunction with the audited
financial statements and notes thereto included elsewhere in this Annual Report
on Form 10-K.

GENERAL

         Big Dogs develops, markets and retails a branded, lifestyle collection
of unique, high-quality, popular-priced consumer products, including activewear,
casual sportswear, accessories and gifts. BIG DOGS(R) is an All-American,
family-oriented brand that we believe has established a unique niche in its
dedication to providing quality, value and fun. Big Dogs products were first
sold in 1983, and operations remained limited through 1992 when the current
controlling stockholders acquired the BIG DOGS(R) brand and related assets.
Following the acquisition, we initiated a strategy of leveraging the brand
through dramatic expansion of our product line and rapid growth in our retail
stores. The number of our stores has grown from 5 in 1993 to 209 as of December
31, 2002. After early years of rapid growth, we reached a level of maturity in
the number of our stores and breadth of our product line. In recent years we
have focused on profitability and brand management.

         Our products are centered around the signature BIG DOGS(R) name, logo
and "Big Dog" characters and are designed to appeal to a broad range of
customers. The BIG DOGS(R) brand conveys a sense of fun, humor and a "Big Dog
attitude," whereby each customer can feel that he or she is a "Big Dog." The Big
Dog attitude and sense of fun are brought to life through our graphic
capabilities that portray the Big Dog characters in a number of engaging,
positive and inspiring situations and activities. The Big Dog attitude is
further defined by a number of slogans such as "If You Can't Run with the Big
Dogs Stay on the Porch"(R), "Large and In Charge" and "Attitude is Everything."
These graphics and slogans combine a bold, spirited attitude with wry,
lighthearted humor. The appeal of the brand is further strengthened through a
customer's personal identification with particular sports and other activities
depicted in these graphics. In addition to our focus on fun, Big Dogs develops
customer loyalty and enhances its brand image by providing a consistently high
level of quality at moderate price points. We accomplish this primarily through
(i) selling our own brand directly to the consumer, (ii) low-cost product
development, and (iii) sourcing high-volume/low-cost basic apparel with limited
fashion risk.

         The BIG DOGS(R) brand is designed to appeal to men, women and children
of all ages, particularly baby boomers and their kids, especially when they are
engaged in leisure or recreational activities. Furthermore, we believe the
millions of dog and other pet owners in the United States, as well as children,
have a strong natural affinity toward the dog-related images and themes in Big
Dogs graphics. In addition, we believe the positive image the brand brings to
being a "Big Dog" has a special appeal to large-size customers. We develop our
apparel products, which include a wide variety of basic apparel and related
products, with an emphasis on being functional rather than fashion-forward or
trendy. These apparel products include graphic T-shirts, shorts, knit and woven
shirts, fleece items, loungewear and boxer shorts. In addition to its BIG
DOGS(R) line of activewear and casual sportswear for men and women, we have a
LITTLE BIG DOGS(R) line of infants' and children's apparel and a BIG BIG DOGS(R)
line of big-size apparel. We also sell a line of non-apparel products, including
plush animals, stationery and pet products, which feature Big Dog graphics and
are developed to complement our apparel.

         We reinforce our brand image by distributing BIG DOGS(R) products
primarily through our own retail stores. This distribution strategy enables us
to present a complete selection of our merchandise in a creative and fun
environment. In addition, this strategy enables us to more effectively reach our
target customers by locating stores in tourist-oriented and other casual
environments where we believe our products have their highest appeal. We operate
our retail stores primarily in outlets, tourist locations and value-oriented
shopping environments. In addition to our retail stores, we market our products
through other channels, including our catalog, better wholesale and corporate
accounts, website and licensing opportunities.
<PAGE>


BUSINESS STRATEGY

         Our mission is to build a brand that is recognized throughout the world
for providing high quality, good value and fun and functional products. To
achieve this goal, we follow the following operating strategies:

         PROMOTE THE BIG DOG SPIRIT OF FUN. A key and unique element in our
brand image is the focus on fun. This spirit of fun revolves around our Big Dog
character that has broad appeal to men, women and children of all ages. We
foster this spirit by creating positive, humorous, topical and inspiring
graphics and slogans that we apply to our merchandise. More than just a logo,
"the Big Dog" represents the leader, athlete, child, comedian, musician, boss,
traveler, parent and dog lover that a wide range of customers can identify with.
Big Dog products are fun, not only because of their graphics and slogans, but
also because they are designed for recreational, sports and leisure activities
and make ideal gifts. Our focus on fun is further enhanced by the lively,
enjoyable atmosphere in our retail stores and is also reflected in our catalog,
website and marketing promotions and activities.

         DELIVER HIGH QUALITY AT A GOOD VALUE. Big Dogs' products are
constructed using high-quality fabrics and other materials. Many of our products
feature unique graphics characterized by advanced print techniques, as well as
unique appliques and embroideries on many of our apparel products. We believe
this combination of quality fabrics and graphics in our apparel products
provides the customer with a product that has an exceptional look and feel. We
are able to deliver this level of quality at reasonable prices primarily as a
result of (i) selling our own brand direct to the consumer, (ii) low-cost
product development, (iii) sourcing of basic apparel, and (iv) low marketing
costs. We believe that delivering quality and value is instrumental in
generating customer appeal and brand loyalty for our products, particularly
those that do not prominently feature Big Dog graphics.

         ENHANCE FUNCTIONAL PRODUCTS WITH GRAPHICS. Big Dogs develops functional
rather than fashion-forward products. We believe we have a special competency in
creating distinctive, popular graphics which we use to differentiate our
products from those of our competitors. We have developed a broad assortment of
classic, functional clothing ("basics") in traditional, less fashion-forward
colors. Our focus on basics and our ability to leverage our graphics across
multiple product categories have allowed us to eliminate the need for a
traditional buyer or design staff, and thereby lower our product development
costs compared to most fashion apparel companies. Furthermore, since our
graphics are added in the last stage of production, we are able to be more
responsive to customer preferences while also lowering our inventory risk.

         TARGET A BROAD, DIVERSE CUSTOMER BASE. We believe we have established
Big Dogs as an All-American, family-oriented brand featuring products, graphic
themes, slogans and promotions that appeal to a broad range of consumers.
Although our marketing focus is on baby boomers and their kids, our customers
include men, women and children of all ages, who span a wide range of geographic
areas and income levels. Furthermore, we believe that the millions of dog and
other pet owners in the United States, as well as children, have a strong
natural affinity for the dog-related images and themes in Big Dogs graphics. In
addition, we believe that the positive image the brand brings to being a "Big
Dog" has a special appeal to big-size customers.

         MAINTAIN CONTROLLED DISTRIBUTION. We sell our products primarily
through our own stores and, to a lesser extent, through our catalog and website.
By selling direct to customers, we are able to present our complete line of
merchandise in a creative and fun environment. This also allows us to target our
customers more precisely by locating stores in tourist-oriented and other
high-traffic areas where we believe consumers are more likely to be of the mind
to purchase Big Dogs' fun, casual apparel. Selling direct to the consumer also
allows us (i) to enhance our margins while still providing customer value, (ii)
to be more responsive to customer feedback, especially with regard to new
product development, (iii) to reduce the need to build brand awareness through
large-scale media advertising, and (iv) to collect customer names for our
catalog through in-store sign-ups.

         CREATE AN ENTERTAINING SHOPPING EXPERIENCE. We seek to create a
distinctive and fun shopping environment in Big Dogs stores through an
innovative display of our graphic art and humor, including in-store "T-shirt
walls" and other displays designed to immediately put the customer in a relaxed,
fun state of mind. By showcasing our complete product line, Big Dogs stores
offer something for everyone in the family. Effective cross-merchandising in the
stores is designed to add excitement and prompt add-on purchases. We believe the
customer's shopping experience is further enhanced by our knowledgeable and
enthusiastic sales staff.

         EMPHASIZE GRASSROOTS MARKETING. We believe Big Dogs' most effective
marketing is by the products themselves and their presentation in our retail
stores, catalog and website. As a result, we have spent relatively little on
advertising. Also important to our marketing strategy is our targeted
"grassroots" marketing activities. These activities include local and charity
sponsorships (such as high school sports teams) and community-oriented
promotional events (such as the Company's annual dog parade in Santa Barbara).
<PAGE>

MERCHANDISING

         Our product line features a branded, lifestyle collection of unique,
high-quality, popular-priced consumer products, including activewear, casual
sportswear, accessories and gifts. Our apparel lines include full collections of
classic unisex casual sportswear and activewear for adults, as well as
collections for infants and children and the big-size market. We continuously
explore opportunities to further leverage our brand and graphics into new
product lines.

         Our apparel products are manufactured from premium cotton, or, in some
instances, cotton/ synthetic blends. Big Dogs' apparel is characterized by
quality fabrics, construction and embellishments, and is distinguished from
other apparel lines by the BIG DOGS(R) name, dog logo, graphics and slogans. In
addition to our distinctive graphics, we believe we have achieved recognition
for the quality and performance of our products.

         The majority of our products range from between $4 and $45. The
following table sets forth the approximate contribution that each of our product
categories made to total net sales in our retail stores for the year ended
December 31, 2002:

                                                                   % OF TOTAL
                                                                  RETAIL STORE*
                                                                    NET SALES
                                                                    ---------
  Adult Apparel and Accessories .....................................   51.8%
  Big-size Apparel ..................................................   22.6
  Infants' and Children's Apparel and Accessories ...................   20.4
  Non-Apparel Products ..............................................    5.2
                                                                       -----

                           Total ....................................  100.0%
                                                                       =====
*Does not include catalog, wholesale and internet sales, which are skewed
 toward larger sizes.

         ADULT APPAREL AND ACCESSORIES. We sell a complete line of adult unisex
activewear and casual sportswear. We offer screen-printed and embroidered
T-shirts and sweatshirts, in a variety of styles and colors, that prominently
display the Big Dogs graphics and slogans. In addition, we offer shorts, knit
and woven casual shirts, fleece tops and bottoms, loungewear, boxer shorts,
swimwear and sleepwear, all of which feature print designs or simply the BIG
DOGS(R) name and/or dog logo. Our adult apparel line primarily focuses on basic
items that recur with relatively minor variation from season-to-season and
year-to-year. While certain of our classic, popular items and graphics have been
in the Big Dogs line with very little change for over 10 years, we introduce new
apparel and other products throughout the year to ensure that the merchandise
assortments are consistent with the top sellers within our competitive market.

         We leverage the Big Dogs trademarks, characters and more popular
graphics by carefully translating them to a wide variety of apparel accessories,
including caps, ties, socks, sunglasses, bags, watches and wallets. These
products are developed and introduced based on their consistency with Big Dog's
brand image and whether they complement our other products. Our accessories not
only provide an opportunity to create add-on purchases, but also minimize
product development costs and inventory risk by utilizing graphics and slogans
that have first proven popular on our graphic T-shirts.

         BIG-SIZE APPAREL. We believe the BIG DOGS(R) image and the positive
emphasis the brand gives to being a "Big Dog" have a unique appeal to consumers
who wear big sizes. Our BIG BIG DOGS(R) category offers a line of unisex
activewear and casual sportswear. As with the regular adult sizes, this category
features screen-printed and embroidered T-shirts and sweatshirts, in a variety
of styles and colors, that prominently display the Big Dogs graphic themes and
slogans. In addition, we offers shorts, knit and woven casual and sports shirts,
fleece tops and bottoms, loungewear, boxer shorts, swimwear and sleepwear, which
may feature print designs or simply the BIG DOGS(R) name and/or dog logo. We
sell our BIG BIG DOGS(R) line primarily through our retail stores, catalog and
website, and also through selected wholesale accounts.
<PAGE>

         INFANTS' AND CHILDREN'S APPAREL AND ACCESSORIES. The LITTLE BIG DOGS(R)
line includes infants, toddlers, kids and youth sizes. Products in this line
include graphic T-shirts, shirts, fleece items, infant and toddler one-pieces,
boxer shorts, dresses and shorts, virtually all of which feature distinctive
graphics. The graphics and fabrics of this line are designed to mirror many of
the more popular graphics and fabrics in the BIG DOGS(R) adult line in order to
encourage family purchases and leverage overall product development costs. We
sell our LITTLE BIG DOGS(R) line primarily through our retail stores, catalog
and website, but also wholesale it to certain specialty and better department
stores.

         NON-APPAREL PRODUCTS. We further leverage our trademarks, characters
and more popular graphics by applying them to a wide variety of adult's and
children's non-apparel items, including pet products, plush animals and other
toys, sporting goods, stationery, calendars and lunch boxes. As with apparel
accessories, new non-apparel products are developed and introduced based on
whether they are consistent with Big Dogs' brand image and complement our other
products. As with apparel accessories, the graphics applied to these products
have first proven popular on our T-shirts, resulting in lower product
development costs and inventory risk. In general, non-apparel items have higher
gross margins than many of our other products.

MARKETING

         We strive to maintain a consistent brand image through the coordination
of our merchandising, marketing and sales efforts. The goal of our marketing
efforts is to present a distinctive image of quality, value and fun that
consumers will associate with our products and thereby enhance the BIG DOGS(R)
brand image. The BIG DOGS(R) brand image has been developed with relatively
little advertising, as we believe its most effective marketing is its products
themselves and their presentation in our retail stores, catalog and website. Our
catalog and website serve not only as a means of product distribution, but also
as key marketing pieces for our retail stores.

         Also important to our marketing strategy is our targeted "grassroots"
marketing activities. These activities include local and charity sponsorships
(such as high school sports teams) and community-oriented promotional events
(such as our annual dog parade in Santa Barbara). We train and incentivize our
store managers to actively involve their stores in local, grassroots activities.
In addition, we utilize billboard advertising designed to direct customers to
local Big Dogs retail stores.

RETAIL STORES

         We seek to create a distinctive and fun shopping environment in Big Dog
stores through the innovative display of our graphic art and humor, including
in-store "T-shirt walls" and other displays designed to immediately put the
customer in a fun, relaxed state of mind. In addition, our cross-merchandising
and colorful signage are designed to add excitement in the stores and prompt
add-on purchases. By showcasing our complete product line and broad assortment,
Big Dogs stores offer something for everyone in the family and are particularly
appealing to the dedicated Big Dogs customer.

