##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2008
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  CONSULIER ENGINEERING, INC.
  Florida
    
    59-2556878(State or other jurisdiction of incorporation or organization)
    
    (IRS Employer Identification No.)
 2391 Old Dixie Highway, Riviera Beach, Florida
    
    33404(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number:
    
    (561) 842-2492Securities registered pursuant to Section 12(b) of the Act:
    
    None.Securities registered pursuant to Section 12(g) of the Act:
    
    Common Stock, $0.01 par value
Redeemable Warrants
 o x
 o x
 x o
 x
  Large Accelerated Filer     o
    
    Accelerated Filer     oNon-Accelerated Filer     o
    
    Smaller reporting company     x(Do not check if a smaller reporting company)
 o x
  APPLICABLE ONLY TO CORPORATE REGISTRANTS
  DOCUMENTS INCORPORATED BY REFERENCE
 None.




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##### 



CONSULIER ENGINEERING, INC.
 REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008
 TABLE OF CONTENTS
 PAGEPART IItem 1.
    
    Business
    
    
    1Item 1A.
    
    Risk Factors
    
    
    2Item 1B.
    
    Unresolved Staff Comments
    
    
    2Item 2.
    
    Properties
    
    
    2Item 3.
    
    Legal Proceedings
    
    
    2Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    3PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    3Item 6.
    
    Selected Financial Data
    
    
    4Item 7.
    
    Managements Discussion and Analysis of Financial Conditions and Results of Operations
    
    
    5Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    9Item 8.
    
    Financial Statements and Supplementary Data
    
    
    10Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    10Item 9A.
    
    Controls and Procedures
    
    
    10Item 9B.
    
    Other Information
    
    
    12PART IIIItem 10.
    
    Directors, Executive Officers, and Corporate Governance
    
    
    13Item 11.
    
    Executive Compensation
    
    
    15Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management And Related Stockholder Matters
    
    
    16Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    16Item 14.
    
    Principal Accounting Fees and Services
    
    
    17PART IVItem 15.
    
    Exhibits, Financial Statement Schedules
    
    
    18EX-31.1EX-31.2EX-32.1EX-32.2




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PART I
 
 ITEM 1.
    
    BUSINESS
 GENERAL DEVELOPMENT OF BUSINESS
  DESCRIPTION OF BUSINESS SEGMENTS
 Environmental Products
  Data-Based Integrated Emergency Room Information Systems




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AVM, L.P.
   CORPORATE SEGMENT
  
 ITEM 1A.
    
    RISK FACTORS
  
 ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
  
 ITEM 2.
    
    PROPERTIES
   
 ITEM 3.
    
    LEGAL PROCEEDINGS
 None.
 2




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ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   
 PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
 MARKET PRICE AND DIVIDENDS
  Year End December 31, 2007
    
    High
    
    LowFirst Quarter
    
    
    6.85
    
    
    
    4.11Second Quarter
    
    
    5.02
    
    
    
    3.72Third Quarter
    
    
    4.98
    
    
    
    3.25Fourth Quarter
    
    
    5.00
    
    
    
    3.73
 Year End December 31, 2008
    
    High
    
    LowFirst Quarter
    
    
    5.15
    
    
    
    3.42Second Quarter
    
    
    4.00
    
    
    
    3.50Third Quarter
    
    
    4.32
    
    
    
    3.60Fourth Quarter
    
    
    5.55
    
    
    
    3.25
   3




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EQUITY COMPENSATION PLANS
    PURCHASES OF EQUITY SECURITIES
  NASDAQ CAPITAL MARKET LISTING
  
 ITEM 6.
    
    SELECTED FINANCIAL DATA
  4




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ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 FORWARD LOOKING STATEMENTS
      CRITICAL ACCOUNTING POLICIES
  Accounting for the Costs
of Software to be Sold, Leased, or Otherwise Marketed.
 5




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PARTNERSHIP AND LIMITED LIABILITY COMPANY INTERESTS
  REVENUE RECOGNITION
    e.g.
  6




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USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
  RESULTS OF OPERATIONS
 .
  7




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OUTLOOK FOR 2009
     8




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LIQUIDITY AND CAPITAL RESOURCES
       IMPACT OF INFLATION AND CHANGING PRICES
  
 ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  9




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ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A.
    
    CONTROLS AND PROCEDURES
 (a)
    
    Evaluation of Disclosure Controls and Procedures
   Managements Annual Report on Internal Control over Financial Reporting
 GAAP
  10




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Changes in Internal Control over Financial Reporting
  1.
    
