UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One) þ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~þ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~ FOR THE QUARTERLY PERIOD ENDED MARCH 31, ~~2008~~2009


o		TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 0-17756

CONSULIER ENGINEERING, INC.

(Exact name of small business issuer as specified in its charter)


Florida		59-2556878

(State or other jurisdiction of of incorporation or organization)		(I.R.S. Employer Identification No.)

~~(Address~~2391 ofOld ~~principal~~Dixie ~~executive~~Highway Riviera ~~offices)~~Beach, FL 33404

(Address of principal executive offices)

(~~Registrant’s telephone number, including area code~~561) 842-2492

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer o Accelerated filer o Non-accelerated filer o ~~Smaller reporting company x~~ (Do not check if a smaller reporting company) Smaller Reporting Company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule ~~126~~12b-2 of the Exchange Act).

Yes o o No x þ

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:

As of May 110, ~~2008~~2009, there were 5,~~304~~294,~~524~~748 outstanding shares of common stock, par value $0.01 per share.

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Report on Form ~~10Q~~ 10-Q contains “forward-looking statements” within the ~~meanings~~meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend,” or similar expressions. The statements include, among others, statements regarding our prospects, opportunities, outlook, plans, intentions, anticipated financial and operating results, our business strategy and means to implement the strategy, and objectives.

Forward-looking statements are only estimates or predictions and are not guarantees of performance. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for our products and services, competition from existing and new competitors, our ability to introduce new products, expected pricing levels, the timing and cost of planned capital expenditures, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Among other things, continued unfavorable economic conditions may impact market growth trends or otherwise impact the demand for our products and services;, and competition from existing and new competitors and producers of alternative products will impact our ability to penetrate or expand our presence in new or growing markets. Uncertainties relating to our ability to develop and distribute new proprietary products to respond to market needs in a timely manner may impact our ability to exploit new or growing markets;. ~~our~~Our ability to ~~successfully~~ successfully identify and implement productivity improvements and cost reduction initiatives may ~~impact~~ impact profitability.

In addition, unless otherwise specifically provided herein, the statements in this Report are made as of end of the period for which the Report is filed. We expect that subsequent events or developments will cause our views to change. We undertake no obligation to update any of the forward-looking statements made herein, whether as a result of new information, future events, changes in expectations or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the end of the period for which the Report is filed.

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES

INDEX

		Page		~~Page~~
PART-I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at March 31, 2008 (Unaudited) and December 31, 2007					5
	Condensed Consolidated Balance Sheets at March 31, 2009 (Unaudited) and December 31, 2008		3
Condensed Interim Consolidated Statements of Operations for the three months ended March 31, 2008 and 2007 (Unaudited)					6
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2009 and 2008 (Unaudited)		4
Condensed Interim Consolidated Statement of Stockholders’ Equity for the three months ended March 31, 2008 (Unaudited)					7
	Condensed Consolidated Statement of Stockholders’ Equity for the three months ended March 31, 2009 (Unaudited)		5
Condensed Interim Consolidated Statements of Cash Flows for the three months ended March 31, 2008 and 2007 (Unaudited)					8
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2009 and 2008 (Unaudited)		6
Notes to the Unaudited Condensed Interim Consolidated Financial Statements					9
	Notes to the Unaudited Condensed Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			23		28
Item 3. Quantitative and Qualitative Disclosures About Market Risk			25		31
Item 4T. Controls and Procedures			25		31
PART-II. OTHER INFORMATION
Item 1. Legal Proceedings			26		33
Item 1A. Risk Factors			26		33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			26		34
Item 3. Defaults Upon Senior Securities			26		35
Item 4. Submission of Matters to a Vote of Security Holders			26		35
Item 5. Other Information			26		35
Item 6. Exhibits			27		35
SIGNATURES			28		36
CERTIFICATIONS
EX-31.1
EX-31.1 Section 302 Certification of CEO
EX-31.2
EX-31.2 Section 302 Certification of CFO
EX-32.1
EX-32.1 Section 906 Certification of CEO
EX-32.2
EX-32.2 Section 906 Certification of CFO

~~PART-I~~CONSULIER ENGINEERING, INC. ~~FINANCIAL~~AND ~~INFORMATION~~SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

Item 1. Financial Statements


	March 31,			December 31,
	2009			2008
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents	$	226,090		$	270,192
Receivables		741,838			1,266,429
Inventories		108,623			117,831
Deferred Implementation Costs		2,293,511			2,293,464
Other Current Assets		207,650			252,385
Deferred Income Taxes		270,483			364,615

Total Current Assets		3,848,195			4,564,916
PROPERTY AND EQUIPMENT, Net		1,255,233			1,316,638
PARTNERSHIP AND LIMITED LIABILITY COMPANIES — INVESTMENTS		2,625,932			2,629,017
DEFERRED INCOME TAXES		668,566			496,393
INTANGIBLE ASSETS		257,516			367,838
OTHER ASSETS		50,898			50,898

TOTAL ASSETS	$	8,706,340		$	9,425,700

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts Payable and Accrued Liabilities	$	1,606,112		$	1,812,163
Unearned Revenue		1,116,223			1,102,902
Related Party Payable		—			201,992

Total Current Liabilities		2,722,335			3,117,057

NOTES PAYABLE — RELATED PARTY		718,796			968,948
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Common Stock $.01 Par Value:
Authorized 25,000,000 Shares; Issued 5,485,122 Shares		54,851			54,851
Additional Paid-in Capital		4,117,221			4,117,221
Accumulated Deficit		(1,047,657	)		(894,360	)

		3,124,415			3,277,712
Less:
Treasury Stock, Cost - 190,374 Shares in 2009 and 2008		(589,027	)		(589,027	)
Notes Receivable for Common Stock		(6,651	)		(6,651	)

Total Stockholders’ Equity		2,528,737			2,682,034

Noncontrolling interest		2,736,472			2,657,661
Total Equity		5,265,209			5,339,695

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	8,706,340		$	9,425,700

~~CONSULIER~~See ~~ENGINEERING,~~accompanying ~~INC.~~notes ~~AND~~to ~~SUBSIDIARIES CONDENSED~~unaudited ~~CONSOLIDATED~~consolidated ~~BALANCE~~financial ~~SHEETS~~statements

	March 31,			December 31,
	2008			2007
	(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents	$	497,443		$	333,024
Receivables, Net of Allowance for Doubtful Accounts of $0		1,078,294			927,574
Inventories		41,125			40,987
Deferred Implementation Costs		1,968,818			2,024,785
Other Current Assets		120,186			89,663
Deferred Income Taxes		291,208			291,208
Total Current Assets		3,997,074			3,707,241
PROPERTY AND EQUIPMENT, Net		1,400,014			1,473,287
CAPITALIZED SOFTWARE DEVELOPMENT COSTS		178,194			215,204
PARTNERSHIP AND LIMITED LIABILITY COMPANIES — INVESTMENTS		2,902,441			3,091,930
DEFERRED INCOME TAXES		570,170			541,988
INTANGIBLE ASSET		721,873			847,339
OTHER ASSETS		30,693			30,693
	$	9,800,459		$	9,907,682
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts Payable and Accrued Liabilities	$	1,219,910		$	1,340,484
Unearned Revenue		806,101			822,659
Related Party Payable		858,783			773,646
Income Tax Payable		88,277			79,932
Total Current Liabilities		2,973,071			3,016,721
NOTES PAYABLE — RELATED PARTY		3,405,062			3,405,062
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST		284,680			232,000
STOCKHOLDERS’ EQUITY:
Common Stock $.01 Par Value:
Authorized 25,000,000 Shares; Issued 5,485,122 Shares		54,851			54,851
Additional Paid-in Capital		4,117,221			4,117,221
Accumulated Deficit		(473,459	)		(461,135	)
		3,698,613			3,710,937
Less:
Treasury Stock, Cost - 180,598 and 145,262 Shares, respectively		(554,316	)		(427,891	)
Notes Receivable for Common Stock		(6,651	)		(29,147	)
Total Stockholders’ Equity		3,137,646			3,253,899
	$	9,800,459		$	9,907,682

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

	THREE MONTHS ENDED
	MARCH 31,
	2008			2007
	2009			2008
Revenue:
Software Licensing Fees	$	~~885~~1,~~155~~132,859		$	~~367~~885,~~361~~155
Other Revenue		32,~~717~~278			43,~~003~~717
Total Revenue		~~888~~1,~~872~~135,137			~~371~~888,~~364~~872
Operating Costs and Expenses:
Cost of Revenue		~~251~~249,~~325~~415			~~121~~251,~~935~~325
Payroll and Related Expense		~~853~~794,~~780~~239			1853,~~084,764~~780
Selling, General and Administrative		~~586~~595,~~099~~125			~~699~~586,~~958~~099
Professional Services		~~373~~139,~~827~~037			~~418~~373,~~292~~827
Depreciation and Amortization		~~279~~168,~~852~~537			~~251~~279,~~766~~852
Total Operating Costs and Expenses		21,~~344~~946,~~883~~353			2,~~576~~344,~~715~~883
Operating Loss		(1811,~~456,011~~216	)		(21,~~205~~456,~~351~~011	)
Other Income (Expense):
Investment Income — Related Parties		1462,~~166,049~~511			~~628~~1,~~807~~166,049
Net Undistributed Income (Loss) of Equity Investees		(43,813	)		94,276
Interest Expense		(19,848	)		(83,564	)
Interest Expense		(83,564	)		(97,593	)
Net Undistributed Income of Equity Investees		26,282			(43,813	)
Other Income		6237,~~868~~138			4162,~~698~~868
Total Other Income (Expense)		1506,~~101,540~~083			~~667~~1,~~188~~101,540
(Loss) from Operations Before Minority Interest and Income Taxes		(354,471	)		(1,538,163	)
Loss Before Income Taxes		(305,133	)		(354,471	)
Minority Interest in Consolidated Subsidiary Losses		313,984			2,137,006
Benefit from Income Taxes		90,997			28,163
Income (Loss) from Operations Before Income Taxes		(40,487	)		598,843
Net Loss	$	(214,136	)	$	(326,308	)
Benefit (Provision) for Income Taxes		28,163			(223,323	)
Less: Net (loss) attributable to noncontrolling interest		(60,839	)		(313,984	)
Net Income (Loss)	$	(12,324	)	$	375,520
Net Loss attributed to Consulier Engineering, Inc.		(153,297	)		(12,324	)
Income (Loss) Per Share — Basic and Diluted:	$	(0.00	)	$	0.07
Loss Per Share — Basic and Diluted	$	(0.03	)	$	—

