9.             COMMITMENTS AND CONTINGENCIES:

Lease Commitments - The Company leases warehouse and office space for the equipment and operations located in Gardena, CA.  The lease term continues through July 2015. August 1, 2015 the Company is no longer under a rental lease agreement for the office and warehouse space in Gardena, CA.  The Company was under a month-to-month agreement through January 2016.

Total rent expense for the three months ended March 31, 2016 and 2015 was $2,250 and $15,057, respectively.

Vendors and Debt - The Company has significant liabilities as of March 31, 2016 with limited cash flow generated by the sale of Company assets and revenue.  The Company has $263,129 in accounts payable and accrued expenses from continuing operations and $45,028 from discontinued operations.  In addition, the Company has $1,594,867 in debt and accrued interest from continuing operations and $262,191 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.