         In 2002, our retail stores contributed approximately 93% of total net
sales. As of December 31, 2002, we operated a total of 209 stores, 207 stores in
43 states and 2 stores in Puerto Rico. Big Dogs stores are typically located in
tourist and recreation-oriented shopping locations and other casual environments
where the Company believes consumers are more likely to be in a fun, relaxed
state of mind. In making site selections, we also consider a variety of other
factors, including proximity to large population centers, area income, the
prestige and potential customer-draw of the other tenants in the center or area,
projected profitability, store location and visibility within the center, and
the accessibility and visibility of the center from nearby thoroughfares.
<PAGE>

The table below sets forth the number of stores located in each state and
territory as of December 31, 2002:

       State           No. of Stores           State            No. of Stores
       -----           -------------           -----            -------------
      Alabama               3                Mississippi              4
      Alaska                1                Missouri                 6
      Arizona               7                Nebraska                 1
      California           37                Nevada                   3
      Colorado              5                New Hampshire            2
      Connecticut           2                New Jersey               2
      Delaware              3                New Mexico               1
      Florida              13                New York                 6
      Georgia               7                North Carolina           6
      Hawaii                1                Ohio                     3
      Idaho                 2                Oklahoma                 1
      Illinois              4                Oregon                   6
      Indiana               4                Pennsylvania             7
      Iowa                  1                South Carolina           6
      Kansas                3                Tennessee                8
      Kentucky              1                Texas                   10
      Louisiana             1                Utah                     3
      Maine                 2                Vermont                  1
      Maryland              6                Virginia                 4
      Massachusetts         4                Washington               5
      Michigan              6                Wisconsin                4
      Minnesota             5

             U.S. Territory           No. of Stores
             --------------           -------------
              Puerto Rico                  2


         We operate Big Dog retail stores primarily in outlet malls. Big Dogs'
traditional emphasis has been on outlet malls because those malls are often
located in tourist areas and attract significant numbers of Big Dogs' targeted
customers. While the growth in the outlet industry has slowed in recent years,
we expect to continue opening stores in new quality outlet malls as they are
opened to the extent they meet our requirements.

         Our outlet mall stores average approximately 2,800 square feet. Our
outlet stores offer a complete and current line of our products priced
approximately 25% less than the same items are sold for in our catalog and
website, our full-price stores and by other retailers. We opened 7 new stores
and closed 6 under-performing stores during 2002. Our cost to open a store in
2002, including leasehold improvements and furniture and fixtures, was
approximately $46,000 (net of tenant improvement allowances paid to us by
landlords). The average per store initial inventory (partially financed by trade
payables) for the new 2002 stores was approximately $57,000 and pre-opening
expenses averaged approximately $13,000 per store.

         Our store operations are managed by a Senior Vice President--Retail,
Director of Retail Operations, two regional managers and approximately 14
district and area managers. Each of the stores is managed and operated by a
store manager, an assistant manager and full-time and part-time sales
associates. We seek to further enhance our customers' shopping experience by
developing a knowledgeable and enthusiastic sales staff to distinguish Big Dogs
from its competition. In this regard, we have implemented employee training and
incentive programs and encourage our sales associates to be friendly and
courteous and to guide customers to graphics and products that tie into their
individual interests. We believe our commitment to customer service enhances our
ability to generate repeat business and to attract new customers. We also
believe that the fun nature of our products create employee enthusiasm and
positive morale that in turn enhance customer service and contribute to the fun
shopping experience.
<PAGE>


NON-RETAIL DISTRIBUTION

         Non-retail distribution channels, which include catalog and internet,
and wholesale and corporate sales, represented approximately 7% of our total net
sales in 2002.

         CATALOG AND INTERNET. In addition to generating their own sales, our
catalog and website serve as key marketing pieces for our products and stores.
Our catalog and internet sales in 2002 were approximately $4.6 million, or
approximately 5% of total net sales. Such sales have had growth in recent years,
on a relatively small base. We have the benefit of being able to develop names
for our mailing list through our retail store chain, which has been the primary
source for such list.

         WHOLESALE AND CORPORATE SALES. The Company's wholesale sales in 2002
were approximately $2.6 million, or approximately 2% of total net sales.

SOURCING

         DOMESTIC AND INTERNATIONAL SOURCING. We do not own or operate any
manufacturing facilities but instead source our products through third-party
contractors with manufacturing facilities that are primarily overseas. We
believe that outsourcing allows us to enhance production flexibility and
capacity, while substantially reducing capital expenditures and avoiding the
costs of managing a large production workforce. In addition, outsourcing allows
us to leverage working capital, transfer risk and focus our energy and resources
on merchandising, marketing and sales.

         Our domestic sourcing is primarily limited to graphic T-shirts. The
bulk of our graphic T-shirt business is managed in-house. This includes
management of screen printing and blanks, but not screen-printing operations.

         The majority of our other products are manufactured overseas, primarily
in Asia, the Middle East and Turkey. In order to reduce our exposure to
production risks and delays arising from trade disputes, political disruption or
other factors relating to any one vendor or country, we utilize a diverse group
of vendors. We source the majority of our product from trading companies.
Through these trading companies and directly, we source from approximately 65
unaffiliated vendors, including over 35 foreign vendors in a number of
countries. In order to enhance our sourcing flexibility, we use trading
companies rather than operate our own foreign sourcing office. These trading
companies assist us in selecting and overseeing third-party vendors, sourcing
fabric and monitoring quotas and other trade regulations. We do not have supply
contracts with any of our suppliers. Although the loss of major suppliers could
have a significant effect on our immediate operating results, since we are
focused on basic apparel, we believe alternate sources of merchandise for most
product categories are available at comparable prices and that we could replace
these suppliers without any long-term adverse effect.

         We forecast production requirements to secure necessary manufacturing
capacity and quota. Since our foreign manufacturers are located at greater
geographic distances from us than our domestic manufacturers, we generally allow
greater lead-times for foreign orders. However, due to our focus on widely
available basics rather than fashion items, we believe these lead times do not
present significant risks.

         QUALITY CONTROL. Our quality control program is designed to ensure that
all goods bearing BIG DOGS(R) trademarks meet our standards. With respect to our
products, Big Dogs, through its employees and sourcing agents, develops and
inspects prototypes of each product prior to manufacture. For apparel products,
Big Dogs, through its employees and sourcing agents, inspects the prototypes and
fabrics prior to cutting by the contractors, establishes fittings based on the
prototype and inspects samples. We or our sourcing agents inspect the final
product prior to shipment to our warehouse or at the warehouse prior to payment.

MANAGEMENT INFORMATION SYSTEMS

         Big Dogs is committed to utilizing technology to enhance its
competitive position. We have put in place computer hardware, systems
applications and networks that are the same as those used by a number of large
retailers. These systems support the sales and distribution of products to our
stores and customers and improve the integration and efficiency of our domestic
and foreign sourcing operations. Big Dogs' management information system ("MIS")
provides integration of store, merchandising, distribution and financial
systems. These systems include stock keeping unit ("SKU") and classification
inventory tracking, purchase order management, open-to-buy, merchandise
distribution, automated ticket making, general ledger, sales audit, accounts
payable, fixed asset management, payroll and integrated financials. These
systems operate on an IBM AS 400 platform and a Microsoft NT server network and
utilize SVI (Island Pacific) software. Our point-of-sale ("POS") system consists
of registers providing price look-up, e-mail and credit card and check
authorization. Through automated two-way communication with each store, sales
information, e-mail and timekeeping information are uploaded to the host system,
and receiving, price changes and systems maintenance are down-loaded through the
POS devices. Sales are updated daily in the merchandising report systems by
polling sales from each store's POS terminals. We evaluate information obtained
through daily polling, including a daily tracking of gross margin, to implement
merchandising decisions regarding reorders, markdowns and allocation of
merchandise. Wholesale and catalog operations are also supported by MIS
applications from established vendors, designed specifically to meet the unique
requirements of these segments of the business. These applications include
customer service phone center, order processing and mailing list maintenance.


ALLOCATION AND DISTRIBUTION OF MERCHANDISE

         Allocation and distribution of our inventory is performed centrally at
the SKU, merchandise classification and store levels using integrated
third-party software. Utilizing our MIS capabilities, our planning and
allocation group works closely with the merchandising and retail departments to
monitor and respond to customer purchasing trends and meet the seasonal and
locale-specific merchandising requirements of our retail stores.

         Our main warehouse facility and our mail order warehouse and
fulfillment facility are located in a 136,000 square-foot distribution facility
in Santa Fe Springs, California. All merchandise is delivered by vendors to this
facility, where it is inspected, entered into our allocation software system,
picked and boxed for shipment to the stores or customers. We ship merchandise to
our stores at least weekly, to provide a steady flow of merchandise.

TRADEMARKS

         Big Dogs utilizes a variety of trademarks which it owns, including the
U.S. registered trademarks BIG DOGS(R), BIG DOG SPORTSWEAR(R), dog logo, BIG
DOG(R), LITTLE BIG DOGS(R) and BIG BIG DOGS(R). In addition, we have registered
certain of our trademarks or have registration applications pending in over 22
other countries. We regard our trademarks and other proprietary rights as
valuable assets and believe they have significant value in the marketing of our
products. Like most popular brands, from time to time in the course of business
we discover products in the marketplace that we believe infringe upon our
trademark rights. In addition, companies may claim that a certain product or
graphic of ours infringes on their intellectual property rights (sometimes in
regard to our parodies of other's trademarks that we do as part of the Big Dogs
sense of fun). We vigorously protect our trademarks and defend ourselves against
claims of others. Actions against infringers include the use of cease and desist
letters, administrative proceedings and lawsuits.


COMPETITION

         Although the level and nature of competition differ among our product
categories, Big Dogs competes primarily on the basis of its brand image,
offering a unique combination of quality, value and fun, and on other factors
including product assortment, price, store location and layout, and customer
service. The markets for each of our products are highly competitive. We believe
that our long-term competitive position will depend upon our ability to
anticipate and respond effectively to changing consumer demands and to offer
customers a wide variety of high-quality, fun products at competitive prices.
Although we believe we do not compete directly with any single company with
respect to our entire range of merchandise, within each merchandise category we
compete with well-known apparel and specialty retail companies such as The GAP,
Eddie Bauer and The Disney Stores, as well as a large number of national and
regional department stores, specialty retailers and apparel designers and
manufacturers. In addition, in recent years, the amount of casual sportswear and
activewear manufactured specifically for department stores and sold under their
own labels has significantly increased. Many of Big Dogs' competitors are
significantly larger and more diversified and have substantially greater
financial, distribution, marketing and other resources and have achieved greater
recognition for their brand names than Big Dogs.
<PAGE>



EMPLOYEES

         At March 7, 2003, we had approximately 600 full-time and 800 part-time
employees. The number of part-time employees fluctuates significantly based on
seasonal needs. None of our employees are covered by collective bargaining
agreements and we consider our relations with its employees to be good.

EXECUTIVE OFFICERS OF THE REGISTRANT

         Set forth below are the names, ages, titles and present and recent past
positions of persons serving as our executive officers as of March 1, 2003:

NAME                     AGE                    POSITION
----                     ---                    --------
Andrew D. Feshbach       42     President, Chief Executive Officer and Director
Douglas N. Nilsen        54     Executive Vice President - Merchandising
Anthony J. Wall          47     Executive Vice President - Business Affairs,
                                General Counsel and Secretary
Roberta J. Morris        43     Chief Financial Officer, Treasurer and
                                Assistant Secretary
Lee M. Cox               34     Senior Vice President - Retail

         ANDREW D. FESHBACH co-founded the Company in May 1992 and has served
as President, Chief Executive Officer and as a director since that time. From
1990 until the present, he has served as a Vice President of Fortune Financial,
a private merchant banking firm owned by the Company's Chairman and majority
stockholder, Fred Kayne. Mr. Feshbach serves as a director of  FAO, Inc., which
owns The Right Start, Inc., an infant products retailer, and FAO Schwartz and
Zainy Brainy, leading toy retailers.  Mr. Feshbach has an M.B.A. from Harvard
University.

         DOUGLAS N. NILSEN has served as Executive Vice President-Merchandising
for more than five years. From 1990 to September 1995, he served as Director of
Merchandise at Walt Disney Attractions, Inc. for its U.S. theme parks and
resorts, and in such capacity was responsible for merchandising all apparel and
accessories. Mr. Nilsen has an M.B.A. from New York University.

         ANTHONY J. WALL has served as Executive Vice President, General Counsel
and Secretary of the Company for more than five years. Mr. Wall also serves as
General Counsel of Fortune Fashions Industries LLC, a custom manufacturer of
embellished apparel, Fortune Casuals, LLC, a manufacturer of casual apparel for
the mass market, and Fortune Swimwear, a manufacturer of swimwear for the mass
market, and a Vice President of Fortune Financial, all of which are controlled
by Fred Kayne.

         ROBERTA J. MORRIS has served as Chief Financial Officer since March
1998, having previously served as Senior Vice President--Finance since January
1995. Ms. Morris is a certified public accountant.

         LEE M. COX joined the Company in September 2000 and has served as
Senior Vice President - Retail since February 2001. From 1994 until September
2000, Mr. Cox was employed by Adidas Retail, Inc. in various capacities, most
recently as Director of Retail Stores.
<PAGE>

ITEM 2.           PROPERTIES

         Our corporate headquarters are in leased offices comprising
approximately 24,000 square feet in Santa Barbara, California. This lease
expires July 2004, with an option to extend for another 5 years. Our
distribution facility is located in Santa Fe Springs, California in a building
comprising approximately 136,000 square feet under a lease that expires in
January 2008. We have an option to extend this lease for 5 years.

         We lease all of our store locations, which comprise an aggregate of
approximately 570,000 square feet. Store leases are typically for a term of 5
years with a 5-year option and provide for base rent plus contingent rent based
upon a percentage of sales in excess of agreed-upon sales levels. See "Item 1.
BUSINESS - RETAIL STORES."

ITEM 3.           LEGAL PROCEEDINGS

         We are involved from time to time in litigation incidental to our
business. We believe that the outcome of such litigation will not have a
material adverse effect on our results of operation or financial condition.

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

         Not applicable.

