Segmented, Significant Customer Information and Economic Dependency.

6 Months Ended

Jun. 30, 2012

Notes to Financial Statements

Note 12. 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 (“BCPA’s”) used by the petroleum, chemical, utility and mining industries to prevent corrosion and scaling in water piping. This product can also be used in detergents to increase biodegradability and in agriculture to increase crop yields by enhancing fertilizer uptake.

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.

Six months ended June 30, 2012:

	EWCP			BPCA		Total
Revenue	$	548,333		$	8,407,467	$	8,955,800
Interest revenue		352			9		361
Interest expense		30,647			30,767		61,414
Depreciation and amortization		484,831			126,955		611,786
Segment profit (loss)		(1,362,229	)		1,118,890		(243,339	)
Segment assets		5,798,357			2,087,331		7,885,710
Expenditures for segment assets		70,028			15,504		85,532

Six months ended June 30, 2011:

	EWCP			BPCA		Total
Revenue	$	686,567		$	7,600,975	$	8,287,542
Interest revenue		-			-		-
Interest expense		36,500			3,589		40,089
Depreciation and amortization		21,812			141,533		163,345
Segment profit (loss)		(868,823	)		1,401,664		532,841
Segment assets		6,204,106			2,303,278		8,507,384
Expenditures for segment assets		592,229			27,024		619,253

The sales generated in the United States and Canada are as follows:

	Six Months Ended June 30, 2012		Six Months Ended June 30, 2011
Canada	$	635,030	$	388,500
United States and abroad		8,320,770		7,899,042
Total	$	8,955,800	$	8,287,542

The Company’s property, equipment, leasehold and patents are located in Canada and the United States as follows:

	June 30, 2012		December 31, 2011
Canada	$	5,798,379	$	6,214,939
United States		2,087,331		2,198,781
Total	$	7,885,710	$	8,413,720

Three customers accounted for $4,865,542 (54%) of sales made during the six months ended June 30, 2012 (2011 - $4,583,941 or 55%).