Friday Dog : Q1 ended March 31, 2022

FRIDAY'S DOG HOLDINGS INC.

(Formerly Cerro Mining Corp.)

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED MARCH 31, 2022

FRIDAY'S DOG HOLDINGS INC. MANAGEMENT DISCUSSION AND ANALYSIS For the Three Months Ended March 31, 2022

General

The purpose of this Management Discussion and Analysis ("MD&A") is to explain management's point of view regarding the past performance and future outlook of Friday's Dog Holdings Inc. ("FDHI" or the "Company"), formerly Cerro Mining Corp. ("Cerro"). This report also provides information to improve the reader's understanding of the financial statements and related notes as well as important trends and risks affecting the Company's financial performance, and should therefore be read in conjunction with the Company's unaudited condensed interim consolidated financial statements for the three months ended March 31, 2022 ("Financial Statements").

All information contained in this MD&A is current as of June 3, 2022 unless otherwise stated.

The Financial Statements and related notes and all financial information in this MD&A has been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and all dollar amounts are expressed in US dollars unless otherwise indicated.

Overview

FDHI is a company incorporated on February 27, 1987 under the Business Corporations Act (British Columbia). The Company's principal place of business is 710 - 1030 West Georgia St., Vancouver, BC V6E 2Y3. The Company is a public company and its shares are listed on the TSX Venture Exchange ("TSXV") under the symbol "FRDY".

The Company's principal business activity is to create premium pet care products that are formulated with natural, ethically sourced non-toxic ingredients; and are non-GMO and sulfate, paraben, and cruelty free for direct business to consumer sales. The Company will also be introducing complimentary premium products in the grooming and care categories for dogs, as well as lifestyle branded items for dogs and their owners. The first products to be rolled out as part of FDI's high margin, diversified product portfolio will be its pet care merchandise targeting a diversity of dog breeds. The initial pet care product portfolio consists of 9 stock keeping units ("SKU") in total which are focused on several product categories: wash and care products, dental care, and premium treats.

Reverse-Takeover Transaction with Friday's Dog Inc.

On February 25, 2022, Cerro acquired all of the issued and outstanding common shares of Friday's Dog Inc. (the "FDI Shares") by way of a reverse takeover that was completed through a three-cornered amalgamation (the "Transaction") and following the completion of the Transaction the common shares of the Company were listed on Tier 2 of the TSXV.

The Transaction was completed by way of a three-cornered amalgamation among Cerro, FDI and a wholly owned subsidiary of Cerro ("Cerro Subco"). Pursuant to the Transaction, FDI amalgamated with Cerro Subco and the holders of FDI Shares received one common share of the resulting issuer of the Transaction (a "Resulting Issuer Share") for every one FDI Share held. The Company issued 43,923,423 Resulting Issuer Shares for every one FDI Share held. The amalgamated company became a wholly owned subsidiary of the FDHI. On closing of the Transaction, Cerro changed its name to FDHI.

In connection with the Transaction, the Company completed a concurrent financing of 18,552,000 subscription receipts to raise aggregate gross proceeds of $9,276,000 (the "Private Placement"), with each subscription receipt converted into one share and one-half of one warrant of the Company immediately prior to the completion of the Transaction. Each warrant entitles the holder thereof to acquire one common share of the Company at a price of $1.00 for a period of two years.

Related party Disclosure Related to the Transaction

Andrew Bowering, director of the Company, was also a shareholder, director and chief financial officer of FDI. Mr. Bowering owned 1,450,000 FDI Shares. Anthony Paterson, a director of the Company, was also a shareholder of FDI and owned 575,000 FDI Shares. The Transaction was therefore considered a 'related party transaction' for the purposes of Multilateral Instrument 61- 101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company relied on the exemptions from the formal valuation and minority shareholder approval requirements provided under MI 61-101.

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FRIDAY'S DOG HOLDINGS INC. MANAGEMENT DISCUSSION AND ANALYSIS For the Three Months Ended March 31, 2022

As compensation for the introduction of FDI to Cerro by a finder, the Company issued to the finder 1,750,000 common shares at closing of the Transaction. The finder was not a Non-Arm's Length Party (as such term is defined in the policies of the TSXV) of the Company. The finder's fee was approved by the TSX.