    Deficiencies in the Companys Control Environment. The Companys control environment
did not sufficiently promote effective internal control over financial reporting throughout
the organization. This material weakness existed because of the aggregate effect of
deficiencies in internal control which affected the Companys control environment,
including: (a) the lack of a formalized review process by management of operations, (b) the
lack of a financial expertise at the Companys operating subsidiary, and (c) the absence of
a whistleblower hotline.2.
    
    Deficiencies in the Companys subsidiary, Patient Care Technology Systems, LLC
(PCTS), Accounting System Controls. The Company failed to perform certain control
procedures designed to ensure that the financial statement presentations and related
disclosures were complete and in accordance with GAAP. These deficiencies included: (a)
inadequate review of journal entries and disbursements, (b) the lack of independent review
of balance sheet account reconciliations and supporting calculations, (c) inadequate review
of subsidiary operations as well as consolidated company financial statements, income tax
calculations, and disclosure checklist, (d) revenue recognition and sales cut-off, and (e)
inadequate communication between management and the accounting department.3.
    
    Deficiencies in Segregation of Duties at PCTS. This material weakness existed because
of the aggregate effect of multiple deficiencies concerning segregation of duties which may
have caused a material financial statement misstatement to be caused, or at least not be
detected in a timely manner. At PCTS, the following duties were not segregated adequately:
(a) generating and posting of journal entries, (b) generation, and approval and processing
of payroll, (c) completion of accounts payable reconciliations and the processing and
approval of payments, and (d) processing and approval of sales transactions and customer
receipts.
 11




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ITEM 9B.
    
    OTHER INFORMATION
  12




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PART III
 
 ITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 DIRECTORS
 Positions and Offices Held andDirector
    
    
    
    
    
    
    
    
    
    Principal Occupation or OtherName
    
    Age
    
    Since
    
    Employment during the Past Five YearsWarren B. Mosler
    
    
    59
    
    
    
    1985
    
    
    Chairman of the Board, 1985 to
present. President and Chief
Executive Officer, June 1985 to May
1994, and from February 1999 to the
present. Principal in AVM, L.P., and
a broker/dealer engaged in arbitrage
and government securities trading,
1983 to present.Alan R. Simon, Esq.
    
    
    58
    
    
    
    1985
    
    
    General Counsel, Treasurer and
Secretary since November 2001. 1982
to present, private practice of law
in Palm Beach Gardens, Florida.
President of Consulier
International, Inc., since 2005.James Combias
    
    
    45
    
    
    
    2007
    
    
    James Combias, age 45, is the
co-manager of the Jupiter Capital
Advisors, LP. Prior to this he was a
Managing Director and head trader
for HSBC Banks Government Bond
trading desk in New York City,
Managing Director and Head Trader
for Merrill Lynchs Government Bond
trading desk and senior trader on
the Government Bond trading desks at
D.L.J., Morgan Stanley, and Lehman
Brothers. Mr. Combias was born and
raised in Summit, N.J., and
graduated Hobart College in 1985
with a degree in Economics.Jean-Pierre Arnaud
    
    
    61
    
    
    
    2005
    
    
    Mr. Arnaud worked for Eastman Kodak
Company in the USA and UK in various
areas involving health imaging,
including manufacturing, sales,
marketing, and management. In 1991
Mr. Arnaud performed financial
auditing services for Fotcor
(Brazil). During 1991, he received
his M.A. in International and Public
Affairs, International Business and
Finance from Columbia University.Dr. Skender Fani
    
    
    69
    
    
    
    1999
    
    
    Dr. Fani is the Chairman of the
Board of Otis Elevators, Austria.
Dr. Fani is a corporate lawyer in
Austria, also specializing in sports
and entertainment law. For the past
20 years he has represented top
sports and entertainment
personalities throughout Europe.
  13




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EXECUTIVE OFFICERS
  
   CODE OF BUSINESS CONDUCT AND ETHICS
   SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
  14




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ITEM 11.
    
    EXECUTIVE COMPENSATION
 SUMMARY COMPENSATION TABLE
  SUMMARY COMPENSATION TABLE
 Name & Principle Position
    
    Fiscal Yr
    
    Salary
    
    All other compensationWarren B. Mosler
    
    
    2008
    
    
    $
    75,000
    
    
    $
    Chairman of Board
    
    
    2007
    
    
    $
    75,000
    
    
    $
    President & CEO
    
    
    2006
    
    
    $
    75,000
    
    
    $
    
   OPTION/SAR GRANTS IN LAST FISCAL YEAR NEED TO CONFIRM
  AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
  LONG-TERM INCENTIVE AND PENSION PLANS
   COMPENSATION OF DIRECTORS
  15




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ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
    Name & Address
    
