Overview

The Company develops, manufactures and markets specialty chemicals that slow the evaporation of water. The Company also manufactures and markets biodegradable polymers which are used in the oil, gas and agriculture industries.

Results of Operations

The Company has two product lines:

Energy and Water Conservation products - The Company's HEAT$AVRŽ product is used in swimming pools and spas. The product forms a thin, transparent layer on the water's surface. The transparent layer slows the evaporation of water, allowing the water to retain a higher temperature for a longer period of time and thereby reducing the energy required to maintain the desired temperature of the water. WATER$AVRŽ, a modified version of HEAT$AVRŽ, can be used in reservoirs, potable water storage tanks, livestock watering ponds, canals, and irrigation ditches.

BCPA products - The second product, TPA's (i.e. thermal polyaspartate biopolymers), are biodegradable polymers 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.

Material changes in the Company's Statement of Operations for the three months ended March 31, 2012 are discussed below:

Three Months Ended March 31, 2012

                     Increase
Item                 (I) or      Reason
                     Decrease
                       (D)
Sales
EWCP products           D        Increased orders in the previous quarter
                                 contributed to decreased orders in this quarter.

BPCA products           I        Increased sales across all market verticals due to
                                 increased success in sales activity.

Gross Profit            I        Increased sales.

Wages                   D        Normal employee attrition replaced by temporary
                                 consultants.

Administrative          I        Increased sales.
salaries and
benefits

Investor                D        Additional effort was made to increase investor
relations and                    awareness of the Company
transfer agent
fees

Consulting              I        Temporary consultants were used to replace normal
                                 employee attrition.

Professional fess       I        Legal costs to protect the Company's intellectual
                                 property have increased due to new patent filings
                                 and cost of arbitration proceeding.

Commissions             I        Increased sales for the quarter resulted in higher
                                 commissions.

Capital Resources and Liquidity

The Company's sources and (uses) of cash for the three months ended March 31,
2012 and 2011 are shown below:

                                       2012            2011
Cash provided (used) by operations     195,800         (895,178 )
Construction of plant in Taber, AB      (9,854 )       (270,329 )
Sale (purchases) of equipment            2,442          (17,369 )
Repayment of loans                     (31,801 )        (30,758 )
Borrowings from line of credit          75,000                -
Purchase of common stock                     -       (1,030,349 )
Changes in exchange rates               14,366            6,272

In February 2011 the Company purchased 792,576 shares of its common stock from unrelated third parties. The shares were acquired in privately negotiated transactions for a total purchase price of $1,030,349. None of the share were acquired in open market transactions.

In 2007, the Company began construction of a plant in Taber Alberta. The plant is being used to manufacture aspartic acid which is the major component of TPAs. Presently the Company buys most of its aspartic acid from China where the base raw material is oil. The Company's plant in Taber uses sugar as the base raw material. Although the Company expects that it will still import some aspartic acid from China, using aspartic acid manufactured by its plant from sugar will reduce its raw material costs, reduce price fluctuations generated by oil prices and reduce shipping costs.

The Company has sufficient cash resources to meets its future commitments and cash flow requirements for the coming year. As of March 31, 2012 working capital was $4,160,594 (2011 - $3,376,569) and the Company has no substantial commitments that require significant outlays of cash over the coming fiscal year.

The Company is committed to minimum rental payments for property and premises aggregating approximately $235,219 over the term of three leases, the last expiring on July 31, 2014.

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

2012     107,920
2013      79,460
2014      47,840

Other than as disclosed above, we do not anticipate any capital requirements for the twelve months ending December 31, 2012.

Other than as disclosed in this report, we do not know of any trends, demands, commitments, events or uncertainties that will result in, or that are reasonable likely to result in, our liquidity increasing or decreasing in any material way.

Other than as disclosed in this report, we do not know of any significant changes in our expected sources and uses of cash.

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

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