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, 2009

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 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. See 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
(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 12b-2 of the Exchange Act). Yes o   No þ

The number of shares outstanding of the Registrant’s common stock as of November 13, 2009 was 4,754,900.

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, 2009 (unaudited) and March 31, 2009	3
	Condensed Consolidated Statements of Operations for the Three and Six Months ended September 30, 2009 and 2008 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Six Months ended September 30, 2009 and 2008 (unaudited)	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6 - 10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10 - 11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	12
Item 4T.	Controls and Procedures	12
PART II — OTHER INFORMATION
Item 6.	Exhibits	13
SIGNATURES		14

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets

	Sept. 30, 2009			Mar. 31, 2009
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	3,916,082		$	4,143,445
Accounts receivable, net		814,931			847,510
Receivable from former ITG shareholders		—			170,715
Prepaid expenses and other current assets		59,569			119,514
Total current assets		4,790,582			5,281,184
Property and equipment, net		203,335			235,493
Goodwill		145,000			750,000
Intangible assets, net		557,855			—
Other assets		17,415			17,415
Total assets	$	5,714,187		$	6,284,092
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	38,749		$	99,492
Accrued expenses		497,565			604,626
Capital leases payable — current portion		18,879			18,051
Total current liabilities		555,193			722,169
Long-term liabilities:
Capital leases payable — net of current portion		17,895			27,546
Commitments
Stockholders’ equity:
Common stock, $.01 par value; authorized 20,000,000 shares; issued 5,050,000 shares; outstanding 4,754,900 shares		50,500			50,500
Additional paid-in capital		4,952,199			4,952,199
Retained earnings		605,673			998,951
		5,608,372			6,001,650
Treasury stock, at cost		(467,273	)		(467,273	)
Total stockholders’ equity		5,141,099			5,534,377
Total liabilities and stockholders’ equity	$	5,714,187		$	6,284,092

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,
	2009			2008			2009			2008
Revenues	$	1,317,905		$	247,690		$	3,224,996		$	247,690
Cost of services		964,137			175,334			2,240,686			175,334
Gross margin		353,768			72,356			984,310			72,356
Selling, general and administrative expenses		708,745			254,500			1,383,424			461,611
Operating loss from continuing operations		(354,977	)		(182,144	)		(399,114	)		(389,255	)
Other income (expense):
Interest income		2,390			35,907			7,808			77,706
Interest expense		(921	)		(260	)		(1,972	)		(260	)
Loss from continuing operations		(353,508	)		(146,497	)		(393,278	)		(311,809	)
Discontinued operations:
Gain (loss) from discontinued operations		—			3,832			—			(1,996	)
Gain on sale of discontinued operations		—			90,513			—			90,513
Net loss	$	(353,508	)	$	(52,152	)	$	(393,278	)	$	(223,292	)
Net earnings (loss) per share:
From continuing operations — basic and diluted	$	(0.07	)	$	(0.03	)	$	(0.08	)	$	(0.07	)
From discontinued operations — basic and diluted	$	0.00		$	0.02		$	0.00		$	0.02
Weighted average shares — basic and diluted		4,754,900			4,761,800			4,754,900			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,
	2009			2008
Cash flows from operating activities:
Loss from continuing operations	$	(393,278	)	$	(311,809	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		102,307			15,628
Stock-based compensation expense		—			15,600
Changes in operating assets and liabilities:
Accounts receivable		32,579			(44,485	)
Prepaid expenses and other current assets		29,362			24,932
Accounts payable		(60,743	)		(46,947	)
Accrued expenses		(107,061	)		64,317
		(3,556	)		29,045
Net cash used in operating activities of continuing operations		(396,834	)		(282,764	)
Operating activities of discontinued operations		—			34,439
Net cash used in operating activities		(396,834	)		(248,325	)
Cash flows from investing activities:
Acquisition of business, net of cash acquired		—			(568,375	)
Acquisition escrow refund		30,583			—
Proceeds from acquisition purchase price adjustment		170,715			—
Proceeds from sale of subsidiary, net of cash divested		—			149,391
Capital expenditures		(23,004	)		—
Net cash provided by (used in) investing activities		178,294			(418,984	)
Investing activities of discontinued operations		—			(9,452	)
Net cash provided by (used in) investing activities		178,294			(428,436	)
Cash flows from financing activities:
Principal payment on debt		—			(1,105,356	)
Principal payment on capital leases payable		(8,823	)		(1,670	)
Net cash used in financing activities		(8,823	)		(1,107,026	)
Net decrease in cash and cash equivalents		(227,363	)		(1,783,787	)
Cash and cash equivalents at beginning of period		4,143,445			6,239,442
Cash and cash equivalents at end of period	$	3,916,082		$	4,455,655
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	1,972		$	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, 2009
(Unaudited)

