The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with its unaudited interim condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto as of and for the fiscal year ended April 30, 2021.

FORWARD-LOOKING STATEMENTS

The discussion contained herein contains "forward-looking statements" that involve risk and uncertainties. These statements may be identified by the use of terminology such as "believes," "expects," "may," "should" or anticipates" or expressing this terminology negatively or similar expressions or by discussions of strategy. The cautionary statements made in this Form 10-Q should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-Q. The Company's actual results could differ materially from those discussed in this report.

BUSINESS AND PLAN OF OPERATION

Lux Amber, Corp., based in Frisco, Texas, is an international specialty chemical company with many products that are friendly to the environment. The common description is "green chemicals." The Company has degreed chemists on staff with years of successful experience in the specialty chemical industry. The term "specialty chemicals" is best defined by those chemicals whose formulas allow the chemical compounds to perform a specific function for a class of customers. The Company's products have been used successfully in a diverse array of applications, including:

  · Chemicals to protect surfaces in asphalt handling equipment




  · Chemicals to control the reproduction of pests




          ·   Military Chemical, Biological, Radiological, Nuclear, and Explosives
              (CBRNE) sites




  · Commercial nuclear power plants and nuclear-powered ships




  · Hazardous toxic industrial chemical and toxic industrial material clean-up

The Company's corporate telephone number is 972-214-9764. The Company's stock symbol is LXAM.

LAC has three (3) wholly owned subsidiaries (collectively with LAC, the "Company"): Worldwide Specialty Chemicals, Inc. ("WSC"), Industrial Chem Solutions, Inc. ("ICS"), and Safeway Pest Elimination, LLC, ("SPE"), which was formed July 16, 2018. LAC and its subsidiaries serve as both producers and distributors of environmentally safe, specialty chemicals. The Company formerly held a 49% interest in PCNM LLC, a Service-Disabled Veteran owned small business that sold the Company's products to government agencies. PCNM was legally dissolved on July 31, 2020.

The Company's products utilize all-natural and renewable resources, contain no dangerous chemicals or additives, and offer "green" solutions to its customers. ICS' product line includes asphalt release agents, industrial cleaners, environmental remediation gels, odor control agents, and consumer friendly cleaners for a wide range of uses, including construction, environmental remediation, hazardous materials clean-up, nuclear decommissioning, industrial cleaning, and odor control. SPE's products are designed for the elimination and control of pests.

LIQUIDITY AND CAPITAL RESOURCES

During the three-month period ended July 31, 2021, the primary sources of liquidity were cash flows from financing activities, and in particular, issuance of stock and promissory notes.

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As of July 31, 2021, the Company had total assets of $3,457,896 consisting of current assets of $347,847, $189,768 in receivables, $151,529 in inventory, $6,550 in other current assets, and long-term assets of $2,309,953 in goodwill and other intangibles, $478,117 in fixed assets, $76,965 on other long-term assets, and $295,014 in right of use assets. As of April 30, 2021, the Company had total assets of $3,353,460, consisting of current assets of $112,982 in receivables, $137,211 in inventory, $7,960 in prepaid expenses and other current assets and long-term assets. These gains in current assets are due to the company's sales increase of 45.87% over the same quarter of the previous comparable period, which in turn lead to an increase in account receivables. The increase in inventory is a result of the company preparing for a comparable increase in sales of the succeeding quarter. The sales increase and the increase in the gross profit allowed the company to obtain a higher percentage return on its current and long-term assets.

The company has made additional acquisitions of products and assets. Since that acquisition has judicially added assets, which combined, provide the basic application equipment and rolling stock to support revenues significantly larger than the revenues produced in May, June, and July of the previous year. In the current quarter, those combined assets produced revenues which are forty-six [46] percent higher than the previous quarter. In June of 2021 the company's ability to increase its revenue has been enhanced by the addition of a Corporate President who has a broad network within the industries that the company serves; therefore, it is the opinion of management that the rate of growth in revenues and margins from the asset base will be sustained.

The increase in total assets was primarily due to the increase in its account receivable and inventory as a result of slower customer pay times due to cash flow issues industry wide as a result of COVID-19 and a buildup of inventory to accommodate the increase in sales.

As of July 31, 2021, the Company had total liabilities totaling $2,621,038 including $1,832,863 in current payables and accrued expenses, $169,110 in related party payables, $240,627 notes payable, $104,752 in Paycheck protection program loans, and $273,685 in right of use liabilities. As of April 30, 2021, the Company had total liabilities totaling $2,468,547 including $1,756,156 in accounts payable and accrued expenses, $208,756 in related party payables, $127,624 in notes payable, and $271,259 in lease liabilities, and $104,752 in Paycheck protection program loans.

As July 31, 2021, the Company had an accumulated stockholders' equity of $836,858 and $884,913 at April 30,2021. The increase is result of the items discussed below.

RESULTS OF OPERATIONS

Comparison of the three-month period ended July 31, 2021 and July 31, 2020.

Revenues

For the three-month period ended July 31, 2021, the Company had revenues of $423,828, and $290,260 for the same period in 2020. The increase in sales of $133,568 is primarily the result of 1) expanded business with legacy customers to service additional Hot Mix Asphalt Plants under their ownership; 2) increase in sales price per unit; 3) addition of new customers.

Cost of Goods Sold decreased as a percentage of revenues due to a change in the mix of products sold during the period and increases in the gross selling prices on all the products offered by the company. The increase in selling prices ranged from thirty-five [35] percent to one hundred [100] percent.

Operating Expenses

For the three-month period ended July 31, 2021, the Company's operating expenses totaled $538,095 which included $153,215 in product delivery expenses, $336,158 in general and administrative expenses, $7,102 in selling expenses and $41,620 in depreciation of assets. For the three-month period ended July 31, 2020, the Company had operating expenses that totaled $691,085 which included $141,981 in product delivery expenses, $492,329 in general and administrative expenses, $19, 491 in selling expenses and $37, 284 in depreciation.

The decrease is primarily due to 1) Less travel cost due to more efficient use of mobile assets; 2) Shifting the cost burden of delivery to the customer; 3) Improved cost accounting processes; 4) Improved purchasing processes by sourcing raw materials from multiple vendors and buying in larger quantities.

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GOING CONCERN

The accompanying consolidated financial statements are presented on a going concern basis. The Company's financial condition raises substantial doubt about the Company's ability to continue as a going concern. The Company has limited cash, its current liabilities exceed its current assets as of July 31, 2021 and has incurred reoccurring losses from operations during the three months ended July 31, 2021. The Company is relying on capital from investors to meet the majority of its operating expenses.

OFF-BALANCE SHEET ARRANGEMENTS

There are no off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other persons that have, or may have, a material effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources of the Company.

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