13. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

13. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY

13.         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, 2017:

	EWCP			BPCA			Total
Revenue	$	247,726		$	4,415,982		$	4,663,708
Interest expense		55			11,512			11,567
Depreciation and amortization		31,971			48,404			80,375
Segment profit (loss)		1,770,391			593,545			3,252,667
Segment assets		323,228			1,482,276			1,805,504
Expenditures for segment assets		(22,497	)		(7,406	)		(29,903	)

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	)

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

	Three months ended March 31, 2017		Three months ended March 31, 2016
Canada	$	74,835	$	135,779
United States and abroad		4,588,873		5,176,856
Total	$	4,663,708	$	5,312,635

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

	March 31, 2017		December 31, 2016
Canada	$	323,232	$	1,966,564
United States		1,482,276		1,523,270
Total	$	1,805,504	$	3,489,834

 Three customers accounted for $2,642,973 (57%) of sales during the three-month period ended March 31, 2017 (2016 - $3,273,817 or 62%). Three customers accounted for $1,889,159 of accounts receivable (56%) at March 31, 2017 (December 31, 2016 – $2,032,646 or 67%).