Overview

American Claims Evaluation, Inc. (together with its subsidiary, “we,” “our,” “us,” or the “Company”) provides a comprehensive range of services to children with developmental delays and disabilities in New York State and has developed a reputation for providing well-rounded therapeutic solutions through our wholly owned subsidiary, Interactive Therapy Group Consultants, Inc. (“ITG”).

Basis of Presentation

The accompanying unaudited consolidated financial statements and footnotes have been condensed and therefore do not contain all disclosures required by generally accepted accounting principles in the United States of America (“GAAP”). In our opinion, these financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to make the consolidated financial position, results of operations and cash flows for the interim periods presented not misleading. Results for interim periods are not necessarily indicative of results which may be achieved for a full year.

Accordingly, these condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2009 (the “Annual Report”), as filed with the Securities and Exchange Commission (“SEC”).

Use of Estimates

The preparation of financial statements in conformity with GAAP requires that we 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.

Recently Implemented Accounting Guidance

In June 2009, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance that established the FASB Accounting Standards Codification (“Codification” or “ASC”) as the single source of authoritative GAAP to be applied by nongovernmental entities, except for the rules and interpretive releases of the SEC under authority of federal securities laws, which are sources of authoritative GAAP for SEC registrants. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standards Updates. Accounting Standards Updates will not be authoritative in their own right as they will only serve to update the Codification. These changes and the Codification itself do not change GAAP. This new guidance became effective for interim and annual periods ending after September 15, 2009. Other than the manner in which new accounting guidance is referenced, the adoption of these changes did not have a material effect on our consolidated financial statements.

In December 2007, new accounting guidance on business combinations was issued which established principles and requirements as to how acquirers recognize and measure in these financial statements the identifiable assets acquired, the liabilities assumed, noncontrolling interests and goodwill acquired in the business combination or a gain from a bargain purchase. This guidance is effective for business combinations with an acquisition date on or after the beginning of the first annual reporting period

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beginning on or after December 15, 2008. This guidance will have an impact on our accounting for any future business acquisitions.

In December 2007, the FASB issued new accounting guidance, under ASC Topic 810 on consolidations, which establishes the accounting for noncontrolling interests in a subsidiary and the deconsolidation of a subsidiary. This guidance requires (a) the ownership interest in the subsidiary held by parties other than the parent to be clearly identified and presented in the consolidated balance sheet within equity, but separate from the parent’s equity, (b) the amount of consolidated net income attributable to the parent and to the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of operations and (c) changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary to be accounted for consistently. Entities must provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. This guidance is effective for financial statements issued for fiscal years beginning on or after December 15, 2008 and interim periods within those fiscal years. This guidance may have an impact on our accounting for any future business acquisitions.

In April 2008, the FASB issued new accounting guidance, under ASC Topic 350 on intangibles, which outlines the requirements for determining the useful life of an intangible asset. The new guidance is intended to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset when the underlying arrangement includes renewal or extension of terms that would require substantial costs or result in a material modification to the asset upon renewal or extension. Companies estimating the useful life of a recognized intangible asset must now consider their historical experience in renewing or extending similar arrangements or, in the absence of historical experience, must consider assumptions that market participants would use about renewal or extension as adjusted for entity-specific factors. This guidance is effective for financial statements issued for fiscal years beginning on or after December 15, 2008 and interim periods within those fiscal years. We expect that the new guidance may have an impact on the accounting for any future business acquisitions.

