13. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

13. 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 (“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.

Nine months ended September 30, 2017:

	EWCP			BPCA			Total
Revenue	$	606,476		$	12,048,984		$	12,655,460
Interest revenue		183			140			323
Interest expense		54			35,644			35,698
Depreciation and amortization		44,302			145,211			189,513
Segment profit (loss)		1,980,968			1,266,398			3,247,366
Segment assets		354,851			1,385,465			1,740,316
Expenditures for segment assets		(50,470	)		(7,406	)		(57,876	)

Nine months ended September 30, 2016:

	EWCP			BPCA			Total
Revenue	$	750,415		$	11,412,437		$	12,162,852
Interest revenue		1			2,160			2,161
Interest expense		59			33,817			33,876
Depreciation and amortization		244,644			160,542			405,186
Segment profit (loss)		(492,829	)		1,881,824			1,388,995
Segment assets		2,097,841			1,614,891			3,712,732
Expenditures for segment assets		(6,130	)		(95,632	)		(101,762	)

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

	Nine Months Ended September 30, 2017		Nine Months Ended September 30, 2016
Canada	$	265,175	$	361,683
United States and abroad		12,390,285		11,801,169
Total	$	12,655,460	$	12,162,852

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

	September 30, 2017		December 31, 2016
Canada	$	354,851	$	1,966,564
United States		1,385,465		1,523,270
Total	$	1,740,316	$	3,489,834

Three customers accounted for $7,527,184 (59%) of sales during the nine months ended September 30, 2017 (2016 - $7,154,393 or 59%). Three customers accounted for $1,964,413 of accounts receivable (67%) at September 30, 2017 (December 31, 2016 – $2,032,646 or 67%).