Quarterly report pursuant to Section 13 or 15(d)

PAYROLL TAXES PAYABLE

PAYROLL TAXES PAYABLE	3 Months Ended
Mar. 31, 2014
Payroll Taxes Payable
PAYROLL TAXES PAYABLE	NOTE 8 - PAYROLL TAXES PAYABLE In 2009 and 2010, REGS, a subsidiary of the Company, became delinquent for unpaid federal employer and employee payroll taxes and accrued interest and penalties related to the unpaid payroll taxes. All interest and penalties related to the delinquent federal payroll taxes are included in the section labeled other income and expenses in the attached condensed consolidated statement of operations. In September 2011, we received approval from the Internal Revenue Service (IRS) to begin paying our outstanding federal payroll tax and related interest and penalties liabilities totaling approximately $971,000, for the aforementioned years in installments (the Installment Plan). Under the Installment Plan, we were required to pay minimum monthly installments of $12,500 commencing September 2011, which increased to $25,000 per month in September 2012, until the liability is paid in full. Through the duration of the Installment Plan, the IRS continues to charge penalties and interest at statutory rates. If the conditions of the Installment Plan are not met, the IRS may cancel it and may demand the outstanding liability to be repaid through a levy on income, bank accounts or other assets, or by seizing certain of our assets. Additionally, the IRS has filed a notice of federal tax lien against certain of our assets to satisfy the obligation. The IRS is to release this lien if and when we pay the full amount due. As of March 31, 2014 and December 31, 2013, the outstanding balance due to the IRS was $965,100, and $958,300, respectively. Two of the officers of REGS also have liability exposure for a portion of the taxes if REGS does not pay them. In May 2013, REGS filed an Offer in Compromise with the IRS. While the Offer in Compromise is under review by the IRS, the requirement to pay $25,000 a month under the Installment Plan is suspended. REGS received a letter from the IRS, dated March 27, 2014, rejecting our Offer in Compromise and in accordance with the rejection letter the Company has submitted a written appeal. During the pendency of appeal, no monthly installment payment is required.

PAYROLL TAXES PAYABLE

3 Months Ended

Mar. 31, 2014

NOTE 8 - PAYROLL TAXES PAYABLE

In 2009 and 2010, REGS, a subsidiary of the Company, became delinquent for unpaid federal employer and employee payroll taxes and accrued interest and penalties related to the unpaid payroll taxes. All interest and penalties related to the delinquent federal payroll taxes are included in the section labeled other income and expenses in the attached condensed consolidated statement of operations.

In September 2011, we received approval from the Internal Revenue Service (IRS) to begin paying our outstanding federal payroll tax and related interest and penalties liabilities totaling approximately $971,000, for the aforementioned years in installments (the Installment Plan). Under the Installment Plan, we were required to pay minimum monthly installments of $12,500 commencing September 2011, which increased to $25,000 per month in September 2012, until the liability is paid in full. Through the duration of the Installment Plan, the IRS continues to charge penalties and interest at statutory rates. If the conditions of the Installment Plan are not met, the IRS may cancel it and may demand the outstanding liability to be repaid through a levy on income, bank accounts or other assets, or by seizing certain of our assets. Additionally, the IRS has filed a notice of federal tax lien against certain of our assets to satisfy the obligation. The IRS is to release this lien if and when we pay the full amount due. As of March 31, 2014 and December 31, 2013, the outstanding balance due to the IRS was $965,100, and $958,300, respectively.

Two of the officers of REGS also have liability exposure for a portion of the taxes if REGS does not pay them.

In May 2013, REGS filed an Offer in Compromise with the IRS. While the Offer in Compromise is under review by the IRS, the requirement to pay $25,000 a month under the Installment Plan is suspended. REGS received a letter from the IRS, dated March 27, 2014, rejecting our Offer in Compromise and in accordance with the rejection letter the Company has submitted a written appeal. During the pendency of appeal, no monthly installment payment is required.