    Amt & nature of
    
    Percent of ClassTitle of Class
    
    of Beneficial Owner
    
    beneficial ownership
    
    at Dec 31, 2008Common Stock
    
    Warren B. Mosler (1)(2)
    
    
    4,427,826
    
    
    
    83.63
    %5000 Estate Southgate
Christainsted, USVI 00820Common Stock
    
    Alan R. Simon (1)(2)
    
    
    190,000
    
    
    
    3.59
    %8295 North Military Trail,
Suite C
Palm Beach Gardens, FL 33410Total
    
    
    4,617,826
    
    
    
    87.22
    %
 
 (1)
    
    Director(2)
    
    Executive Officer 
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 INDEPENDENT DIRECTORS
  AUDIT COMMITTEE
  16




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AUDIT COMMITTEE FINANCIAL EXPERT
   as needed
 
 ITEM 14.
    
    PRINCIPAL ACCOUNTING FEES AND SERVICES
         17




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PART IV
 
 ITEM 15.
    
    EXHIBITS, FINACIAL STATEMENT SCHEDULES
  Number
    
    Description3.1
    
    
    Articles of Incorporation, as amended (1)3.2
    
    
    By-Laws (1)4.1
    
    
    Form of Common Stock Certificate (1)10.1
    
    
    Tandem Stock Option Plan (1)10.2
    
    
    Incentive Stock Option Plan (1)10.3
    
    
    Exchange Agreement between the Company and Warren B. Mosler Dated July 17, 2006 (1)10.4
    
    
    Exchange Agreement between the Company and Warren B. Mosler Dated September 29, 2006 (1)14.0
    
    
    Code of Ethics (1)21.0
    
    
    Subsidiaries of the Registrant (1)31.1
    
    
    Section 302 Certificate of Chief Executive Officer (2)31.2
    
    
    Section 302 Certificate of Chief Financial Officer (2)32.1
    
    
    Section 906 Certificate of Chief Executive Officer (2)32.2
    
    
    Section 906 Certificate of Chief Financial Officer (2)
 
 (1)
    
    Previously filed.(2)
    
    Filed herewith. 18




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SIGNATURES
  CONSULIER ENGINEERING, INC.Dated: April 15, 2009
    By:
    /s/ Warren B. MoslerWarren B. Mosler,
PresidentChairman of the Board of Directors, and
Chief Executive Officer  Name
    
    Title
    
    Date/s/ Warren B. Mosler

Warren B. Mosler
    
    Chairman of Board of Directors
President & Chief Executive Officer
    
    April 15, 2009/s/ Alan R. Simon

Alan R. Simon
    
    Secretary, Treasury
    
    April 15, 2009/s/ James S. Combias

James S. Combias
    
    Director
    
    April 15, 2009/s/ Skender Fani

Skender Feni
    
    Director
    
    April 15, 2009/s/ Jean-Pierre Arnaud

Jean-Pierre Arnaud
    
    Director
    
    April 15, 2009
 19




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CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
FORM 10-K ITEM 8 CONSOLIDATED FINANCIAL STATEMENTS
 TABLE OF CONTENTS
 PAGE
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    
    
    F-2, 3CONSOLIDATED FINANCIAL STATEMENTS:Balance Sheets
    
    
    F-4Statements of Operations
    
    
    F-5Statements of Stockholders Equity
    
    
    F-6Statements of Cash Flows
    
    
    F-7, 8Notes to the Consolidated Financial Statements
    
    
    F-9
 F-1




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    /s/ Berenfeld Spritzer Shechter & Sheer LLPCertified Public Accountant 
 F-2




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    /s/ Goldstein Lewin & Co.Certified Public Accountant 
 F-3




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##### Table of Contents



CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2008 AND 2007
 2008
    
    
    2007ASSETSCURRENT ASSETSCash and Cash Equivalents
    
    $
    270,192
    
    
    $
    333,024Receivables
    
    
    1,266,429
    
    
    
    927,574Inventories
    
    
    117,831
    
    
    
    40,987Deferred Implementation Costs
    
    
    2,293,464
    
    
    
    2,024,785Other Current Assets
    
    
    252,385
    
    
    
    89,663Deferred Income Taxes
    
    
    364,615
    
    
    
    291,208Total Current Assets
    
    
    4,564,916
    
    
    
    3,707,241PROPERTY AND EQUIPMENT, Net
    
    
    1,316,638
    
    
    
    1,473,287CAPITALIZED SOFTWARE DEVELOPMENT COSTS
    
    
    
    
    
    
    215,204PARTNERSHIP AND LIMITED LIABILITY COMPANIES  INVESTMENTS
    
    
    2,629,017
    
    
    
    3,091,930DEFERRED INCOME TAXES
    
    
    496,393
    
    
    