                                     PART II

ITEM 5.           MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
                              SHAREHOLDER MATTERS

         The common stock of our Company is traded on the NASDAQ National Market
under the symbol BDOG. The following table sets forth, for the period from the
first quarter 2001 through the fourth quarter 2002, the high and low "sales"
price of the shares of our common stock, as reported on the NASDAQ National
Market.
                                           2002                      2001
                                           ----                      ----
                                      High     Low              High       Low
                                      ------------              --------------
  First Quarter                     $ 5.590  $ 1.890          $ 4.500   $ 3.750
  Second Quarter                      5.146    2.760            4.250     3.620
  Third Quarter                       3.690    2.100            3.970     2.410
  Fourth Quarter                      3.730    2.450            3.600     2.500

         On March 7, 2003, the last sales price of the common stock as reported
on the NASDAQ National Market was $2.180 per share. As of March 7, 2003, we had
approximately 146 shareholders of record of our common stock.

         On November 1, 2001, we issued 12,000 shares of common stock to David
Walsh upon exercise of a previously issued warrant for $3 per share. Such sale
was exempt from registration under the Securities Act of 1933 in reliance on
Section 4(2) as a transaction not involving a public offering.

         Our current credit agreement prohibits the payment of dividends (see
Liquidity and Capital Resources). We did not pay a dividend in 2002 and 2001,
and do not expect to pay dividends in the future.


<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA

         The selected consolidated financial data set forth below should be read
in conjunction with the Consolidated Financial Statements and the Notes thereto
and with "Management's Discussion and Analysis of Financial Condition and
Results of Operations" appearing elsewhere in this Form 10-K.
<TABLE>
                                                                     YEARS ENDED DECEMBER 31,
                                                                     ------------------------
                                                        2002       2001        2000        1999       1998
                                                        ----       ----        ----        ----       ----
                                                        (in thousands, except per share and operating data)
STATEMENT OF OPERATIONS DATA:
<S>                                                     <C>         <C>         <C>         <C>        <C>
Net sales......................................      $108,756    $112,369    $115,280    $109,573    $100,677
Cost of goods sold.............................        46,970      49,154      48,836      46,491      41,236
                                                     --------    --------    --------    --------    --------
Gross profit...................................        61,786      63,215      66,444      63,082      59,441
                                                     --------    --------    --------    --------    --------
Selling, mareting and distribution expenses (1)        49,224      49,586      49,680      46,643      44,785
General and administrative expenses (1)........         4,937       5,232       4,861       4,412       4,548
                                                     --------    --------    --------    --------    --------
Total operating expenses.......................        54,161      54,818      54,541      51,055      49,333
                                                     --------    --------    --------    --------    --------
EBITDA (2).....................................         7,625       8,397      11,903      12,027      10,108
Depreciation and amortization..................         2,619       3,460       4,029       4,090       3,752
Write-off of impaired asset (3)................           ---         ---       3,000         ---         ---
Other income...................................           ---        (334)        ---         ---         ---
Interest income (4)............................        (3,175)        (39)       (258)       (439)       (392)
Interest expense (4)...........................         3,761       1,158         596          44          42
                                                     --------     -------    --------    --------     -------
Income before provision........................         4,420       4,152       4,536       8,332       6,706
Provision for income taxes.....................           603       1,512       2,719       3,136       2,674
                                                     --------    --------    --------    --------    --------
Net income.....................................      $  3,817    $  2,640    $  1,817    $  5,196    $  4,032
                                                     ========    ========    ========    ========    ========

Net income per share
 Basic and diluted.............................        $ 0.45      $ 0.31      $ 0.17      $ 0.43      $ 0.32

Weighted average common shares
Basic..........................................         8,409       8,457      10,808      12,032      12,472
Diluted........................................         8,409       8,477      10,906      12,182      12,509

Cash dividend per common share.................        $ 0.00      $ 0.00      $ 0.10      $ 0.10      $ 0.00

OPERATING DATA:
Number of stores (5)
 Stores open at beginning of period.............          208         198         191         177         150
 Stores added (net of closures).................            1          10           7          14          27
                                                      -------    --------     -------     --------    -------
 Stores open at end of period...................          209         208         198         191         177
Comparable stores sales (decrease) increase (6).       (6.3)%      (4.4)%        1.3%        1.0%         0.6%

BALANCE SHEET DATA:
Working capital.................................      $27,229     $22,261     $17,553     $32,462      $30,348
Total assets....................................       39,679      40,307      43,280      56,413       52,994
Total indebtedness (7)..........................          ---       1,767       6,000         ---         ---
Stockholders' equity............................       31,983      28,408      25,859      46,660       43,187
</TABLE>

(1) Amounts exclude depreciation and amortization expense.

(2) EBITDA represents income from operations, plus depreciation and
amortization. The method of calculating EBITDA set forth above may be different
from calculations of EBITDA employed by other companies and, accordingly, may
not be directly comparable to such other computations. EBITDA should not be
viewed as a substitute for Generally Accepted Accounting Principles (GAAP)
measurements such as net income or cash flows from operations. It is presented
as supplementary information.
<PAGE>

(3) In 2000, we wrote off our entire $3,000,000 investment in PETsMART.com
preferred stock. Subsequently, in 2001, a proposal and acceptance occurred
whereby we sold this preferred stock for $334,000.

(4) In 2002, we earned $3,172,000 of interest income and incurred $3,288,000 of
interest expense relating to the short-sale and repurchase of $95,384,000 of
U.S. Treasury Securities.

(5) Excludes one temporary store open for a portion of 1998.

(6) Comparable store sales represent net sales of stores open at least one full
year. Stores are considered comparable beginning on the first day of the third
month following the one-year anniversary of their opening. Stores that are
relocated but remain in the same shopping area remain in the comparable store
base. The Company believes this method best reflects the effect of one-time
promotional events and is most consistent with industry methods.

(7) Includes subordinated debt, obligations under the bank line of credit and
obligations under capital leases.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

         The following discussion and analysis should be read in conjunction
with the Consolidated Financial Statements and Notes thereto of the Company
contained elsewhere in this Form 10-K.

GENERAL

         Big Dogs develops, markets and retails a branded, lifestyle collection
of unique, high-quality, popular-priced consumer products, including activewear,
casual sportswear, accessories and gifts. The number of our stores has grown
from 5 in 1993 to 209 as of December 31, 2002.

         On July 31, 2000, we announced that our Board of Directors authorized
us to purchase by tender offer and retire up to 3.5 million shares of our common
stock at $6.25 per share, which represented approximately 29% of the outstanding
shares. The tender offer commenced on August 2, 2000 and expired on August 30,
2000. The tender offer was fully subscribed and we funded the tender offer in
the amount of $22.0 million on September 1, 2000 from available cash and
borrowings under the former credit agreement (see Liquidity and Capital
Resources). Upon redemption of the tendered shares, we retired the shares by
reducing common stock by $35,000 and additional paid-in capital by $22.0
million.

         During July 2002, we entered into two transactions relating to the
short-sale and repurchase of $95.3 million of U. S. Treasury Securities. The
transactions were intended to address interest rate exposure and generate
capital gains that could be used to offset previously incurred capital losses.
The first transaction, which represented $95.3 million of U. S. Treasury
Securities, matured on November 15, 2002. In the second transaction, we had
repurchased $95.3 million of U. S. Treasury Securities on November 15, 2002. As
of December 31, 2002, we recorded interest income of $3.2 million and interest
expense of $3.3 million related to these transactions. The net loss related to
these transactions totaled $0.1 million.
<PAGE>

RESULTS OF OPERATIONS

         The following table sets forth, for the periods indicated, certain
selected statement of operations data expressed as a percentage of net sales:

                                                      YEARS ENDED DECEMBER 31,
                                                      ------------------------

                                                         2002    2001     2000
                                                        -----   -----     ----
Net sales...........................................    100.0%  100.0%   100.0%
Cost of goods sold..................................     43.2    43.7     42.4
                                                        -----   -----    -----

Gross profit........................................     56.8    56.3     57.6

Selling, marketing and distribution expenses........     47.4    46.9     46.1
General and administrative expenses.................      4.8     5.0      4.7
                                                        -----   -----    -----
Total operating expenses............................     52.2    51.9     50.8
                                                        -----   -----    -----

Income from operations..............................      4.6%    4.4%     6.8%


YEARS ENDED DECEMBER 31, 2002 AND 2001

         NET SALES. Net sales consist of sales from our stores, catalog,
website, and wholesale accounts, all net of returns and allowances. Net sales
decreased to $108.8 million in 2002 from $112.4 million for 2001, a decrease of
$3.6 million, or 3.2%. Of the $3.6 million decrease, $6.5 million was
attributable to a 6.3% comparable store sales decrease for the period, offset by
$2.7 million from stores not yet qualifying as comparable stores, and $0.2
million increase in our wholesale business.

         GROSS PROFIT. Gross profit decreased to $61.8 million in 2002 from
$63.2 million for 2001, a decrease of $1.4 million, or 2.2%. As a percentage of
net sales, gross profit increased to 56.8% in 2002 from 56.3% in 2001. The 0.5%
increase was primarily due to a shift of promotional sales to higher margined
sales such as T-shirts.

         SELLING, MARKETING AND DISTRIBUTION EXPENSES. Selling, marketing and
distribution expenses consist of expenses associated with creating,
distributing, and selling products through all channels of distribution,
including occupancy, payroll and catalog costs. Selling, marketing and
distribution expenses decreased to $51.5 million in 2002 from $52.7 million in
2001, a decrease of $1.2 million, or 2.3%. The decrease in these expenses is
primarily a result of a decrease in depreciation of $0.8 million and various
retail, sales and catalog expenses totaling $0.4 million. As a percentage of net
sales, these expenses increased to 47.4% in 2002 from 46.9% in 2001, an increase
of 0.5%. The increase as a percentage of net sales is due to a lower net sales
base in 2002.

         GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses consist of administrative salaries, corporate occupancy costs and other
corporate expenses. General and administrative expenses decreased to $5.3
million in 2002 from $5.6 million in 2001, a decrease of $0.3 million, or 5.4%.
The decrease is comprised of lower depreciation and donation expenses. As a
percentage of net sales, these expenses remained relatively constant, decreasing
to 4.8% in 2002 from 5.0% in 2001.

         OTHER INCOME. In 2001, other income resulted from a $0.3 million gain
on the sale of PETsMART.com stock. After careful consideration of the internet
and capital markets, we wrote-off our entire $3,000,000 investment in
PETsMART.com stock at December 31, 2000. Subsequently, in June 2001, a proposal
and acceptance occurred whereby we sold this stock for $0.3 million.

         INTEREST INCOME. In 2002, we earned $3.2 million of interest income
relating to the short-sale and repurchase of $95.3 million of U. S. Treasury
Securities. The transactions were intended to address interest rate exposure and
generate capital gains that were used to offset previously incurred capital
losses.
<PAGE>

         INTEREST EXPENSE. Interest expense increased to $3.8 million in 2002
from $1.2 million for the same period in 2001. Interest expense in 2002
consisted of $3.3 million of interest expense related to our short bond
transactions (See "Interest Income") and $0.5 million related to short-term
borrowings. In 2001, interest expense consisted of $1.2 million related to
short-term borrowings. The $0.7 million decrease in interest expense related to
short-term borrowings in 2002 compared to 2001 is due to lower outstanding
borrowings during 2002.

         INCOME TAXES. In 2002, the provision for income taxes reflects a 13.6%
effective tax rate, compared to a 36.4% tax rate in 2001. The decrease in the
effective tax rate is primarily related to a valuation allowance established in
2000 and relieved in 2002, specifically identified with the write-off of our
$3.0 million investment in PETsMART.com, which represented a capital loss and
required us to generate capital gains in order to realize the deferred tax
asset. Based on the nature of the loss, we provided a valuation allowance in
2000 to reduce our deferred tax asset to a level which, more likely than not,
would be realized. In 2002, we completed our short bond transactions (See
"Interest Income"), which generated the capital gains necessary to offset these
capital losses thereby relieving this valuation allowance.

YEARS ENDED DECEMBER 31, 2001 AND 2000

         NET SALES. Net sales decreased to $112.4 million in 2001 from $115.3
million for 2000, a decrease of $2.9 million, or 2.5%. Of the $2.9 million
decrease, $4.6 million was attributable to a 4.4% comparable store sales
decrease for the period, and a $0.7 million decrease in our wholesale business,
offset by $1.9 million from stores not yet qualifying as comparable stores, and
$0.5 million increase in our mail order business.

         GROSS PROFIT. Gross profit decreased to $63.2 million in 2001 from
$66.4 million for 2000, a decrease of $3.2 million, or 4.8%. As a percentage of
net sales, gross profit decreased to 56.3% in 2001 from 57.6% in 2000. This
decrease as a percentage of net sales was primarily due to an increased level of
promotional activity.

         SELLING, MARKETING AND DISTRIBUTION EXPENSES. Selling, marketing and
distribution expenses decreased to $52.7 million in 2001 from $53.2 million in
2000, a decrease of $0.5 million, or 0.9%. As a percentage of net sales, these
expenses increased to 46.9% in 2001 from 46.1% in 2000, an increase of 0.8%. The
increase as a percentage of net sales is primarily due to a lower net sales base
in 2001.

         GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses increased to $5.6 million in 2001 from $5.4 million in 2000, an
increase of $0.2 million, or 3.7%. As a percentage of net sales, these expenses
remained relatively constant, increasing to 5.0% in 2001 from 4.7% in 2000.

         OTHER INCOME. In 2001, other income resulted from a $0.3 million gain
on the sale of PETsMART.com stock. After careful consideration of the internet
and capital markets, we wrote-off our entire $3,000,000 investment in
PETsMART.com stock at December 31, 2000. Subsequently, in June 2001, a proposal
and acceptance occurred whereby we sold this stock for $0.3 million.

         INTEREST INCOME. We had interest income of $39,000 in 2001 compared to
$0.3 million of interest income in 2000. The change is due to higher excess cash
in 2000, which was invested in short-term interest bearing investments.

         INTEREST EXPENSE. We had interest expense of $1.2 million in 2001,
compared to $0.6 million of interest expense in 2000. The change is due to
increased average borrowings under the credit agreement throughout 2001, which
was partially offset by a reduction in interest rates.