~~The~~See ~~Accompanying~~accompanying ~~Notes~~notes ~~are~~to anunaudited ~~Integral Part~~consolidated offinancial ~~These Consolidated Financial Statements~~statements

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES ~~CONDENSED INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY THREE MONTHS ENDED MARCH 31, 2008 (UNAUDITED)~~

															Notes
															Receivable
										Additional					for			Total
	Common Stock				Treasury Stock					Paid-in		(Accumulated			Common			Stockholders’
	Shares		Amount		Shares		Amount			Capital		Deficit)			Stock			Equity
Balance, December 31, 2007		5,485,122	$	54,851		145,262	$	(427,891	)	$	4,117,221	$	(461,135	)	$	(29,147	)	$	3,253,899
Net Loss		—		—		—		—			—		(12,324	)		—			(12,324	)
Purchase of Treasury Stock		—		—		35,336		(126,425	)		—		—			—			(126,425	)
Collection of Notes Receivable for Common Stock		—		—		—		—			—		—			22,496			22,496
Balance, March 31, 2008		5,485,122	$	54,851		180,598	$	(554,316	)	$	4,117,221	$	(473,459	)	$	(6,651	)	$	3,137,646

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

~~The~~THREE ~~Accompanying~~MONTHS ~~Notes~~ENDED ~~are~~MARCH an31, ~~Integral~~2009 ~~Part of These Consolidated Financial Statements~~

7(UNAUDITED)


															Notes
												Retained			Receivable
										Additional		Earnings			for			Total
	Common Stock				Treasury Stock					Paid-in		(Accumulated			Common			Stockholders’
	Shares		Amount		Shares		Amount			Capital		Deficit)			Stock			Equity
Balance, December 31, 2008		5,485,122	$	54,851		190,374	$	(589,027	)	$	4,117,221	$	(894,360	)	$	(6,651	)	$	2,682,034

Net Loss attributed to Consulier Engineering, Inc.													(153,297	)					(153,297	)


Balance March 31, 2009		5,485,122	$	54,851		190,374	$	(589,027	)	$	4,117,221	$	(1,047,657	)	$	(6,651	)	$	2,528,737

See accompanying notes to unaudited consolidated financial statements

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

	THREE MONTHS ENDED
	MARCH 31,
	2008			2007
	2009			2008
Cash Flow (Used in) Operating Activities	$	(1169,~~536,777~~912	)	$	(21,~~187~~536,~~325~~777	)
Investing Activities:
Distributions from Partnership Interest		1,389,091			628,807
Acquisition of Software Upgrades		—			(20,400	)
Acquisition of Property and Equipment		(23,703	)		(29,515	)
Distributions from Partnership Interest		460,992			1,389,091
Acquisition of Software Upgrades		(20,400	)		(44,100	)
Net Acquisition of Property and Equipment		(3,190	)		(23,703	)
Net Cash Provided by Investing Activities		1457,~~344,988~~802			~~555~~1,~~192~~344,988
Financing Activities:
Proceeds from Minority Shareholder in ST, LLC		375,000			2,243,393
Proceeds from Noncontrolling Interest in ST, LLC		140,000			375,000
Increase in Related Party Payables		85,137			81,040
Increase (Decrease) in Related Party Payables		(201,992	)		85,137
Proceeds from Subscription Receivable		~~22,496~~—			—22,496
Purchase of Treasury Stock		~~(126,425~~—	)		—(126,425	)
Repayments on Line of Credit		—			(575,000	)
Repayment of Notes Payable Related Party		(270,000	)		—
Net Cash Provided by Financing Activities		356,208			1,749,433
Net Cash Provided by (Used in) Financing Activities		(331,992	)		356,208
Increase in Cash and Cash Equivalents		164,419			117,300
Increase (Decrease) in Cash and Cash Equivalents		(44,102	)		164,419
Cash and Cash Equivalents — Beginning of Period		~~333~~270,~~024~~192			~~241~~333,~~428~~024
Cash and Cash Equivalents — End of Period	$	~~497~~226,~~443~~090		$	~~358~~497,~~728~~443
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Paid for Interest	$	—63,440		$	~~13,973~~—
Cash Paid for Income Taxes	$	20,000		$	—

~~The~~See ~~Accompanying~~accompanying ~~Notes~~notes ~~are~~to anunaudited ~~Integral Part~~consolidated offinancial ~~These Consolidated Financial Statements~~statements

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED ~~INTERIM~~ CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2009

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Consulier Engineering, Inc., and its subsidiaries (collectively called “Consulier” or the “Company”) are engaged in three primary business lines: ownership in medical software activities, distribution of Captain Cra-Z Soap™ and minority ownership of other business entities.

Consulier International, Inc. (a wholly-owned subsidiary) markets and distributes Captain Cra-Z Soap™ . Consulier’s income is also derived from ownership of interests (Note 4) in BioSafe Systems, ~~LLC~~ LLC (“BioSafe”), a California limited liability company, and AVM, L.P. (“AVM”), an Illinois limited partnership. BioSafe develops and markets environmentally safe products, alternatives to traditionally toxic pesticides. AVM is a broker-dealer in government securities and other fixed income instruments. Consulier’s Chairman and majority stockholder, Warren B. Mosler (“Mosler”), is a general partner of the general partner of AVM.

ST, LLC, a majority-owned (51%) limited liability company, is a majority member (75%) of Patient Care Technology Systems, LLC (“PCTS”), a California limited liability company, which develops and licenses data-based integrated emergency room information systems marketed as Amelior ED™. PCTS is also a provider of passive tracking technologies for emergency departments and operating rooms. Its software technologies track the status and location of patients and assets through wireless badges worn by people or attached to equipment in the emergency department and ancillary areas. PCTS also designs, customizes, markets, sells and distributes paper templates used for diagnostic purposes in emergency medical departments. Mosler’s ownership in ST, LLC was approximately 24% as the Class A member and Consulier’s ownership was approximately 51% as of March 31, ~~2008~~2009.

Basis of Consolidation

The accompanying condensed ~~interim~~ consolidated financial statements include Consulier and its wholly-owned subsidiary, Consulier International, Inc., and ST, LLC, with its majority- owned subsidiary, PCTS. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company uses the equity method of accounting for investments where its ownership is between 20% and 50% (Note 43).

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED ~~INTERIM~~ CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2009

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Interim Financial Data

The accompanying unaudited condensed ~~interim~~ consolidated financial statements have been prepared in in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, management believes the accompanying unaudited condensed ~~interim~~ consolidated financial statements ~~contain~~ contain all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the consolidated financial position of Consulier Engineering, Inc. and subsidiaries as of March 31, ~~2008~~ 2009, and the results of their operations and cash flows for the three months ended March 31, 2009 and 2008. The results of operations and cash flows for the period are not necessarily indicative of the results of operations or cash flows that can be expected for the year ending December 31, ~~2008~~2009. For further information, refer to the consolidated financial statements and footnotes thereto included in Consulier’s annual report on Form 10-~~KSB~~K for the year ended December 31, ~~2007~~2008.

Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates are used when accounting for allowances for doubtful accounts, software and service revenue, revenue reserves, inventory reserves, depreciation and amortization, taxes, contingencies and impairment allowances, if any. Such estimates are reviewed on an ongoing basis. Actual results could differ from these estimates and those differences may be material.

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Concentrations

Financial instruments, which potentially expose the Company to concentrations of credit risk, as defined by Statement of Financial Accounting Standards No. 105, Disclosure of Information about Financial Instruments with Off-Balance-Sheet Risk and Financial Instruments with Concentrations of Credit Risk, consist primarily of accounts receivable. ST, LLC’s accounts receivable are concentrated in the healthcare industry. Although, ST, LLC’s customers typically have been well-established hospitals or medical facilities, some hospitals and medical facilities have experienced significant operating losses as a result of limits on third-party reimbursements from insurance companies and governmental entities, and extended payment of receivables from these entities is not uncommon.

To date, PCTS has relied on a limited number of customers for a substantial portion of its total revenues. The Company expects that a significant portion of its future revenues will continue to be generated by a limited number of customers. The failure to obtain new customers or expand sales through remarketing partners, the loss of existing customers, or the reduction in revenues from existing customers could materially and adversely affect the Company’s operating results.

PCTS currently buys all of its hardware and some major software components of its emergency room information systems from third-party and related-party vendors (Note 10). Although there are a limited number of vendors capable of supplying these components, management believes that other suppliers could provide similar components on comparable terms. A change in suppliers, however, could cause a delay in system implementations and a possible loss of revenues, which could adversely affect operating results

Capitalized Software Development Costs

Software development costs are accounted for in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 86, Accounting for the Costs of Software to be Sold, Leased or Otherwise Marketed. Costs associated with the planning and designing phase of software development, including coding and testing activities necessary to establish technological feasibility, are classified as product research and development and are expensed as incurred. Once technological feasibility has been determined, a portion of the costs incurred in development, including coding, testing, and product quality assurance, are capitalized and subsequently reported at the lower of unamortized cost or net realizable value.

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Capitalized Software Development Costs (Continued)

Amortization is provided on a product-by-product basis over the estimated economic life of the software, not to exceed three years, using the straight-line method. Amortization commences when a product is available for general release to customers. Unamortized capitalized costs determined to be in excess of the net realizable value of a product are expensed at the date of such determination. Amortization expense on capitalized software development costs totaled $57,410 and $26,833 for the three months ended March 31, 2008 and 2007, respectively. Accumulated amortization totaled $1,218,627 and 1,161,217 at March 31, 2008 and December 31, 2007, respectively.

The Company required third party expertise for the development of a new data-based integrated emergency room information system to enhance the functionality, reliability and flexibility of the Company’s existing products, which has not achieved the criteria for capitalization. For the three months ended March 31, 2008 and 2007, research and development costs totaled $188,288 and $356,787, respectively. These expenses are included with professional services in the accompanying condensed interim consolidated statements of operations.