    541,988INTANGIBLE ASSETS
    
    
    367,838
    
    
    
    847,339OTHER ASSETS
    
    
    50,898
    
    
    
    30,693TOTAL ASSETS
    
    $
    9,425,700
    
    
    $
    9,907,682LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts Payable and Accrued Liabilities
    
    $
    1,812,163
    
    
    
    1,340,484Income Tax Payable
    
    
    
    
    
    
    79,932Unearned Revenue
    
    
    1,102,902
    
    
    
    822,659Related Party Payable
    
    
    201,992
    
    
    
    773,646Total Current Liabilities
    
    
    3,117,057
    
    
    
    3,016,721NOTES PAYABLE  RELATED PARTY
    
    
    968,948
    
    
    
    3,405,062COMMITMENTS AND CONTINGENCIESMINORITY INTEREST
    
    
    2,657,661
    
    
    
    232,000STOCKHOLDERS EQUITY:Common Stock $.01 Par Value:Authorized 25,000,000 Shares; Issued 5,485,122 Shares
    
    
    54,851
    
    
    
    54,851Additional Paid-in Capital
    
    
    4,117,221
    
    
    
    4,117,221Accumulated Deficit
    
    
    (894,360
    )
    
    
    (461,135
    )3,277,712
    
    
    
    3,710,937Less:Treasury Stock, Cost - 190,374 and 145,262 Shares in 2008 and 2007, respectively
    
    
    (589,027
    )
    
    
    (427,891
    )Notes Receivable for Common Stock
    
    
    (6,651
    )
    
    
    (29,147
    )Total Stockholders Equity
    
    
    2,682,034
    
    
    
    3,253,899TOTAL LIABILITIES & STOCKHOLDERS EQUITY
    
    $
    9,425,700
    
    
    $
    9,907,682
  F-4




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CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2008 AND 2007
 2008
    
    
    2007Revenue:Software Licensing Fees
    
    $
    2,889,879
    
    
    $
    2,152,579Other Revenue
    
    
    22,096
    
    
    
    25,286Total Revenue
    
    
    2,911,975
    
    
    
    2,177,865Operating Costs and Expenses:Cost of Revenue
    
    
    1,087,316
    
    
    
    1,351,630Payroll and Related Expense
    
    
    4,106,157
    
    
    
    4,325,138Selling, General and Administrative
    
    
    2,487,245
    
    
    
    2,430,100Professional Services
    
    
    776,397
    
    
    
    1,171,135Depreciation and Amortization
    
    
    1,126,385
    
    
    
    1,066,291Total Operating Costs and
Expenses
    
    
    9,583,500
    
    
    
    10,344,294Operating Loss
    
    
    (6,671,525
    )
    
    
    (8,166,429
    )Other Income (Expense):Investment Income  Related Parties
    
    
    3,425,442
    
    
    
    2,621,375Interest Expense
    
    
    (200,053
    )
    
    
    (350,161
    )Net Undistributed Income of Equity Investees
    
    
    120,228
    
    
    
    369,250Other Income
    
    
    166,983
    
    
    
    183,191Gain on Disposal of Equipment
    
    
    15,400
    
    
    
    Total Other Income (Expense)
    
    
    3,528,000
    
    
    
    2,823,655(Loss) from Operations Before Minority Interest and Income Taxes
    
    
    (3,143,525
    )
    
    
    (5,342,774
    )Minority Interest in Consolidated Subsidiary Losses
    
    
    2,670,065
    
    
    
    5,590,393Income (Loss) from Operations Before Income Taxes
    
    
    (473,460
    )
    
    
    247,619Benefit from (provision for) Income Taxes
    
    
    40,235
    
    
    
    (481,455
    )Net (Loss)
    
    $
    (433,225
    )
    
    $
    (233,836
    )(Loss) Per Share  Basic and Diluted
    
    $
    (0.08
    )
    
    $
    (0.04
    )Average shares outstanding-basic and diluted
    
    
    5,305,158
    
    
    
    5,365,837
  F-5




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CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
DECEMBER 31, 2008 AND 2007
 NotesRetained
    
    
    ReceivableAdditional
    
    
    Earnings
    
    
    for
    
    
    TotalCommon Stock
    
    
    Treasury Stock
    
    
    Paid-in
    
    
    (Accumulated
    
    
    Common
    
    
    StockholdersShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Deficit)
    
    
    Stock
    
    
    EquityBalance, December 31, 2006
    
    
    5,485,122
    
    
    $
    54,851
    
    
    
    104,936
    
    
    $
    (264,512
    )
    
    $
    4,107,503
    
    
    $
    (227,299
    )
    
