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Segmented, Significant Customer Information and Economic Dependency

12 Months Ended

Dec. 31, 2017

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”), also known as TPA’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, 2017:

	EWCP		BCPA		Consolidated

Sales	$	641,675	$	14,852,650	$	15,494,325
Interest expense		54		44,071		44,125
Depreciation		62,376		219,108		281,484
Income tax expense		-		680,319		680,319
Segment profit		2,021,289		(266,548)		1,754,741
Segment assets		580,304		1,437,657		2,017,961
Expenditures for segment assets		287,853		138,628		426,480

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		-			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

Sales by territory are shown below:

	2017		2016

Canada	$	362,362	$	453,480
United States and abroad		15,131,963		15,792,534
Total	$	15,494,325	$	16,246,014

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

	2017		2016

Canada	$	580,304	$	1,966,564
United States		1,437,657		1,523,270
Total	$	2,017,961	$	3,489,834

Three customers accounted for $8,453,163 (55%) of sales made in 2017 (2016 - $10,148,042 or 62%).