Partnership and Limited Liability Company Investments

The Company’s interest in AVM and Biosafe constitute less than 50% of the ownership of each entity and are accordingly accounted for using the equity method. The Company owns in excess of 50% of ST, LLC, thereby requiring consolidation. The Company owns less than 8% in AVM; however, the Company has the ability to significantly influence this investee under the terms of the partnership agreement. Income or loss is allocated to Consulier based on the partnership and LLC agreements of AVM, BioSafe and ST, LLC. The Company reviews its interest in each of these companies for other than temporary declines in value on a monthly basis by analyzing actual revenue, earnings capacity and estimated future undiscounted cash flows.

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Partnership and Limited Liability Company Investments (Continued)

Effective April 1, 2005, the operating agreement of ST, LLC was amended to reallocate membership interests in this LLC based upon historical contributions. The Company receives allocated losses to the extent of its contributions from inception. Consequently, the losses allocated to Consulier can be greater than or less than the Company’s ownership percentage.

As a result of consolidating ST, LLC, a minority interest was created representing the other member. As of March 31, 2008 there was $52,680 related to this minority interest available to offset future losses.

Effective April 1, 2006, ST, LLC’s operating agreement was amended to create a Class A membership interest. The Class A members are entitled to a cumulative annual priority return of 10% on their investment, and cash available for distribution after payment of that return is distributable to all of the members in accordance with their percentage membership interests. In accordance with this amendment to the operating agreement, allocations of losses are based upon historical annual contributions. As of March 31, 2008, the Class A member had invested $13,197,571, which included an investment of $375,000 during the three months ended March 31, 2008. Unpaid cumulative priority returns on the Class A membership interest totaled approximately $1,817,000 and $1,492,000 at March 31, 2008 and December 31, 2007, respectively.

Consulier can require its principal stockholder to purchase its interest in ST, LLC for cash equal to Consulier’s capital account as of the closing date. Consulier has contributed to ST, LLC approximately $17,017,000 million since inception. As of March 31, 2008, Consulier’s capital account was $0.

Stock-Based Compensation

On January 1, 2006, the Company adopted the fair value recognition provisions of Financial Accounting Standards Board (“FASB”) Statement No. 123(R), Share-Based Payment, (“SFAS 123(R)”). Prior to January 1, 2006, the Company accounted for share-based payments under the recognition and measurement provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees (“APB25”), and related Interpretations, as permitted by FASB Statement No. 123, “Accounting for Stock-Based Compensation (“SFAS 123”). In accordance with APB 25, no compensation cost was required to be recognized for options granted that had an exercise price equal to the market value of the underlying common stock on the date of grant.

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock-Based Compensation (Continued)

The Company adopted SFAS 123(R) using the modified-prospective-transition method. Under this method, compensation cost recognized includes: a) compensation cost for all share-based payments granted prior to, but not yet vested as of December 31, 2005, based on the grant-date fair value estimated in accordance with the original provisions of SFAS 123, and b) compensation cost for all share-based payments granted subsequent to December 31, 2005, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R). In addition, deferred stock compensation related to non-vested options is required to be eliminated against additional paid-in capital upon adoption of SFAS 123(R).

During the three months ended March 31, 2008, there were no stock options granted to employees.

Revenue Recognition

~~The~~PCTS ~~Company~~ derives revenue from the following sources: (1) licensing and sale of data- based ~~integrated~~ integrated emergency room information systems and passive tracking technologies, which include new ~~software~~ software license and software license updates and product support revenues, and (2) services, which ~~include~~ include consulting, advanced product services and education revenues. The following generally describes the revenue accounting followed by ~~the Company~~PCTS.

New software license revenues represent all fees earned from granting customers licenses to use the ~~Company~~PCTS’s database and tracking technology as well as applications software, and exclude revenue derived from software license updates, which is included in software license updates and product support. While the basis for software license revenue recognition is substantially governed by the provisions of Statement of Position (“SOP”) No. 97-2, Software Revenue Recognition, issued by the American Institute of Certified Public Accountants, ~~the~~PCTS ~~Company~~ exercises judgment and uses estimates in connection with the determination of the amount of software and services revenues to be recognized in each accounting period. For software license arrangements that do not require significant modification or customization of the underlying software, PCTS recognizes new software license revenue when: (1) PCTS enters into a legally binding arrangement with a customer for the license of software; (2) PCTS delivers the products; (3) a customer payment is deemed fixed or determinable and free of contingencies or significant uncertainties; and (4) collection is probable. Substantially all new software license revenues are recognized in this manner.

148

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
MARCH 31, 2009

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition (Continued)

For software license arrangements that do not require significant modification or customization of the underlying software, the Company recognizes new software license revenue when: (1) the Company enters into a legally binding arrangement with a customer for the license of software; (2) the Company delivers the products; (3) a customer payment is deemed fixed or determinable and free of contingencies or significant uncertainties; and (4) collection is probable. Substantially all new software license revenues are recognized in this manner. The vast majority of software license arrangements include software license updates and product support, which are recognized ratably over the term of the arrangement, typically one year. Software license updates provide customers with rights to unspecified software product upgrades, maintenance releases and patches released during the term of the support period. Product support includes internet access to technical content, as well as internet and telephone access to technical support personnel. Software license updates and product support are generally priced as a percentage of the net new software license fees.

Many of PCTS’s software arrangements include consulting implementation services sold separately under consulting engagement contracts. Consulting revenue from these arrangements is generally accounted for separately from new software license revenue because the arrangements qualify as service transactions as defined in SOP No. 97-2. The more significant factors considered in determining whether the revenue should be accounted for separately include the nature of services (i.e.g. consideration of whether the services are essential to the functionality of the licensed product), degree of risk, availability of services from other vendors, timing of payments and impact of milestones or acceptance criteria on the realizability of the software license fee.

Revenue for consulting services is generally recognized as the services are performed. If there is a significant uncertainty about the project completion or receipt of payment for the consulting services, revenue is deferred until the uncertainty is sufficiently resolved. Contracts with fixed or “not to exceed” fees are recognized on a proportional performance basis.

If an arrangement does not qualify for separate accounting of the software license and consulting transactions, then new software license revenue is generally recognized together with the consulting services based on contract accounting using either the percentage-of-completion or completed-contract method. Contract accounting is applied to any arrangements: (1) that include milestones or customer specific acceptance criteria that may affect collection of the software license fees; (2) where services include significant modification or customization of the software; (3) where significant consulting services are provided for in the software license contract without additional charge or are substantially discounted; or (4) where the software license payment is tied to the performance of consulting services. Advanced product services revenue is recognized over the term of the service contract, which is generally one year. Education revenue is recognized as the classes or other education offerings are delivered.

159

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED ~~INTERIM~~ CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2009

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition (Continued)

~~Advanced~~For arrangements with multiple elements, PCTS allocates revenue to each element of a transaction based upon its fair value as determined by “vendor specific objective evidence.” Vendor specific objective evidence of fair value for all elements of an arrangement is based upon the normal pricing and discounting practices for those products and services when sold separately, and for software license updates and product support services, is additionally measured by the renewal rate offered to the customer. PCTS defers revenue for any undelivered elements, and recognizes revenue when the product is ~~recognized~~delivered or over the ~~term~~period ofin which the service ~~contract~~is performed, ~~which~~in isaccordance ~~generally~~with ~~one~~the ~~year~~revenue recognition policy for such element. ~~Education~~If ~~revenue~~PCTS iscannot ~~recognized~~objectively asdetermine the ~~classes~~fair value orof ~~other~~any ~~education~~undelivered ~~offerings~~element included in bundle software and service arrangements, PCTS defers revenue until all elements are delivered and services have been performed, or until fair value can objectively be determined for any remaining undelivered elements. When the fair value of a delivered element has not been established, the residual method is used to record revenue if the fair value of all undelivered elements is determinable. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered elements and is recognized as revenue.

For arrangements with multiple elements, the Company allocates revenue to each element of a transaction based upon its fair value as determined by “vendor specific objective evidence.” Vendor specific objective evidence of fair value for all elements of an arrangement is based upon the normal pricing and discounting practices for those products and services when sold separately, and for software license updates and product support services, is additionally measured by the renewal rate offered to the customer.

The Company defers revenue for any undelivered elements, and recognizes revenue when the product is delivered or over the period in which the service is performed, in accordance with the revenue recognition policy for such element. If the Company cannot objectively determine the fair value of any undelivered element included in bundle software and service arrangements, the Company defers revenue until all elements are delivered and services have been performed, or until fair value can objectively be determined for any remaining undelivered elements. When the fair value of a delivered element has not been established, the residual method is used to record revenue if the fair value of all undelivered elements is determinable. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered elements and is recognized as revenue.

Sales of the Company’s soap products are recorded upon shipment of goods to customers.

Shipping and handling costs billed to customers are included in sales and recorded when goods are shipped to customers. Shipping costs of the Company are classified as a selling expense.

Advertising and Marketing Costs

Advertising costs are expensed as incurred and amounted to approximately $79,000 and $82,000 for the three months ended March 31, 2008 and 2007, respectively.

Income Taxes

The Company accounts for income taxes under the liability method. Under this method, deferred tax liabilities and assets are determined based on the difference between the consolidated financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

16As part of the process of preparing our consolidated financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. This process involves estimating current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the Company’s consolidated balance sheet. The Company then assesses the likelihood that the deferred tax assets will be recovered from future taxable income and to the extent it believes that recovery is not likely, it establishes a valuation allowance.

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
MARCH 31, 2009

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes (Continued)

As part of the process of preparing our consolidated financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. This process involves estimating current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the Company’s consolidated balance sheet. The Company then assesses the likelihood that the deferred tax assets will be recovered from future taxable income and to the extent it believes that recovery is not likely, it establishes a valuation allowance. To the extent the Company establishes a valuation allowance or changes this allowance in a period, it includes an expense or a benefit within the tax provision in the Company’s statement of operations.

