Results of Operations

We have two product lines.

The first is a chemical ("EWCP") 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 and thereby reducing the energy required to maintain the desired temperature of the water. A modified version of the product can also be used in reservoirs, potable water storage tanks, livestock watering pods, canals, and irrigation ditches.

The second product ("TPAs") biodegradable polymers is used by the petroleum, chemical, utility and mining industries to prevent corrosion and scaling in water piping. This product can also be used in detergent to increase biodegradability and in agriculture to increase crop yields by enhancing fertilizer uptake.

Year Ended
December 31,
2008

                   Increase (I) or
Item                Decrease (D)     Reason

Sales
 EWCP                     D          Sales in our EWCP Division in 2008 were
                                     approximately the same as they were in 2007.

 TPAs                     I          Sales increases in oilfield services, detergents and
                                     agriculture. The oilfield shutdowns experienced in
                                     2007 were not repeated on the same scale in 2008.

Cost of sales
 EWCP/TPAs                I          Cost of sales, as a percentage of gross profit, with
                                     respect to our EWCP and TPA products was virtually
                                     the same between 2008 and 2007.

Wages
 EWCP                     D          Wages paid in 2008 were similar to those paid in
                                     2007.

 TPAs                     I          Renovation of our new facility in Alberta, Canada.

Administrative            D          In 2006, we granted 5 year stock options to a few
salaries and                         key employees. The expense for financial reporting
benefits                             purposes added $204,602 to administrative salaries
                                     in 2007 but only $124,888 in 2008.

Advertising and           I          Advertising was increased to better promote brand
promotion                            recognition.

Investor                  D          Costs incurred related to the May 2007 private
relations and                        placement did not recur in 2008.
transfer agent
fee

Office and                I          Various costs associated with the renovation of the
miscellaneous                        new facility in Alberta, Canada. Once the facility
                                     is operational, these costs will be allocated to
                                     cost of sales. Costs also increased since more
                                     administration was required for higher sales levels.

Consulting
 TPAs                     I          Increased sales resulted in the need to rely on
                                     consultants rather than adding more permanent staff.

 EWCP                     D          Better allocation of staff resulted in less need for
                                     consultants.

Year Ended
December 31,
2007

                   Increase (I) or
Item                Decrease (D)     Reason

Sales
 EWCP                     D          Decrease sales in the Ecosavr division were the
                                     result of poor management which has since been let
                                     go.

 TPAs                     D          Maintenance shutdowns in the oil extraction industry
                                     during 2007 reduced sales of TPAs. It is understood
                                     that shutdowns did not occur in 2006 because high
                                     oil prices encouraged the oil companies to continue
                                     production.
Wages
 EWCP                     D          Decrease in sales resulted in decrease in wages.

 TPAs                     I          Renovation of our new facility in Alberta, Canada.

Administrative            I          In 2006, we granted five-year stock options to
salaries and                         several key employees. The expense for financial
benefits                             reporting purposes added $369,992 to administrative
                                     salaries in 2006 but only $204,602 in 2007.

Advertising and           I          Advertising was increased to better promote brand
promotion                            recognition.

Investor                  I          Upon the closing of our private placement in May
relations and                        2007, the Company issued bonuses in the form of
transfer agent                       stock options and cash payments.
fee

Office and                I          Various administrative costs associated with the
miscellaneous                        start up of the new facility have been allocated to
                                     this account. Once the facility is operational,
                                     these costs will be allocated to overhead.

Consulting                I          The expense, for financial reporting purposes, of
                                     stock options granted in 2006 to consultants that
                                     did not recur in 2007.

Professional              D          Resolution of several legal proceedings in the year
fees                                 2007 reduced our costs.

Commissions
 EWCP/TPAs                D          Decreased sales led to a decrease in commission
                                     costs.

