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 transitional period ended April 30, 2020.





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 currently operates from a 12,000 square foot chemical production and distribution facility in Frisco, TX. Most of the chemical formulas are protected by patents or trade secrets. For certain specific markets, the Company provides customized applications systems that assure safe and proportioned product delivery. The Company may elect to apply for patents on one or more of the application systems.

The Company's principal executive offices are located at 145 Rose Lane, Suite 102, Frisco, TX 75036. The Company's corporate telephone number is 972-214-9764. The Company's stock symbol is LXAM.

The Company has three wholly owned subsidiaries: Worldwide Specialty Chemicals, Inc. ("WSCI"), Industrial Chem Solutions, Inc. ("ICS"), and Safeway Pest Elimination, LLC ("SPE"). Both ICS and SPE serve as both a producer and distributor of environmentally safe, specialty chemicals. The Company and its subsidiaries are located at 145 Rose Lane, Suite 102, Frisco, TX 75036.









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ICS' 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 refines, packages and markets compound derived from natural sources that are formulated to eliminate and/or control pests.

LIQUIDITY AND CAPITAL RESOURCES

During the nine-month period ended January 31, 2021, the primary sources of liquidity were cash flows from financing activities, and in particular, convertible debentures.

As of January 31, 2021, the Company had total assets of $3,435,192 consisting of $39,274 in receivables, $156,618 in inventory, $37,832 in other current assets, and other long-term assets of $35,165, goodwill of $2,294,952, other intangibles of $15,000, fixed assets of $557,733, and $296,618 in right of use assets. As of April 30, 2020, the Company had total assets of $3,612,474, consisting of current assets of $49,185 in cash, $106,876 in receivables, $131,205 in inventory, $9,481 in prepaid expenses and other current assets. The decrease in total assets of $177,282, was primarily due to the decreases in its cash of $49,185,receivables of $67,602, and amortization of right of use assets of $127,197 which were offset by an increase in inventory of $25,413 as a result of decreased customer demand due to slowing of construction in the winter months.

As of January 31, 2021, the Company had total liabilities totaling $2,124,382 including $1,721,943 in current payables and accrued expenses, $60,820 in related party payables, $31,620 in notes payable, and $309,999 in right of use liabilities. As of April 30, 2020, the Company had total liabilities totaling $2,397,838 including $1,094,717 in accounts payable and accrued expenses, $85,603 in related party payables, $762,889 in notes payable and $454,629 in right of use liabilities and long-term liabilities. The decrease in liabilities of $165,321, was largely the result of a decrease in notes payable of $730,000 due to debenture conversions and right of use liabilities of $117,045 from scheduled payments, with the remainder being offset by an increase in operating expenses in accounts payable and accrued expenses.

On January 31, 2021, the Company had stockholders' equity of $1,310,810 and $1,214,636 on April 30, 2020. The decrease is result of the items discussed above and below.





RESULTS OF OPERATIONS

Comparison of the three and nine-month periods ended January 31, 2021 and January 31, 2020.





Revenues

For the nine-month period ended January 31, 2021, the Company had revenues of $816,598, and $845,047 for the same period in 2020. The decrease in sales is primarily the result of the decrease in SPE's sales by approximately $210,000 offset by an increase in ICS's sales of approximately $113,500. SPE was selling a proprietary product to a single customer. Due to a change in the marketing strategy of the single customer, that customer's requirement for the product was discontinued. From time-to-time there will be other opportunities for the Company to produce custom products for specific customers, which may not have continuing revenues from one financial period to another.

For the three-month period ended January 31, 2021, the Company had revenues of $130,183, and $119,451 for the same period in 2020. The increase in sales is primarily the result of the decrease in SPE's sales by approximately $55,440 offset by an increase in ICS's sales of approximately $30,000 and LAC's sales of $14,800. SPE was selling a proprietary product to a single customer. Due to a change in the marketing strategy of the single customer, that customer's requirement for the product was discontinued. From time-to-time there will be other opportunities for the Company to produce custom products for specific customers, which may not have continuing revenues from one financial period to another.









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Operating Expenses

For the nine-month period ended January 31, 2021, the Company's operating expenses totaled $1,628,240, and $3,038,127 for the same period in 2020. The decrease of $1,409,887 is primarily related to 1) a decrease in stock compensation expense; 2) lower selling expenses; 3) offset by an increase in product delivery costs.

For the three-month period ended January 31, 2021, the Company's operating expenses totaled $188,495, and $1,943,745 for the same period in 2020. The decrease of $1,755,250 is primarily related to 1) a decrease in stock compensation expense; 2) lower selling expenses 3) offset by an increase of product delivery costs.





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, 2021 and has incurred reoccurring losses from operations during the nine months ended January 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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