    $
    (6,651
    )
    
    $
    3,663,892Purchase of Treasury Stock
    
    
    
    
    
    
    
    
    
    
    46,325
    
    
    
    (176,157
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (176,157
    )Sale of Treasury Stock
    
    
    
    
    
    
    
    
    
    
    (5,999
    )
    
    
    12,778
    
    
    
    9,718
    
    
    
    
    
    
    
    (22,496
    )
    
    
    Net (Loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (233,836
    )
    
    
    
    
    
    
    (233,836
    )Balance, December 31, 2007
    
    
    5,485,122
    
    
    
    54,851
    
    
    
    145,262
    
    
    
    (427,891
    )
    
    
    4,117,221
    
    
    
    (461,135
    )
    
    
    (29,147
    )
    
    
    3,253,899Purchase of Treasury Stock
    
    
    
    
    
    
    
    
    
    
    45,112
    
    
    
    (161,136
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (161,136
    )Collection of Notes Receivable
for common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,496
    
    
    
    22,496Net (Loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (433,225
    )
    
    
    
    
    
    
    (433,225
    )Balance, December 31, 2008
    
    
    5,485,122
    
    
    $
    54,851
    
    
    
    190,374
    
    
    $
    (589,027
    )
    
    $
    4,117,221
    
    
    $
    (894,360
    )
    
    $
    (6,651
    )
    
    $
    2,682,034
  F-6




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CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2008 AND 2007





2008
    
    
    2007Operating Activities:Net (Loss)
    
    $
    (433,225
    )
    
    $
    (233,836
    )Adjustments to Reconcile Net (Loss) to Net Cash (Used in) Operations:Depreciation and Amortization
    
    
    1,126,385
    
    
    
    1,066,291(Gain) Loss on Sale of Equipment
    
    
    (15,400
    )
    
    
    Minority Interest in consolidated Subsidiary Losses
    
    
    (2,670,065
    )
    
    
    (5,590,393
    )Write-off of Notes Receivable  Related Parties
    
    
    
    
    
    
    200,000Undistributed Income of Equity Investee
    
    
    (120,228
    )
    
    
    (369,250
    )Investment Income
    
    
    (3,425,442
    )
    
    
    (2,621,375
    )Accrued Interest on Notes Payable  Related Party
    
    
    968,948
    
    
    
    340,548Deferred Income Taxes
    
    
    (27,812
    )
    
    
    360,854Changes in Operating Assets and Liabilities:Decrease (Increase) in Receivables
    
    
    (338,855
    )
    
    
    27,427Decrease (Increase) in Income Tax Receivable
    
    
    
    
    
    
    651,068Decrease (Increase) in Inventories
    
    
    (76,844
    )
    
    
    16,854Decrease (Increase) in Deferred Implementation Costs
    
    
    (268,679
    )
    
    
    (275,685
    )Decrease (Increase) in Other Current Assets
    
    
    (162,722
    )
    
    
    104,671Decrease (Increase) in Other Assets
    
    
    (20,205
    )
    
    
    (30,693
    )Increase (Decrease) in Accounts Payable and Accrued Liabilities
    
    
    471,679
    
    
    
    (177,728
    )Increase (Decrease) in Deferred Revenue
    
    
    280,243
    
    
    
    268,552Increase (Decrease) in Income Taxes Payable
    
    
    (79,932
    )
    
    
    79,932Net Cash (Used in) Operations
    
    
    (4,792,154
    )
    
    
    (6,182,763
    )Investing Activities:Distributions from Partnership Interest
    
    
    4,008,583
    
    
    
    2,224,191Purchase Price Adjustment to Intangible Asset
    
    
    
    
    
    
    (232,000
    )Acquisition of Property and Equipment
    
    
    (259,631
    )
    
    
    (81,525
    )Acquisition of Software Upgrades
    
    
    
    
    
    
    (153,894
    )Net Cash Provided by Investing
Activities
    
    
    3,748,952
    
    
    
    1,756,772Financing Activities:Proceeds from Minority Shareholder in ST, LLC
    
    
    1,699,000
    
    
    
    5,590,393Repayments of Notes Payable-Related Party
    
    
    
    
    
    
    (96,649
    )Proceeds from Notes Receivable for Treasury Stock
    
    
    22,496
    
    
    
    Decrease (increase) in Related Party Payable
    
    
    (579,990
    )
    
    
    Purchase of Treasury Stock
    
    
    (161,136
    )
    
    
    (176,157
    )Repayments to Line of Credit, Net of Proceeds
    
    
    
    
    
    
    (800,000
    )Net Cash Provided by Financing
Activities
    
    
    980,370
    
    
    