         INCOME TAXES. In 2001, our provision for income taxes reflects a 36.4%
effective tax rate, compared to a 59.9% tax rate in 2000. The decrease in the
effective tax rate is primarily related to a valuation allowance established in
2000, specifically identified with the write-off of our $3.0 million investment
in PETsMART.com, which represents a capital loss and would require us to
generate capital gains in order to realize the deferred tax asset. Based on the
nature of the loss, we provided a valuation allowance to reduce our deferred tax
asset to a level which, more likely than not, would be realized.
<PAGE>


SEASONALITY AND QUARTERLY RESULTS

         We believe our seasonality is somewhat different than many apparel
retailers since a significant number of our stores are located in tourist areas
and outdoor malls that have different visitation patterns than urban and
suburban retail centers. The third and fourth quarters (consisting of the summer
vacation, back-to-school and Christmas seasons) have historically accounted for
the largest percentage of our annual net sales and profits. In 2002, excluding
sales generated by stores not open for all of 2002, substantially all our
operating income and approximately 28% and 32% of our net retail sales were
generated during the third and fourth quarters, respectively.

         Our quarterly results of operations may also fluctuate as a result of a
variety of factors, including the timing of store openings, the amount of
revenue contributed by new stores, changes in comparable store sales, changes in
the mix of products sold, customer acceptance of new products, the timing and
level of markdowns, competitive factors and general economic conditions.

LIQUIDITY AND CAPITAL RESOURCES

         During 2002, our primary uses of cash were for income taxes, the
build-out of new stores and paying down short-term borrowings under the credit
agreement. We satisfied our cash requirements from existing cash balances and
short-term borrowings under the credit agreement.

         Cash provided by operating activities was $6.7 million and $4.1 million
in 2002 and 2001, respectively. In addition to a $3.8 million net income in 2002
compared to a $2.6 million net income in 2001, the increase in net cash provided
during 2002 as compared to 2001 is primarily due to a reduction in inventory
purchases, as well as a decrease in cash disbursements for accounts payable,
which were partially offset by an increase in cash disbursements for income
taxes payable.

         Cash used in investing activities was $1.4 million and $0.8 million
during 2002 and 2001, respectively. Cash used in investing activities in 2002
primarily related to 7 new store openings and capital additions to our existing
stores. Additionally in 2002, we had an offsetting investment transaction
related to the short bond transaction whereby $95.3 million of proceeds from the
sale of U.S. Treasury Bonds was offset by $95.4 million used for the repurchase
of such bonds. Cash used in investing activities for 2001 primarily related to
16 new store openings, and was offset by proceeds received from the sale of
investments, property, and equipment.

         Cash used in financing activities during 2002 and 2001 was $2.2 million
and $4.6 million, respectively. In 2002, we paid down $1.8 million of short-term
borrowings under the credit agreement and repurchased $0.2 million of common
stock. In 2001, we paid down $4.2 million of short-term borrowings and
repurchased $0.1 million of common stock.

         In October 2001, we entered into a $30.0 million three-year line of
credit facility with Wells Fargo Retail Finance. This facility is secured by
substantially all of our assets and requires daily, weekly and monthly financial
reporting as well as compliance with financial, affirmative and negative
covenants and prohibits the payment of dividends. This credit agreement provides
for a performance-pricing structured interest charge, ranging up to LIBOR plus
1.75% which is based on excess availability levels. As of December 31, 2002, we
did not have an outstanding balance under this credit agreement. We had $1.1
million of letters of credit outstanding as of December 31, 2002, which expire
through December 2003.

         In 2002, our average cost to build a new store, including furniture and
fixtures, and leasehold improvements, net of tenant improvement allowances, was
approximately $46,000. The average total cost to build new stores will vary in
the future, depending on various factors, including square footage, changes in
store design, local construction costs and tenant improvement allowances. Our
average initial inventory for new stores opened in 2002 was approximately
$57,000. Our initial inventory for new stores will vary in the future depending
on various factors, including store concept and square footage. We believe cash
generated from operations together with borrowings under the credit agreement
will be sufficient to fund its operations and planned expansion through 2003.
<PAGE>

COMMITMENTS AND OBLIGATIONS

As of December 31, 2002, we had the following obligations:
<TABLE>

                                                                Amounts of Commitment Expiration per Period
                                                                -------------------------------------------
                                                 Total
                                                 Amounts        Less than 1
                                                 Committed      year            1 to 3 years   4 to 5 years  Over 5 years
                                               -----------     ------------     ------------   ------------  ------------
<S>                                                 <C>             <C>            <C>            <C>            <C>
Contractual Obligations:
 Operating leases.....................         $45,508,000     $15,090,000       $21,384,000    $9,052,000     $2,982,000

Other Commercial Commitments:
 Letters of credit....................             817,000         817,000               ---            ---           ---
 Standby letters of credit............             315,000         315,000               ---            ---           ---
                                               -----------     -----------       -----------     ----------    ----------

Total Commitments.....................         $46,640,000     $16,222,000       $21,384,000     $9,052,000    $2,982,000
                                               ===========     ===========       ===========     ==========    ==========
</TABLE>

RECENT ACCOUNTING PRONOUNCEMENTS

         In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for
Derivative Instruments and Hedging Activities. SFAS No. 133 establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts and for hedging activities.
The statement requires that we recognize all derivatives as either assets or
liabilities in the balance sheet and measure those instruments at fair value. We
adopted SFAS No. 133 effective January 1, 2001. The adoption of SFAS No. 133 did
not have an impact on our consolidated financial statements.

         In July 2001, the FASB issued SFAS No. 141, Business Combinations and
SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that
all business combinations be accounted for under the purchase method. The
statement further requires separate recognition of intangible assets that meet
one of two specified criteria. The statement applies to all business
combinations initiated after June 30, 2001. SFAS No. 142 requires that an
intangible asset that is acquired shall be initially recognized and measured
based on its fair value. The statement also provides that goodwill should not be
amortized, but should be tested for impairment annually, or more frequently if
circumstances indicate potential impairment, through a comparison of fair value
to its carrying amount. SFAS No. 142 is effective for fiscal years beginning
after December 15, 2001. We implemented the pronouncement at the beginning
of 2002. The adoption of this statement did not have an impact on our
consolidated financial statements.

         In June 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations, which provides standards on the accounting for
obligations associated with the retirement of long-lived assets. SFAS No. 143 is
effective for fiscal years beginning after June 15, 2002. We do not believe the
adoption of this statement will have a significant impact on our consolidated
financial statements.

         In July 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. SFAS No. 144 addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
This Statement supercedes SFAS No. 121 on the same topic and the accounting and
certain reporting provisions of Accounting Principles Board ("APB") Opinion No.
30, Reporting the Results of Operations--Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions, for the disposal of a segment of a business (as defined
in that Opinion). This Statement also amends Accounting Research Bulletin No.
51, Consolidated Financial Statements, to eliminate the exception to
consolidation for a subsidiary for which control is likely to be temporary. SFAS
No. 144 is effective for fiscal periods beginning after December 15, 2001. We
implemented the pronouncement beginning in the first quarter of 2002. The
adoption of this statement did not have an impact on our consolidated financial
statements.
<PAGE>
         In June 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities, which addresses exit or disposal
activities including one-time involuntary employee termination benefits,
contract termination costs and costs to consolidate facilities or relocate
employees. Existing accounting guidelines (principally Emerging Issue Task Force
Issue 94-3, Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity) require companies to recognize a liability when
management commits itself or announces plans to exit or dispose of an activity.
SFAS No. 146 will prohibit companies from recognizing an exit or disposal
liability until the liability has been incurred, generally the "communication
date" for one-time termination benefits and the contract termination or "cease
use date" for contract costs, and will require these liabilities to be measured
at fair value. This statement is effective for exit or disposal activities
initiated after December 31, 2002. We are reviewing the provisions of this
statement but do not expect it to have a significant impact on our consolidated
financial statements.

         In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation. SFAS No. 123, Accounting for Stock-Based Compensation,
as amended by SFAS No. 148, requires companies to estimate employee stock
compensation expense based on the fair value method of accounting. However, the
statement allows the alternative of continued use of the intrinsic value method
described in APB Opinion No. 25, Accounting for Stock Issued to Employees, if
pro forma disclosure of fair value amounts is provided. The Company has elected
the alternative of continued use of APB Opinion No. 25.

         In November 2002, the FASB issued FASB Interpretation No. 45,
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others, which elaborates on required
disclosures by a guarantor in its financial statements about obligations under
certain guarantees that it has issued and clarifies the need for a guarantor to
recognize, at the inception of certain guarantees, a liability for the fair
value of the obligation undertaken in issuing the guarantee. The Company is
reviewing the provisions of this Interpretation relating to initial recognition
and measurement of guarantor liabilities, which are effective for qualifying
guarantees entered into or modified after January 1, 2003. The disclosure
requirements in this Interpretation are effective for financial statements of
interim or annual periods ending after December 15, 2002. The adoption of the
disclosure requirements of this interpretation did not have a impact on our
consolidated financial statements.

         In January 2003, the FASB issued FASB Interpretation No. 46,
Consolidation of Variable Interest Entities, which addresses consolidation by a
business of variable interest entities in which it is the primary beneficiary.
The Interpretation is effective immediately for certain disclosure requirements
and variable interest entities created after January 31, 2003, and for the
quarter ended September 27, 2003 for all other variable interest entities. We
are reviewing the provisions of this Interpretation but do not expect it to have
a siginificant impact on our financial statements.

CRITICAL ACCOUNTING POLICIES

         We prepare our consolidated financial statements in accordance with
accounting principles generally accepted in the United States. Our significant
accounting policies are discussed in Note 1 to the consolidated financial
statements. Certain of these accounting policies as discussed below require
management to make estimates and assumptions about future events that could
materially affect the reported amounts of assets, liabilities, revenues and
expenses and disclosure of contingent assets and liabilities. Our most critical
estimate relates to projecting future cash flows used in assessing future store
operating performance and testing long-lived assets for impairment.

         We evaluate the carrying value of long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying value of
such assets may not be recoverable. This evaluation is performed based on the
estimated undiscounted future cash flows from operating activities compared with
the carrying value of the related asset. If the undiscounted future cash flows
are less than the carrying value, an impairment loss is recognized, measured by
the difference between the carrying value and the estimated fair value of the
assets. We estimate future cash flows at the store level based on historical
operating results and anticipated impacts of operational changes. We recorded a
write-down of fixed assets for certain retail stores totaling $102,000 and
$287,000 in 2002 and 2001, respectively, which is included in selling, marketing
and distribution expenses in the consolidated statements of income.

         We make limited use of derivative instruments. On the date we enter
into a derivative contract, management designates the derivative as a hedge for
the identified exposure. We formally document all relationships between hedging
instruments and hedged items, as well as the risk-management objective and
strategy for entering into various hedge transactions. In this documentation, we
identify the asset, liability, firm commitment, or forecasted transaction that
has been designated as a hedged item and indicate how the hedging instrument is
expected to hedge the risks related to the hedged item. We formally measure
effectiveness of hedging relationships both at the hedge inception and on an
ongoing basis in accordance with its risk management policy. We would
discontinue hedge accounting prospectively if it is determined that the
derivative is no longer effective in offsetting changes in the hedged item.
<PAGE>
RISK FACTORS

         Investors in the Company should consider the following risk factors as
well as the other information contained herein.

         CONTROL BY MAJORITY SHAREHOLDER, SMALL PUBLIC FLOAT, AND LOW TRADING
VOLUME OF SHARES. Our Chairman of the Board, Fred Kayne, owns over 50% of Big
Dogs outstanding common stock. As a result, Mr. Kayne is able to control the
election of directors, and to determine the outcome of any other matter
submitted to a vote of our stockholders, including a change in control. In
addition, over 80% of our shares are held by Mr. Kayne and other directors,
officers or beneficial owners of more than 10%, none of whom have historically
traded in the shares on any regular basis. While our shares are currently listed
on the NASDAQ National Market System, the average daily trading volume,
particularly in recent years, has been very low. Due to all the foregoing, and
other factors, there has been and can expect to be significant illiquidity in
our shares.

         POSSIBLE CHANGE IN LISTING. We have been informed by the NASDAQ that
the market value of our shares deemed "publicly held" has fallen below the
threshold required for the National Market, and if that threshold is not met,
our shares will be required to be listed on the NASDAQ Small Cap Market or over
the counter on the OTCBB. In either case, the liquidity and ease of trading Big
Dogs shares will likely decline if they are required to move from the National
Market. In order to remain listed on the NASDAQ National Market, our shares must
trade above approximately $2.545 for 10 consecutive trading days (giving an
implied value of at least $5 million for our 1,964,263 shares deemed to be
"publicly held") before May 28, 2003. The NASDAQ does not count as "publicly
held" the over 1,000,000 Big Dogs shares held by Fidelity Advisor Strategic
Opportunities Fund, though such fund is not affiliated with Big Dogs and does
not exercise any control over our Company.

         CHANGES IN CONSUMER PREFERENCES. The consumer products industry in
general, and the apparel industry in particular, are subject to changing
consumer demands and preferences. Although we believe our products historically
have not been significantly affected by fashion trends, Big Dogs products are
subject to changing consumer preferences. Our success will depend significantly
on our ability to continue to produce popular graphics and products that
anticipate, gauge and respond in a timely manner to changing consumer demands
and preferences. In addition, over the years general consumer preferences rise
and decline in regard to graphic and logo-oriented merchandise, which can have
an effect on our business.

         FACTORS AFFECTING STORE TRAFFIC. The large majority of our stores are
located in tourist areas, tourist-serving areas and outlet malls, and our sales
depend on a high level of traffic in these locations. We, therefore, depend on
the ability of these tourist destinations and malls to continue to generate a
high volume of consumer traffic in the vicinity of our stores. Outlet mall
traffic appears to have declined in recent years. Tourism and therefore, outlet
mall traffic, may be adversely affected by domestic and international economic
downturns, such as a recession, adverse weather, war or international conflict,
acts of terrorism or terrorism alerts, natural disasters, changing consumer
preferences, highway or surface street traffic, the closing of high-profile
stores near our stores and declines in the desirability of the tourism or
shopping environment in a particular tourist destination or mall.

         DEPENDENCE ON KEY PERSONNEL. Our success is significantly dependent on
the performance of our key management, particularly Chief Executive Officer,
Andrew Feshbach, and Executive Vice President--Merchandising, Doug Nilsen.