Corporate Goals

Management believes that the demand for premium dog care products is rising as the heightened awareness of environmental issues has increased the consumer demand for manufactured goods that reduce pets' exposure to harmful chemicals and toxic ingredients. In addition, the pet industry has witnessed rapid growth due to the humanization of dogs. Many owners consider their dogs "members of the family" and purchase supplies that are designed to cater to their health and hygiene needs. Wash and care merchandise such as pet shampoo have become essential products to keep animals clean and hygienic and to maintain the shine and brightness of their coat. Other wash and care products also prevent the common skin problems related to germs, fleas, and ticks, among others. All these factors are anticipated to bode well for pet wash and care product demand.

According to a recent report published by Allied Market Research, an arm's length party to FDI, the global pet grooming products market size was valued at US $3.8 billion in 2017 and is projected to reach US$5.5 billion in 2025. The global pet shampoo and conditioner market is expected to grow at a Compound Annual Growth Rate ("CAGR") of 5.0% between 2019 and 2025, and with North America dominating with a CAGR of 3.9% in terms of value.

The US pet grooming products market accounts for nearly 30% of the global market. The household segment is expected to register the fastest CAGR of 6.7% from 2019 to 2025, owing to the increasing adoption of companion animals across the globe.

Historically, the pet care industry is one of the few that is considered recession proof, because bad economic times have not reduced revenues. Pet-care spending even grew during the past two recessions: 29% during the 2001 recession and 17% during the 2008-09 recession. Despite the economic slowdown experienced worldwide due to the COVID-19 pandemic, the pet care products industry has adapted through increased online marketing.

The online platform or distribution channel has witnessed exponential growth due to the rise in the penetration of the internet and smartphones and the development of the e-commerce industry. In 2019, retail e-commerce sales worldwide amounted to US $3.53 trillion and e-retail revenues are projected to grow to US$6.54 trillion in 2022. In the US, revenue from online sales are projected to at least double by 2024.

In addition to e-commerce through its' corporate website, FDI will market the products on the Amazon sales platform which is considered an essential part of the success of any direct to consumer business model. The Company will also utilize home televised shopping channels such as QVC which offer distinctive entrepreneurial brands and products such as those to be sold by FDI. QVC customers are remarkably brand loyal, as much as 92% are repeat customers. The Company has made a strategic shift to focus on sustainable growth, and has taken decisive action to reduce cash burn taking measures to enhance both short and long-term liquidity including pausing non-critical capital expenditures and lowering general & administrative spending with the aim of extending its cash runway and establishing a path towards profitability.

The Company provides the following operational updates following the changes in corporate strategy as it continues to progress on previously announced milestones:

• Friday's Dog has successfully completed the previously announced e-commerce soft launch of its nine commercial products receiving the anticipated welcome for its product line-up. This line-up consists of five
• 1. non-sulphidesbottled shampoo and conditioner items, one (1) oral rinse and three (3) flavored treat pouches.
• The Company anticipates its products to be launched as planned on Amazon's sales platform by the end of May, 2022 and intends to continue working with an established agency partner to optimize ROAS and revenue.
• The Company intends to continue to pursue televised home shopping sales, PR strategies and intends to reduce spending on paid media, and social media advertisement due to increased media costs and current market conditions. Friday's Dog intends to continue to collaborate with expert agency partners in developing new marketing channels.

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FRIDAY'S DOG HOLDINGS INC. MANAGEMENT DISCUSSION AND ANALYSIS For the Three Months Ended March 31, 2022

• The Company expects to have the full launch of products by mid-summer, following which the Company intends to shift the majority of its focus into retail distribution, with the goal of being retail-ready by Q1 2023.
• The Company pleased to announce the launch of a pilot program to test markets within professional grooming and boarding facilities, as well as a partnership with a reputable animal charity with in-person events and activations.

Corporate Activities

In February 2022, immediately prior to the closing of the Transaction, the convertible debentures totaling $6,300,000 issued in fiscal 2021 and accrued interest totaling $425,490 were converted into 19,215,673 common shares of FDI at a price of $0.35 per share.

