10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2008

OR

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

For the transition period from                      to                     

Commission file number: 0-14807

AMERICAN CLAIMS EVALUATION, INC.

(Exact name of registrant as specified in its charter)

New York	11-2601199
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
One Jericho Plaza, Jericho, New York	11753
(Address of principal executive offices)	(Zip code)

(516) 938-8000

(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 Securities Exchange Act of 1934 during the preceding twelve months (or for such 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 þ     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. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o     No þ

The number of shares outstanding of the Registrant’s common stock as of November 14, 2008 was 4,761,800.

AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARY

INDEX

	Page No.
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 2008 (unaudited) and March 31, 2008		3
Condensed Consolidated Statements of Operations for the Three and Six Months ended September 30, 2008 and 2007 (unaudited)		4
Condensed Consolidated Statements of Cash Flows for the Six Months ended September 30, 2008 and 2007 (unaudited)		5
Notes to Condensed Consolidated Financial Statements (unaudited)		6 - 8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		9 - 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk		13
Item 4. Controls and Procedures		13
PART II — OTHER INFORMATION
Item 6. Exhibits		14
SIGNATURES		15
EX-10.13: EMPLOYMENT AGREEMENT
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32.1: CERTIFICATION
EX-32.2: CERTIFICATION

2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARY

Condensed Consolidated Balance Sheets

	Sept. 30, 2008			Mar. 31, 2008
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	4,455,655		$	6,239,442
Accounts receivable		1,188,496			—
Current assets of discontinued operations		—			111,337
Prepaid expenses and other current assets		90,359			33,560
Total current assets		5,734,510			6,384,339
Property and equipment, net		275,056			92,072
Goodwill		750,000			—
Non-current assets of discontinued operations		—			7,674
Other assets		18,565			—
Total assets	$	6,778,131		$	6,484,085
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	129,328		$	18,936
Accrued expenses		475,507			106,190
Current liabilities of discontinued operations		—			33,150
Capital lease obligations — current		18,406			—
Total current liabilities		623,241			158,276
Long-term liabilities
Capital lease obligations — net of current portion		36,773			—
Total long-term liabilities		36,773			—
Commitments
Stockholders’ equity:
Common stock, $.01 par value. Authorized 20,000,000 shares in 2008 and 10,000,000 shares in 2007; issued 5,050,000 shares; outstanding 4,761,800 shares		50,500			50,500
Additional paid-in capital		4,946,699			4,931,099
Retained earnings		1,582,759			1,806,051
		6,579,958			6,787,650
Treasury stock, at cost		(461,841	)		(461,841	)
Total stockholders’ equity		6,118,117			6,325,809
Total liabilities and stockholders’ equity	$	6,778,131		$	6,484,085

See accompanying notes to condensed consolidated financial statements.

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AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Operations

(Unaudited)

	Three months ended						Six months ended
	Sept. 30,			Sept. 30,			Sept. 30,			Sept. 30,
	2008			2007			2008			2007
Revenues	$	247,690		$	—		$	247,690		$	—
Cost of services		175,334			—			175,334			—
Gross margin		72,356			0			72,356			0
Selling, general and administrative expenses		254,500			177,577			461,611			628,284
Operating loss from continuing operations		(182,144	)		(177,577	)		(389,255	)		(628,284	)
Interest income		35,907			90,133			77,706			180,400
Interest expense		(260	)		—			(260	)		—
Loss from continuing operations		(146,497	)		(87,444	)		(311,809	)		(447,884	)
Discontinued operations:
Gain (loss) from discontinued operations		3,832			(115	)		(1,996	)		(6,564	)
Gain on sale of discontinued operations		90,513			—			90,513			—
Net loss	$	(52,152	)	$	(87,559	)	$	(223,292	)	$	(454,448	)
Net earnings (loss) per share:
From continuing operations — basic and diluted	$	(0.03	)	$	(0.02	)	$	(0.07	)	$	(0.10	)
From discontinued operations — basic and diluted	$	0.02		$	0.00		$	0.02		$	0.00
Net loss — basic and diluted	$	(0.01	)	$	(0.02	)	$	(0.05	)	$	(0.10	)
Weighted average shares — basic and diluted		4,761,800			4,761,800			4,761,800			4,761,800

See accompanying notes to condensed consolidated financial statements.

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AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six months ended
	Sept. 30,			Sept. 30,
	2008			2007
Cash flows from operating activities:
Loss from continuing operations	$	(311,809	)	$	(447,884	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		15,628			10,138
Stock-based compensation expense		15,600			285,000
Changes in assets and liabilities:
Accounts receivable		(44,485	)		—
Prepaid expenses and other current assets		24,932			15,550
Accounts payable		(46,947	)		18,884
Accrued expenses		64,317			(24,189	)
		29,045			305,383
Net cash used in operating activities of continuing operations		(282,764	)		(142,501	)
Operating activities of discontinued operations		34,439			19,539
Net cash used in operating activities		(248,325	)		(122,962	)
Cash flows from investing activities:
Acquisition of business, net of cash acquired		(568,375	)		—
Proceeds from sale of subsidiary, net of cash divested		149,391			—
Capital expenditures		—			(39,055	)
Net cash used in investing activities		(418,984	)		(39,055	)
Investing activities of discontinued operations		(9,452	)		(2,637	)
Net cash used in investing activities		(428,436	)		(41,692	)
Cash flows from financing activities:
Payment of debt		(1,105,356	)		—
Payment of capitalized lease obligations		(1,670	)		—
Net cash used in financing activities		(1,107,026	)		—
Net decrease in cash and cash equivalents		(1,783,787	)		(164,654	)
Cash and cash equivalents at beginning of period		6,239,442			6,589,576
Cash and cash equivalents at end of period	$	4,455,655		$	6,424,922
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	260		$	—

See accompanying notes to condensed consolidated financial statements.