         DEPENDENCE ON THIRD-PARTY AND FOREIGN MANUFACTURERS. We do not own or
operate any manufacturing facilities and are therefore dependent on third
parties for the manufacture of our products. The loss of major suppliers, or the
failure of such suppliers to timely deliver our products or to meet our quality
standards, could adversely affect our ability to deliver products to our
customers in a timely manner.
<PAGE>

         The majority of our products are purchased from a variety of trading
companies with relationships with manufacturing facilities located outside the
United States. Our operations could be adversely affected by events that result
in disruption of trade from foreign countries in which our suppliers are
located.

         Our staff or agents periodically visit and observe the operations of
its foreign and domestic manufacturers, but we do not control such manufacturers
or their labor practices. Therefore we cannot necessarily prevent legal or
ethical violations by independent manufacturers, and it is uncertain what impact
such violations would have on us.

         SUBSTANTIAL COMPETITION. The markets for each of our products are
highly competitive. In recent years, the increased consumer shift toward large
mass-market and discount retailers has put substantial pricing and competitive
pressure on other apparel retailers. We believe our long-term competitive
position will depend upon our ability to anticipate and respond effectively to
changing consumer demands and to offer customers a wide variety of high-quality,
fun products at competitive prices.

         RELIANCE ON INFORMATION SYSTEMS. We rely on various information systems
to manage our operations and regularly makes investments to upgrade, enhance or
replace such systems. Substantial disruptions affecting our information systems
could have an adverse effect on our business.

         DEPENDENCE ON TRADEMARKS. We use a number of trademarks, the primary
ones of which are registered with the United States Patent and Trademark Office
and in a number of foreign countries. While we believe our trademark rights are
strong, in our pursuit and defense of particular infringement claims it cannot
be assured that we will always prevail. See "Business - Trademarks" and "Legal
Proceedings".

FORWARD-LOOKING STATEMENTS

         This Annual Report on Form 10-K contains forward-looking statements
that involve risks and uncertainties. The statements contained in this Form 10-K
that are not purely historical are forward-looking statements, including without
limitation statements regarding our expectations, beliefs, intentions or
strategies regarding the future. Such forward-looking statements include the
discussions in this Management's Discussion and Analysis of Financial Condition
and Results of Operations regarding the seasonality of business, expected new
store openings and costs and inflation risks. Uncertainties to which the
foregoing and other aspects of our business may be subject include those
discussed below in regard to factors that may affect quarterly results discussed
below, the factors affecting the costs of building new stores, and other risks
and uncertainties discussed below. All forward-looking statements in this
document are based upon information available to us on the date hereof, and we
assume no obligation to update any such forward-looking statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We do not believe we have material exposure to losses from market-rate
sensitive instruments. We have not invested in derivative financial instruments.
We have a credit agreement with Wells Fargo Retail Finance whereby we may borrow
at a floating rate. The credit agreement provides for a performance-pricing
structured interest charge, ranging up to LIBOR plus 1.75%, based on access
availability levels. See "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources."
We did not have any outstanding borrowings under this arrangement as of December
31, 2002.

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         See "Index to Consolidated Financial Statements" at Item 15(a) for a
listing of the consolidated financial statements filed as part of this report.

ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                  AND FINANCIAL DISCLOSURE
         None.
<PAGE>




                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         See "Executive Officers" in Part I, Item 1 hereof for information
regarding the executive officers. Other information with respect to this item is
incorporated by reference from the registrant's definitive proxy statement to be
filed with the Commission not later than 120 days after the end of the
registrant's fiscal year.

ITEM 11. EXECUTIVE COMPENSATION

         Information with respect to this item is incorporated by reference from
the registrant's definitive proxy statement to be filed with the Commission not
later than 120 days after the end of the registrant's fiscal year.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information with respect to this item is incorporated by reference from
the registrant's definitive proxy statement to be filed with the Commission not
later than 120 days after the end of the registrant's fiscal year.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information with respect to this item is incorporated by reference from
the registrant's definitive proxy statement to be filed with the Commission not
later than 120 days after the end of the registrant's fiscal year.

ITEM 14. CONTROLS AND PROCEDURES

         EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The term "disclosure
controls and procedures" is defined in Rules 13a-14(c) and 15d-14(c) of the
Securities and Exchange Act of 1934 ("Exchange Act"). These rules refer to the
controls and other procedures of a company that are designed to ensure that
information required to be disclosed by a company in the reports that it files
under the Exchange Act is recorded, processed, summarized and reported within
required time periods. Our chief executive officer and our chief financial
officer have evaluated the effectiveness of the Company's disclosure controls
and procedures as of a date within 90 days before the filing of this Annual
Report on Form 10-K (the "Evaluation Date"), and believe that, as of the
Evaluation Date, such controls and procedures were effective at ensuring that
required information will be disclosed on a timely basis in our reports filed
under the Exchange Act.

         There were no significant changes in the Company's internal controls or
in other factors that could significantly affect internal controls, known to the
Chief Executive Officer or the Chief Financial Officer, subsequent to the date
of the evaluation.

                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)      1.       The financial statements listed in the "Index to Consolidated
                  Financial Statements" at page F-1 are filed as a part of this
                  report.

         2.       Schedule II - Valuation and Qualifying Accounts

                  Schedules other than that referred to above have been omitted
                  because they are not applicable or are not required under the
                  instructions contained in Regulation S-X or because the
                  information is included elsewhere in the Consolidated
                  Financial Statements or the Notes thereto.

         3.       Exhibits included or incorporated herein: See "Index to
                  Exhibits."

(b)               Reports on Form 8-K.

                  There were no reports on Form 8-K filed during the last
                  quarter of the fiscal year covered by this report.


<PAGE>


SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
March 27, 2003 on its behalf by the undersigned, thereunto duly authorized.
                                        BIG DOG HOLDINGS, INC.

                                        By /s/ANDREW D. FESHBACH
                                        ----------------------------
                                          Andrew D. Feshbach
                                          Chief Executive Officer and President

         Each person whose signature appears below hereby authorizes Andrew D.
Feshbach and Anthony J. Wall or either of them, as attorneys-in-fact to sign on
his behalf, individually, and in each capacity stated below and to file all
amendments and/or supplements to the Annual Report on Form 10-K.

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>

         SIGNATURE                                        TITLE                                  DATE
            <S>                                            <C>                                    <C>

/s/ANDREW D. FESHBACH                Chief Executive Officer, President and Director          March 27, 2003
---------------------
Andrew D. Feshbach                   (Principal Executive Officer)

/s/ROBERTA J. MORRIS                 Chief Financial Officer, Treasurer and Assistant         March 27, 2003
--------------------
Roberta J. Morris                    Secretary (Principal Financial and Accounting Officer)

/s/FRED KAYNE                        Chairman of the Board                                    March 27, 2003
-------------
Fred Kayne

/s/SKIP R. COOMBER, III              Director                                                 March 27, 2003
-----------------------
Skip R. Coomber, III

/s/STEVEN C. GOOD                    Director                                                 March 27, 2003
-----------------
Steven C. Good

/s/ROBERT H. SCHNELL                 Director                                                 March 27, 2003
--------------------
Robert H. Schnell

/s/DAVID J. WALSH                    Director                                                 March 27, 2003
-----------------
David J. Walsh
</TABLE>

<PAGE>


                     BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                  YEARS ENDED DECEMBER 31, 2002, 2001, and 2000
<TABLE>



                                                                                                 PAGE

<S>                                                                                                <C>
Independent Auditors' Report.................................................................      F-2

Consolidated Balance Sheets as of December 31, 2002 and 2001.................................      F-3

Consolidated Statements of Income for the years ended December 31, 2002, 2001, and
2000.........................................................................................      F-4

Consolidated Statements of Stockholders' Equity for the years ended December 31,
2002, 2001, and 2000.........................................................................      F-5

Consolidated Statements of Cash Flows for the years ended December 31, 2002, 2001, and
2000.........................................................................................      F-6

Notes to the Consolidated Financial Statements...............................................      F-7
</TABLE>



<PAGE>



                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of Big Dog Holdings, Inc.:

         We have audited the accompanying consolidated balance sheets of Big Dog
Holdings, Inc. and subsidiaries (the "Company") as of December 31, 2002 and
2001, and the related consolidated statements of income, stockholders' equity,
and cash flows for each of the three years in the period ended December 31,
2002. Our audits also included the financial statement schedule listed in the
Index at Item 15(a). These financial statements and the financial statement
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and the financial
statement schedule based on our audits.

         We conducted our audits 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 audits provide a
reasonable basis for our opinion.

         In our opinion, such consolidated financial statements present fairly,
in all material respects, the financial position of the Company as of December
31, 2002 and 2001, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 2002 in conformity with
accounting principles generally accepted in the United States of America. Also,
in our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.



DELOITTE & TOUCHE LLP


Los Angeles, California
March 14, 2003
<PAGE>

<TABLE>

                     BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                                                   DECEMBER 31,
                                                            --------------------------
                                                               2002            2001
                                                               ----            ----
                                ASSETS (Note 5)
<S>                                                             <C>             <C>
CURRENT ASSETS:
Cash and cash equivalents...............................    $ 6,194,000     $ 3,055,000
Receivables:
 Trade, net.............................................        346,000         450,000
 Other..................................................        113,000         362,000
Inventories (Note 10)...................................     24,808,000      26,777,000
Prepaid expenses and other current assets...............        457,000         473,000
Deferred income taxes (Notes 4 and 6)...................      1,960,000       1,954,000
                                                           ------------    ------------
Total current assets....................................     33,878,000      33,071,000
PROPERTY AND EQUIPMENT, Net (Note 2)....................      5,234,000       6,634,000
INTANGIBLE ASSETS, Net..................................        149,000         173,000
OTHER ASSETS............................................        418,000         429,000
                                                           ------------     -----------
TOTAL...................................................    $39,679,000     $40,307,000
                                                           ============     ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Short-term borrowings (Note 5).........................    $       ---     $ 1,767,000
 Accounts payable.......................................      1,935,000       2,923,000
 Income taxes payable (Note 6)..........................        555,000       1,983,000
 Accrued expenses and other current liabilities.........      4,159,000       4,137,000
                                                            -----------     -----------
Total current liabilities...............................      6,649,000      10,810,000
DEFERRED RENT (Note 7)..................................        693,000         683,000
DEFERRED GAIN ON SALE-LEASEBACK (Note 2)................        354,000         406,000
                                                            -----------     -----------
 Total liabilities......................................      7,696,000      11,899,000
                                                            -----------     -----------
COMMITMENTS AND CONTINGENCIES (Note 5 and 7)
STOCKHOLDERS' EQUITY (Notes 3 and 8):
Preferred stock, $.01 par value, 3,000,000 share
 authorized, none issued and outstanding................    $       ---    $        ---
Common stock $.01 par value, 30,000,000 shares
 authorized 9,698,284 shares issued at December 31, 2002
 and 2001...............................................         97,000          97,000
Additional paid-in capital..............................     20,510,000      20,510,000
Retained earnings.......................................     18,824,000      15,007,000
Treasury stock, 1,305,636 and 1,233,220 shares December
 31, 2002 and 2001, respectively........................     (7,448,000)     (7,206,000)
                                                            -----------     -----------
Total stockholders' equity..............................     31,983,000      28,408,000
                                                            -----------     -----------
TOTAL...................................................    $39,679,000     $40,307,000
                                                            ===========     ===========
</TABLE>

                 See notes to consolidated financial statements.
<PAGE>





                     BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME
<TABLE>


                                                                                   YEARS ENDED DECEMBER 31,
                                                                                   ------------------------
                                                                          2002             2001              2000
                                                                          ----             ----              ----
<S>                                                                       <C>              <C>               <C>
NET SALES (Note 3)...........................................        $ 108,756,000    $ 112,369,000      $ 115,280,000
COST OF GOODS SOLD (Note 10).................................           46,970,000       49,154,000         48,836,000
                                                                     -------------    -------------      -------------
GROSS PROFIT.................................................           61,786,000       63,215,000         66,444,000
                                                                     -------------    -------------      -------------
OPERATING EXPENSES:
 Selling, marketing and distribution.........................           51,528,000       52,660,000         53,176,000
 General and administrative..................................            5,252,000        5,618,000          5,394,000
                                                                     -------------    -------------      -------------
  Total operating expenses...................................           56,780,000       58,278,000         58,570,000
                                                                     -------------    -------------      -------------

INCOME FROM OPERATIONS.......................................            5,006,000        4,937,000          7,874,000

WRITE-OFF OF IMPAIRED ASSET (Note 3).........................                  ---              ---          3,000,000

OTHER INCOME (Note 3)........................................                  ---         (334,000)              ---

INTEREST INCOME (Note 4).....................................           (3,175,000)         (39,000)          (258,000)

INTEREST EXPENSE (Notes 4 and 5).............................            3,761,000        1,158,000            596,000
                                                                     -------------    -------------     --------------

INCOME BEFORE PROVISION FOR INCOME TAXES.....................            4,420,000        4,152,000          4,536,000

PROVISION FOR INCOME TAXES (Notes 4 and 6)...................              603,000        1,512,000          2,719,000
                                                                    --------------    -------------     --------------

NET INCOME...................................................         $  3,817,000     $  2,640,000     $    1,817,000
                                                                      ============     ============     ==============

NET INCOME PER SHARE
 BASIC AND DILUTED...........................................         $       0.45     $       0.31      $       0.17
                                                                      ============     ============      ============
</TABLE>

                 See notes to consolidated financial statements.