In May 2022, the Company appointed Jeremy Ross as Chief Executive Officer and President, in place of Richard Scheiner effective immediately. Mr. Ross has over 24 years of experience in venture capital financings and serving in various roles for a number of successful public companies. Jeremy was a director and consultant for Fission Uranium Corp. and Fission Energy Corp. (TSX Venture Top 50 Company). He was also the head of corporate development for Able Auctions and Smart Tire systems, both of which graduated from the OTC-BB to the NYSE. In connection with Mr. Ross's appointment, the Company's wholly owned subsidiary Friday's Dog Inc. terminated the employment contract of Mr. Scheiner in accordance with the terms of his agreement.

The Company also appointed Chelsea Rusche as Chief Operations Officer in place of outgoing COO Richard Scheiner. Chelsea has been instrumental in the development of major operational channels for the Company She is a Design Operations professional with over 14 years of improving digital and physical operations systems and workflows for companies seeking rapid growth. She also brings her significant experience in e-commerce and retail consumer food clients in niche industry scaling EDI, and the development and strategizing of 3PL integration to Friday's Dog.

Selected Quarterly Information

All financial information in this MD&A has been prepared in accordance with IFRS. The following financial data is derived from the Financial Statements:

		For the three months ended
		March 31,
		2022	2021
		$	$
	Operating expenses	(2,111,415)	(560,305)
	Other income (expenses)	(13,927,044)	(317,048)
	Net income (loss)	(16,038,459)	(877,353)
	Earnings (loss) per share (basic)	(0.31)	(0.04)
		As at March	As at March
		31, 2022	31, 2021
		$	$
	Working capital	10,487,081	429,856
	Total assets	11,076,607	963,131
	Total liabilities	589,526	3,118,275

For the year ended December 31, 2021, the Company identified payments made to certain vendors and to a former officer of the Company. The payments related to purported equipment and product purchases and research activities. The Company has determined these payments represent no economic benefit and are considered a misappropriation of assets in the amount of $742,798 (US$600,000). The Company is currently reviewing its legal options and is attempting to recover these payments.

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FRIDAY'S DOG HOLDINGS INC. MANAGEMENT DISCUSSION AND ANALYSIS For the Three Months Ended March 31, 2022

Operations

As a pet care product company in the development stage, the Company has yet to generate any revenue from its planned operations and has, to date, incurred net losses from operating and administrative expenses.

The Company's operating expenses for the three months ended March 31, 2022 totalled $2,111,415 (March 31, 2021

• $560,305). The table below details the changes in major expenditures for the three months ended March 31, 2022 as compared to the corresponding period ended March 31, 2021:

Expenses	Increase / Decrease	Explanation for Change
	in Expenses
Accretion expenses	Increase of	Increased due to convertible debentures financing closed in April
	$1,165,093	2021.
Consulting fees	Increase of $77,344	Increased due to engaging new consultants, appointing new
		management, and increases in certain current consultant's
		compensation.
Marketing	Increase of $92,123	Increased due to incurring marketing fees for creating market
		awareness.

As at March 31, 2022, the Company had not yet achieved profitable operations and has accumulated losses of $22,787,770 (December 31, 2021 - $6,749,311) since inception. These losses resulted in a net loss per share (basic and diluted) for the three months ended March 31, 2022 of $0.31 (March 31, 2021 - $0.04).

Summary of Quarterly Results

The following selected quarterly financial information is derived from the financial statements of the Company.

	1st Quarter	4th Quarter	3rd Quarter	2nd Quarter
Three months ended	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021
	$	$	$	$
Revenue	-	-	-	-
Loss and comprehensive loss	(16,038,459)	(352,922)	(1,040,087)	(275,456)
Loss per share - basic and
diluted	(0.31)	(0.01)	(0.04)	(0.01)
	1st Quarter	4th Quarter	3rd Quarter
Three months ended	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020
	$	$	$
Revenue	-	-	-
Loss and comprehensive loss	(877,353)	(508,084)	(1,673,750)
Loss per share - basic and
diluted	(0.04)	(0.02)	(0.07)

Variances quarter over quarter can be explained as follows:

• In the quarter ended Mar 31, 2022, the Company recorded accretion expenses of $1,165,093 and listing expenses of $14,182,194 in connection to the Transaction.

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