NOTE F - GEOGRAPHIC and OTHER INFORMATION

Through its Guardian Laboratories division the Company manufactures and markets cosmetic ingredients, pharmaceuticals, medical lubricants, and specialty industrial products. It also conducts research and development, primarily related to the development of new and unique cosmetic ingredients. The Company’s R&D department

not

only develops new products but also modifies and refines existing products, with the goal of expanding the potential markets for the Company’s products. Many of the cosmetic ingredients manufactured by Guardian, particularly its Lubrajel line of water-based moisturizing and lubricating gels, are currently used by many of the major multinational personal care products companies.

The Company operates in

one

business segment. The Company’s products are separated into

four

distinct product categories: cosmetic ingredients, pharmaceuticals, medical products, and industrial products. Each product category is marketed differently. The cosmetic ingredients are marketed through a global network of marketing partners and distributors. These marketing partners purchase product outright from the Company and provide the marketing functions for these products on behalf of the Company. They in turn receive their compensation for those efforts by re-selling those products at a markup to their customers. This enables the Company to aggressively have its products marketed without the high cost of maintaining its own in-house marketing staff. The Company has written marketing arrangements with only

one

of its global distributors, ASI, and that contract renews every

two

years unless cancelled for any reason by either party at least

days prior to the expiration of the

two

-year marketing period in effect at that time. The current marketing period with ASI ends on

December 31, 2021.

The Company’s other marketing partners are

not

under any contractual obligation to market the Company’s cosmetic ingredients, and the Company has the ability to cancel those marketing arrangements at any time upon reasonable notice. All sales of the Company’s cosmetic ingredients are final other than product later determined to be defective, and the Company does

not

make any sales on consignment.

prior regulatory approval is needed by the Company to sell any products other than its pharmaceutical products. The end users of its products

may

not

need regulatory approvals, depending on the intended claims and uses of those products.

The pharmaceutical products are

two

urological products that are sold to end users primarily through distribution agreements with the major drug wholesalers. For these products, the Company does the marketing, and the drug wholesalers supply the product to the end users, such as hospitals and pharmacies. The Company’s marketing efforts for these products are currently centered around the corporate web site as well as a separate web site developed specifically for Renacidin, which is its most important drug product. In

2018

the Company began promoting Renacidin through internet advertising. Both of these products are drug products that required the Company to obtain regulatory approval before marketing.

The medical products are

not

pharmaceutical products. They consist primarily of medical lubricants, which are marketed by the Company directly to manufacturers that incorporate them into urologic catheters and other medical devices and products that they sell. These products are distinguished from the pharmaceutical products in that, unlike the pharmaceutical products, the Company is

not

required to obtain regulatory approval prior to marketing these products. Approvals are the responsibility of the company that markets the products in which the Company’s products are used, such as medical devices. However, the Company is responsible for manufacturing these products in accordance with current Good Manufacturing Practices for medical devices.

The industrial products are also marketed by the Company directly to manufacturers, and generally do

not

require that the Company obtain regulatory approval. However, the manufacturers of the finished products

may

have to obtain such regulatory approvals before marketing these products.

The following tables present the significant concentrations of the Company’s sales. Although a significant percentage of Customer A’s purchases from the Company are sold to foreign customers, in table “b” below all sales to Customer A are included in “United States” sales revenue because all shipments to Customer A are delivered to Customer A's warehouses in the U.S.

In addition, there are

four

customers for the Company’s medical products that take delivery of their shipments in the U.S. but potentially ship some of that product to manufacturing facilities outside the U.S. Since the Company makes those shipments to U.S. locations, sales to those customers are also included in the “United States” revenue number in the table below.

(a)

Net Sales

	Years ended December 31,
	2019			2018
Cosmetic Ingredients	$	6,383,224		$	7,529,487
Pharmaceuticals		5,238,226			4,516,537
Medical Products		2,971,243			2,238,813
Industrial and other		161,138			173,218
Gross Sales		14,753,831			14,458,055
Less: Discounts and allowances		(1,154,747	)		(1,012,490	)
Net Sales	$	13,599,084		$	13,445,565

(b)

Geographic Information

	Years ended December 31, .
	2019		2018
United States	$	11,118,629	$	10,931,681
Other countries		2,480,455		2,513,884
Net Sales	$	13,599,084	$	13,445,565

(c)

Gross Sales to Major Customers

	Years ended December 31,
	2019		2018
Customer A	$	5,349,381	$	6,067,821
Customer B		2,390,911		2,049,190
All other customers		7,013,539		6,341,044
	$	14,753,831	$	14,458,055