Note 12- Significant Customers

Revenue for the three months ended September 30, 2021 and 2020 was $9.5 million and $3.8 million, respectively. Three diagnostic services clients accounted for 19.6%, 12.0% and 10.4% of our revenue for the three months ended September 30, 2021. No contract manufacturing customer accounted for a significant portion of our revenue for the three months ended September 30, 2021. Two third-party contract manufacturing customers accounted for 57.6% and 15.9%, respectively, of our revenue from continuing operations for the three months ended September 30, 2020. The loss of sales to any of these large customers could have a material adverse effect on our business operations and financial condition.

Revenue for the nine months ended September 30, 2021 and 2020 was $33.9 million and $9.4 million, respectively. Two diagnostic services clients accounted for 28.4% and 20.7%, respectively, of our revenue for the nine months ended September 30, 2021. Two third-party contract manufacturing customers accounted for 56.2% and 16.6%, respectively, of our revenue for the nine months ended September 30, 2020. The loss of sales to any of these large customers could have a material adverse effect on our business operations and financial condition.

Five diagnostic services clients generated 19.5%, 19.3%, 12.0%, 11.7% and 11.6% of our total reimbursement receivable balances from government agencies and healthcare issuers at September 30, 2021. Three of our customers represented 36%, 20% and 13% of our total trade receivable balances at December 31, 2020.

ProPhase Labs, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(unaudited)