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AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

September 30, 2008

(Unaudited)

General

The accompanying unaudited consolidated financial statements and footnotes have been condensed and therefore do not contain all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, the information furnished reflects all adjustments, consisting of normal recurring adjustments, necessary to make the consolidated financial position, results of operations and cash flows for the interim periods not misleading. Interim periods are not necessarily indicative of results for a full year.

These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the fiscal year ended March 31, 2008 and the notes thereto contained in the Company’s Annual Report on Form 10-KSB, as filed with the Securities and Exchange Commission (“SEC”).

Discontinued Operations

On September 12, 2008, the Company completed the disposition of its wholly-owned subsidiary, RPM Rehabilitation & Associates, Inc. (“RPM”), pursuant to a Stock Purchase Agreement whereby the Company sold all of the issued and outstanding shares of RPM to Stephen D. Renz, the President of RPM, for a purchase price of $150,000 in cash, plus an additional purchase price of up to $150,000 in cash contingent upon the future net earnings of RPM calculated over a period of five years from and after the closing of the transaction. A gain on the sale of RPM of $90,513 was recognized for book purposes.

The Company followed the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, related to the accounting and reporting for segments of a business to be disposed of. Accordingly, the results of RPM’s operations have been classified as discontinued operations in all periods presented.

Acquisition

On September 12, 2008 (the “Closing Date”), the Company acquired all of the issued and outstanding shares of Interactive Therapy Group Consultants, Inc. (“ITG”), a New York corporation and provider of a comprehensive range of services to children with developmental delays and disabilities, for $570,000 in cash. Under the terms of the Stock Purchase Agreement (the “Stock Purchase Agreement”), the purchase price is subject to positive or negative adjustment based on the final determination of the tangible net worth of ITG as of the close of business on the Closing Date. The results of operations for ITG are included in the consolidated results of operations beginning September 13, 2008.

The Company had been seeking an acquisition to transition into a new line of business. ITG created the opportunity for growth in its industry organically and through potential add-on acquisitions.

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The business combination was accounted for using the purchase method of accounting and, accordingly, the purchase price was allocated to assets acquired and liabilities assumed based on fair values at the date of acquisition as follows:

Cash	$	1,625
Accounts receivable		1,144,011
Prepaid expenses		41,432
Total current assets		1,187,068
Property and equipment		198,612
Other assets		18,565
Total assets acquired	$	1,404,245
Accounts payable		157,339
Accrued expenses		305,000
Bank debt		1,105,356
Capital lease obligations		56,849
Total liabilities assumed	$	1,624,544
Net assets acquired	$	(220,299	)
The purchase price has been calculated as follows:
Total purchase price	$	570,000
Anticipated recovery from former owner per terms of the Stock Purchase Agreement		(40,299	)
	$	529,701
Excess of the purchase price over the net assets acquired (Goodwill)	$	750,000

The following pro forma information presents the Company’s revenues, net loss and loss per share as if the acquisition of ITG had occurred on the first day of the fiscal year presented below.

	Three months ended						Six months ended
	September 30,						September 30,
	2008			2007			2008			2007
Revenue	$	1,460,098		$	1,224,178		$	3,185,318			$	2,780,679
Loss from continuing operations	$	(181,559	)	$	(407,635	)	$	(258,241	)		$	(903,602	)
Net loss	$	(82,464	)	$	(348,938	)	$	(147,715	)		$	(781,413	)
Net loss per share — basic and diluted	$	(0.02	)	$	(0.07	)	$	(0.03	)		$	(0.16	)

The pro forma supplemental information is not necessarily indicative of actual results had the acquisition occurred on the first day of the respective period, nor is it necessarily indicative of future results. The pro forma supplemental information does not reflect potential synergies, integration costs, or other costs or savings.

Pursuant to the terms of the ITG acquisition, $105,000 of the cash consideration was deposited into an escrow account in accordance with an Escrow Agreement (the “Escrow Agreement”) to assure that there are funds available to satisfy indemnification obligations in respect of any amounts payable by ITG pursuant to a claim by the New York State Insurance Fund for non-payment of workers’ compensation premiums and in respect of any outstanding accounts receivable that are not collected in full within 240 days of the Closing Date.

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The Company is currently exploring alternatives to ITG’s corporate structure concerning non-compliance issues regarding the practice of certain licensed professions in the State of New York. If a change in professional practice structure is deemed necessary, the Company will take all appropriate measures to assure compliance on a timely basis. Revenues derived from services performed by these licensed professionals approximate 20% of total revenues.

ITG also entered into a two-year Employment Agreement (the “Employment Agreement”) with John Torrens. Under this Employment Agreement, Mr. Torrens will be employed as President of ITG, is entitled to receive an annual base salary of $200,000 and is entitled to certain other benefits. The Employment Agreement contains non-competition, non-solicitation and confidentiality provisions.