In June 2008, the FASB issued new accounting guidance, under ASC Topic 260 on earnings per share, related to the determination of whether instruments granted in share-based payment transactions are participating securities. This guidance clarifies that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends participate in undistributed earnings with common shareholders. Awards of this nature are considered participating securities and the two-class method of computing basic and diluted earnings per share must be applied. This guidance is effective for financial statements issued for fiscal years beginning on or after December 15, 2008 and interim periods within those fiscal years. The adoption of this guidance did not have a material effect on our consolidated financial statements.

In November 2008, the FASB issued new accounting guidance, under ASC Topic 323 on investments— equity method and joint ventures, relating to the accounting for equity method investments. This guidance addresses how the initial carrying value of an equity method investment should be determined, how it should be tested for impairment, and how changes in classification from equity method to cost method should be treated. This guidance is effective on a prospective basis in fiscal years beginning on or after December 15, 2008 and interim periods within those fiscal years. We expect this guidance to have an impact on its accounting for any future business acquisitions.

In May 2009, the FASB issued new accounting guidance, under ASC Topic 855 on subsequent events, which sets forth a) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, b) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and c) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This guidance was

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effective for interim and annual periods ending after June 15, 2009. The adoption of this guidance did not have a material effect on our consolidated financial statements.

Revenue Recognition

We recognize revenue for services rendered when there is evidence of billable time expended and recoverability is reasonably assured. Deferred revenue is recorded for federal flow-through funding attributable to special education programs when invoiced and recognized over the applicable program periods.

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 us. This concentration of customers may impact our overall exposure to credit risk, either positively or negatively, in that our customers may be similarly affected by changes in economic or other conditions in New York State.

Goodwill and Intangible Assets

In September 2008, we acquired all of the outstanding shares of ITG for an adjusted net purchase price of $174,632. The purchase price of the acquisition exceeded the carrying value of the assets acquired. The allocation of the excess of the purchase price over the fair value of the tangible assets acquired was classified as follows:

Customer contracts	$	570,000
Non-compete convenant		35,000
Goodwill and other non-amortizable intangibles		145,000
Total excess purchase price over fair value of tangible assets acquired	$	750,000

Customer contracts are being amortized over a fifteen-year period and the non-compete covenant is being amortized over a five-year period. Amortization expense totaling $47,145 for the six months ended September 30, 2009 is included in selling, general and administrative expenses in the consolidated statements of operations.

Accrued Expenses

The components of accrued expenses were as follows:

	Sept. 30, 2009		March 31, 2009
Accrued compensation and related taxes	$	463,440	$	553,926
Other		34,125		50,700
	$	497,565	$	604,626

Seasonality

Our business is moderately seasonal in nature based on the school year. Accordingly, our second fiscal quarter (the three month period ending September 30), which includes two full months during which schools are not in session (July and August), is the quarter in which we achieve our lowest volume of revenues.

8

Net Earnings (Loss) Per Share

Basic earnings (loss) per share is based on the weighted average number of 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. Our net loss and weighted average shares outstanding used for computing diluted loss per share for continuing operations and discontinued operations were the same as those used for computing basic loss per share for the three and six months ended September 30, 2009 and 2008 because the inclusion of common stock equivalents to the calculation of diluted loss per share for continuing operations would be anti-dilutive. Potentially dilutive securities consisting of employee and director stock options to purchase 1,221,000 and 1,233,500 shares as of September 30, 2009 and 2008, respectively, were not included in the diluted net loss per share calculations because their effect would have been anti-dilutive.

Stock Option Plans

We accounted for stock-based compensation by recording stock options at their fair value on the measurement date, which is typically the date the services are performed (generally the vesting period of the grant).