<PAGE>
<TABLE>



                     BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


                                                                                                           NOTES
                                                                                                           RECEIVABLE
                                                                                                           FROM
                                    COMMON STOCK       ADDITIONAL                  TREASURY STOCK          COMMON
                                    ------------        PAID-IN     RETAINED       --------------          STOCK-
                                SHARES       AMOUNT     CAPITAL     EARNINGS     SHARES       AMOUNT       HOLDERS      TOTAL
                                ------       ------     -------     --------     ------       ------       -------      -----
<S>                              <C>          <C>         <C>         <C>          <C>          <C>           <C>        <C>
BALANCE,
JANUARY 1, 2000..............  13,183,550  $ 132,000  $42,417,000  $11,750,000  1,183,200  $(7,006,000)  $(633,000)  $46,660,000

Cash dividend paid...........         ---        ---          ---   (1,200,000)       ---          ---         ---    (1,200,000)
Repurchased and retired
 common stock (Note 8).......  (3,505,166)   (35,000) (21,969,000)         ---        ---          ---         ---   (22,004,000)
Repurchased common
 stock (Note 8)..............         ---        ---          ---          ---     19,000      (74,000)        ---       (74,000)
Options exercised............       7,900        ---       27,000          ---        ---          ---         ---        27,000
Collection of notes
 receivable..................         ---        ---          ---          ---        ---          ---     633,000       633,000
Net income...................         ---        ---          ---    1,817,000        ---          ---         ---     1,817,000
                                ---------  ---------   ----------   ----------  ---------   ----------   ---------   -----------
BALANCE,
DECEMBER 31, 2000............   9,686,284     97,000   20,475,000   12,367,000  1,202,200   (7,080,000)        ---    25,859,000

Repurchased common
 stock (Note 8)..............         ---        ---          ---          ---     31,020     (126,000)        ---      (126,000)
Warrants exercised...........      12,000        ---       35,000          ---        ---          ---         ---        35,000
Net income...................         ---        ---          ---    2,640,000        ---          ---         ---     2,640,000
                                ---------  ---------   ----------   ----------  ---------   ----------   ---------   -----------
BALANCE,
DECEMBER 31, 2001............   9,698,284      97,000  20,510,000   15,007,000  1,233,220   (7,206,000)        ---    28,408,000

Repurchase Common
 stock (Note 8)..............         ---         ---         ---          ---     72,416     (242,000)        ---      (242,000)
Net income...................         ---         ---         ---    3,817,000        ---          ---         ---     3,817,000
                                ---------  ----------  ----------   ----------  ---------  -----------   ---------   -----------
BALANCE,
DECEMBER 31, 2002............   9,698,284  $   97,000 $20,510,000  $18,824,000  1,305,636  $(7,448,000)  $     ---   $31,983,000
                                =========  ========== ===========  ===========  =========  ===========   =========   ===========
</Table>







                 See notes to consolidated financial statements.
<PAGE>





                     BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>

                                                                                      YEARS ENDED DECEMBER 31,

                                                                                 2002           2001            2000
                                                                                 ----           ----            ----
<S>                                                                               <C>            <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income................................................................  $ 3,817,000     $ 2,640,000    $ 1,817,000
 Adjustments to reconcile net income to net cash provided by operating
activities:
  Depreciation and amortization............................................    2,619,000       3,460,000      4,029,000
  Amortization of deferred financing fees..................................      153,000         136,000         13,000
  Provision for losses on receivables......................................       68,000         473,000         33,000
  Loss (gain) on disposition of property and equipment.....................       21,000         (74,000)       221,000
  Loss on sale of U.S. Treasury Bonds......................................      115,000             ---            ---
  Write-off of impaired asset - fixed assets...............................      102,000         287,000        359,000
  Write-off of impaired asset - PETsMART.com investment....................          ---             ---      3,000,000
  Gain on sale of PETsMART.com investment..................................          ---        (334,000)           ---
  Deferred income taxes....................................................       (6,000)       (525,000)      (554,000)
  Changes in operating assets and liabilities:
   Receivables.............................................................      285,000        (746,000)       397,000
   Inventories.............................................................    1,969,000         (18,000)    (6,809,000)
   Prepaid expenses and other current assets...............................       16,000          76,000        558,000
   Accounts payable........................................................     (988,000)     (1,630,000)     1,142,000
   Income taxes payable....................................................   (1,428,000)        157,000         58,000
   Accrued expenses and other current liabilities..........................       22,000         417,000        536,000
   Deferred rent...........................................................       10,000        (180,000)       (15,000)
   Deferred gain on sale-leaseback.........................................      (52,000)        (53,000)       (53,000)
                                                                             -----------      ----------    -----------
    Net cash provided by operating activities..............................    6,723,000       4,086,000      4,732,000
                                                                             -----------      ----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital expenditures......................................................   (1,299,000)     (1,374,000)    (1,769,000)
 Proceeds from sale of U.S. Treasury Bonds.................................   95,269,000             ---            ---
 Repurchase of U.S. Treasury Bonds.........................................  (95,384,000)            ---            ---
 Proceeds from sale of PETsMART.com investment.............................          ---         334,000            ---
 Purchase of PETsMART.com investment.......................................          ---             ---       (100,000)
 Proceeds from sale of property and equipment..............................       16,000         177,000        157,000
 Principal repayments of notes receivable..................................       16,000         107,000        119,000
 Issuance of long-term notes receivable....................................          ---             ---        (20,000)
 Other.....................................................................      (43,000)        (68,000)        75,000
                                                                             -----------      ----------    -----------
    Net cash used in investing activities..................................   (1,425,000)       (824,000)    (1,538,000)
                                                                             -----------      ----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Short-term borrowings, net................................................   (1,767,000)     (4,233,000)     6,000,000
 Repurchase and retirement of common stock.................................          ---             ---    (22,004,000)
 Repurchase of common stock................................................     (242,000)       (126,000)       (74,000)
 Payment of deferred financing fees........................................     (150,000)       (259,000)      (125,000)
 Proceeds from exercise of options.........................................          ---             ---         27,000
 Proceeds from exercise of warrants........................................          ---          35,000            ---
 Principal repayments of notes receivable..................................          ---             ---        633,000
 Dividends paid............................................................          ---             ---     (1,200,000)
                                                                            ------------      ----------    -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.......................    3,139,000      (1,321,000)   (13,549,000)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR...............................    3,055,000       4,376,000     17,925,000
                                                                            -------------   -------------  ------------
CASH AND CASH EQUIVALENTS, END OF YEAR..................................... $  6,194,000    $  3,055,000   $  4,376,000
                                                                            ============    ============   ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
 Cash paid for:
  Interest.................................................................  $  3,617,000    $  1,049,000  $    532,000
  Income taxes.............................................................  $  2,037,000    $  1,880,000  $  3,213,000
</TABLE>

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:

         In April 2000, the Company purchased $520,000 of PETsMART.com Series D
preferred stock from certain officers and other individuals of the Company in
exchange for cash of $100,000 and redemption of notes receivable from such
officers and others.



                 See notes to consolidated financial statements.


<PAGE>


                     BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BUSINESS

         The consolidated financial statements include the accounts of Big Dog
Holdings, Inc. and its subsidiaries (the "Company"). All significant
intercompany accounts and transactions have been eliminated.

         The Company principally develops and markets apparel and other consumer
products through Company-operated retail stores, wholesale accounts, catalog and
internet website.

CASH & CASH EQUIVALENTS

         The Company considers all highly liquid investments with a maturity of
less than three months when purchased to be cash equivalents.

INVENTORIES

         Inventories, consisting substantially of finished goods, are stated at
the lower of cost (first-in, first-out method) or market.

PROPERTY AND EQUIPMENT

         Property and equipment are stated at cost, less accumulated
depreciation, and depreciated using the straight-line method over their
estimated useful lives, ranging from two to ten years. Amortization of leasehold
improvements is computed using the straight-line method based upon the life of
the improvement or the term of the lease, whichever is shorter.

INTANGIBLE ASSETS

         Intangible assets are stated at cost, less accumulated amortization,
and amortized using the straight-line method over five years. Accumulated
amortization was $823,000 and $764,000 at December 31, 2002 and 2001,
respectively.

IMPAIRMENT OF LONG-LIVED ASSETS

         The Company evaluates the carrying value of long-lived assets for
impairment whenever events or changes in circumstances indicate that the
carrying value of such assets may not be recoverable. This evaluation is
performed based on the estimated undiscounted future cash flows from operating
activities compared with the carrying value of the related asset. If the
undiscounted future cash flows are less than the carrying value, an impairment
loss is recognized, measured by the difference between the carrying value and
the estimated fair value of the assets. The Company recorded write-downs of
fixed assets for certain retail stores totaling $102,000 and $287,000 in 2002
and 2001, respectively, which are included in selling, marketing and
distribution expenses in the consolidated statements of income.

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITY

         The Company makes limited use of derivative instruments. On the date
the Company enters into a derivative contract, management designates the
derivative as a hedge for the identified exposure. The Company formally
documents all relationships between hedging instruments and hedged items, as
well as the risk-management objective and strategy for entering into various
hedge transactions. In this documentation, the Company identifies the asset,
liability, firm commitment, or forecasted transaction that has been designated
as a hedged item and indicates how the hedging instrument is expected to hedge
the risks related to the hedged item. The company formally measures
<PAGE>

                     BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

effectiveness of its hedging relationships both at the hedge inception and on
an ongoing basis in accordance with its risk management policy. The Company
would discontinue hedge accounting prospectively if it is determined that the
derivative is no longer effective in offsetting changes in the hedged item.

REVENUE RECOGNITION

         Substantially all of the Company's revenues are generated by its retail
operations, which are recognized at the time of sale. The Company also generates
revenues through its wholesale, internet and mail order catalog operations,
which are recognized at the time of shipment.

STORE PREOPENING EXPENSES

         The Company expenses store preopening costs as incurred, which totaled
$121,000, $200,000 and $321,000, in 2002, 2001, and 2000, respectively.

INCOME TAXES

         The Company accounts for income taxes using an asset and liability
approach for measuring deferred income taxes based on temporary differences
between the financial statement and income tax bases of assets and liabilities
existing at each balance sheet date. A valuation allowance is established, when
necessary, to reduce deferred income tax assets to the amount expected to be
realized.

EARNINGS PER SHARE

         Basic earnings per share is calculated based on the weighted average
number of shares outstanding. Diluted earnings per share is calculated based on
the same number of shares plus additional shares representing stock
distributable under stock-based plans computed using the treasury stock method.

         The following reconciles the numerator and denominator of the basic
and diluted per-share computations for net income:

<TABLE>
                                                                          YEARS ENDED DECEMBER 31,
                                                                          ------------------------
                                                                      2002           2001          2000
                                                                      ----           ----          ----
<S>                                                                    <C>            <C>           <C>
Net income....................................................     $  3,817,000    $  2,640,000   $ 1,817,000
                                                                   ============    ============   ===========
Basic Weighted Average Shares:
 Weighted average number of shares outstanding................        8,409,000       8,456,000    10,808,000
Effect of Dilutive Securities:
 Options and warrants.........................................              ---          21,000        98,000
                                                                   ------------    ------------   -----------
Diluted Weighted Average Shares:
 Weighted average number of shares outstanding and
 Common share equivalents.....................................        8,409,000       8,477,000    10,906,000
                                                                    ===========    ============   ===========

Antidilutive options and warrants.............................        1,683,000       1,341,000       940,000
</TABLE>

         Antidilutive options consist of the weighted average of stock options
for the respective years that had an exercise price greater than the average
market price during the year. Such options are therefore excluded from the
computation of diluted shares.

<PAGE>

                     BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

ACCOUNTING FOR STOCK-BASED COMPENSATION

    Statement of Financial Accounting Standards ("SFAS") No. 123, Accounting
for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-
Based Compensation, requires companies to estimate employee stock compensation
expense based on the fair value method of  accounting. However, the statement
allows the alternative of continued use of  the intrinsic value method
described in Accounting Principles Board ("APB") Opinion No. 25, Accounting for
Stock Issued to Employees, if pro forma disclosure of fair value amounts is
provided. The Company has elected the alternative of continued use of APB
Opinion No. 25.

    Had compensation cost for the Company's stock option plan been  determined
based on their fair value at the grant date for options granted in 2002, 2001,
and 2000 consistent with the provisions of SFAS No. 123, the Company's net
income and net income per share would have been adjusted to the pro forma
amounts indicated below:
<TABLE>
                                                                                     YEARS ENDED DECEMBER 31,
                                                                                     ------------------------
                                                                         2002              2001          2000
                                                                         ----              ----          ----
<S>                                                                        <C>              <C>           <C>
Net income:
 As reported.....................................................      $ 3,817,000      $ 2,640,000    $ 1,817,000
 Pro forma.......................................................        2,823,000        2,008,000      1,414,000
Net income per share:
 As reported:
 Basic and diluted...............................................      $      0.45      $      0.31    $      0.17
 Pro forma:
 Basic and diluted...............................................      $      0.34      $      0.24    $      0.13

</TABLE>


USE OF ESTIMATES

    The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.

CONCENTRATION OF CREDIT RISK

    The Company has $4,969,000 of cash on deposit with two different high
credit quality financial institutions in excess of the Federal Deposit
Insurance Corporation limits.

FAIR VALUE OF FINANCIAL INSTRUMENTS

    The estimated fair values of receivables, accounts payable and short-term
borrowings approximate their carrying values because of the short-term maturity
of these instruments.

RECENTLY ISSUED ACCOUNTING STANDARDS

    In June 1998, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities.
SFAS No. 133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts and for hedging activities. The statement requires that the Company
recognize all derivatives as either assets or liabilities in the balance sheet
and measure those instruments at fair value. The Company adopted SFAS No. 133
effective January 1, 2001. The adoption of SFAS No. 133 did not have an impact
on the Company's consolidated financial statements.
<PAGE>
                     BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

         In July 2001, the FASB issued SFAS No. 141, Business Combinations and
SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that
all business combinations be accounted for under the purchase method. The
statement further requires separate recognition of intangible assets that meet
one of two specified criteria. The statement applies to all business
combinations initiated after June 30, 2001. SFAS No. 142 requires that an
intangible asset that is acquired shall be initially recognized and measured
based on its fair value. The statement also provides that goodwill should not be
amortized, but should be tested for impairment annually, or more frequently if
circumstances indicate potential impairment, through a comparison of fair value
to its carrying amount. SFAS No. 142 is effective for fiscal years beginning
after December 15, 2001. The Company implemented the pronouncement at the
beginning of 2002. The adoption of this statement did not have an impact on the
Company's consolidated financial statements.

         In June 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations, which provides standards on the accounting for
obligations associated with the retirement of long-lived assets. SFAS No. 143 is
effective for fiscal years beginning after June 15, 2002. The Company does not
believe the adoption of this statement will have a significant impact on the
Company's consolidated financial statements.

         In July 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. SFAS No. 144 addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
This Statement supercedes SFAS No. 121 on the same topic and the accounting and
certain reporting provisions of APB Opinion No.30, Reporting the Results of
Operations--Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions, for
the disposal of a segment of a business (as defined in that Opinion). This
Statement also amends Accounting Research Bulletin No. 51, Consolidated
Financial Statements, to eliminate the exception to consolidation for a
subsidiary for which control is likely to be temporary. SFAS No. 144 is
effective for fiscal periods beginning after December 15, 2001. The
Company implemented the pronouncement beginning in the first quarter of fiscal
year 2002. The adoption of this statement did not have an impact on the
Company's consolidated financial statements.