Subsequent to the Closing Date, the Company paid off ITG’s line of credit and a term note payable totaling approximately $1,105,000, including interest.

Revenue Recognition

The Company recognizes revenue for services rendered when there is evidence of billable time expended and recoverability is reasonably assured.

Concentration of Credit Risk

Service revenue is concentrated within a limited number of clients throughout New York State; municipalities within New York State provide substantial and significant revenue to ITG. This concentration of customers may impact ITG’s overall exposure to credit risk, either positively or negatively, in that ITG’s customers may be similarly affected by changes in economic or other conditions in New York State.

Net Earnings (Loss) Per Share

Basic earnings (loss) per share are computed on the weighted average common shares outstanding. Diluted earnings (loss) per share reflects the maximum dilution from potential common shares issuable pursuant to the exercise of stock options, if dilutive, outstanding during each period. The Company’s net earnings (loss) and weighted average shares outstanding used for computing diluted earnings (loss) per share for continuing operations and discontinued operations were the same as those used for computing basic earnings (loss) per share for the three and six months ended September 30, 2008 and 2007 because the inclusion of common stock equivalents to the calculation of diluted earnings (loss) per share for continuing operations would be anti-dilutive. Potentially dilutive securities consisting of employee and director stock options to purchase 1,233,500 and 1,236,000 shares as of September 30, 2008 and 2007, respectively, were not included in the diluted net loss per share calculations because their effect would have been anti-dilutive.

Stock Option Plans

The Company follows the provisions of SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123R”). Under these provisions, stock-based compensation is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the recipient’s requisite service period (generally the vesting period of the grant).

The Company recognized stock-based compensation totaling $15,600 during the six months ended September 30, 2008 based on the fair value of stock options granted. This expense is included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. At

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September 30, 2008, all outstanding options to purchase shares are fully vested. However, certain option grants contain disposition restrictions which prohibit the sale of 50% of the shares obtained through the exercise of such awarded options until the first anniversary of the grant date and the remaining 50% of the shares obtained through the exercise of the awarded options until the second anniversary of the grant date.

The Company estimates the fair value of stock options granted using the Black-Scholes option pricing model. Under this method, the average fair value of stock options granted during the six months ended September 30, 2008 was $0.78 per share. In addition to the exercise price of the awards, certain weighted average assumptions were used to estimate the fair value of stock option grants as follows: expected volatility of 50.8%, expected dividend yield of 0%, risk-free interest rate of 3.52% and an expected option term of 5 years.

The following table summarizes information about stock option activity for the six months ended September 30, 2008:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Shares			Price		Term		Value
Outstanding at March 31, 2008		1,233,500		$	2.12	6.0 years
Granted		20,000		$	1.63	10 years
Expired		(20,000	)	$	2.25		—
Outstanding at September 30, 2008		1,233,500		$	2.11	5.7 years		$	—
Exercisable at September 30, 2008		1,233,500		$	2.11	5.7 years		$	—

There were no options outstanding with an exercise price less than the closing price of the Company’s shares of $0.67 as of September 30, 2008. Accordingly, there was no intrinsic value associated with outstanding options at such date. At September 30, 2008, there was no unrecognized compensation cost related to non-vested stock option awards.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Critical Accounting Policies

The Company makes estimates and assumptions in the preparation of its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ significantly from those estimates under different assumptions and conditions. Our significant accounting policies are described in Note 1 to the audited consolidated financial statements included in our Annual Report on Form 10-KSB for the fiscal year ended March 31, 2008. The accounting policies used in preparing our interim condensed consolidated financial statements are the same as those described in such Annual Report.

9

Results of Operations — Three and Six Months ended September 30, 2008 and 2007

On September 12, 2008, the Company completed the disposition of its wholly-owned subsidiary, RPM. The financial statements have been reclassified to exclude the operating results of RPM from the continuing operations and account for them as discontinued operations. The following discussion relates only to the Company’s continuing operations, unless otherwise noted.

During the period of September 13, 2008 to September 30, 2008, the Company recognized revenues of $247,690 generated by its newly acquired subsidiary, ITG. ITG provides a comprehensive range of services to children with developmental delays and disabilities. Costs of services for this period were $175,334 consisting of payroll paid to its staff of salaried and per diem clinicians.

Selling, general and administrative expenses for the quarter ended September 30, 2008 increased to $254,500 from $177,577 for the three months ended September 30, 2007 as a result of the introduction of expenses incurred by ITG’s operations. Excluding ITG’s expenses, corporate selling, general and administrative expenses for the three months ended September 30, 2008 experienced only a modest increase over the comparable period in the prior year. During the six months ended September 30, 2007, the Company had recorded stock-based compensation expense of $285,000 in accordance with the provisions of SFAS 123R for stock options granted during the period. By comparison, stock-based compensation expense of $15,600 was recorded during the six months ended September 30, 2008.

Interest income for the three and six months ended September 30, 2008 was $35,907 and $77,706, respectively. Interest income for the three and six months ended September 30, 2007 was $90,133 and $180,400, respectively. The dramatic decrease in interest income was a result of declining cash balances available for investment and a shift to more conservative investments which produced lower yields.

As a result of the sale of RPM, the Company recognized a gain of $90,513 for book purposes.

