12.  COMMITMENTS AND CONTINGENCIES:

Lease Commitments - On July 18, 2012, the Company entered into a thirteen month lease for office space for its corporate headquarters located in Greenwood Village, Colorado. Under the terms of the lease agreement, the Company leased approximately 2,244 square feet of general office space. The lease term commenced on July 23, 2012 and ended June 30, 2014.

Upon movement of the Company’s corporate headquarters to California, the Company assumed a lease of warehouse and office space for the equipment and operations located in Gardena, CA.  On August 1, 2015 the Company is no longer under a rental lease agreement for the office and warehouse space in Gardena, CA.  The Company is now on a month-to-month agreement and will be required to exit the premises if the landlord identifies a new tenant.

Total rent expense for the year ended December 31, 2015 and 2014 was $50,035 and $55,744, respectively.

Purchase Commitments - During the year ended December 31, 2014, the Company had a commitment to its manufacturer to purchase equipment and parts totaling approximately $70,000.  In December 2014, the Company paid the existing commitment in full.  No future commitment exists at this time.

Vendors and Debt - The Company has significant liabilities as of December 31, 2015 with limited cash flow generated by the sale of Company assets and revenue.  The Company has $159,249 in accounts payable from continuing operations and $33,777 from discontinued operations.  In addition, the Company has $1,528,969 in debt and accrued interest from continuing operations and $255,310 in debt and accrued interest from discontinued operations.  The Company will work with their vendors and lenders to establish payment plans, explore extensions and conversion of debt.