In June 2006, the Financial Accounting Standards Board published FASB Interpretation No. 48 (“FIN noNo. 48”). “Accounting for Uncertainty in Income Taxes,” to address the non-comparability in reporting tax assets and liabilities resulting from a lack of specific guidance in FASB Statement of Financial Accounting Standards No. 109 (“SFAS 109”), “Accounting for Income Taxes,” on the uncertainty in income taxes recognized in an enterprise’s financial statements. Specifically, FIN No. 48 prescribes (a) a consistent recognition threshold and (b) a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides related guidance on derecognition, classification, interest and penalties, accounting interim periods, disclosure and transition. FIN 48 requires companies to determine whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. For those tax positions where it is “not more likely than not” that a tax benefit will be sustained, no tax benefit is recognized. Where applicable, associated interest and penalties are also recorded. ~~FIN~~in ~~No. 48~~the ~~applies~~accompanying toconsolidated ~~fiscal~~financial ~~years~~statements ~~beginning~~as ~~after December 15~~selling, ~~2006,~~ ~~with~~general ~~earlier~~and ~~adoption~~administrative ~~permitted~~expenses.

~~The~~Based ~~Company~~on ~~adopted~~our ~~the~~evaluation, ~~provisions~~we ofhave ~~FIN~~concluded 48that onthere ~~January 1,~~are ~~2007~~no significant uncertain tax positions requiring recognition in our financial statements. AsOur aevaluation ~~result~~was ofperformed for the ~~implementation~~tax years ofended ~~FIN~~December 31, 482008, ~~the~~2007, ~~Company~~2006, ~~had~~and no2005, ~~changes~~the intax ~~the~~years ~~carrying~~which ~~value~~remain ofsubject ~~its~~to ~~tax~~examination ~~assets~~by major ortax ~~liabilities~~jurisdictions ~~for any~~as ~~unrecognized~~of ~~tax~~March 31, ~~benefits~~2009.

17 Newly Issued Accounting Pronouncements

In September 2006, the FASB issued SFAS 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. For all of our financial assets and liabilities that are recognized and disclosed at fair value on a recurring basis, we adopted the provisions of SFAS 157 effective January 1, 2008. The implementation of SFAS No. 157 did not have a material effect on the Company’s consolidated financial statements.

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
MARCH 31, 2009

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Newly Issued Accounting Pronouncements (Continued)

In September 2006, the FASB issued SFAS 157, “Fair Value Measurements” (SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. For all ~~of our financial~~ assets and liabilities that are recognized and disclosed at fair value on a recurring basis, we adopted the provisions of SFAS 157 effective January 1, 2008. The implementation of SFAS No. 157 did not have a material effect on the Company’s consolidated financial statements. For all assets and liabilities that are non-financial that are recognized or disclosed at fair value in the financial statements on a non-recurring basis we ~~plan~~had planned to adopt the provisions of SFAS 157 effective January 1, 2009. This partial deferral was a result of Staff Position 157-2 “Effective Date of FASB Statement No. 157” (FSP 157-2”) issued on February 12, 2008, which delayed the adoption of SFAS 157 for non-financial assets and liabilities that are recognized or disclosed at fair value on a non-recurring basis. We are currently evaluating the impact of SFAS 157-2 on our financial statements relative to non-financial assets and liabilities.

On February 15, 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS No. 159”). Under SFAS No. 159, the Company may elect to report financial instruments and certain other items at fair value on a contract-by-contract basis with changes in value reported in earnings. This election is irrevocable. SFAS No. 159 provides an opportunity to mitigate volatility in reported earnings that is caused by measuring hedged assets and liabilities that were previously required to use a different accounting method than the related hedging contracts when the complex provisions of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, (“SFAS 133”) applicable to hedge accounting are not met. The ~~Company~~ Company adopted SFAS No. 159 on January 1, 2008. The Company chose not to elect the fair value option for its financial assets and liabilities existing at January 1, ~~2008~~2009, and did not elect the fair value option on financial assets and liabilities transacted in the three months ended March 31, ~~2008~~2009. Therefore, the adoption of SFAS No. 159 had no impact on the Company’s interim condensed consolidated financial statements.

18In March 2008, the FASB issued SFAS 161 “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (“SFAS 161”), which is effective for fiscal years and interim periods beginning after November 15, 2008, with earlier adoption encouraged. This statement is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, financial performance, and cash flows. SFAS 161 applies to all derivative instruments within the scope of SFAS 133, as well as related hedged items, bifurcated derivatives, and non-derivative instruments that are designated and qualify as hedging instruments. This statement was adopted effective January 1, 2009. SFAS 161 had no material impact on our consolidated financial statements.

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED ~~INTERIM~~ CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2009

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Newly Issued Accounting Pronouncements (Continued)

In ~~March~~December ~~2008~~2007, the FASB issued SFAS ~~161~~141R, “~~Disclosures~~Business ~~about~~Combinations” ~~Derivative~~(“SFAS ~~Instruments~~141R”), ~~and~~which ~~Hedging~~is ~~Activities,~~effective anprospectively ~~amendment~~for ofall ~~FASB~~business ~~Statement~~combinations ~~No. 133”~~with ~~(SFAF~~acquisition ~~161”),~~dates ~~which~~on isor ~~effective~~after ~~for fiscal~~the ~~years~~beginning ~~and~~of ~~interim~~the ~~periods~~first fiscal year beginning after ~~November~~December 15, 2008, with ~~earlier~~the ~~adoption~~exception ~~encourages.~~of the ~~This~~accounting ~~statement~~for isvaluation ~~intended~~allowances toon ~~improve~~deferred ~~transparency~~taxes inand ~~financial~~acquired ~~reporting~~tax bycontingencies. ~~requiring~~SFAS ~~enhanced~~141R ~~disclosures~~replaces SFAS 141 “Business Combinations” (“SFAS 141”), but it retains the underlying concepts of SFAS an141 ~~entity’s~~in ~~derivative~~that ~~instruments~~all ~~and~~business ~~hedging~~combinations ~~activities~~are ~~and~~required ~~their~~to ~~effects~~be onaccounted for at fair value under the ~~entity’s~~acquisition ~~financial~~method ~~position,~~of ~~financial~~accounting. ~~performance~~However, ~~and~~SFAS ~~cash~~141R ~~flows.~~changed ~~SFAS~~the ~~161~~method ~~applies~~of toapplying ~~all~~the ~~derivative~~acquisition ~~instruments~~method ~~within~~in ~~the~~a ~~scope~~number of ~~SFAS~~significant ~~133,~~ways. ~~“Accounting~~Acquisition ~~for~~costs ~~Derivative~~will ~~Instruments~~generally ~~and~~be expensed ~~Hedging~~as ~~Activities”~~incurred; ~~(“SFAS~~noncontrolling ~~133”)~~interests aswill ~~well~~be asvalued ~~related~~at ~~hedged~~fair ~~items,~~value ~~bifurcated~~at ~~derivatives,~~the ~~and~~acquisition date; ~~non~~in-~~derivative~~process ~~instruments~~research ~~that~~and ~~are~~development ~~designated~~will ~~and~~be ~~qualify~~recorded at fair value at the acquisition date as ~~hedging~~an indefinite-lived ~~instruments.~~intangible Weasset; dorestructuring ~~not~~cost associated with a business combination will ~~expect~~generally ~~SFAS~~be ~~161~~expensed subsequent to ~~have~~the aacquisition ~~material~~date; ~~impact~~and onchanges ~~our~~in ~~consolidated~~deferred ~~financial~~tax ~~statements~~asset valuation allowances and ~~plan~~income totax uncertainties after the acquisition date generally will affect ~~adopt~~income ittax expense. This statement was adopted effective January 1, 2009. SFAS 141R did not have a material impact on our consolidated financial statements.

In ~~December~~April ~~2007~~2008, the FASB issued ~~SFAS~~FSP ~~141R~~No. FAS ~~“Business~~142-3, ~~Combinations” (~~“~~SFAS~~Determination ~~141R”),~~of ~~which~~the ~~is effective~~Useful ~~prospectively~~Life ~~for~~of ~~all~~Intangible Assets.” ~~business~~This ~~combinations~~FSP ~~with~~amends ~~acquisition dates on or after~~ the ~~beginning~~ offactors ~~the~~that ~~first~~should ~~fiscal~~be ~~year~~considered ~~beginning~~in ~~after~~developing ~~December 15,~~renewal ~~2008,~~or ~~with~~extension assumptions ~~the~~used ~~exception~~to ofdetermine the ~~accounting~~ ~~for~~useful ~~valuation~~life ~~allowances~~of ona ~~deferred~~recognized ~~taxes~~intangible ~~and~~asset ~~acquired~~under ~~tax contingencies.~~ SFAS ~~141R~~No. 142, ~~replaces~~“Goodwill ~~SFAS~~and ~~141~~Other ~~“Business~~Intangible ~~Combinations~~Assets” (“SFAS ~~141”~~142),. ~~but~~The itobjective ~~retains the underlying concepts~~ of ~~SFAS~~ ~~141~~this inFSP ~~that~~is ~~all business combinations are required~~ to beimprove ~~accounted for at fair value under~~ the ~~acquisition~~consistency ~~method~~between ~~of accounting. However, SFAS 141R changed~~ the ~~method~~useful life of ~~applying the acquisition method in~~ a ~~number~~recognized ofintangible ~~significant~~asset ~~ways.~~under ~~Acquisition~~SFAS ~~costs~~142 ~~will~~and ~~generally~~the ~~be expensed~~period asof ~~incurred;~~expected ~~noncontrolling~~cash ~~interest~~flows ~~will~~used beto ~~valued~~measure ~~at fair value at~~ the ~~acquisition date; in-process research and development will be recorded at~~ fair value atof the ~~acquisition date as an indefinite-lived intangible~~ asset; ~~restructuring~~under ~~cost~~SFAS ~~associated~~141(R), ~~with a business combination will generally be expensed subsequent to the acquisition date;~~ and ~~changes in deferred tax asset~~other ~~valuation~~principles ~~allowances~~of ~~and income tax uncertainties after the acquisition date generally will affect income tax expense~~GAAP. ~~We do not expect SFAS 141R to have a material impact on our consolidated financial statements and plan to adopt it effective January 1, 2009.~~

19This FSP applies to all intangible assets, whether acquired in a business combination or otherwise, and shall be effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years and applied prospectively to intangible assets acquired after the effective date. Early adoption is prohibited. We have evaluated the new statement and have determined that it will not have a significant impact on the determination or reporting of our consolidated financial results.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (SFAS 162). This statement identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in accordance with GAAP. With the issuance of this statement, the FASB concluded that the GAAP hierarchy should be directed toward the entity and not its auditor, and reside in the accounting literature

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED ~~INTERIM~~ CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2009

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Newly Issued Accounting Pronouncements (Continued)