Liquidity and Capital Resources

At September 30, 2008, the Company had working capital of $5,111,269 as compared to working capital of $6,226,063 at March 31, 2008. The Company believes that it has sufficient cash resources and working capital to meet its present cash requirements.

During the six months ended September 30, 2008, net cash used in operations was $248,325, primarily due to the Company’s operating loss offset by stock based compensation expense of $15,600 and the gain on the sale of RPM of $90,513.

Subsequent to the Closing Date, the Company paid off ITG’s line of credit and a term note payable totaling approximately $1,105,000, including interest. ITG will seek a new line of credit for working capital purposes, if deemed necessary.

Future minimum lease payments under non-cancelable capital and operating leases and subleases, exclusive of future escalation charges, for the remainder of the fiscal year ending March 31, 2009 and fiscal years ending thereafter are as follows:

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	Capital			Operating
	Leases			Leases
2009	$	11,916		$	97,000
2010		21,523			182,000
2011		21,523			116,000
2012		9,383			84,000
2013 and thereafter		0			60,000
Total minimum lease payments		64,345		$	539,000
Less: Amounts representing interest		(9,166	)
Present value of minimum lease payments		55,179
Less: Current portion		(18,406	)
Long-term portion of capital leases	$	36,773

While we have not experienced any significant impact from the general slowdown of the economy or current global credit crisis, continuing economic deterioration could have a negative impact on our net revenues and profitability in future periods.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to the Company.

Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007. The adoption of this standard on April 1, 2008 did not have a material effect on the Company’s consolidated financial statements.

In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — An Amendment of FASB Statements No. 87, 88, 106 and 132(R)” (“SFAS 158”). SFAS 158 requires an employer to (i) recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status; (ii) measure a plan’s assets and its benefit obligations that determine its funded status as of the end of the employer’s fiscal year (with limited exceptions); and (iii) recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur. Those changes will be reported in comprehensive income. The Company does not maintain any such plans. Therefore, the requirement to recognize the funded status of a benefit plan and the disclosure requirements did not have a material effect on the Company’s consolidated financial statements. The requirement to measure plan assets and benefit obligations to determine the funded status as of the end of the fiscal year and to recognize changes in the funded status in the year in which the changes occur is effective for fiscal years ending after December 15, 2008. The adoption of the measurement date provisions of this standard is not expected to have a material effect on the Company’s consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value

11

option has been elected are reported in earnings. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company is not electing to measure its financial assets or liabilities at fair value pursuant to this statement.

In December 2007, the FASB issued SFAS No. 141, (revised 2007) “Business Combinations”, (“SFAS 141R”). SFAS 141R replaces SFAS 141, which the Company previously adopted. SFAS 141R revises the standards for accounting and reporting of business combinations. In summary, SFAS 141R requires the acquirer of a business combination to measure, at fair value, the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, with limited exceptions. SFAS 141R applies to all business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company does not believe that the adoption of this statement on April 1, 2009 will have a material effect on the Company’s consolidated financial statements.

In December, 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS 160”), which requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and noncontrolling interest. SFAS 160 is effective for fiscal years beginning on or after December 15, 2008. The adoption of this standard is not expected to have a material effect on the Company’s consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”). SFAS 161 changes the reporting requirements for derivative instruments and hedging activities under SFAS 133, “Accounting for Derivatives and Hedging Activities”, by requiring enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments are accounted for under SFAS 133 and (c) the effect of derivative instruments and hedging activities on an entity’s financial position, financial performance and cash flows. SFAS 161 is effective for fiscal years beginning after November 15, 2008. The Company does not believe that the adoption of this statement will have a material effect on the Company’s consolidated financial statements.

In April 2008, the FASB issued FASB Staff Position (“FSP”) No. FAS 142-3, “Determination of the Useful Life of Intangible Assets” (“FAS 142-3”). FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS 142, “Goodwill and Other Intangible Assets”. The objective of FAS 142-3 is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141R and GAAP. FAS 142-3 is effective for financial statements issued for years beginning after December 15, 2008, and interim periods within those years and applied prospectively to intangible assets acquired after the effective date. The Company does not believe that the adoption of FAS 142-3 will have a material effect on the Company’s consolidated financial statements.

In June 2008, the FASB issued FSP No. EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities” (“EITF 03-6-1”). EITF 03-6-1 affects entities which accrue non-returnable cash dividends on share-based payment awards during the awards’ service period. The FASB concluded that unvested share-based payment awards which are entitled to cash dividends, whether paid or unpaid, are participating securities any time the common shareholders receive dividends. Because the awards are considered participating securities, the issuing entity is required to apply the two-class method of computing basic and diluted earnings per share. EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008, and early adoption is not permitted. The Company does not believe that the adoption of EITF 03-6-1 will have a material effect on the Company’s consolidated financial statements.

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Cautionary Statement Regarding Forward Looking Statements

Except for the historical information contained herein, the matters discussed in this Report on Form 10-Q may contain forward-looking statements that involve risks and uncertainties. The Company’s actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, general economic and market conditions and the ability of the Company to successfully identify and thereafter consummate one or more acquisitions.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The Company is exposed to market risk related to changes in interest rates. Most of the Company’s cash and cash equivalents are invested at variable rates of interest and decreases in market interest rates would cause a related reduction in interest income.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure the reliability of the financial statements and other disclosures included in this Report. As of the end of the fiscal quarter ended September 30, 2008, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information required to be included in the Company’s periodic SEC filings.

