15. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

15. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY

15.             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 (“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.

Year ended December 31, 2016:

	EWCP			BCPA		Consolidated
Sales	$	785,660		$	15,460,354	$	16,246,014
Interest expense		59			41,640		41,699
Depreciation		325,696			214,383		540,079
Income tax expense (recovery)		-			982,133		982,133
Segment profit (loss)		(417,770	)		2,211,104		1,793,334
Segment assets		1,966,564			1,523,270		3,489,834
Expenditures for segment assets		6,352			107,918		114,270

Year ended December 31, 2015:

	EWCP			BCPA		Consolidated
Sales	$	687,828		$	15,210,719	$	15,898,547
Interest expense		1			55,769		55,770
Depreciation		384,909			193,429		578,338
Income tax expense (recovery)		-			765,328		765,328
Segment profit (loss)		(1,054,344	)		2,559,040		1,504,696
Segment assets		2,211,931			1,679,801		3,891,732
Expenditures for segment assets		(244,358	)		303,388		59,030

Sales by territory are shown below:

	2016		2015
Canada	$	453,480	$	404,880
United States and abroad		15,792,534		15,493,667
Total	$	16,246,014	$	15,898,547

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

	2016		2015
Canada	$	1,966,564	$	2,211,348
United States		1,523,270		1,680,384
Total	$	3,489,834	$	3,891,732

Three customers accounted for $10,148,042 (63%) of sales made in 2016 (2015 - $10,421,165 or 66%).