SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Note 16. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY

The Company operates in two segments:

(a) Development and marketing of two lines of energy and water conservation products (as shown under the column heading “EWCP” below), which consists of a (i) liquid swimming pool blanket which saves energy and water by inhibiting evaporation from the pool surface, and (ii) food-safe powdered form of the active ingredient within the liquid blanket and which is designed to be used in still or slow moving drinking water sources.

(b) Manufacture of biodegradable polymers and chemical additives used within the petroleum, chemical, utility and mining industries to prevent corrosion and scaling in water piping (as shown under the column heading “TPA” below). These chemical additives are also manufactured for use in laundry and dish detergents, as well as in products to reduce levels of insecticides, herbicides and fungicides.

The accounting policies of the segments are the same as those described in Note 2, Significant Accounting Policies. The Company evaluates performance based on profit or loss from operations before income taxes, not including nonrecurring gains and losses and foreign exchange gains and losses.

The Company’s reportable segments are strategic business units that offer different, but synergistic products and services. They are managed separately because each business requires different technology and marketing strategies.

Year ended December 31, 2011:

	EWCP			TPA		Total
Revenue	$	1,032,596		$	14,486,039	$	15,518,635
Interest expense		69,273			26,476		95,749
Depreciation		43,597			287,342		330,939
Income tax expense		-			1,145,632		1,145,632
Segment profit (loss)		(1,788,841	)		1,971,831		182,990
Segment property, equipment and leaseholds		6,006,733			2,198,781		8,205,514
Expenditures for segment assets		726,512			68,336		794,848

Year ended December 31, 2010:

	EWCP			TPA		Total
Revenue	$	936,832		$	10,554,569	$	11,491,401
Interest expense		75,951			1,265		77,216
Depreciation		46,337			313,205		359,542
Income tax expense		-			690,180		690,180
Segment profit (loss)		(1,634,570	)		1,444,490		(190,080	)
Segment property, equipment and leaseholds		5,449,885			2,417,787		7,867,672
Expenditures for segment assets		479,811			134,091		613,902

Sales by territory are shown below:

	2011		2010
Canada	$	512,499	$	357,646
United States and abroad		15,006,136		11,133,755
Total	$	15,518,635	$	11,491,401

The Company’s long-lived assets (property, equipment, leaseholds and patents) are located in Canada and the United States as follows:

	2011		2010
Canada	$	6,214,939	$	5,675,065
United States		2,198,781		2,417,787
Total	$	8,413,720	$	8,092,852

Three customers accounted for $9,702,119 (63%) of sales made in 2011 (2010 - $7,033,072 or 61%).