(b) Changes in Internal Controls over Financial Reporting

There have been no changes in the Company’s internal controls over financial reporting that occurred during the quarter ended September 30, 2008 that has materially affected, or is reasonably likely to materially affect, the internal controls over financial reporting identified by the Company’s evaluation in connection with the preparation of this Form 10-Q.

Management is aware that there is a lack of segregation of duties due to the small number of employees dealing with general administrative and financial matters. However, management has decided that considering the employees involved and the control procedures in place, risks associated with such lack of segregation are insignificant and the potential benefits of adding employees to clearly segregate duties do not justify the expenses associated with such increases.

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PART II — OTHER INFORMATION

Item 6. Exhibits.

Exhibit 10.13	Employment Agreement, dated September 12, 2008, between Interactive Therapy Group Consultants, Inc. and John Torrens
Exhibit 31.1	Section 302 Principal Executive Officer Certification
Exhibit 31.2	Section 302 Principal Financial Officer Certification
Exhibit 32.1	Section 1350 Certification
Exhibit 32.2	Section 1350 Certification

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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.

	AMERICAN CLAIMS EVALUATION, INC.
Date: November 14, 2008	By:	/s/ Gary Gelman
		Gary Gelman
		Chairman of the Board, President and Chief Executive Officer
Date: November 14, 2008	By:	/s/ Gary J. Knauer
		Gary J. Knauer
		Chief Financial Officer, Treasurer and Secretary

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EX-10.13

EXHIBIT 10.13

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT is entered into as of September 12, 2008 by and between Interactive Therapy Group Consultants, Inc., a New York corporation (“Employer”), with its principal office located at One Jericho Plaza, Jericho, New York 11753, and John Torrens, residing at 6368 East Seneca Turnpike, Jamesville, NY 13078 (“Employee”).

W I T N E S S E T H :

A. Pursuant to the Stock Purchase Agreement, dated September 12, 2008 (the “Stock Purchase Agreement”), by and among American Claims Evaluation, Inc. (“AMCE”), John Torrens, Kyle Palin Torrens and Carlena Palin Torrens, AMCE is purchasing all of the outstanding shares of capital stock of Employer.

B. Upon consummation of the transaction described in Recital A. above, Employer, engaged in business as a provider of a comprehensive range of services to children with developmental delays and disabilities (“Employer’s Business”), will become a wholly-owned subsidiary of AMCE.

C. Section 5.1 of the Stock Purchase Agreement provides that it is a condition to consummation of such Stock Purchase Agreement that Employer employ Employee.

D. Employer desires to employ Employee as the President of Employer, for the purpose of exercising such authority and performing such executive duties as are commensurate with the duties of President of Employer, as well as, where reasonably requested by the Board of Directors of Employer, supervising or assisting in operations of Employer’s affiliates and subsidiaries.

     NOW, THEREFORE, in consideration of the foregoing, the parties agree as follows:

1. Employment

(a) During the Term of Employment (as defined in Section 2), Employer agrees to employ Employee, as President of Employer, with the management responsibilities set forth in Recital D above. Employee agrees to act in the foregoing capacities, in accordance with the terms and conditions contained in this Agreement.

(b) Employee shall devote all of Employee’s working time to the performance of his duties under this Agreement and shall not engage in any other business activities during the term hereof. Employee shall render services, without additional compensation, as reasonably requested by the Employer’s Board of Directors in connection with the operation of Employer’s Business, including activities of affiliates and subsidiaries of Employer as may reasonably exist from time to time. As used in this Agreement, the term “affiliate” shall mean any entity or person that, directly or indirectly, is controlled by or under common control with Employer.

2. Term

The  term of Employee’s employment under this Agreement shall be for a period of two (2) years, to commence on September 10, 2008 and end on September 9, 2010 (the “Term of Employment”) unless sooner terminated as set forth in Section 5 of this Agreement. Upon expiration of the Term of Employment, the parties may by mutual agreement renew this Agreement. Such renewal must be in writing. Upon expiration of the Term of Employment, should Employee continue in the Employer’s employ and the parties do not execute a written renewal or new employment agreement (i) Employee shall be an “employee at will” at Employee’s then-current level of compensation, and (ii) Section 6 shall continue to be applicable in accordance with its terms subsequent to the Term of Employment.

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3. Compensation

Employer shall pay to Employee an annual base salary of Two Hundred Thousand Dollars ($200,000) for the Term of Employment. All payments shall be made in equal bi-weekly installments, in arrears, or such other installments as may be consistent with the regular payroll practices of Employer for its employees.

4. Additional Employee Benefits

(a) Employer shall reimburse Employee for all expenses reasonably incurred by Employee in connection with the performance of Employee’s duties under this Agreement against Employee’s submitted documented vouchers for such expenses.