         In June 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities, which addresses exit or disposal
activities including one-time involuntary employee termination benefits,
contract termination costs and costs to consolidate facilities or relocate
employees. Existing accounting guidelines (principally Emerging Issue Task Force
Issue 94-3, Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity) require companies to recognize a liability when
management commits itself or announces plans to exit or dispose of an activity.
SFAS No. 146 will prohibit companies from recognizing an exit or disposal
liability until the liability has been incurred, generally the "communication
date" for one-time termination benefits and the contract termination or "cease
use date" for contract costs, and will require these liabilities to be measured
at fair value. This statement is effective for exit or disposal activities
initiated after December 31, 2002. We are reviewing the provisions of this
statement but do not expect it to have a significant impact on our consolidated
financial statements.

         In December 2002, the FASB issued SFAS No. 148. SFAS No. 123,
as amended by SFAS No. 148, requires companies to estimate employee stock
compensation expense based on the fair value method of accounting. However, the
statement allows the alternative of continued use of the intrinsic value method
described in APB Opinion No. 25 if pro forma disclosure of fair value amounts
is provided. The Company has elected the alternative of continued use of APB
Opinion No. 25.

         In November 2002, the FASB issued FASB Interpretation No. 45,
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others, which elaborates on required
disclosures by a guarantor in its financial statements about obligations under
certain guarantees that it has issued and clarifies the need for a guarantor to
recognize, at the inception of certain guarantees, a liability for the fair
value of the obligation undertaken in issuing the guarantee.
<PAGE>

                     BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company is reviewing the provisions of this Interpretation relating to
initial recognition and measurement of guarantor liabilities, which are
effective for qualifying guarantees entered into or modified after January 1,
2003. The disclosure requirements in this Interpretation are effective for
financial statements of interim or annual periods ending after December 15,
2002. The adoption of the disclosure requirements of this interpretation did
not have a impact on the Company's consolidated financial statements.

         In January 2003, the FASB issued FASB Interpretation No. 46,
Consolidation of Variable Interest Entities, which addresses consolidation by a
business of variable interest entities in which it is the primary beneficiary.
The Interpretation is effective immediately for certain disclosure requirements
and variable interest entities created after January 31, 2003, and for the
quarter ended September 27, 2003 for all other variable interest entities. The
Company is reviewing the provisions of this Interpretation but does not expect
it to have a significant impact on the Company's financial statements.

RECLASSIFICATIONS

         Certain amounts in the prior year's financial statements have been
reclassified to conform to the current year's presentation.

2. PROPERTY AND EQUIPMENT

         Property and equipment consist of the following:
<TABLE>
                                                                            DECEMBER 31,
                                                                         2002            2001
         <S>                                                            <C>             <C>
         Leasehold improvements.............................         $ 7,853,000     $ 7,886,000
         Equipment and fixtures.............................          18,281,000      17,558,000
                                                                      ----------      ----------

                                                                      26,134,000      25,444,000

         Less accumulated depreciation and amortization.....          20,900,000      18,810,000
                                                                      ----------      ----------
         Property and equipment, net........................         $ 5,234,000     $ 6,634,000
                                                                     ===========     ===========
</TABLE>

         Depreciation and amortization expense of property and equipment totaled
$2,560,000, $3,422,000 and $3,997,000 in 2002, 2001 and 2000, respectively.

         In May 1999, the Company purchased the building which houses its
downtown Santa Barbara retail store for $1,600,000. In August 1999, the Company
sold this building for $2,119,000 and simultaneously entered into a 10-year
lease. The $527,000 gain related to the sale of this building is being deferred
over the life of the lease.

3. INVESTMENT IN PETsMART.COM

         In 1999, the Company purchased $2,500,000 of Series D preferred stock
and entered into a strategic relationship agreement and related agreements with
PETsMART.com, Inc. In conjunction with this investment, the Company also made
loans totaling $400,000 to certain officers and other individuals of the Company
to finance their purchase of the Series D preferred stock of PETsMART.com. Such
secured notes bore interest at 9% per annum, payable annually with principal due
in October 2003.

         In April 2000, the Company purchased $520,000 of PETsMART.com Series D
preferred stock from certain officers and other individuals of the Company in
exchange for cash and the related notes.
<PAGE>


                     BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

3. INVESTMENT IN PETsMART.COM (continued)

         As of December 2000, no public offering for PETsMART.com had occurred
and it was unlikely this event would occur in the foreseeable future.
Additionally, in December 2000, PETsMART.com restructured its ownership and
diluted the Company's ownership position significantly. After careful
consideration of the internet and capital markets, the Company wrote off the
entire $3,000,000 investment at December 31, 2000. In June 2001, the Company
sold its investment in PETsMART.com for a gain of $334,000, which is included in
Other Income in the consolidated statements of income.

4. SHORT BOND TRANSACTIONS

         During July 2002, the Company entered into two transactions relating to
the short-sale and repurchase of $95,384,000 of U. S. Treasury Securities. The
transactions were intended to address interest rate exposure and generate
capital gains that could be used to offset previously incurred capital losses.
The first transaction, which represented $95,384,000 of U. S. Treasury
Securities, matured on November 15, 2002. In the second transaction, the Company
repurchased $95,384,000 of U. S. Treasury Securities on November 15, 2002. As of
December 31, 2002, the Company had recorded interest income of $3,172,000 and
interest expense of $3,288,000 related to these transactions. The net loss
related to these transactions totaled $115,000. As a result of the transactions,
the Company released $1,050,000 of its deferred tax valuation allowance, as it
was able to utilize the capital losses.

5. SHORT-TERM BORROWINGS

         In October 2001, the Company entered into a $30,000,000 three-year line
of credit with Wells Fargo Retail Finance. This credit agreement is secured by
substantially all of the Company's assets and requires daily, weekly and monthly
financial reporting as well as compliance of financial, affirmative and negative
covenants and prohibits the payment of dividends. This credit agreement provides
for a performance-pricing structured interest charge, ranging up to LIBOR plus
1.75% which is based on excess availability levels. As of December 31, 2002, the
Company did not have an outstanding balance under this credit agreement. As of
December 31, 2001, the Company had $1,767,000 outstanding. The Company had
$1,132,000 of letters of credit outstanding as of December 31, 2002, which
expire through December 2003 and $703,000 of letters of credit outstanding as of
December 31, 2001, which expired through April 2002.

6. INCOME TAXES

         The provision for income taxes consists of the following:
<TABLE>

                                                                    YEARS ENDED DECEMBER 31,
                                                               2002          2001           2000
                                                               ----          ----           ----
        <S>                                                     <C>           <C>            <C>
        Current:
            Federal......................................   $   510,000    $ 1,707,000   $ 2,818,000
            State........................................        99,000        330,000       455,000
                                                           -------------  ------------- ------------
        Total............................................       609,000      2,037,000     3,273,000
                                                           ------------    ------------  -----------
        Deferred:
            Federal......................................       (36,000)      (442,000)     (417,000)
            State........................................        30,000        (83,000)     (137,000)
                                                           ------------    -----------   -----------
        Total............................................        (6,000)      (525,000)     (554,000)
                                                           ------------    -----------   -----------
        Total income tax provision.......................  $    603,000    $ 1,512,000   $ 2,719,000
                                                           ============    ===========   ===========
</TABLE>
<PAGE>




                     BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

6. INCOME TAXES (continued)

         The Company's effective income tax rate differs from the federal
statutory rate due to the following:
<TABLE>

                                                                    YEARS ENDED DECEMBER 31,
                                                               2002          2001           2000
                                                               ----          ----           ----
        <S>                                                      <C>          <C>            <C>
        Federal statutory income tax rate................       34.0%          34.0%         34.0%
        State taxes, net of federal benefit..............        3.6            3.6           3.6
        Valuation allowance..............................      (23.8)           0.0          24.9
        Other, net.......................................       (0.2)          (1.2)         (2.6)
                                                              ------          -----        -------
        Total............................................       13.6%          36.4%         59.9%
                                                                ====           ====          ====
</TABLE>

         Significant components of the Company's net deferred income tax assets
are as follows:
<TABLE>

                                                                                 DECEMBER 31,
                                                                                 ------------
                                                                               2002           2001
                                                                               ----           ----
        <S>                                                                    <C>            <C>
        Deferred income tax assets:
            Allowance for doubtful receivables and sales returns.......   $    79,000   $    232,000
            Accrued vacation...........................................        92,000         82,000
            Write-off of impaired asset ...............................           ---      1,103,000
            Inventory uniform capitalization...........................       548,000        591,000
            Depreciation...............................................       547,000        327,000
            Intangible assets..........................................       146,000        148,000
            Deferred rent..............................................       274,000        270,000
            Deferred gain on sale of building..........................       140,000        161,000
            Reserve liabilities........................................       378,000        234,000
                                                                          -----------    -----------
        Total gross deferred income tax assets........................      2,204,000      3,148,000
        Less valuation allowance......................................            ---      1,050,000
                                                                          -----------    -----------
        Total deferred income tax assets..............................      2,204,000      2,098,000
                                                                          -----------    -----------
        Deferred income tax liabilities:
            Prepaid expenses...........................................       (91,000)       (98,000)
            State Income taxes.........................................      (153,000)       (46,000)
                                                                          -----------    -----------
        Total deferred income tax liabilities.........................       (244,000)      (144,000)
                                                                          -----------    -----------

        Deferred income tax asset.....................................    $ 1,960,000    $ 1,954,000
                                                                          ===========    ===========
</TABLE>

         The valuation allowance in 2001 was specifically identified with the
$3,000,000 write-off of its investment in PETsMART.com, which represented a
capital loss and required the Company to generate capital gains in order to
realize the deferred tax asset. Based on the nature of the loss, the Company
provided a valuation allowance in 2000 to reduce the deferred tax asset to an
amount which, more likely than not, would be realized. In 2002, the Company
completed two short bond transactions (See Note 4). As a result of the
transactions, the Company released $1,050,000 of its deferred tax valuation
allowance, as it was able to utilize the capital losses.

7. COMMITMENTS AND CONTINGENCIES

LEASES
         The Company leases retail stores, office buildings and warehouse space
under lease agreements that expire through 2012. Future minimum lease payments
under noncancelable operating leases are as follows:
<PAGE>


                     BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

7. COMMITMENTS AND CONTINGENCIES (continued)
<TABLE>
<S>                                                                                        <C>
YEARS ENDING DECEMBER 31,
-------------------------
                  2003............................................................     $ 15,090,000
                  2004............................................................       12,556,000
                  2005............................................................        8,828,000
                  2006............................................................        5,751,000
                  2007............................................................        3,301,000
                  Thereafter......................................................        2,982,000
                                                                                        -----------

                  Total...........................................................     $ 48,508,000
                                                                                       ============
</TABLE>

         The above amounts do not include contingent rentals based on sales in
excess of the stipulated minimum that may be paid under certain leases on retail
stores and common area charges. Additionally, certain leases contain future
adjustments in rental payments based on changes in a specified inflation index.
The effective annual rent expense for the Company is the total rent paid over
the term of the lease, amortized on a straight-line basis. The difference
between the actual rent paid and the effective rent recognized for financial
statement purposes is reported as deferred rent.

         Rent expense for 2002, 2001 and 2000, totaled $16,711,000 $16,460,000
and $16,873,000, respectively, and includes contingent rentals of $345,000,
$475,000 and $392,000, for 2002, 2001, and 2000, respectively.

LITIGATION

         The Company is involved from time to time in litigation incidental to
its business. The Company believes that the outcome of such litigation will not
have a material adverse effect on its results of operation or financial
condition.

8. STOCKHOLDERS' EQUITY

COMMON STOCK

         In March 1998, the Board of Directors authorized the repurchase of up
to $10,000,000 of its common stock. The Company has repurchased 1,305,636 shares
totaling $7,448,000 as of December 31, 2002 and repurchased 1,233,220 shares
totaling $7,206,000 as of December 31, 2001.

         As of December 31, 2002 and 2001, there were no unexercised warrants
outstanding. As of December 31, 2000, there were 193,000 unexercised warrants to
purchase common stock at exercise prices ranging between $10 and $3 per share.

         On July 31, 2000, the Company announced that its Board of Directors
authorized the Company to purchase by tender offer and retire up to 3,500,000
shares of the Company's common stock at $6.25 per share, which represented
approximately 29% of the outstanding shares. The tender offer commenced on
August 2, 2000 and expired on August 30, 2000. The tender offer was fully
subscribed and the Company funded the total repurchase price of $22,004,000 on
September 1, 2000 from available cash and borrowings under its credit agreement.
Upon redemption of the tendered shares, the Company retired the shares by
reducing common stock by $35,000 and additional paid-in capital by $21,969,000.

         The Company's credit agreement prohibits the payment of dividends. The
Company did not pay a dividend in 2002 and 2001, and does not expect to pay
dividends in the future.
<PAGE>


                     BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

8. STOCKHOLDERS' EQUITY (continued)

STOCK OPTIONS

         In August 1997, the Company adopted the 1997 Performance Award Plan to
attract, reward and retain officers and employees. The maximum number of shares
reserved for issuance under this plan was 1,000,000. In February 1998, the
Company amended the 1997 Performance Award Plan (the "Plan") to increase the
maximum number of shares reserved for issuance under the Plan to 2,000,000. The
Company amended the Plan again in April 2002 to increase the maximum number of
shares reserved for issuance under the Plan to 3,000,000. Awards under this plan
may be in the form of nonqualified stock options, incentive stock options, stock
appreciation rights, restricted stock, performance shares, stock bonuses, or
cash bonuses based upon performance.