    4,517,587Increase (Decrease) in Cash and Cash Equivalents
    
    
    (62,832
    )
    
    
    91,596Cash and Cash Equivalents  Beginning of Year
    
    
    333,024
    
    
    
    241,428Cash and Cash Equivalents  End of Year
    
    $
    270,192
    
    
    $
    333,024
  F-7




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##### Table of Contents



CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, 2008 AND 2007
 2008
    
    
    2007SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash Paid for Interest
    
    $
    
    
    
    $
    18,589Cash Paid for Income Taxes
    
    $
    95,359
    
    
    $
    40,669SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:Conversion of Note Payable-Related Party to Class A Stock of ST, LLC
    
    $
    3,405,062
    
    
    $
    Write-off of Notes Receivable  Related Parties
    
    $
    
    
    
    $
    200,000Assignment of Membership Interest to Minority Shareholder
    
    $
    
    
    
    $
    232,000Distributions due from Equity Investments
    
    $
    
    
    
    $
    385,508Issuance of Treasury Stock for Subscription Receivable
    
    $
    
    
    
    $
    22,496
  F-8




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##### Table of Contents



NOTE 1:
    
    DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 NATURE OF BUSINESS
     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 BASIS OF CONSOLIDATION
   F-9




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##### Table of Contents



NOTE 1:
    
    DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 ACCOUNTING ESTIMATES
  CASH AND CASH EQUIVALENTS
  ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
   F-10




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##### Table of Contents



NOTE 1:
    
    DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 CONCENTRATIONS
 Disclosure of Information about
Financial Instruments with Off-Balance-Sheet Risk and Financial Instruments with Concentrations of
Credit Risk
   INVENTORIES
  PROPERTY AND EQUIPMENT
  F-11




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##### Table of Contents



NOTE 1:
    
    DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 CAPITALIZED SOFTWARE DEVELOPMENT COSTS
 Accounting for
the Costs of Software to be Sold, Leased or Otherwise Marketed
   INTANGIBLE ASSETS
  LONG-LIVED ASSETS  IMPAIRMENTS AND DISPOSALS
 Accounting for the Impairment or Disposal of Long-Lived Assets.
 F-12




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##### Table of Contents



NOTE 1:
    
    NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
 PARTNERSHIP AND LIMITED LIABILITY COMPANIES INVESTMENTS
    F-13




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##### Table of Contents



NOTE 1:
    
    DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 STOCK-BASED COMPENSATION
    REVENUE RECOGNITION
    F-14




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##### Table of Contents



NOTE 1:
    
    DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 REVENUE RECOGNITION (CONTINUED)
         F-15




---



##### Table of Contents



ADVERTISING AND MARKETING COSTS
  INCOME TAXES
     EARNINGS (LOSS) PER COMMON SHARE
  F-16




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##### Table of Contents



NOTE 1:
    
    DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 FAIR VALUE OF FINANCIAL INSTRUMENTS
 Disclosures about Fair Value of Financial Instruments,
  RECENT ACCOUNTING PRONOUNCEMENTS
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities Amendment of FASB Statement No. 115.
  F-17




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##### Table of Contents



RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)
  Disclosures about Derivative Instruments and Hedging
Activities
 NOTE 2:
    
    DEFERRED IMPLEMENTATION COSTS
  NOTE 3:
    
    CONCENTRATION OF CREDIT RISK
    F-18




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##### Table of Contents



NOTE 4:
    
    RECEIVABLES
  2008
    
    
    2007Trade Receivables
    
    $
    594,501
    
    
    $
    542,067Due from AVM
    
    
    504,338
    
    
    
    251,507Due from BioSafe
    
    
    167,590
    
    
    
    134,000$
    1,266,429
    
    
    $
    927,574
 NOTE 5:
    
    PROPERTY AND EQUIPMENT
  Range of UsefulLives (years)
    
    2008
    
    
    2007Building & Improvements
    
    40
    
    $
    869,557
    
    
    $
    830,463Land
    
    n/a
    
    
    412,000
    
    
    
    412,000Computer Hardware & Software
    
    3~5
    
    
    3,218,395
    
    
    
    1,253,923Machinery & Equipment
    
    5~7
    
    
    242,692
    
    
    
    639,305Furniture & Fixtures
    
    5~7
    
    
    237,125
    
    
    
    192,6284,979,769
    
    
    
    3,328,319Less accumulated depreciation
    
    
    
    
    3,663,131
    
    
    
    1,855,032$
    1,316,638
    
    
    $
    1,473,287
  NOTE 6:
    
    INTANGIBLE ASSETS
  Range of UsefulLives (years)
    