(b) Employee shall be entitled to (i) participate in any and all health and dental insurance, short term and long term disability leave, sick leave and 401(k) plans as are maintained by the Employer from time to time for its salaried exempt employees; (ii) three (3) weeks of paid vacation per calendar year, such vacation to be accrued and used in accordance with applicable company policy; and (iii) one (1) week of paid benefit time per calendar year; and with respect to the foregoing, the Employer shall provide credit for all years of service of the Employee with ITG prior to the date hereof. Notwithstanding, and in addition to the foregoing, the Employer shall assume all of Employee’s accrued and unused vacation and sick time with ITG outstanding as of the date of closing of the transactions contemplated by the Stock Purchase Agreement.

(c) At the sole discretion of Employer’s Board of Directors, Employer may pay Employee such cash incentive bonuses as may be decided upon by Employer’s Board of Directors.

5. Termination

(a)	Termination by Employer for Cause. Employer may terminate this Agreement for cause.
(b)	“Cause” within the meaning of this Agreement shall mean any one or more of the following:

i.	Employee’s failure or refusal to follow any lawful specific written directions of Employer’s Board of Directors (which directions include a statement to the effect that failure or refusal to follow such directions shall constitute cause for termination of the employment of Employee hereunder) provided Employee shall have been given written notice by Employer’s Board of Directors of such failure or refusal to perform these directions and seven (7) business days within which to cure the same; or
ii.	Employee’s failure or refusal to perform or observe Employee’s duties and obligations in accordance with Recital D or Section 1 hereof, provided Employee shall have been given written notice by Employer’s Board of Directors of such failure or refusal to perform these duties and seven (7) business days within which to cure the same; or
iii.	Failure by Employee to comply in any material respect with the terms of any provision contained in this Agreement or any lawful written policies or directives of Employer’s Board of Directors, provided Employee shall have been given written notice of such failure or refusal to perform these duties and three (3) business days within which to cure the same; or
iv.	Physical incapacity or disability of Employee to perform the services required to be performed under this Agreement. For purposes of this Section 5(b)iv., Employee’s incapacity or disability to perform such services for any cumulative period of ninety (90) days during any twelve-month period, or for any consecutive period of sixty (60) days, shall be deemed “cause” hereunder; or

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v.	Employee is convicted of, pleads guilty or no contest to any felony or any act of fraud, misappropriation or embezzlement; or
vi.	Employee engages in an intentional fraudulent act or dishonest act to the damage or prejudice of Employer and/or its affiliates or in conduct or activities damaging to the property, business or reputation of Employer and/or its affiliates; or
vii.	The payment required to be made to AMCE by Sellers (as defined in the Stock Purchase Agreement) pursuant to Section 1.4 of the Stock Purchase Agreement, if so required to be made, is not made in accordance with such Section 1.4.

(c) If Employer notifies Employee of its election to terminate this Agreement for cause, this termination shall become effective at the time notice is deemed to have been given in accordance with Section 9.

(d) This Agreement shall automatically terminate upon the death of Employee.

(e) This Agreement and Employee’s employment by Employer will immediately terminate if Employer elects to discharge Employee other than for Cause (as defined in Section 5(b)). Upon termination of Employee’s employment other than for Cause, Employer will have no further obligation to make payments under this Agreement other than (i) compensation payments, payments in respect of accrued but unpaid vacation and reimbursement for business expenses, in each case due, accrued or payable as of the date of Employee’s termination, (ii) such vested stock options and retirement benefits as Employee may be entitled to under any equity incentive or employee benefit plan of Employer, and (iii) subject to Employee’s compliance with the provisions of Section 6 of this Agreement, Employee’s base salary as set forth in Section 3, and the continued provision of Employee’s health, dental and short-term and long-term disability insurance as set out in Section 4, for the remaining portion of the Term of Employment (the “Severance”), with the cash portion of such Severance being payable to Employee during such period in accordance with Employer’s then in effect payroll policy.

(f) Employee may terminate this Agreement if Employer fails to make the payments required by Section 3 and such failure has not been cured by Employer within two (2) business days after Employer has been given written notice of such failure by Employee. Upon termination pursuant to this Section 5(f), Employer will have no further obligation to make payments under this Agreement, other than (i) compensation payments, payments in respect of accrued but unpaid vacation and reimbursement for business expenses, in each case due, accrued or payable as of the date of such termination, (ii) such vested stock options and retirement benefits as Employee may be entitled to under any equity incentive or employee benefit plan, and (iii) subject to Employee’s compliance with the provisions of Section 6 of this Agreement, Severance, payable to Employee during such period in accordance with Employer’s then in effect payroll policy.

(g) Employee may terminate his employment hereunder on at least ninety (90) days’ prior written notice to Employer. Upon such termination, this Agreement will immediately terminate and Employer will have no further obligation to make payments under this Agreement other than (i) compensation payments, payments in respect of accrued but unpaid vacation and reimbursement for business expenses, in each case due, accrued or payable as of the date of Employee’s termination, and (ii) such vested stock options in accordance with the terms of the plan(s) such stock options have been granted under and retirement benefits as Employee may be entitled to under any equity incentive or employee benefit plan of Employer.

6. Non-Competition, Non-Solicitation, Non-Disclosure, Shop Rights and Insider Trading

(a) Non-Competition.