Gain on sale of           I          Sale of unused land at our plant in Illinois.
property

Our material sources and <uses> of cash during the year ended December 31, 2008

were:

Cash provided by operations                                        $      (212,574 )
Patent development                                                          26,235
Equipment purchases, primarily related to our new facility in
Alberta, Canada                                                         (1,746,531 )
Loans                                                                    1,546,836
Exchange rate changes                                                     (639,077 )
Other                                                                       15,321

Our material sources and <uses> of cash during the year ended December 31, 2007 were:

                    Cash provided by operations   $   242,451
                    Patent development                (60,680 )
                    Equipment purchases              (586,127 )
                    Sale of common stock            3,164,481
                    Exchange rate changes             142,990
                    Other                              (1,981 )

We are committed to minimum rental payments for property and premises aggregating approximately $136,329 over the term of three leases, the last expiring on December 31, 2011.

Commitments in each of the next five years are approximately as follows:

2009   $ 108,417
2010   $  13,956
2011   $  13,956

Other than as disclosed above, we do not anticipate any capital requirements for the twelve months ending December 31, 2009.

We do not have any commitments or arrangements from any person to provide us with any additional capital.

See Note 2 to the financial statements included as part of this report for a description of our significant accounting policies and recent accounting pronouncements.

Critical Accounting Policies And Estimates

Allowances for Product Returns. We grant certain of our customers the right to return product which they are unable to sell. Upon sale, we evaluate the need to record a provision for product returns based on our historical experience, economic trends and changes in customer demand.

Allowances for Doubtful Accounts Receivable. We evaluate our accounts receivable to determine if they will ultimately be collected. This evaluation includes significant judgments and estimates, including an analysis of receivables aging and a review of large accounts. If, for example, the financial condition of our customers deteriorates resulting in an impairment of their ability to pay or a pattern of late payment develops, allowances may be required.

Provisions for Inventory Obsolescence. We may need to record a provision for estimated obsolescence and shrinkage of inventory. Our estimates would consider the cost of inventory, the estimated market value, the shelf life of the inventory and our historical experience. If there are changes to these estimates, provisions for inventory obsolescence may be necessary.

In October 2008, the FASB issued FASB Staff Position FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active ("FSP 157-3"). FSP 157-3 clarifies the application of SFAS 157 in a market that is not active, and demonstrates how the fair value of a financial asset is determined when the market for the financial assets is inactive. FSP 157-3 was effective upon issuance, including prior periods for which financial statements had not been issued. The implementation of this standard did not have an impact on our Consolidated Financial Statements.

In May 2008, the FASB issued Statement of Financial Accounting Standards ("SFAS") No. 162, The Hierarchy of Generally Accepted Accounting Principles ("SFAS 162"). SFAS 162 defines the order in which accounting principles that are generally accepted should be followed. SFAS 162 is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. We do not expect the adoption of SFAS 162 to have a material impact on our Consolidated Financial Statements.

In February 2008, the FASB issued FASB FSP 157-2, The Effective Date of FASB Statement No. 157 ("SFAS 157-2"), which delays the effective date of SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), until fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. These nonfinancial items include assets and liabilities such as reporting units measured at fair value in a goodwill impairment test and nonfinancial assets acquired and liabilities assumed in a business combination. We do not expect the adoption of SFAS 157-2 to have a material impact on our Consolidated Financial Statements.

Effective January 1, 2008, we adopted the provisions of SFAS No. 157 for financial assets and liabilities and any other assets and liabilities carried at fair value. This pronouncement defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. In February 2008, the FASB agreed to a one-year deferral for the implementation of SFAS 157 for other non-financial assets and liabilities. Our adoption of SFAS 157 did not have a material effect on our Consolidated Financial Statements for financial assets and liabilities and any other assets and liabilities carried at fair value.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations ("SFAS 141R"), which replaces FASB Statement No. 141. SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non controlling interest in the acquire and the goodwill acquired. The Statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. SFAS 141R is to be applied prospectively to business combinations for which the acquisition date is on or after an entity's fiscal year that begins after December 15, 2008. We will assess the impact of SFAS 141R if and when a future acquisition occurs.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements - an amendment of Accounting Research Bulletin No. 51 ("SFAS 160"), which establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent's ownership interest and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. The Statement also establishes reporting requirements that provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 is effective as of the beginning of an entity's fiscal year that begins after December 15, 2008. We are currently evaluating the potential impact, if any, of the adoption of SFAS 160 on our Consolidated Financial Statements.