Inestablished ~~December 2007,~~by the FASB ~~issued~~as ~~SFAS~~opposed ~~160~~to ~~“Non-controlling~~the ~~Interests~~American inInstitute ~~Consolidated~~of ~~Financial Statements”~~Certified ~~(“SFAS160”),~~Public ~~which amends Accounting Research Bulletin (“ARB”) 51, “Consolidated~~Accountants ~~Financial Statements”~~ (~~“ARB 51”~~AICPA). Statement ~~SFAS~~on ~~160~~Auditing isStandards ~~effective for quarterly and annual reporting periods that begin after December~~No. 1569, ~~2008.~~“The ~~SFAS~~Meaning ~~160~~of ~~establishes~~Present ~~accounting~~Fairly ~~and~~in ~~reporting~~Conformity ~~standards with~~With ~~respect~~Generally toAccepted ~~non-controlling~~Accounting ~~interests~~Principles.” ~~(also~~This ~~called~~statement ~~minority~~is ~~interests)~~effective in60 days anfollowing ~~effort to improve~~ the SEC’s ~~relevance,~~approval ~~comparability and transparency~~ of ~~financial~~the ~~information~~Public ~~that~~Company aAccounting ~~company~~Oversight ~~provides~~Board ~~with respect~~amendments to ~~its~~AU ~~non-controlling~~Section 411, ~~interests.~~ “The ~~significant requirements under SFAS 160 are the~~ ~~reporting~~Meaning of ~~the~~Present ~~non-controlling~~Fairly ~~interests separately~~ in ~~the~~Conformity ~~equity~~With ~~section~~Generally ofAccepted ~~the~~Accounting ~~balance~~Principles.” ~~sheet~~We have ~~and~~evaluated the ~~reporting~~new ofstatement ~~the~~and ~~net~~have ~~income~~determined orthat ~~loss~~it ofwill ~~the~~not ~~controlling~~have ~~and~~a ~~non-controlling~~significant ~~interests separately~~impact on the determination ~~face~~or ofreporting ~~the statement~~ of ~~operations. We do not expect SFAS 160 to have a material impact on~~ our consolidated financial ~~statements and plan to adopt it effective January 1, 2009~~results.

~~NOTE~~In December 2007, the FASB issued FAS 160 “Non-controlling Interests in Consolidated Financial Statements” (“FAS160”), which amends Accounting Research Bulletin (“ARB”) 51, “Consolidated Financial Statements” (“ARB 51”). This statement was adopted effective January 1, 2009. FAS160 provides guidance for the accounting, reporting and disclosure of noncontrolling interests and requires, among other things, that noncontrolling interests be recorded as equity in the consolidated financial statements. The adoption of this standard resulted in the reclassification of $2,736,472 of Minority Interests (now referred to as noncontrolling interests) to a separate component of Stockholders’ Equity on the Consolidated Balance Sheet. ~~DEFERRED~~Additionally, ~~IMPLEMENTION~~net ~~COSTS~~income attributable to non controlling interests is now shown separately from parent net income in the Consolidated Statement of Income. Prior periods have been restated to reflect the presentation and disclosure requirements of FAS 160.

~~Deferred~~EITF ~~implementation costs as of March 31~~08-6, ~~2008~~which ~~and~~is ~~December 31,~~effective ~~2007, totaled $~~January 1,~~968,818~~ ~~and $2~~2009,~~024,785,~~ ~~respectively,~~clarifies ~~and~~the ~~represented~~accounting ~~equipment purchased~~ for ~~customers, payroll and payroll related expenses for customer contracts which have not met~~ certain ~~milestones, customer acceptance~~transactions orand ~~“go-live”~~impairment ~~dates.~~considerations ~~Implementation~~involving ~~costs~~equity ~~are~~method ~~deferred~~investments and ~~recognized~~is ~~ratably~~applied ~~over the initial licensing term or upon reaching certain milestones, acceptance criteria or “go-live” dates depending~~ on ~~the~~a ~~applicable revenue stream. Deferred implementation costs are stated at the lower~~prospective ofbasis ~~cost~~to orfuture ~~market~~transactions.

~~NOTE~~Under 3FSP FAS 157-4, if an entity determines that there has been a significant decrease in the volume and level of activity for an asset or liability in relation to the normal market activity for the asset or liability (or similar assets or liabilities), then transactions or quoted prices may not accurately reflect fair value. ~~CONCENTRATION~~In OFaddition, ~~CREDIT~~if ~~RISK~~there is evidence that the transaction for the asset or liability is not orderly, the entity shall place little, if any, weight on that transaction price as an indicator of fair value. Since FSP FAS 157-4 is effective for interim reporting periods ending after June 15, 2009, the Company will adopt the provisions of FSP FAS 157-4 during the second quarter of 2009 and is currently assessing the impact of adoption on its financial position and results of operations.

~~The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally~~14 insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. The Company places its cash with high credit quality financial institutions. Cash held by these financial institutions in excess of FDIC limits amounted to approximately $368,000 at March 31, 2008.

The Company grants credit to customers, substantially all of whom are businesses located in the United States and Canada. The Company typically does not require collateral from customers. The Company monitors exposure to credit losses and maintains allowances for anticipated losses considered necessary in the circumstances.

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
MARCH 31, 2009

~~CONSULIER~~NOTE ~~ENGINEERING, INC~~1. ~~AND~~DESCRIPTION ~~SUBSIDIARIES NOTES~~OF TOBUSINESS ~~THE~~AND ~~UNAUDITED~~SUMMARY ~~CONDENSED~~OF ~~INTERIM~~SIGNIFICANT ~~CONSOLIDATED FINANCIAL~~ACCOUNTING ~~STATEMENTS~~POLICIES (CONTINUED)

~~NOTE~~Newly 3.Issued ~~CONCENTRATION~~Accounting OFPronouncements ~~CREDIT RISK~~ (~~CONTINUED~~Continued)

~~Approximately~~FSP ~~43%~~FAS 107-1/APB 28-1 requires disclosures about fair values of financial instruments in interim and annual financial statements. Prior to the ~~Company’s~~issuance ~~software~~of ~~licensing~~FSP ~~fees~~FAS 107-1/APB 28-1, disclosures about fair values of financial instruments were ~~derived~~only ~~from~~required ~~two~~to ~~customers~~be ~~for~~disclosed ~~the~~annually. FSP FAS ~~three~~107-1/APB ~~months~~28-1 ~~ended~~requires ~~March 31,~~disclosures ~~2008.~~about ~~Customer~~fair Avalue ~~and~~of Bfinancial ~~represented~~instruments ~~approximately~~in ~~31%~~interim and ~~12%,~~annual ~~respectively,~~financial ofstatements. ~~total~~Since ~~software~~FSP ~~licensing~~FAS ~~fees~~107-1/APB 28-1 is effective for ~~the~~interim ~~three~~reporting ~~months~~periods ending ~~ended~~after ~~March~~June 3115, ~~2008.~~2009, the Company will adopt FSP FAS 107-1/APB 28-1 in the second quarter ~~Approximately~~2009. ~~20%~~Since FSP FAS 107-1/APB 28-1 requires only additional disclosures of ~~the~~fair ~~Company’s~~values ~~software~~of financial ~~licensing~~instruments ~~fees~~in ~~were~~interim ~~derived~~financial ~~from~~statements, ~~one~~the ~~customer~~adoption ~~for~~will not affect the Company’s ~~three~~financial ~~months~~position ~~ended~~or ~~March 31,~~results ~~2007~~of operations.

NOTE 42. ~~INVESTMENTS~~DEFERRED —IMPLEMENTATION ~~PARTNERSHIP AND LIMITED LIABILITY COMPANY~~COSTS

~~The~~Deferred ~~Company’s~~implementation ~~limited~~costs ~~partnership~~as ~~and~~of ~~limited~~March 31, ~~liability~~2009, ~~company~~totaled ~~interests~~$2,293,511 ~~consist~~and of$2,293,464 ~~Consulier’s~~as of ~~investments~~December 31, in2008, ~~AVM~~and represented equipment purchased for customers, Lpayroll and payroll related expenses for customer contracts which have not met certain milestones and customer acceptance or “go-live” dates.P. Implementation costs are deferred and ~~BioSafe~~recognized ~~Systems~~ratably over the initial licensing term or upon reaching certain milestones, ~~LLC~~acceptance criteria or “go-live” dates, depending ~~respectively~~on the applicable revenue stream. Deferred implementation costs are stated at the lower of cost or market.

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
MARCH 31, 2009

NOTE 3. INVESTMENTS — PARTNERSHIP AND LIMITED LIABILITY COMPANY

The Company’s limited partnership and limited liability company interests consist of its investments in AVM and BioSafe, respectively.

AVM, L.P.

Consulier owned an ~~approximate~~approximately 6.3% and 7.5% limited partnership interest in AVM as of March 31, 2009 and 2008, ~~and 2007~~respectively. Based on capital and earnings distributions provided in the partnership agreement, Consulier was allocated approximately 3.7% and 5.6% of AVM’s earnings during the three months ended March 31, ~~2008~~2009 and ~~2007~~ 2008, respectively. Under the partnership agreement, Consulier may withdraw ~~all~~from orAVM ~~any portion of its capital account~~ upon 3090 days’ written notice.

The following is a summary of the results of operations (unaudited) of AVM and the income allocated to the Company:

	Three Months Ended
	March 31,
	(In Thousands)
	(Unaudited)
	2008		2007
	2009		2008
Revenues	$	4327,~~413~~347	$	2243,~~914~~413
Cost and Expenses		22,727		11,520
Cost & Expenses	$	14,967	$	22,727
Net Income	$	2012,~~686~~380	$	1120,~~394~~686
Consulier’s Share of Earnings	$	~~1,166~~463	$	~~629~~1,166

The carrying value of the Company’s investment in AVM, ~~L.P.~~ at March 31, ~~2008~~2009 and December 31, ~~2007~~ 2008, was $1,~~852~~552,~~133~~893 and $1,~~997~~582,~~810~~260, respectively.

