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 Dothan, Alabama, 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 214-676-5475. 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'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 nine-month period ended January 31, 2022, 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 January 31, 2022, the Company had total assets of $3,150,976 consisting of current assets of $93,829, which included $27,480 in cash, $45,279 in receivables, $16,103 in inventory, $4,967 in prepaid expenses and other current assets, and long-term assets of $2,309,953 in goodwill and other intangibles, $434,110 in fixed assets, $18,270 in other long-term assets, and $294,814 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 of $2,309,953 in goodwill and other intangibles, and $512,697 in fixed assets and $272,657 in right of use assets.

As of January 31, 2022, the Company had total liabilities totaling $2,974,722 including $2,354,123 in current payables and accrued expenses, $211,442 in related party payables, $21,076 notes payable, $104,752 in Paycheck Protection Program loans, and $283,329 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 January 31, 2022, the Company had an accumulated stockholders' equity of $176,253 and $884,913 at April 30,2021. The decrease is result of the items discussed below.





RESULTS OF OPERATIONS

Comparison of the three and nine-month periods ended January 31, 2022 and January 31, 2021.





Revenues

For the nine-month period ended January 31, 2022, the Company had revenues of $1,112,022, and $816,598 for the same period in 2021. The increase in sales is primarily of an increase in ICS's sales of approximately $295,424 due to an increase in selling price and new customers. The increase in the cost of goods sold is due to an increase in sales volume.

For the three-month period ended January 31, 2022, the Company had revenues of $248,944, and $130,183 for the same period in 2021. The increase in sales is primarily the result of an increase in ICS's sales of approximately $118,606 due to an increase in selling price and new customers. The increase in the cost of goods sold is due to an increase in sales volume.





Operating Expenses

For the nine-month period ended January 31, 2022, the Company had total operating expenses of $2,089,921 which included $24,629 in product delivery expenses, $1,944,324 in general and administrative expenses, $11,607 in selling expenses, and $109,362 in depreciation and amortization of assets. For the nine-month period ended January 31, 2021, the Company had total operating expenses of $1,628,240 which included $404,895 in product delivery expenses, $1,038,304 in general and administrative expenses, $70,450 in selling expenses, and $114,591 in depreciation of assets. The increase in operating expenses is primarily related to 1) increase in stock compensation expense; 2) offset by lower selling expenses; 3) lower product delivery costs.

For the three-month period ended January 31, 2022, the Company had total operating expenses of $988,772 which included $15,475 in product delivery expenses, $874,730 in general and administrative expenses, $6,683 in selling expenses, and $91,884 in depreciation and amortization of assets. For the three-month period ended January 31, 2021, the Company had total operating expenses of $188,495 which included $103,629 in product delivery expenses, $10,547 in general and administrative expenses, $34,695 in selling expenses, and $39,624 in depreciation of assets. The increase in operating expenses is primarily related to 1) increase in stock compensation expense; 2) offset by lower selling expenses; 3) lower product delivery costs.



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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 January 31, 2022 and has incurred reoccurring losses from operations during the nine months ended January 31, 2022. 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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