    2008
    
    
    2007Customer Lists
    
    3~5
    
    $
    1,860,723
    
    
    $
    1,860,723Non-Compete Agreements
    
    1
    
    
    200,000
    
    
    
    200,0002,060,723
    
    
    
    2,060,723Less accumulated
amortization
    
    
    
    
    1,692,885
    
    
    
    1,213,384$
    367,838
    
    
    $
    847,339
 F-19




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##### Table of Contents



NOTE 6:
    
    INTANGIBLE ASSETS (CONTINUED)
  Year Ending December 31,2009
    
    $
    325,6212010
    
    $
    42,217$
    367,838
  F-20




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##### Table of Contents



NOTE 7:
    
    PARTNERSHIP AND LIMITED LIABILITY COMPANIES  INVESTMENTS
  AVM, L.P
   2008
    
    
    2007(In thousands)
    
    
    (In thousands)Cash
    
    $
    25,199
    
    
    $
    11,922Due from Brokers
    
    $
    1,169
    
    
    $
    45,569Securities owned
    
    $
    157,696
    
    
    $
    55,034Investment in affiliate & other assets
    
    $
    7,839
    
    
    $
    9,930Total Assets
    
    $
    191,903
    
    
    $
    122,455Due to Brokers
    
    $
    568
    
    
    $
    43,272Customer payables & subordinate borrowings
    
    $
    150,964
    
    
    $
    44,931Other liabilities
    
    $
    4,424
    
    
    $
    2,067Anticipated partners withdrawals
    
    $
    10,667
    
    
    $
    4,328Total Liabilities
    
    $
    166,623
    
    
    $
    94,598Partners Capital
    
    $
    25,280
    
    
    $
    27,857Total Liabilities & Partners Capital
    
    $
    191,903
    
    
    $
    122,455Revenue
    
    $
    121,824
    
    
    $
    97,721Net Income
    
    $
    69,180
    
    
    $
    49,575Consuliers share of AVM earnings
    
    $
    3,425
    
    
    $
    2,621
  F-21




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##### Table of Contents



NOTE 7:
    
    PARTNERSHIP AND LIMITED LIABILITY COMPANIES  INVESTMENTS (CONTINUED)
 BIOSAFE SYSTEMS, LLC
  Unaudited2008
    
    
    2007Total Assets
    
    $
    3,410,269
    
    
    $
    3,284,033Total Liabilities
    
    $
    737,996
    
    
    $
    500,696Total Capital
    
    $
    2,672,273
    
    
    $
    2,782,337Revenue
    
    $
    8,188,228
    
    
    $
    7,932,600Cost & Expenses
    
    $
    7,885,362
    
    
    $
    7,009,476Net Income
    
    $
    302,866
    
    
    $
    923,124Consuliers share of earnings
    
    $
    120,228
    
    
    $
    369,250
  NOTE 8:
    
    INCOME TAXES
  2008
    
    
    2007Current:Federal
    
    $
    (45,650
    )
    
    $
    100,601State
    
    
    33,227
    
    
    
    20,000$
    (12,423
    )
    
    $
    120,601Deferred:Federal
    
    $
    58,479
    
    
    $
    346,189State
    
    
    (86,291
    )
    
    
    14,665(27,812
    )
    
    
    360,854Total Income Tax (Benefit) Expense
    
    $
    (40,235
    )
    
    $
    481,455
 F-22




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##### Table of Contents



NOTE 8:
    
    INCOME TAXES (CONTINUED)
  2008
    
    
    2007Federal tax expense (benefit) at statutory rate
    
    $
    (160,976
    )
    
    $
    84,190State income tax expense (benefit) net of federal tax effect
    
    $
    (35,022
    )
    
    $
    28,989Losses allocated to minority shareholder of St. LLC
    
    $
    (13,511
    )
    
    $
    150,878Adjustment of net operating loss carryovers
    
    $
    91,986
    
    
    $
    156,610Other
    
    $
    77,288
    
    
    $
    60,788Income Tax (Benefit) Expense
    
    $
    (40,235
    )
    
    $
    481,455
   2008
    
    
    2007Depreciation & Amortization
    
    $
    310,974
    
    
    $
    306,228Tax loss carry forward
    
    
    185,419
    
    
    
    235,760Accrued Interest
    
    
    364,615
    
    
    
    291,208Total Net Deferred Tax Asset
    
    $
    861,008
    
    
    $
    833,196
  2008
    
    
    2007Net Short-Term Deferred Tax Asset
    
    $
    364,615
    
    
    $
    291,208Net Long-Term Deferred Tax Asset
    
    
    496,393
    
    
    
    541,988Net Deferred Tax Assets
    
    $
    861,008
    
    
    $
    833,196
  F-23




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##### Table of Contents



NOTE 9:
    