     As a material inducement to Employer to enter into this Agreement and to perform its obligations hereunder, Employee covenants and agrees that, during Employee’s period of employment with Employer, and for a period of two (2) years from the date of expiration or termination of such employment (the “Restricted Period”), Employee shall not engage in any business that is in competition with the Employer’s Business within the states of Connecticut and New York, whether directly or indirectly, through any

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subsidiary, affiliate, partnership, licensee, joint venture or agent, or as a partner, owner, manager, operator, employee, advisor, agent or consultant of or to any person; provided, however, that nothing herein shall prevent Employee from investing as a less than one (1%) percent shareholder in the securities of any company listed on a national securities exchange or quoted on an automated quotation system in which Employee does not, directly or indirectly, exercise any operational or strategic control.

(b) Non-Solicitation.

     During the Restricted Period, Employee covenants and agrees that Employee will not, directly or indirectly, either for himself or for any other person or business entity, (i) solicit any employee of Employer to terminate his or her employment with Employer or employ such individual during his or her employment with Employer, or (ii) make any disparaging statements concerning Employer, Employer’s Business or its officers, directors, or employees, that could reasonably be determined to injure, impair or damage the relationships between Employer or Employer’s Business on the one hand and any of the employees, customers or suppliers of Employer’s Business, or any lessor, lessee, vendor, supplier, customer, distributor, employee or other business associate of Employer’s Business. During the Restricted Period, Employer covenants and agrees that Employer will not, directly or indirectly, either for itself or for any other person or business entity, make any disparaging statements concerning Employee.

(c) Non-Disclosure and Non-Use.

     (i) Description of Confidential Information. For purposes of this Section 6(c), Confidential Information means any information (i) known by Employee while a shareholder of Employer and (ii) disclosed during the Restricted Period, which is clearly either marked or reasonably understood as being confidential or proprietary including, but not limited to, information disclosed in discussions between the parties in connection with technical information, data, proposals and other documents of Employer pertaining to its business, products, services, finances, product designs, plans, customer lists, public relations and other marketing information and other unpublished information. Confidential Information shall include all tangible materials containing Confidential Information including, but not limited to, written or printed documents and computer disks and tapes, whether machine or user readable.

     (ii) Standard of Care. Employee shall protect the Confidential Information from disclosure to any person other than other employees of Employer who have a need to know, by using a reasonable and prudent degree of care, in light of the significance of the Confidential Information, to prevent the unauthorized use, dissemination, or publication of such Confidential Information.

     (iii) Exclusion. This Section 6(c) imposes no obligation upon Employee with respect to information that: (a) is or becomes a matter of public knowledge through no fault of Employee; (b) is rightfully received by Employee from a third party who does not have a duty of confidentiality; (c) is disclosed under operation of law, except that Employee will disclose only such information as is legally required and give Employer prompt prior notice so that Employer may seek a protective order or other relief; or (d) is disclosed by Employee with Employer’s prior written consent.

     (iv) Stock Trading. If the information disclosed, or of which Employee becomes aware, is material non-public information about Employer, then Employee agrees not to trade in the securities of AMCE, or in the securities of or any appropriate and relevant third party, until such time as no violation of the applicable federal and state securities laws would result from such securities trading.

     (v) Return of Confidential Information. Employee will immediately destroy or return all tangible material embodying Confidential Information (in any form and including, without limitation, all summaries, copies and excerpts of Confidential Information) upon the earlier of (i) the completion or termination of the dealings between the Employer and Employee under this Agreement or (ii) at such time that Employer may so request.

     (vi) Notice of Breach. Employee shall notify Employer immediately upon discovery of any of his unauthorized use or disclosure of Confidential Information, or any other material breach of this Agreement by Employee, and will cooperate with Employer in every reasonable way to help Employer regain possession of Confidential Information and prevents its further unauthorized use.

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(d) Shop Rights and Inventions, Patents, and Technology. Employee shall promptly disclose to Employer any developments, designs, patents, inventions, improvements, trade secrets, discoveries, copyrightable subject matter or other intellectual property conceived, either solely or jointly with others, developed, or reduced to practice by Employee during Employee’s Term of Employment in connection with the services performed for Employer (the “Company Developments”) and shall treat such information as proprietary to Employer. Employee agrees to assign to Employer any and all of Employee’s right, title and interest in the Company Developments and Employee hereby agrees that Employee shall have no rights in the Company Developments. Any and all Company Developments in connection with the services performed for Employer pursuant to this Agreement are “works for hire” created for and owed exclusively by Employer.

(e) Entities Covered. For purposes of this Section 6, the term “Employer” shall collectively mean Employer and its affiliates existing from time to time.

(f) Injunctive Relief. Employee acknowledges that a breach of this Section 6 by Employee could cause irreparable harm to the Employer for which monetary damages may be difficult to ascertain or an inadequate remedy. Employee therefore agrees that Employer will have the rights in addition to its other rights and remedies, to seek and obtain injunctive relief from any violation of this Agreement.

7. Representation and Indemnification

     Employee hereby represents and warrants that Employee is not a party to any agreement, whether oral or written, which would prohibit Employee from being employed by Employer, and Employee further agrees to indemnify and hold Employer, its directors, officers, shareholders and agents, harmless from and against any and all losses, cost or expense of every kind, nature and description (including, without limitation, whether or not suit be brought, all reasonable costs, expenses and fees of legal counsel), based upon, arising out of or otherwise in respect of any breach of such representation and warranty.