The following summarizes stock option activity for the periods presented:
<TABLE>

                                                                                     WEIGHTED-
                                                               NUMBER                 AVERAGE
                                                              OF SHARES            EXERCISE PRICE
                                                              ---------            --------------
<S>                                                             <C>                    <C>
Balance at January 1, 2000...........................       1,195,450                  6.27

 Options granted ....................................          76,500                  5.76
 Options exercised...................................          (7,900)                (3.50)
 Options cancelled...................................        (343,800)                (6.66)
                                                            ---------
Balance at December 31, 2000                                  920,250                  6.10

  Options granted....................................         820,000                  4.52
  Options cancelled..................................         (76,000)                (5.69)
                                                            ---------
Balance at December 31, 2001.........................       1,664,250                  5.34

  Options granted....................................          94,500                  3.73
  Options cancelled..................................         (76,500)                (5.89)
                                                            ---------
Balance at December 31, 2002.........................       1,682,250                  5.23
                                                            =========
</TABLE>

The following table summarizes information about stock options outstanding at
December 31, 2002:
<TABLE>
                                                                                              OPTIONS
                                           OPTIONS OUTSTANDING                              EXERCISABLE
                                -------------------------------------------------        ----------------------
                                                   WEIGHTED-
                                                    AVERAGE              WEIGHTED-                     WEIGHTED-
          RANGE OF             OPTIONS             REMAINING             AVERAGE         OPTIONS        AVERAGE
          EXERCISE               OUT-             CONTRACTUAL            EXERCISE        EXERCIS-       EXERCISE
           PRICES              STANDING              LIFE                 PRICE           ABLE            PRICE
           ------            -----------             ----                 -----           ----            -----
            <S>                 <C>                   <C>                  <C>             <C>             <C>
        $3.50 - 3.60           264,000             6.9 years             $ 3.51          150,700         $ 3.50
         4.00 - 4.63           748,500             8.1 years               4.26          153,100           4.27
         5.00 - 6.50           498,750             5.6 years               6.29          368,000           6.26
            8.00                85,000             5.7 years               8.00           29,000           8.00
       10.00 - 14.00            86,000             5.6 years              10.05            3,500          11.14
                             ---------                                                ----------
        3.50 - 14.00         1,682,250             6.9 years               5.23          704,300           5.33
                             =========                                                  ========
</TABLE>
<PAGE>

                     BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

8. STOCKHOLDERS' EQUITY (continued)

         The Company accounts for its stock-based awards using the intrinsic
value method in accordance with APB Opinion No. 25 and its related
interpretations. Accordingly, no compensation expense has been recognized in the
financial statements for employee stock arrangements.

         The weighted average fair values of the options granted were $3.18,
$3.07, and $4.21 during 2002, 2001, and 2000, respectively. The fair value of
stock-based awards to employees is calculated through the use of an option
pricing model, even though such models were developed to estimate the fair value
of freely tradable, fully transferable options without vesting restrictions,
which significantly differ from the Company's stock option awards. These models
also require subjective assumptions, including future stock price volatility and
expected time to exercise, which greatly affect the calculated values. The
Company's calculations were made using the Black-Scholes option pricing model
with the following weighted average assumptions used for grants in 2002, 2001,
and 2000, respectively: expected volatility of 224%, 200%, and 215%; risk-free
interest rates of 5.4%, 5.2%, and 6.4%,; expected lives of 10.0, 10.0, and 10.0
years; no dividend in 2002 and 2001 and $0.10 per share cash dividend in 2000.

9. EMPLOYEE BENEFIT PLAN

         The Company has a Retirement Savings Plan (the "Plan"), a defined
contribution plan adopted pursuant to Section 401(k) of the Internal Revenue
Code. The Plan is available to substantially all of the Company's employees.
Prior to November 2000, the Plan did not provide for an employer matching
contribution. The Company amended the Plan in November 2000 to match each dollar
deferred up to 3% of compensation, which is limited to $1,000 annually, per
participant. Participants vest in the Company's contribution at varying rates of
0% to 25% per year over six years. The Company contributed approximately
$167,000, $139,000 and $29,000 in 2002, 2001 and 2000, respectively.

10. RELATED PARTY TRANSACTIONS

         Two of the Company's stockholders and directors have ownership
interests in two former merchandise vendors to the Company. Merchandise
inventory purchased from these related vendors totaled $250,000 and $474,000 in
2001 and 2000, respectively. There were no purchases made in 2002.
<PAGE>


<TABLE>

                     BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

11. QUARTERLY FINANCIAL DATA (unaudited)

                                                                     FIRST       SECOND       THIRD      FOURTH
                                                                    QUARTER      QUARTER     QUARTER     QUARTER
                                                                    -------      -------     -------     -------
                                                                          (in thousands, except per share)
   <S>                                                                 <C>         <C>         <C>        <C>
   Year ended December 31, 2002
   Net Sales......................................................   $17,546     $25,763     $30,114     $35,333
   Gross profit...................................................     9,266      15,008      17,417      20,095
   Selling, marketing and distribution expenses...................    11,836      12,342      13,117      14,233
   General and administrative expenses............................     1,224       1,227       1,289       1,512
   Total operating expenses.......................................    13,060      13,569      14,406      15,745
   (Loss) income from operations..................................    (3,794)      1,439       3,011       4,350
   Net (loss) income..............................................    (2,383)        793       1,736       3,671
   Net (loss) income per share
    Basic and diluted.............................................   $ (0.28)    $  0.09     $  0.21     $  0.44
   Weighted average shares outstanding
   Basic..........................................................     8,460       8,393       8,393       8,393
   Diluted........................................................     8,460       8,404       8,393       8,393

   Year ended December 31, 2001:
   Net Sales......................................................   $16,986     $25,194     $30,204     $39,985
   Gross profit...................................................     9,106      14,431      17,320      22,358
   Selling, marketing and distribution expenses...................    12,172      13,185      12,720      14,583
   General and administrative expenses............................     1,223       1,549       1,181       1,665
   Total operating expenses.......................................    13,395      14,734      13,901      16,248
   (Loss) income from operations..................................    (4,289)       (303)      3,419       6,110
   Net (loss) income..............................................    (2,786)       (144)      1,875       3,695
   Net (loss) income per share
    Basic and diluted.............................................   $ (0.33)    $ (0.02)    $  0.22     $  0.44
   Weighted average shares outstanding
   Basic..........................................................     8,459       8,453       8,453       8,461
   Diluted........................................................     8,459       8,453       8,462       8,461

</TABLE>
<PAGE>

  Chief Executive Officer Certification

I, Andrew D. Feshbach, President and Chief Executive Officer of Big Dog
Holdings, Inc., certify that:

1.  I have reviewed this Annual Report on Form 10-K of Big Dog Holdings, Inc.,
    (the "Registrant");

2.  Based on my knowledge, this Annual Report does not contain any untrue
    statement of a material fact or omit to state a material fact necessary to
    make the statements made, in light of the circumstances under which such
    statements were made, not misleading with respect to the period covered by
    this Annual Report;

3.  Based on my knowledge, the financial statements, and other financial
    information included in this Annual Report, fairly present in all material
    respects the financial condition, results of operations and cash flows of
    the Registrant as of, and for, the periods presented in this Annual Report;

4.  The Registrant's other certifying officers and I are responsible for
    establishing and maintaining disclosure controls and procedures (as defined
    in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:

    a. designed such disclosure controls and procedures to ensure that material
       information relating to the a Registrant, including its consolidated
       subsidiaries, is made known to us by others within those entities,
       particularly during the period in which this Annual Report is being
       prepared;

    b. evaluated the effectiveness of the Registrant's disclosure controls and
       procedures as of a date within 90 days prior to the filing date of this
       Annual Report (the "Evaluation Date"); and

    c. presented in this Annual Report our conclusions about the effectiveness
       of the disclosure controls and procedures based on our evaluation as of
       the Evaluation Date;

5.  The Registrant's other certifying officers and I have disclosed, based on
    our most recent evaluation, to the Registrant's auditors and the audit
    committee of Registrant's board of directors (or persons performing the
    equivalent functions):

    a. all significant deficiencies in the design or operation of internal
       controls which could adversely affect a the Registrant's ability to
       record, process, summarize and report financial data and have identified
       for the Registrant's auditors any material weaknesses in internal
       controls; and

    b. any fraud, whether or not material, that involves management or other
       employees who have a significant role in the Registrant's internal
       controls; and

6.  The Registrant's other certifying officers and I have indicated in this
    Annual Report whether there were significant changes in internal controls or
    in other factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including any
    corrective actions with regard to significant deficiencies and material
    weaknesses.

Dated:   March 27, 2003

                                       By /s/ANDREW D. FESHBACH
                                       ----------------------------
                                          Andrew D. Feshbach
                                          Chief Executive Officer and President



<PAGE>



                      Chief Financial Officer Certification

I, Roberta J. Morris, Chief Financial Officer of Big Dog Holdings, Inc.,
certify that:

1.  I have reviewed this Annual Report on Form 10-K of Big Dog Holdings, Inc.,
    (the "Registrant");

2.  Based on my knowledge, this Annual Report does not contain any untrue
    statement of a material fact or omit to state a material fact necessary to
    make the statements made, in light of the circumstances under which such
    statements were made, not misleading with respect to the period covered by
    this Annual Report;

3.  Based on my knowledge, the financial statements, and other financial
    information included in this Annual Report, fairly present in all material
    respects the financial condition, results of operations and cash flows of
    the Registrant as of, and for, the periods presented in this Annual Report;

4.  The Registrant's other certifying officers and I are responsible for
    establishing and maintaining disclosure controls and procedures (as defined
    in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:

    a. designed such disclosure controls and procedures to ensure that material
       information relating to the a Registrant, including its consolidated
       subsidiaries, is made known to us by others within those entities,
       particularly during the period in which this Annual Report is being
       prepared;

    b. evaluated the effectiveness of the Registrant's disclosure controls and
       procedures as of a date within 90 days prior to the filing date of this
       Annual Report (the "Evaluation Date"); and

    c. presented in this Annual Report our conclusions about the effectiveness
       of the disclosure controls and procedures based on our evaluation as of
       the Evaluation Date;

5.  The Registrant's other certifying officers and I have disclosed, based on
    our most recent evaluation, to the Registrant's auditors and the audit
    committee of Registrant's board of directors (or persons performing the
    equivalent functions):

    a. all significant deficiencies in the design or operation of internal
       controls which could adversely affect a the Registrant's ability to
       record, process, summarize and report financial data and have identified
       for the Registrant's auditors any material weaknesses in internal
       controls; and

    b. any fraud, whether or not material, that involves management or other
       employees who have a significant role in the Registrant's internal
       controls; and

6.  The Registrant's other certifying officers and I have indicated in this
    Annual Report whether there were significant changes in internal controls or
    in other factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including any
    corrective actions with regard to significant deficiencies and material
    weaknesses.

Dated:   March 27, 2003

                                                   By /s/ROBERTA J. MORRIS
                                                   ----------------------------
                                                       Roberta J. Morris
                                                       Chief Financial Officer


<PAGE>


SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 2001 AND 2002


<TABLE>
                                                                Additions
                                                                ---------
                                                 Balance at     Charged to      Write-offs,
                                                 ----------     ----------      -----------
                                                 Beginning of   Costs and       Net of         Balance at
                                                 ------------   ---------       ------         ----------
                                                 Year           Expense         Recoveries     End of Year
                                                 ----           -------         ----------     -----------
<S>                                                 <C>           <C>              <C>             <C>
Year ended December 31, 2000
Reserves and allowances deducted from
asset accounts:
Allowance for uncollectable accounts
receivable.............................          $ 91,000      $  33,000         $(7,000)        $ 117,000


Year ended December 31, 2001
Reserves and allowances deducted from
asset accounts:
Allowance for uncollectable accounts
receivable..............................        $ 117,000      $ 473,000         $(2,000)        $ 588,000


Year ended December 31, 2002
Reserves and allowances deducted from
asset accounts:
Allowance for uncollectable accounts
receivable..............................        $ 588,000      $  68,000      $ (455,000)        $ 201,000
</TABLE>

<PAGE>

                               INDEX TO EXHIBITS

Exhibit No.           Description
   3.1              Amended and Restated Certificate of Incorpration (1)
   3.1A             Certificate of Correction (1)
   3.2              Amended and Reinstated Bylaws (2)
   4.1              Reference is hereby made to Exhibits 3.1, 3.1A, and 3.2
   4.2              Specimen Stock Certificate (1)
  10.1              Loan and Security Agreement among Big Dog Holdings, Inc.,
                    Big Dog USA, Inc. and CSI Acquistion Corporation as
                    borrowers and Wells Fargo Retail Finance LLC as lender
                    dated October 23, 2001 (3)
  10.10             Amended and Restated 1997 Performance Award Plan (5)
  10.10A            Form of Employee Nonqualified 1997 Performance Award
                         Plan (1)
  10.10B            Terms and Conditions for Non-Qualified Options
                         Granted under the Amended and Restated 1997
                         Performance Award Plan (4)
  10.10C            From of Eligible Director Non-Qualified Stock Option
                         Agreement (4)
  10.11             Lease between Big Dog USA, Inc. and The Prudential
                         Insurance Company of America dated November 4,
                         1997 (2)
  10.12             Lease Agreement between Big Dog Holdings, Inc. and
                         S.V.B. Properties dated as of June 1, 1994, as
                         amended by Lease Agreement dated as of
                         December 1, 1994, Second Lease Amendment dated as
                         of March 1, 1996, Third Lease Amendment between
                         Big Dog Holdings and Freeland Realty LLC dated as
                         of July 22, 1996, (1) and Fourth Lease Amendment
                         dated December 18, 1998 (4)
  10.14             Form of Idemnification Agreement (1)
  21.1              List of Subsidiaries of Big Dog Holdings, Inc. (6)
  23.1              Independent Auditors' Consent
  24.1              Power of Attorney (included in signature page)
  99.1              Certification of Chief Executive Officer
                         Pursuant to 18 U.S.C. Section 1350,
                         as Adopted Pursuant to Section 906
                         of the Sarbanes-Oxley Act of 2002
  99.2              Certification of Chief Financial Officer Pursuant
                         to 18 U.S.C. Section 1350, as Adopted
                         Pursuant to Section 906 of the
                         Sarbanes-Oxley Act of 2002

(1)  Incorporated by reference from the Company's S-1 Registration Statement
     (No. 333-33027), as amended, which became effective September 25, 1997.

(2)  Incorporated by reference from the Company's Annual Report on Form 10-K
     for the year ended December 31, 1997.

(3)  Incorporated by reference from the Company's Quarterly Report on Form 10-Q
     filed November 14, 2001.

(4)  Incorporated by reference from the Company's Schedule TO filed July 31,
     2000.

(5)  Incorporated by reference from the Company's Annual Report on Form 10-K for
     the year ended December 31, 1998.

(6)  Incorporated by reference from the Company's Annual Report on Form 10-K
     for the year ended December 31, 2001.