2116

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
MARCH 31, 2009

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4. INVESTMENTS — PARTNERSHIP AND LIMITED LIABILITY COMPANY (CONTINUED)

BIOSAFE SYSTEMS, LLC

Consulier ~~owns~~owned a 40% interest in BioSafe Systems as of March 31, ~~LLC~~2009 ~~(“BioSafe”)~~and 2008. The following is a summary of the results of operations of BioSafe and the income allocated to Consulier:

	Three Months Ended
	March 31,
	(In Thousands)
	(Unaudited)
	2008			2007
	2009			2008
Revenues	$	1,~~786~~419		$	1,~~689~~786
Cost and Expenses		1,896			1,453
Cost & Expenses	$	1,351		$	1,896
Net Income (Loss)	$	(110	)	$	236
Net Income	$	68		$	(110	)
Consulier’s Share of Earnings (Loss)	$	(44	)	$	94
Consulier’s Share of Earnings	$	26		$	(44	)

The carrying value of Consulier’s investment in BioSafe at March 31, 2009 was $1,~~050~~073,~~307~~039 and $1,~~094~~046,~~120~~757 at ~~March 31, 2008 and~~ December 31, ~~2007, respectively~~2008.

NOTE 54. ~~TREASURY~~EARNINGS ~~STOCK~~PER SHARE

~~During~~Basic ~~the~~earnings ~~three~~per ~~months~~share ~~ended,~~are ~~March~~calculated by dividing net income (loss) ~~31,~~available ~~2008,~~to stockholders by the ~~Company~~weighted ~~repurchased~~average ~~35,336~~number of common shares ofoutstanding ~~its~~during ~~common~~each period. Diluted earnings per ~~stock~~share ~~for~~are ~~$126,425,~~computed ~~representing~~using the ~~market~~weighted ~~value~~average number of ~~the~~common ~~Company’s~~and dilutive potential common shares outstanding onduring the ~~date~~period. Dilutive potential common shares consist of shares issuable upon the ~~purchase~~exercise ~~plus~~of ~~broker~~stock ~~commissions.~~awards (calculated using the treasury stock method) warrants, convertible debt and convertible preferred stock during the period they were outstanding.

~~NOTE 6. EARNINGS PER SHARE~~17

Basic earnings per share is calculated by dividing net income (loss) available to stockholders by the weighted average number of common shares outstanding during each period. Diluted earnings per share is computed using the weighted average number of common and dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of shares issuable upon the exercise of stock awards (calculated using the treasury stock method) warrants, convertible debt and convertible preferred stock during the period they were outstanding.

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED ~~INTERIM~~ CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2009

NOTE 64. EARNINGS PER SHARE (CONTINUED)

Basic and diluted earnings per share for the three months ended March 31, ~~2008~~2009 ~~and 2007~~ were calculated as follows:

	Three Months Ended
	March 31,
	2008			2007
	2009			2008
BASIC AND DILUTED INCOME (LOSS) PER SHARE COMPUTATION:
BASIC & DILUTED EARNINGS PER SHARE COMPUTATION:
NUMERATOR:
Net Income (Loss)	$	(12,324	)	$	375,520
Net Loss attributed to Consulier Engineering, Inc.	$	(153,297	)	$	(12,324	)
DENOMINATOR:
Average number of common shares outstanding		5,320,823			5,485,122
Common Shares- Weighted Average Number of common share outstanding		5,294,748			5,320,823
	$	(.00	)	$	.07
Earnings(Loss) per share weighted average shares outstanding	$	(0.03	)	$	0.00

As of March 31, ~~2008~~2009 and ~~2007~~2008, the Company did not have any dilutive outstanding common stock instruments to be included in its diluted earnings per share computation.

NOTE 75. SEGMENT INFORMATION

Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company has four reportable segments: distribution of household and tool products, ownership of limited liability entities, medical software activities, and corporate. The household and tool products manufacturing segment is engaged in sales of the Captain Cra-Z soap product line and tool and ladder related products. The investments segment maintains investment interests in a limited partnership and a limited liability company (which are together called “Limited Liability Companies” in the following tables). The corporate segment is engaged in management of the business and finance activities.

2318

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED ~~INTERIM~~ CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2009

~~NOTE~~Segment 7.information ~~SEGMENT~~as ~~INFORMATION~~of ~~(CONTINUED)~~ and for the three months ended March 31, 2009 and 2008 are as follows:

Segment information as of and for the three months ended March 31, 2008 and 2007 are as follows:


	Three Months Ended March 31, 2009
				Income (loss) Derived						Medical
	Distribution			from Ownership of			Corporate			Software
	Activities			Investments			Activities			Activites			Total
Revenue (b)	$	2,278		$	—		$	—		$	1,132,859		$	1,135,137
Operating Income (loss)		(26,425	)		—			(148,474	)		(636,317	)		(811,216	)
Other Income (loss)(a)		—			488,793			17,290			—			506,083
Noncontrolling Interest		—			—			—			60,839			60,839
Income Tax Benefit		—			—			—			—			0
(Expense)		8,945			(165,673	)		44,603			203,122			90,997
Net Income (loss)(a)		(17,480	)		323,120			(86,581	)		(372,356	)		(153,297	)
Total Assets	$	36,241		$	2,625,932		$	2,289,116		$	3,755,051		$	8,706,340

	Three Months Ended March 31, 2008
				Income (Loss)
				Income (loss) Derived						Medical
				Derived From
	Distribution			from Ownership of			Corporate			Software
				Ownership of						Medical
	Activities			Investments			Activities			Activites			Total
	Distribution			Limited Liability			Corporate			Software
	Activities			Companies			Activities			Activities			Total
Revenue (b)	$	3,717		$	—		$	—		$	885,155		$	888,872
Operating (Loss)		(33,706	)		—			(204,274	)		(1,218,031	)		(1,456,011	)
Operating Income (loss)		(33,706	)		—			(204,274	)		(1,218,031	)		(1,456,011	)
Other Income (Loss)		—			1,122,236			64,491			(85,187	)		1,101,540
Other Income (loss)(a)		—			1,122,236			64,491			(85,187	)		1,101,540
Minority Interest		—			—			—			313,984			313,984
Noncontrolling Interest		—			—			—			313,984			313,984
Income Tax Benefit (Provision)		11,096			(401,756	)		51,720			367,103			28,163
Income Tax Benefit														—
Net Income (Loss) (a)		(22,610	)		720,480			(88,063	)		(622,131	)		(12,324	)
(Expense)		11,096			(401,756	)		51,720			367,103			28,163
Net Income (loss)(a)		(22,610	)		720,480			(88,063	)		(622,131	)		(12,324	)
Total Assets	$	50,272		$	2,902,441		$	2,602,286		$	4,245,460		$	9,800,459

	Three Months Ended March 31, 2007
				Income (Loss)
				Derived From
				Ownership of						Medical
	Distribution			Limited Liability			Corporate			Software
	Activities			Companies			Activities			Activities			Total
Revenue (b)	$	4,003		$	—		$	—		$	367,361		$	371,364
Operating (Loss)		(22,763	)		—			(139,040	)		(2,043,548	)		(2,205,351	)
Other Income (Loss)		—			723,083			37,563			(93,458	)		667,188
Minority Interest		—			—			—			2,137,006			2,137,006
Income Tax Benefit		7,967			(277,597	)		46,307			—			(223,323	)
(Provision)
Net Income (Loss) (a)		(14,796	)		445,486			(55,170	)		—			375,520
Total Assets	$	65,781		$	2,805,280		$	3,132,583		$	4,813,913		$	10,817,557


(a)		All interest expense incurred by the Company was allocated to the Corporate Activities Segment.

(b)		There was no intersegment revenue during the period.

2419

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
MARCH 31, 2009

~~CONSULIER~~NOTE ~~ENGINEERING, INC~~6. ~~AND~~INCOME ~~SUBSIDIARIES~~TAXES ~~NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS~~

NOTE 8. INCOME TAXES

Provisions (benefit) for federal and state income tax in the interim condensed consolidated statements of operations consist of the following:

	For the Three Months
	Ended March 31,
	2008			2007
	2009			2008
Current:
Federal	$	—(12,956	)	$	—
State		—		$	—
		—			—
	$	(12,956	)	$	—
Deferred:
Federal	$	(2564,~~477~~741	)	$	~~201~~(25,~~780~~477	)
State	$	(213,~~686~~300	)	$	21(2,~~543~~686	)
		(28,163	)		223,323
	$	(78,041	)	$	(28,163	)
Total income tax provision (benefit)	$	(28,163	)	$	223,323
Total Income Tax (Benefit)	$	(90,997	)	$	(28,163	)

Applicable income taxes (benefit) for financial reporting purposes differ from the amount computed by applying the statutory federal income tax rate as follows:

	Three Months Ended
	For Three Months
	March 31,
	Ended March 31,
	2008			2007
	2009			2008
Federal tax expense (benefit) at statutory rate	$	(120,520	)	$	196,216
Federal Tax Expense (Benefit) at statutory Rate	$	(103,745	)	$	(120,520	)
State income tax expense (benefit) net of federal tax effect		(12,867	)		21,738
State Income Tax Expense (Benefit) net of Federal Tax effect	$	(8,778	)	$	(12,867	)
Losses allocated to minority shareholder of ST, LLC		103,072			—
Losses allocated to noncontrolling interest of ST, LLC	$	20,685		$	103,072
Meals and Entertainment	$	~~2,152~~841		$	—2,152
Other		—			5,369
Income Tax (Benefit)	$	(90,997	)	$	(28,163	)
Income tax expense (benefit)	$	(28,163	)	$	223,323

As of March 31, ~~2008~~2009, the Company had Federal and state tax loss carry-forwards totaling approximately $~~40,000~~0 and $65,~~500~~200,000, respectively, available to reduce future years’ income ~~through~~ ~~2024.~~through 2023.