8. Notices

     All notices shall be in writing and shall be delivered personally (including by courier), sent by facsimile transmission (with appropriate documented receipt thereof), by overnight receipted courier service (such as UPS or Federal Express) or sent by certified, registered or express mail, postage prepaid, to the parties at their address set forth at the beginning of this Agreement with Employer’s copy being sent to Employer at its then principal office. Any such notice shall be deemed given when so delivered personally, or if sent by facsimile transmission, when transmitted, or, if mailed, seventy-two (72) hours after the date of deposit in the mail. Any party may, by notice given in accordance with this Section to the other party, designate another address or person for receipt of notices hereunder. Copies of any notices to be given to Employer shall be given simultaneously to: Siller Wilk LLP, 675 Third Avenue, New York, New York 10017-5704, Attention: Joel I. Frank, Esq. Copies of any notices to be given to Employee shall be given simultaneously to: Sherrard & Roe, PLC, 424 Church Street, Suite 2000, Nashville, TN 37219, Attn: Elizabeth E. Moore, Esq.

9. Miscellaneous

(a) This Agreement shall be governed in all respects, including validity, construction, interpretation and effect, by New York law, without giving effect to the choice of law provisions thereof. Except as otherwise provided herein, any dispute or controversy arising under or in connection with this Agreement and the transactions contemplated thereby shall be resolved by confidential binding arbitration which shall be conducted before a panel of three (3) arbitrators in New York, New York in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) then in effect. Unless the parties involved agree otherwise, the panel of arbitrators will be selected by the AAA. The panel of arbitrators shall not have the authority to add to, detract from or modify any provision of this Agreement nor to award punitive damages to any injured party. A decision by a majority of the panel of arbitrators shall be final and binding and judgment may be entered on the award of the arbitrators by any court of competent jurisdiction. All fees and expenses of the arbitration proceeding, including the fees and expenses of the AAA and the panel of arbitrators, and the reasonable legal fees and expenses of the prevailing party shall be borne by and be the responsibility of, the non-prevailing party.

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(b) This Agreement may be amended, superseded, canceled, renewed or extended, and the terms hereof may be waived, only by a written instrument signed by authorized representatives of the parties or, in the case of a waiver, by an authorized representative of the party waiving compliance. No such written instrument shall be effective unless it expressly recites that it is intended to amend, supersede, cancel, renew or extend this Agreement or to waive compliance with one or more of the terms hereof, as the case may be. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any such right, power or privilege, or any single or partial exercise of any such right, power or privilege, preclude any further exercise thereof or the exercise of any other such right, power or privilege. The rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies that any party may otherwise have at law or in equity.

(c) If any provision or any portion of any provision of this Agreement or the application of any such provision or any portion thereof to any person or circumstance, shall be held invalid or unenforceable, the remaining portion of such provision and the remaining provisions of this Agreement, or the application of such provision or portion of such provision as is held invalid or unenforceable to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and such provision or portion of any provision as shall have been held invalid or unenforceable shall be deemed limited or modified to the extent necessary to make it valid and enforceable; in no event shall this Agreement be rendered void or unenforceable.

     (d) The headings to the Sections of this Agreement are for convenience of reference only and shall not be given any effect in the construction or enforcement of this Agreement.

     (e) This Agreement shall inure to the benefit of and be binding upon the successors and assigns of Employer, but no interest in this Agreement shall be transferable in any manner by Employee.

     (f) This Agreement constitutes the entire agreement and understanding between the parties and supersedes all prior discussions, agreements and undertakings, written or oral, of any and every nature with respect thereto.

     (g) This Agreement may be executed by the parties hereto in separate counterparts which together shall constitute one and the same instrument.

     (h) In the event of the termination or expiration of this Agreement, in addition to other provisions which by their own terms survive such termination, the provisions of Sections 6, 7 and 9 hereof shall remain in full force and effect, in accordance with their respective terms.

     (i) Employee agrees to reasonably cooperate with Employer in Employer’s effort to obtain key person life insurance on his life for the benefit of Employer in an amount equal to $5 million.

(j) The parties agree that in the event it becomes necessary to bring an action for the breach or threatened breach of this Agreement, the prevailing party will be entitled, in addition to all other remedies, to recover from the non-prevailing party all costs of such action, including but not limited to, reasonable attorneys’ fees and costs and paralegals’ fees, together with all sales taxes thereon, and also including all such expenses related to any appeal.

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     IN WITNESS WHEREOF, this Agreement has been executed as of the date stated at the beginning of this Agreement.

INTERACTIVE THERAPY GROUP CONSULTANTS, INC.
By:	/s/ Gary Gelman
	Gary Gelman
	Chief Executive Officer
	/s/ John Torrens
	John Torrens

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EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Gary Gelman, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of American Claims Evaluation, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2008

/s/ Gary Gelman

Gary Gelman
Chief Executive Officer

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EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Gary J. Knauer, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of American Claims Evaluation, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2008

/s/ Gary J. Knauer

Gary J. Knauer
Chief Financial Officer

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EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of American Claims Evaluation, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gary Gelman, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Gary Gelman

Gary Gelman
Chief Executive Officer

November 14, 2008

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to American Claims Evaluation, Inc. and will be retained by American Claims Evaluation, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of American Claims Evaluation, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gary J. Knauer, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Gary J. Knauer

Gary J. Knauer
Chief Financial Officer

November 14, 2008

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to American Claims Evaluation, Inc. and will be retained by American Claims Evaluation, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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