14. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

Note 14. 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, 2013:

	EWCP			TPA		Consolidated
Revenue	$	769,818		$	15,031,778	$	15,801,596
Interest expense		49,539			59,660		109,199
Depreciation		1,079,256			219,360		1,298,616
Extraordinary items		-			250,000		250,000
Income tax expense (recovery)		-			(134,720)		(134,720)
Segment profit (loss)		(713,633	)		2,535,267		1,821,634
Segment assets		4,258,075			1,741,916		5,999,991
Expenditures for segment assets		235,565			-		235,565

 
Year ended December 31, 2012:

	EWCP			TPA		Consolidated
Revenue	$	828,135		$	15,571,972	$	16,400,107
Interest expense		78,467			49,940		128,407
Depreciation		1,002,228			254,010		1,256,238
Income tax expense		-			1,126,468		1,126,468
Segment profit (loss)		(2,745,801	)		1,661,353		(1,084,448	)
Segment assets		5,424,966			1,961,276		7,386,242
Expenditures for segment assets		80,217			16,504		96,721

Sales by territory are shown below:

	2013		2012
Canada	$	563,221	$	718,128
United States and abroad		15,238,375		15,681,979
Total	$	15,801,596	$	16,400,107

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

	2013		2012
Canada	$	4,258,075	$	5,424,966
United States		1,741,916		1,961,276
Total	$	5,999,991	$	7,386,242

Three customers accounted for $9,884,601 (63%) of sales made in 2013 (2012 - $9,712,657 or 59%).