2520

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
MARCH 31, 2009

~~CONSULIER~~NOTE ~~ENGINEERING, INC~~6. ~~AND~~INCOME ~~SUBSIDIARIES NOTES~~TAXES ~~TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED~~(CONTINUED) ~~FINANCIAL STATEMENTS~~

~~NOTE~~The 8.approximate ~~INCOME~~tax ~~TAXES~~effects of temporary differences that give rise to deferred tax assets (~~CONTINUED~~liabilities) as of March 31, 2009 and December 31, 2008, are as follows:

The approximate tax effects of temporary differences that give rise to deferred tax assets (liabilities) as of March 31, 2008 are as follows:


	March 31,		December 31,
	2009		2008
Depreciation and Amortization	$	339,567	$	310,974
Tax loss carry forward		328,999		185,419
Accrued Interest		270,483		364,615

Total Net Deferred Tax Asset	$	939,049	$	861,008

Depreciation and Amortization	$	287,137
Tax loss carry forward		250,996
Accrued Interest — Note Payable, Related Party		323,245
Total Net Deferred Tax Asset	$	861,378

Deferred tax assets and liabilities are reflected on the balance sheet as of March 31, 2009 and December 31, 2008, as follows:

Deferred tax assets and liabilities are reflected on the balance sheet as of March 31, 2008 as follows:


	March 31,		December 31,
	2009		2008
Net Short-Term Deferred Tax Asset	$	270,483	$	364,615
Net Long-Term Deferred Tax Asset		668,566		496,393

Net Deferred Tax Assets	$	939,049	$	861,008

Net Short-Term Deferred Tax Assets	$	291,208
Net Long-Term Deferred Tax Assets		570,170
Net Deferred Tax Assets	$	861,378

NOTE 7. COMMITMENTS AND CONTINGENCIES

~~NOTE~~From 9:time ~~COMMITMENTS~~to ~~AND~~time, ~~CONTINGENCIES~~the Company may be involved in lawsuits and claims in the ordinary course of business. Currently, neither the Company nor any of its subsidiaries are involved in any lawsuits or claims.

~~From~~NOTE ~~time to time, the Company is involved in lawsuits and claims in the ordinary course of business~~8. ~~Management~~RELATED ~~does~~PARTY ~~not believe the outcome of any litigation against the Company would have~~TRANSACTIONS ~~a material adverse effect on the Company’s financial position or results of operations.~~

On August 2, 2006, PCTS was made a defendant to a lawsuit filed by Hill-Rom Services, Inc. et al. vs. Versus Technology, et al., United States District Court, Middle District of North Carolina, Civil Action No. 1:03CV01227, as a successor in interest to Healthcare Information Technology, Inc., and as a customer of a vendor concerning the vendor’s disputed patent ownership and unauthorized use of such patents. Effective January 21, 2008, all claims against PCTS were settled and the cased was dismissed.

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10. RELATED PARTY TRANSACTIONS

NOTE PAYABLE — RELATED PARTY

ST, LLC, has unsecured promissory notes to the majority stockholder totaling $3718,~~405,062~~796 as of March 31, ~~2008~~2009, the proceeds of which have been used to meet operating ~~funding~~ requirements. These ~~promissory~~ promissory notes accrue interest at 10% per annum, compounding monthly. Interest only is payable annually on the anniversary date of each of the promissory notes. The promissory notes and any ~~accrued~~ accrued interest are due on demand ~~anytime~~any time after 10 years from the applicable date of the note. Accordingly, the total unpaid principal balance is included in long-term liabilities on the accompanying ~~condensed interim~~ consolidated balance sheet. The Company may not prepay the principal balance without prior consent of the majority stockholder. Accrued interest on this note totaled $858,783 and $773,646 and is included in related party payable on the accompanying consolidated balance sheets as of March 31, 2008 and December 31, 2007, respectively.

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
MARCH 31, 2009

NOTE PAYABLE — RELATED PARTY (CONTINUED)

Accrued interest on these notes totaled $9,815 and $53,407 and is included in note payable related party on the accompanying consolidated balance sheets as of March 31, 2009 and December 31, 2008, respectively. Interest on the note totaled $19,848 and $858,783 for the period ending March 31, 2009 and 2008, respectively.

OTHER RELATED PARTY TRANSACTIONS

PCTS’s president is also the majority owner of a company that provides materials related to the Company’s passive tracking technologies. The Company paid this vendor approximately $8214,000 ~~through~~for the ~~May~~three months ended March ~~2008~~31, 2009, for these materials. Amounts due this related party vendor totaled $422,~~992 and $77,992 as of March 31, 2008 and December 31, 2007, respectively~~950. These amounts are included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets.

27ACCOUNTS RECEIVABLE — RELATED PARTY

Included in accounts receivable on the condensed consolidated balance sheets at March 31, 2009, is $154,197 due from AVM, L.P.

~~CONSULIER~~CONULIER ENGINEERING, INC. AND SUBSIDIARIES


ITEM 2.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Gross revenue, which is predominantly software licensing fees, ~~was~~increased approximately ~~139~~28% ~~greater~~ in ~~the~~ ~~first~~ the quarter ended March 31, ~~2008~~2009, compared to the quarter ended March 31, ~~2007~~2008, due to the ~~completion~~ completion of implementation projects at certain hospitals.

The operating loss for the three months ended March 31, ~~2008~~2009, was approximately $1811,~~456,~~000 compared to an operating loss for the three months ended March 31, ~~2007~~2008, of $21,~~205~~456,000. This reduction in operating loss of approximately $~~749~~645,000 was largely due to aan ~~reduction~~increase in ~~operating~~revenue ~~expenses~~from ~~and~~software ~~professional~~licensing ~~services~~fees, asand itreduction ~~relates to software changes~~ in ~~PCTS’~~professional ~~primary~~services ~~software~~of ~~solutions,~~that ~~which were nearing completion~~segment.

During the quarter ended March 31, ~~2008~~2009, other income ~~(expense) increased~~decreased by approximately $~~434~~600,000, primarily driven by the Company’s interest in AVM, Ltd., whose income was approximately 85 60% ~~greater~~ less than for the same period of ~~2007~~2008. ~~However,~~The ~~the~~income ~~results of operations~~ from the Company’s interest in ~~BioSafe~~AVM ~~Systems~~Ltd., was income of approximately $44463,000 ~~loss~~ in the first quarter of ~~2008~~ 2009 compared to income of $941,~~276~~166,000 for the quarter ended ~~March~~December 31, ~~2007. The negative results were due to cost increases in raw materials and freight. BioSafe implemented a price increase in March of~~ 2008 ~~in an attempt to offset these additional cost~~.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s cash position ~~increased~~decreased $~~164~~44,~~419~~102 in the three months ended March 31, ~~2008~~2009, compared to to an increase of $~~117~~164,~~300~~419 during the comparable period in ~~2007~~2008. Net cash flow used in operations ~~for~~ for the three months ended March 31, ~~2008~~2009, was ~~approximately~~ $~~1.5 million dollars~~169,912, compared with cash used in operations of approximately $~~2.2 million~~1,536,000 ~~dollars~~ for the three months ended March 31, ~~2007~~ 2008. The primary reason for the $~~700~~1,~~000~~366,088 difference is a decrease in operating costs and the recognition of deferred revenues associated with completed implementation contracts.

Net cash ~~provided~~used by financing activities was ~~approximately~~ $~~356~~331,~~000~~992 for the three months ended March 31, ~~2008~~2009, compared to cash provided by financing activities of approximately $1356,~~749,~~000 for the three months ended March 31, ~~2007~~2008. Net cash provided by financing activities in ~~both~~2008 ~~periods were~~was primarily affected from ~~proceeds~~investments from the minority shareholder ~~amounting~~in tothe amount of approximately $375,000. ~~and~~During ~~$2,243,000 for~~ the period ~~quarters~~ending ~~ended~~ March 31, ~~2008~~2009, ~~and~~approximately ~~2007~~$472,000 ~~respectively.~~was ~~Cash~~used ~~provided by~~to ~~financing~~reduce ~~activities~~related ~~was~~party ~~offset~~debt byand investments ~~the~~from ~~repayment~~minority ofshareholder ~~the~~was ~~line-of-credit totaling~~ $~~575~~140,000 ~~during the three months ended March 31, 2007~~.

Net cash provided by investing activities relates primarily to the distribution from AVM of ~~approximately~~ $1460,~~389,000~~992 for the three months ended March 31, ~~2008, which was offset by the continued acquisition of software upgrades in the PCTS subsidiary~~2009. This compares to net cash provided by investing activities for the three months ended March 31, ~~2007~~2008, of approximately $~~555~~1,~~192~~345,000. The distribution from AVM for ~~that~~the quarter ended March 31, 2008, was approximately $~~628~~1,~~807~~389,000.

~~The ability of Consulier to continue to generate cash flow in excess of its normal operating~~23 requirements depends almost entirely on the performance of its limited partnership interest in AVM. Consulier cannot, with any degree of assurance, predict whether there will be a continuation of the net return from our interest in AVM, Ltd., for the three months ended March 31, 2008, nor whether we will continue to be able to obtain additional funding when necessary. However, Consulier does not expect that the rate of return will decline to the point where Consulier has negative cash flow. Furthermore, although AVM has given Consulier no indication that it intends to redeem the Company’s interest in AVM, there can be no assurance that AVM will not do so in the future.

Consulier is planning to continue to invest in ST, LLC and estimates an additional investment of $5 million to $7 million during the next 5 years, at which time the goal is for ST, LLC to be at the break-even point for its operations. The Company anticipates that the cash which it will use to invest in ST, LLC, will be available from the Company’s interest AVM, LP and BioSafe, LLC.

The Company does not trade derivative instruments. However, AVM enters into various transactions involving derivatives and other off-balance sheet financial instruments. These derivatives and off-balance sheet instruments are subject to varying degrees of market and credit risk.

The ability of Consulier to continue to generate cash flow in excess of its normal operating requirements depends almost entirely on the performance of its limited partnership interest in AVM. Consulier cannot, with any degree of assurance, predict whether there will be a continuation of the net return from our interest in AVM for the three months ended March 31, 2009, nor whether we will continue to be able to obtain additional funding when necessary. However, Consulier does not expect that the rate of return will decline to the point that Consulier has negative cash flow.

Consulier is planning to continue to invest in ST, LLC, and estimates an additional investment of $2 million to $3 million during the next two years, at which time the goal is for ST, LLC to be at the break-even point for its operations. The Company anticipates that the cash which it will use to invest in ST, LLC will be available from the Company’s interest in AVM and BioSafe.

OUTLOOK

Based on AVM’s operations over the past 5 five years, management expects continued ~~annualized~~ return in ~~2008~~ on2009 on its interest in AVM; however, there is no guarantee that the ~~annualized~~ return in the first quarter of ~~2008~~ 2009 will be maintained throughout fiscal ~~2008~~2009.

