13. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

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.

Six months ended June 30, 2017:

	EWCP			BPCA			Total
Revenue	$	475,018		$	8,911,056		$	9,386,074
Interest expense		53			24,243			24,296
Depreciation and amortization		38,730			96,807			135,537
Segment profit (loss)		2,335,153			1,191,137			3,526,290
Segment property, equipment, leaseholds, and patents		349,454			1,433,869			1,783,323
Expenditures for segment assets		(48,900	)		(7,406	)		(56,306	)

Six months ended June 30, 2016:

	EWCP			BPCA			Total
Revenue	$	618,806		$	8,427,012		$	9,045,818
Interest expense		58			22,500			22,558
Depreciation and amortization		162,083			106,612			268,695
Segment profit (loss)		(356,091	)		1,659,122			1,303,031
Segment property, equipment, leaseholds, and patents		2,203,389			1,652,939			3,856,328
Expenditures for segment assets		-			(79,750	)		(79,750	)

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

	Six Months Ended June 30, 2017		Six Months Ended June 30, 2016
Canada	$	218,915	$	236,288
United States and abroad		9,167,159		8,809,530
Total	$	9,386,074	$	9,045,818

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

	June 30, 2017		December 31, 2016
Canada	$	349,454	$	1,966,564
United States		1,433,869		1,523,270
Total	$	1,783,323	$	3,489,834

 Three customers accounted for $5,527,771 (59%) of sales during the six months ended June 30, 2017 (2016 - $5,208,367 or 58%). Three customers accounted for $2,669,711 of accounts receivable (70%) at June 30, 2017 (December 31, 2016 – $2,032,646 or 67%).