12. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

12. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY

The Company operates in two segments:

(a)   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)   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 “BPCA” 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.

Three months ended March 31, 2016:

	EWCP			BPCA			Total
Revenue	$	327,713		$	4,984,922		$	5,312,635
Interest expense		-			10,944			10,944
Depreciation and amortization		78,478			53,109			131,587
Segment profit (loss)		(130,408	)		872,202			741,794
Segment assets		2,274,377			1,717,392			3,991,769
Expenditures for segment assets		-			(90,701	)		(90,701	)

Three months ended March 31, 2015:

	EWCP			BPCA		Total
Revenue	$	238,402		$	4,725,485	$	4,963,887
Interest revenue		-			2,962		2,962
Interest expense		2			17,344		17,346
Depreciation and amortization		112,468			44,474		156,942
Segment profit (loss)		(311,736	)		816,001		504,265
Segment assets		2,797,532			1,643,815		4,441,347
Expenditures for segment assets		29,028			-		29,028

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

	Three months ended March 31, 2016		Three months ended March 31, 2015
Canada	$	135,779	$	39,846
United States and abroad		5,176,856		4,924,041
Total	$	5,312,635	$	4,963,887

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

	March 31, 2016		December 31, 2015
Canada	$	2,273,793	$	2,211,348
United States		1,717,976		1,680,384
Total	$	3,991,769	$	3,891,732

 Three customers accounted for $3,273,817 (62%) of sales during the three-month period ended March 31, 2016 (2015 - $2,971,579 or 60%).  Three customers accounted for $2,055,710 of accounts receivable (56%) at March 31, 2016 (December 31, 2015 – $1,298,821 or 66%).