Consulier International, Inc., continues to develop new retail and distribution outlets locally, nationally and internationally. However, sales of that company’s primary product, Captain Cra-Z Hand and All Purpose Cleaner, have decreased for the three months ended March 31, ~~2008~~2009, by 739% over the comparable ~~2007~~2008 period.

InPCTS ~~the~~successfully ~~first~~completed ~~quarter,~~three ~~Patient~~implementations ~~Care~~across ~~Technology~~its ~~Systems~~high ~~(PCTS) signed~~acuity atracking ~~strategic~~and ~~teaming partnership~~documentation ~~agreement~~portfolio. ~~with~~These 3Mincluded ~~Track~~patient and ~~Trace~~asset ~~Solutions,~~tracking ~~who~~in ~~will bring~~ the ~~PCTS~~cardiovascular ~~portfolio~~department ofat ~~integrated~~Providence ~~workflow~~St. ~~solutions~~Vincent toMedical ~~3M’s~~Center ~~customers. 3M~~(Portland, aOR); ~~broadly~~patient ~~diversified~~and ~~technology~~asset ~~company,~~tracking isin athe ~~leader~~emergency indepartment ~~the~~at ~~emerging~~Moses ~~field~~Taylor ofHospital ~~Track and Trace~~(Scranton, ~~which~~PA); ~~employs~~and ~~Radio~~emergency ~~Frequency~~department ~~Identification~~documentation (~~RFID~~EDIS) inat aStafford ~~variety~~Hospital ofCenter ~~ways~~in ~~to identify and track high-value assets for a growing variety of healthcare applications~~Virginia. ~~The~~During 3Mthe ~~and~~quarter, PCTS ~~teaming~~also ~~partnership~~exhibited ~~spans~~at ~~both~~two ~~technology~~national ~~and go-to-market~~clinical ~~integration~~conferences. PCTS ~~signed~~customer aimplementations ~~reseller~~were ~~agreement~~profiled ~~with~~in ~~AeroScout,~~trade ~~Inc.,~~publications aand ~~leading~~the ~~provider of Wi-Fi-based active RFID locating technologies. PCTS intends to resell this locating technology, which utilizes a hospital~~Company’s ~~existing Wi-Fi network, as an integrated component of its departmental~~ ~~and~~emergency enterprise-wide workflow automation solutions. The agreement broadens PCTS’ portfolio of leading real-time location technologies to which it can integrate its software. PCTS successfully implemented its perioperative department ~~tracking~~implementation ~~software~~ at ~~the~~Albert ~~first~~Einstein ofMedical ~~three~~Center ~~facilities~~was ~~within the~~featured ~~Lehigh~~as ~~Valley Hospital and Health Network,~~ a ~~nationally-recognized health care provider. An~~patient ~~existing~~flow ~~customer,~~case ~~MediCorp,~~study ~~signed~~best apractice ~~contract~~by tothe ~~install~~Agency ~~PCTS’~~for ~~emergency~~Healthcare ~~department~~Research ~~tracking~~ and ~~documentation~~ ~~software~~Quality in(AHRQ), a ~~new hospital and a stand-alone clinic currently under construction.~~division ~~MediCorp’s~~of ~~flagship facility, Mary Washington Hospital, has been using~~ the ~~software since 2002~~U. ~~PCTS announced that over one million emergency department patient visits have now been electronically charted using its Amelior ED™ software~~S. ~~Executive~~Department ~~representatives from three~~ of ~~PCTS’~~ ~~customers~~Health ~~spoke~~& onHuman their organizations’ success with their emergency and perioperative department workflow automation software at the annual HIMSS Conference in Orlando, the largest event within the health care information technology marketServices.

PCTS currently supports 2428 completed installations of its core product line of electronic tracking and documentation solutions with over 12 implementations in progress. Including its non-core solutions, PCTS supports a total customer base of 6466 implementations representing over 1.78 million annual patient encounters.

3024

The Company’s ~~loss~~income from its interest in BioSafe ~~Systems, LLC~~ was $4326,~~813~~282 for the three months ended March 31, ~~2008~~ 2009, compared to ~~income~~a loss of $9443,~~276~~813 for the three months ended March 31, ~~2007~~2008. ~~The agricultural~~Total ~~market~~revenue ~~segment~~for the ~~continues~~quarter toended beMarch 31, ~~strong~~2009, ~~with~~decreased aby ~~sales increase of 4~~36% ~~over~~compared with the ~~comparable three month period in 2007. The home & garden market segment had a very difficult first~~ quarter~~. This~~ ~~was~~ended ~~caused by competitive pressures to reduce their sales prices offset by significant increases in material~~March 31, ~~production and shipping costs~~2008. ~~BioSafe’s new products have been well~~ ~~received~~The byCompany ~~the~~expects ~~customers~~continued ~~in this market segment and BioSafe is actively seeking new distributors to widen its customer base. With an increased~~ sales ~~and~~growth ~~marketing effort~~ and ~~new~~continued ~~national distribution~~success ~~channels,~~with ~~BioSafe expects its growth in this market to continue. In March 2008, BioSafe implemented a 5% price increase to offset~~ cost ~~increases~~containment.


ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is a smaller reporting company, as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, and is accordingly not required to provide the information required by this Item.

ITEM 4T. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, or the “Evaluation Date,” we carried out an an evaluation under the supervision and with the participation of our management, including our ~~Chief~~ Chief Executive Office and Chief Financial Officer, of the effectiveness of our disclosure controls ~~and~~ and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities ~~Exchange~~ Exchange Act of 1934, as amended, or the “Exchange Act”). Because of its inherent limitations, our ~~internal~~ internal control over financial reporting may not prevent material errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The continued effectiveness of our internal control over financial reporting is subject to risks, including that the controls may become inadequate because of changes in conditions or that the degree of compliance with our policies or procedures may deteriorate. ~~Subject~~Based ~~to the limitations, and based~~ on the evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~the~~March 31, ~~Evaluation Date~~2009, the disclosure controls ~~are not~~ were effective asin aensuring ~~result~~that of the ~~material~~information ~~weakness~~required ~~discussed~~to inbe ~~Item 8A,~~disclosed ~~“Controls~~by ~~and Procedures,~~us ~~“of~~in ~~our~~reports ~~Annual~~filed ~~Report~~under the onExchange ~~Form~~Act ~~10-KSB~~is ~~for~~recorded, ~~the~~processes, ~~year~~summarized ~~ended~~and ~~December 31, 2007~~reported.

We Changes ~~are~~ in ~~the~~Internal ~~process~~Control ofover ~~implementing~~Financial ~~changes to respond to the aforementioned material weakness on~~Statements ~~an immediate and longer term basis. We have begun remediation and expect to continue to implement further improvements throughout the next three months.~~

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2009, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 4T. CONTROLS AND PROCEDURES (CONTINUED)

Changes in Internal Control over Financial Reporting

We are investing in ongoing efforts to continuously improve our internal control over financial reporting and have committed resources to the improvement of the design, implementation, documentation, testing and monitoring of our internal controls.

As of the date of this filing, we believe that we have made progress in the implementation of the corrective actions noted above and toward remediation of the material weakness disclosed in Item 8A, “Controls and Procedures,” of our Annual Report of Form 10-KSB for the fiscal year ended December 31, 2007.

Except for such corrective actions, there were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES

PART II. OTHER INFORMATION


ITEM 1.		LEGAL PROCEEDINGS

~~On August 2, 2006, PCTS was made a defendant to a lawsuit filed by Hill-Ron Services, Inc~~None. et al. vs. Versus Technology, et al., United States District Court, Middle District of North Carolina, Civil Action No. 1:03CV01227, as a successor in interest to Healthcare Information Technology, Inc., and as a customer of a vendor concerning the vendor’s disputed patent ownership and unauthorized use of such patents. Effective January 21, 2008, all claims against PCTS were settled and the case was dismissed.

ITEM 1A. RISK FACTORS


ITEM 2.		UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In April 2007, the Company adopted a plan to repurchase up to 50,000 shares of its common stock on the open market at a price not to exceed $3.75 per share plus brokerage fees. In January 2008, the Company adopted a second plan to repurchase up to an additional 50,000 shares of its common stock on the open market at a price not to exceed $3.50 plus brokerage fees. Since April, 2007 through March 31, ~~2008~~2009, the Company repurchased 8191,~~667~~437 shares of its common stock. ~~The~~There ~~following~~were ~~table~~no ~~sets forth the information on the~~ repurchases of stock during the quarter ended March 31, ~~2008~~2009.

Issuer Purchases of Equity Securities

(d)

(c)

Maximum number (or

Total number of

approximate dollar

shares (or units)

value) of shares

(a)

purchased as part

(or units) that may

Total number of

(b)

of publicly

yet be purchased

shares (or units)

Average price paid

announced plans or

under the plans or

Period

purchased

per share (or unit)

programs

Month #1 January 1-31, 2008

3,675

3.80

3,675

None

Month #2 February 1-29, 2008

29,899

3.55

29,899

20,101 Shares

Month #3 March 1-31, 2008

1,762

3.55

1,762

18,339 Shares

Total

35,336

CONSULIER ENGINEERING, INC. AND SUBSIDIARIES

PART II. OTHER INFORMATION (CONTINUED)


ITEM 3.		DEFAULTS UPON SENIOR SECURITIES

None.


ITEM 4.		SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.


ITEM 5.		OTHER INFORMATION

None.


ITEM 6.		EXHIBITS

~~(a) EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-B None (b) CURRENT REPORTS ON FORM 8-K None (c)~~ 31.1 — Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (d) 31.2 — Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (e) 32.1 — Certification of Chief Executive Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (f) 32.2 — Certification of Chief Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002 The Company has attached Exhibits 31.1, 31.2, 32.1 and 32.2 to this filing to comply with the requirements of the Sarbanes-Oxley Act of 2002.

3531.2 — Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

32.1 — Certification of Chief Executive Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002

32.2 — Certification of Chief Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CONSULIER ENGINEERING, INC. (Registrant)
Date: May 20, 2008	By:	/s/ Alan R Simon
Date: May 18, 2009	By:	/s/ Alan R Simon
		Alan R. Simon, Esq.
		Secretary and Treasurer (Principal Financial and Accounting Officer)
Date: May 20, 2008	By:	/s/ Warren B. Mosler
Date: May 18, 2009	By:	/s/ Warren B. Mosler
		Warren B. Mosler
		Chairman of the Board, President & Chief Executive Officer (Principal Executive Officer)

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