NOTE 12  COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS: a) Employment Contracts: The Company has multi-year contracts with two key employees. The contracts call for salaries presently aggregating $730,000 per year, and they expire in March 2020 and December 2021. The following table is a schedule of future minimum salary commitments: 2020 $ 365,000 2021 365,000 Chembios President &amp; CEO, the key employee whose agreement was set to expire in March 2020, resigned effective as of January 3, 2020. b) Pension Plan: The Company has a 401(k) plan established for its employees whereby it matches 40% of the first 5% (or 2% of salary) that an employee contributes to the plan. Matching contribution expenses totaled $93,892 and $94,544 for the years ended December 31, 2019 and 2018, respectively. c) Leases: Chembios leases have historically been limited to its facilities in New York, Germany, Malaysia &amp; Brazil. As of December 31, 2019, the Company was a party to eight leases. One of the leases is subject to a sublease for the remainder of its term, as further described below. The Companys leases generally include optional renewal periods. Upon entering into a new lease, the Company evaluates the leasehold improvements and regulatory requirements related to its operations in that location. To the extent that the initial lease term of the related lease is less than the useful life of the leasehold improvements and potential regulatory costs associated with moving the facility, the Company concludes that it is reasonably certain that a renewal option will be exercised, and thus that renewal period is included in the lease term and the related payments are reflected in the right-of-use (ROU) asset and lease liability. In January 2019 the Company recognized $0.8 million and $0.8 million of right-of-use assets and liabilities, respectively. During 2019, the Company entered into a new lease agreement for its new headquarter location in Hauppauge, NY. the right-of-use asset acquired in exchange for right-of-use liabilities was approximately $6.5 million. The Companys leases generally include fixed rental payments with defined annual increases. While certain of the Companys leases are gross leases, the majority of the Companys leases are net leases in which the Company makes separate payments to the lessor based on the lessors property and casualty insurance costs, the property taxes assessed on the property, and a portion of the common area maintenance where applicable. The Company has elected the practical expedient not to separate lease and nonlease components for all of the Companys facility leases. The Company has also elected the practical expedient for short-term lease exception for all of its facility leases. The components of lease expense were as follows: Year Ended December 31, 2019 Operating lease expense $ 1,655,573 Finance lease cost Amortization of right-of-use assets $ 23,373 Interest on lease liabilities 7,892 Total finance lease expense $ 31,265 Rent expense was $653,155 for the year ended December 31, 2018. Supplemental cash flow and other information related to leases were as follows: Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 632,952 Operating cash flows for finance leases 7,892 Financing cash flows for finance leases 19,875 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 7,030,744 Finance leases 210,350 Supplemental balance sheet information related to leases was as follows: December 31, 2019 Operating Leases Operating lease right-of-use assets $ 7,030,744  Current portion of operating lease liability 568,294 Operating lease liabilities 6,969,603 Total operating lease liabilities $ 7,537,897 Finance Leases Finance lease right of use asset $ 233,722 Accumulated depreciation (23,372 ) Finance lease right of use asset, net $ 210,350 Current portion of finance lease liability 41,894 Finance lease liability 171,953 Total finance lease liabilities $ 213,847 Weighted Average Remaining Lease Term Operating leases 9.3 years Finance leases 4.8 years Weighted Average Discount Rate Operating leases 8.67 % Finance leases 7.00 % During 2019, the Company executed an operating sublease related to its former Holbrook, New York facility. The sublease runs conterminously with the base lease in Holbrook, for which the Company remains primarily responsible. In addition, the Company entered into a finance lease agreement relating to office furniture in June 2019. The Company recognized the corresponding lease asset and liability effective June 30, 2019 and recorded related depreciation starting on July 1, 2019. Monthly payments towards this lease commenced in July 2019. At the time of the initial assessment, the Company did not have an established incremental borrowing rate and the interest rates implicit in each of the leases were not readily determinable, therefore the Company used an interest rate based on the market place for public debt. In September 2019, the Company entered into a credit agreement for a $20 million term loan as described on Note 13 - Long Term Debt. Maturities of lease liabilities as of December 31, 2019 were as follows. Operating Leases Finance Leases 2020 $ 1,205,161 $ 55,536 2021 1,209,787 55,536 2022 1,057,757 55,536 2023 1,026,272 55,536 2024 1,018,875 27,767 Thereafter 5,773,887  Total lease payments $ 11,291,739 $ 249,911 Less: imputed interest (3,753,842 ) (36,064 ) Total $ 7,537,897 $ 213,847 As previously disclosed in the Companys 2018 Annual Report on Form 10-K, and under the previous lease accounting standard, future minimum lease payments for operating leases having initial or remaining non-cancellable lease terms in excess of one year would have been as follows for the years ending December 31: 2019 $ 384,308 2020 88,576 2021  $ 472,884 d) Economic Dependency: Customers are considered major customers when net sales exceed 10% of the Companys total net sales for period or outstanding trade receivables exceed 10% of accounts receivable. The Company had the following major customers for the respective periods: For the years ended Accounts Receivable December 31, 2019 December 31, 2018 December 31, 2019 December 31, 2018 Net Sales % of Net Sales Net Sales % of Net Sales Customer 1 $ 11,263,573 39 % $ 11,333,767 33 % $ 941,962 $ 3,499,340 Customer 2 5,782,543 20 % 4,346,640 13 % 16,033 1,033,824 The following table delineates purchases the Company had with vendors in excess of 10% of total purchases for the periods indicated: For the years ended Accounts Payable December 31, 2019 December 31, 2018 December 31, 2019 December 31, 2018 Purchases % of Purc. Purchases % of Purc. Vendor 1 * * 1,646,614 16 % * 164,312 In the tables above, an asterisk (*) indicates that purchases from the vendor did not exceed 10% for the period indicated. The Company purchases materials pursuant to intellectual property rights agreements that are important components in its products. Management believes that other suppliers could provide similar materials on comparable terms. A change in suppliers, however, could cause a delay in manufacturing and a possible loss of sales, which could adversely affect operating results. e) Litigation: From time to time, the Company is involved in certain legal actions arising in the ordinary course of business. The outcomes of such actions, either individually or in the aggregate, are not expected to have a material adverse effect on the Companys future financial position or results of operations. f) Governmental Regulation: All of the Companys existing and proposed diagnostic products are regulated by the U.S. Food and Drug Administration, U.S. Department of Agriculture, certain U.S., state and local agencies, and/or comparable regulatory bodies in other countries. Most aspects of development, production, and marketing, including product testing, authorizations to market, labeling, promotion, manufacturing, and record keeping, are subject to regulatory review. After marketing approval has been granted, Chembio must continue to comply with governmental regulations. Failure to comply with applicable requirements can lead to sanctions, including withdrawal of products from the market, recalls, refusal to authorize government contracts, product seizures, civil money penalties, injunctions, and criminal prosecution.