    STOCKHOLDERS EQUITY
 CAPITAL STOCK
  TREASURY STOCK
    STOCK-BASED EMPLOYEE COMPENSATION
   F-24




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##### Table of Contents



STOCK OPTION PLANS
    WeightedOptions
    
    
    Average PriceBalance at Jan. 1, 2007
    
    $
    
    
    
    $
    Options granted
    
    
    
    
    
    
    Options exercised
    
    
    
    
    
    
    Options expired
    
    
    
    
    
    
    Balance at Dec. 31, 2007
    
    
    
    
    
    
    Options granted
    
    
    
    
    
    
    Options exercised
    
    
    
    
    
    
    Options expired
    
    
    
    
    
    
    Balance at Dec. 31, 2008
    
    $
    
    
    
    $
    
 NOTE 10:
    
    RELATED PARTY TRANSACTIONS
 DUE FROM RELATED PARTIES
  NOTE PAYABLE  RELATED PARTY
   F-25




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##### Table of Contents



NOTE 11:
    
    BUSINESS SEGMENT INFORMATION
 SEGMENT INFORMATION
  Year Ended December 31, 2008Income (loss) Derived
    
    
    
    
    
    
    MedicalDistribution
    
    
    from Ownership of
    
    
    Corporate
    
    
    SoftwareActivities
    
    
    Investments
    
    
    Activities
    
    
    Activites
    
    
    TotalRevenue (b)
    
    $
    22,096
    
    
    $
    
    
    
    $
    
    
    
    $
    2,889,879
    
    
    $
    2,911,975Operating Income
(loss)
    
    
    (102,856
    )
    
    
    
    
    
    
    (589,494
    )
    
    
    (5,979,175
    )
    
    $
    (6,671,525
    )Other Income
(loss)(a)
    
    
    
    
    
    
    3,545,670
    
    
    
    160,467
    
    
    
    (178,137
    )
    
    $
    3,528,000Minority Interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,670,065
    
    
    $
    2,670,065Income Tax Benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (Expense)
    
    
    38,365
    
    
    
    (1,334,236
    )
    
    
    176,325
    
    
    
    1,159,781
    
    
    $
    40,235Net Income (loss)(a)
    
    
    (64,491
    )
    
    
    2,211,434
    
    
    
    242,231
    
    
    
    (2,822,399
    )
    
    $
    (433,225
    )Total Assets
    
    $
    42,054
    
    
    $
    2,629,017
    
    
    $
    1,720,548
    
    
    $
    5,034,081
    
    
    $
    9,425,700
 Year Ended December 31, 2007Income (loss) Derived
    
    
    
    
    
    
    MedicalDistribution
    
    
    from Ownership of
    
    
    Corporate
    
    
    SoftwareActivities
    
    
    Investments
    
    
    Activities
    
    
    Activites
    
    
    TotalRevenue (b)
    
    $
    25,286
    
    
    $
    
    
    
    $
    
    
    
    $
    2,152,579
    
    
    $
    2,177,865Operating Income
(loss)
    
    
    (97,125
    )
    
    
    
    
    
    
    (541,571
    )
    
    
    (7,527,733
    )
    
    
    (8,166,429
    )Other Income
(loss)(a)
    
    
    
    
    
    
    2,990,625
    
    
    
    135,500
    
    
    
    (302,470
    )
    
    
    2,823,655Minority Interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,590,393
    
    
    
    5,590,393Income Tax Benefit
    
    
    
    
    
    
    (1,125,372
    )
    
    
    152,805
    
    
    
    491,112
    
    
    
    (481,455
    )(Expense)Net Income (loss)(a)
    
    
    (97,125
    )
    
    
    1,865,253
    
    
    
    (253,266
    )
    
    
    (1,748,698
    )
    
    
    (233,836
    )Total Assets
    
    $
    53,572
    
    
    $
    3,091,930
    
    
    $
    2,404,985
    
    
    $
    4,357,195
    
    
    $
    9,907,682
 
 (a)
    
    All interest expense incurred by the Company was allocated to the Corporate Activities
Segment.(b)
    
    There was no intersegment revenue during the year. F-26




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##### Table of Contents



NOTE 12:
    
    COMMITMENTS AND CONTINGENCIES
 LEGAL PROCEEDINGS
  LEASES
   Year Ending December 31,2009
    
    $
    540,4352010
    
    
    600,3922011
    
    
    325,0002012
    
    
    325,0002013
    
    
    325,000after 2013
    
    
    54,167
  LEASE OF REAL ESTATE
  NOTE 13:
    
    401 (K) PLAN
  F-27