v3.26.1
SEGMENTS
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
SEGMENTS

13. SEGMENTS

 

The Company operates in two segments:

 

(a) The first segment is specialty chemicals (“SPCH”). This includes our biodegradable polymers (“TPAs”), used by the petroleum, chemical, utility and mining industries to prevent corrosion and scaling in water piping. TPAs can also be used to increase biodegradability in detergents and in the agriculture industry to increase crop yields by enhancing fertilizer uptake. Along with biodegradable polymers, the Company produces nitrogen conservation products used for the agriculture industry. These products decrease the loss of nitrogen fertilizer after initial application and allow less fertilizer to be used.

 

The SPCH division also produces a chemical used in swimming pools and spas. The product forms a thin, transparent layer on the water’s surface. The transparent layer slows the evaporation of water, allowing the water to retain a higher temperature for a longer period of time thereby reducing the energy required to maintain the desired temperature of the water. A modified version of EWCP can also be used in reservoirs, potable water storage tanks, livestock watering pods, canals, and irrigation ditches for the purpose of reducing evaporation.

 

(b) The second segment is food grade products and ingredients (“FGPI”) that the Company manufactures for specific clients and are confidential.

 

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. The economic factors that impact the nature, amount, timing, and uncertainty of revenue and cash flows vary among the Company’s operating segments and the geographical regions in which they operate. This operating segment structure is used by the Chief Operating Decision Maker (“CODM”), who has been determined to be the Chief Executive Officer, to make key operating decisions and assess performance of the Company. The CODM evaluates segment operating performance, and makes resource allocation and performance evaluation decisions, based on gross profit and net operating income.

 

Three months ended June 30, 2026:

 

   SPCH   FGPI   Other (1)   Consolidated 
Product sales  $5,124,050   $2,486,098   $-   $7,610,148 
Cost of sales   5,868,427    2,029,487    -    7,897,914 
Gross profit (loss)   (744,377)   456,611    -    (287,766)
Wages, administrative salaries and benefits   660,556    333,887    -    994,443 
Selling, general, and administrative   299,537    134,652    98,410    532,599 
Other segment items (2)   126,979    63,852    215,467    406,298 
Net operating loss   (1,831,449)   (75,780)   (313,877)   (2,221,106)
Interest expense   107,915    20,697    -    128,612 
Depreciation and amortization (included in cost of sales)   243,629    319,300    -    562,929 
Capital expenditures   48,324    697,468    -    745,792 
Assets at June 30, 2026 (3)   54,315,751    4,364,083    286,539    58,966,373 

 

 

Three months ended June 30, 2025:

   SPCH   FGPI   Other (1)   Consolidated 
Product sales  $8,274,932   $592,200   $-   $8,867,132 
Research and development services sales   2,500,000    -    -    2,500,000 
Cost of sales   5,547,824    434,042    -    5,981,866 
Gross profit   5,227,108    158,158    -    5,385,266 
Wages, administrative salaries and benefits   847,842    46,948    -    894,790 
Selling, general, and administrative   828,595    47,608    (42,058)   834,145 
Other segment items (2)   155,380    1,924    201,913    359,217 
Net operating income (loss)   3,395,291    61,678    (159,855)   3,297,114 
Interest expense   158,152    25,974    -    184,126 
Depreciation and amortization (included in cost of sales)   443,643    51,252    -    494,895 
Capital expenditures   776,873    200,018    -    976,891 
Assets at December 31, 2025 (3)   58,201,497    2,429,280    1,201,602    61,832,379 

 

Six months ended June 30, 2026:

 

   SPCH   FGPI   Other (1)   Consolidated 
Product Sales  $10,415,550   $5,491,595   $-   $15,907,145 
Cost of sales   9,853,290    4,452,315    -    14,305,605 
Gross profit   562,260    1,039,280    -    1,601,540 
Wages, administrative salaries and benefits   1,315,591    705,938    -    2,021,529 
Selling, general, and administrative   736,701    395,310    162,945    1,294,956 
Other segment items (2)   263,426    141,352    187,348    592,126 
Operating loss   (1,753,458)   (203,320)   (350,293)   (2,307,071)
Interest expense   220,402    42,279    -    262,681 
Depreciation and amortization (included in COGS)   587,526    484,898    -    1,072,424 
Capital expenditures   559,856    2,419,701    -    2,979,557 

 

 

Six months ended June 30, 2025:

 

   SPCH   FGPI   Other (1)   Consolidated 
Product sales  $15,748,624   $592,200   $-   $16,340,824 
Research and development sales   2,500,000    -    -    2,500,000 
Cost of sales   11,069,952    434,042    -    11,503,994 
Gross profit   7,178,672    158,158    -    7,336,830 
Wages, administrative salaries and benefits   1,725,174    64,853    -    1,790,027 
Selling, general, and administrative   1,531,746    57,581    868    1,590,195 
Other segment items (2)   384,676    14,461    329,514    728,651 
Net operating income (loss)   3,537,076    21,263    (330,382)   3,227,957 
Interest expense   338,823    43,322    -    382,145 
Depreciation and amortization (included in cost of sales)   841,188    118,905    -    960,093 
Capital expenditures   766,991    564,051    -    1,331,042 

 

(1)   Other is not considered an operating segment and includes expenses and income not identifiable to an operating segment and is not included in operating segment results
     
(2)   Other segment items for each reportable segment includes items such as professional fees and research and development.
     
(3)   Segment assets include cash, term deposits, accounts receivable, inventory, prepaid expenses, property held for sale, property, equipment and leaseholds, right of use assets, intangible assets, long-term deposits, investments and goodwill.

 

Sales by territory are shown below:

    

   2026   2025   2026   2025 
  

Three months ended

June 30,

  

Six months ended

June 30,

 
   2026   2025   2026   2025 
Canada  $289,586   $167,020   $377,878   $455,115 
United States and abroad  $7,320,562   $11,200,112   $15,529,267   $18,385,709 
Total  $7,610,148   $11,367,132   $15,907,145   $18,840,824 

 

The Company’s long-lived assets (property, equipment and leaseholds, right of use assets, intangibles, and goodwill) by territory as follows:

    

   June 30, 2026   December 31, 2025 
         
Canada  $98,922   $108,423 
United States and abroad   27,843,817    24,318,631 
Total  $27,942,739   $24,427,054 

 

Three primary customers accounted for $4,145,285 (54%) of sales during the three month period ended June 30, 2026 (2025 - $4,007,158 or 45%) and $8,784,409 (55%) for the six month period ended June 30, 2026 (2025 - $7,672,394 or 47%).