NOTE 9  COMMITMENTS AND CONTINGENCIES Legal On September 29, 2020, the Companys former Chief Executive Officer Stephen D. Cooper commenced an action entitled Stephen D. Cooper v. One Stop Systems, Inc. et al , in San Diego County Superior Court, Case No. 37-2020-00034492-CU-BC-CTL alleging claims for (1) breach of written contract and (2) violation of California Labor Code Sections 201 and 203 and seeking unspecified compensatory damages and statutory penalties. The Companys responsive pleading is due on or before December 9, 2020, and the Company intends to vigorously defend the allegations. Guarantees and Indemnities The Company has made certain indemnities, under which it may be required to make payments to an indemnified party, in relation to certain transactions. The Company indemnifies its directors, officers, employees and agents to the maximum extent permitted under the laws of the State of Delaware. In connection with its facility lease, the Company has indemnified its lessor for certain claims arising from the use of the facilities. Also, in connection with its Credit Agreement (Note 8), the Company has agreed to indemnify its lender and others related to the use of the proceeds and other matters. The duration of the indemnities varies, and in many cases is indefinite. These indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make any payments for these obligations and no liabilities have been recorded for these indemnities in the accompanying consolidated balance sheets. Leases The Company leases its offices, manufacturing, and warehouse facility in San Diego County under a non-cancelable operating lease. Our corporate headquarters are in a leased space comprising approximately 29,342 square feet in Escondido, California under a lease that was renewed in August 2018 and expires in August 2024. The Company also leases a 3,208 square foot facility in Salt Lake City, Utah that houses our Ion software development team. The Company is the lessee of a leased space comprising approximately 12,000 square feet located in Irvine, California with the lease expiring in March 2021. Bressner Technology GmbH, leases space comprising 8,073 square feet on a month to month basis. For the three month periods ended September 30, 2020 and 2019, rent expense was $162,262 and $154,029, respectively. For the nine month periods ended September 30, 2020 and 2019, rent expense was $528,418 and $493,045, respectively. Purchase Commitments In the normal course of business the Company enters into purchase commitments for inventory components to be delivered based upon pre-established delivery schedules over a period that may exceed one year. Customer Concentration During the three and nine month periods ended September 30, 2020 the Company had two customers and in 2019, one customer that had approximately 23.3%, and 35.2% and 14.7%, and 35%, respectively of net sales that represent customers which are each greater than 10% of our consolidated annual revenue. As of September 30, 2020, the Company had three customers and as of December 31, 2019, two customers that had approximately 67% and 90%, respectively of net trade accounts receivables that represent customer balances which are each greater than 10% of our consolidated trade accounts receivable balance. As a result of the recent worldwide economic impact attributable to COVID-19, disguise, the Companys largest customer, has been experiencing a slowdown in its business as the entertainment and media markets have been required to scale back or cancel large group gatherings and as a result the Company has implemented a modified payment plan for this customer for the collection of outstanding accounts receivables which are being paid as scheduled. During the three and nine month periods ended September 30, 2020 and 2019, approximately 31%, and 32% and 24%, and 11%, respectively, of net purchases represent vendors/suppliers which are each greater than 10% of our consolidated purchases.