13. Commitments and Contingencies Contingent Consideration In connection with its acquisitions of Quantum Technology Sciences, Inc. (Quantum) and the OptoSeis  fi ber optic sensing technology business, the Company recorded contingent purchase price payments, or contingent consideration, that may be owed in the future. For both acquisitions, the contingent payments are based on future receipt of contracts awards and the resulting revenue derived from such contracts. The Company utilizes the services of independent valuation consultants to assist it with the estimation of the fair value of this contingent consideration. The determination of fair value is inherently unpredictable since it requires estimates and projections of future revenue, including the size, length, timing and, in the case of Quantum, the extent of gross profits earned under its future contracts. As a result, the Company anticipates fair value adjustments to these liabilities over the respective earn-out periods, and these adjustments will result in either charges or credits to the Companys operating expenses when the fair value of the contingent consideration increases or decreases, respectively. The Company recorded an initial contingent earn-out liability of $7.7 million in connection with its July 2018 acquisition of Quantum. Contingent payments, if any, may be paid in the form of cash or Company stock and will be derived from eligible revenue generated during a four-year earn-out period ending July 2022. The maximum amount of contingent payments is $23.5 million over the four-year earn-out period. At September 30, 2019, the Company recorded a $2.9 million adjustment to decrease the initial earn-out liability to an estimated fair value of $4.8 million. At March 31, 2020, the Company recorded a $1.5 million adjustment to increase the earn-out liability to an estimated fair value of $6.3 million. The increase in the earn-out liability was due to an increase in projected eligible revenue. In April 2020, Quantum was awarded a $10 million contract with the U.S. Customs and Border Protection U.S. Border Patrol to provide a technology solution to the Department of Homeland Security. The Company does not expect any significant revenue from this contract to be recognized until the first quarter of fiscal year 2021. The Company recorded an initial contingent earn-out liability of $4.3 million in connection with its November 2018 acquisition of all the intellectual property and related assets of the OptoSeis  fiber optic sensing technology. Contingent cash payments, if any, will be derived from eligible revenue generated during a five-and-a-half year earn-out period ending in May 2024. The maximum amount of contingent payments is $23.2 million over the five-and-a-half year earn-out period. At September 30, 2019, the Company recorded a $0.8 million adjustment to increase the initial earn-out liability to an estimated value of $5.1 million. At March 31, 2020, the Company recorded a $0.5 million adjustment to decrease the initial earn-out liability to an estimated value of $4.6 million. The decrease in the earn-out liability was due to a decrease in projected eligible revenue attributable to the current economic environment. The Company reviews and assesses the fair value of its contingent earn-out liabilities on a quarterly basis. Operating Leases The Company leases office space and certain equipment for terms of two years or less. For the remaining six months of fiscal year 2020 and for fiscal year 2021, future minimum lease obligations for the Companys operating right-of-use asset and the Companys other short-term leases $0.1 million and $0.1 million, respectively. Legal Proceedings The Company is involved in various pending legal actions in the ordinary course of its business. Management is unable to predict the ultimate outcome of these actions, because of the inherent uncertainty such actions. However, management believes that the most probable, ultimate resolution of these pending matters will not have a material adverse effect on the Companys consolidated financial position, results of operations or cash flows.