NOTE 10 — CONCENTRATIONS

Revenue from Waterlase systems, the Company’s principal product line, which includes the iPlus and the MD Turbo, comprised 63%, 60%, and 32% of total net revenues for the years ended December 31, 2012, 2011, and 2010, respectively. Revenue from Diode systems comprised 11%, 19%, and 30% of total revenue for the same periods. Revenue from consumables and other comprised 10%, 11%, and 16% of total revenue for the same periods. Revenue from imaging systems comprised 6%, 0%, and 0% of total net revenue for the same periods. Revenue from services comprised 10%, 9%, and 16% of total net revenue for the same periods. Revenue from license fees and royalties comprised 0%, 1%, and 6% of total net revenue for the same periods.

Approximately 3%, 19%, and 38% of the Company’s revenue in 2012, 2011, and 2010, respectively, was generated through sales to HSIC worldwide.

The Company maintains its cash and cash equivalent accounts with established commercial banks. Such cash deposits periodically exceed the Federal Deposit Insurance Corporation insured limit.

No individual customer represented more than 10% of the Company’s accounts receivable at December 31, 2012 and 2011.

The Company currently purchases certain key components of its products from single suppliers. Although there are a limited number of manufacturers of these key components, management believes that other suppliers could provide similar key components on comparable terms. A change in suppliers, however, could cause delays in manufacturing and a possible loss of sales, which could adversely affect the Company’s results of operations.