There were no stock options granted during the six month period ended September 30, 2009. Stock-based compensation totaling $15,600 was recognized during the six months ended September 30, 2008 based on the fair value of stock options granted. We estimate the fair value of stock options granted using the Black-Scholes option pricing model.

At September 30, 2009, 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. At September 30, 2009, there was no unrecognized compensation cost related to non-vested stock option awards.

The following table summarizes information about stock option activity for the six months ended September 30, 2009:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Shares			Price		Term		Value
Outstanding at March 31, 2009		1,246,000		$	2.12	5.3 years
Granted		—		$	—		—
Expired		(25,000	)	$	2.50		—
Outstanding at September 30, 2009		1,221,000		$	2.11	4.9 years		$	—
Exercisable at September 30, 2009		1,221,000		$	2.11	4.9 years		$	—

There were no options outstanding with an exercise price less than the closing price of our shares of $0.65 as of September 30, 2009. Accordingly, there was no intrinsic value associated with outstanding options at such date.

Regulatory Matters

We are 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, we will take all appropriate measures to assure

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compliance on a timely basis. Revenues derived from services performed by these licensed professionals approximate 23% of total revenues for the six months ended September 30, 2009.

Subsequent Events

We have completed an evaluation of the impact of any subsequent events through November 13, 2009, the date these financial statements were issued, and determined that there were no subsequent events requiring disclosure in or adjustment to these financial statements.

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

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. Our 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 our ability to successfully identify and thereafter consummate one or more acquisitions.

Critical Accounting Policies

Our significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements included in our Annual Report. A discussion of our critical accounting policies and estimates is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) in our Annual Report. There have been no material changes to the critical accounting policies or estimates reported in the MD&A section of our audited financial statements for the year ended March 31, 2009 as filed with the SEC.

Results of Operations — Three and Six Months ended September 30, 2009 and 2008

On September 12, 2008, we completed the disposition of our wholly-owned subsidiary, RPM Rehabilitation & Associates, Inc. (“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 our continuing operations, unless otherwise noted.

During the three and six month periods ended September 30, 2009, we recognized revenues of $1,317,905 and $3,224,996, respectively, from ITG’s operations. Revenues for the current quarter were approximately 31% lower than our first quarter ended June 30, 2009 as a result of the decline in demand for our services during the summer months when schools are not in session.

The costs of services for the three and six month periods ended September 30, 2009 were approximately 73.2% and 69.5% of revenue, respectively, consisting of payroll and payroll-related costs paid to ITG’s staff of salaried and per diem clinicians. The cost of services as a percentage of revenues for the quarter is higher than our previously reported quarter due to decreased utilization of our salaried clinicians during our slowest operating quarter.

Selling, general and administrative expenses for the three and six month periods ended September 30, 2009 were $708,745 and $1,383,424, respectively, as compared to $254,500 and $461,611 for the three and six month periods ended September 30, 2008, respectively. The increase in selling, general and administrative expenses in the current fiscal year versus the prior year’s comparable periods is the result of expenses incurred by ITG’s operations and the recording of amortization expense for intangible assets resulting from the ITG acquisition. Excluding ITG’s expenses, corporate selling, general and

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administrative expenses for the three months ended September 30, 2009 experienced a slight decrease over the comparable period in the prior year.

Interest income for the three and six months ended September 30, 2009 were $2,390 and $7,808, respectively, as compared to interest income of $35,907 and $77,706 for the three and six months ended September 30, 2008, respectively. The decrease in interest income was a result of substantial declines in prevailing interest rates compounded by a reduction in cash balances available for investment due to the payment to purchase ITG and subsequent repayment of ITG’s bank debt.

Liquidity and Capital Resources

At September 30, 2009, we had working capital of $4,253,389 as compared to working capital of $4,559,015 at March 31, 2009. We believe that we have sufficient cash resources and working capital to meet our present cash requirements.

During the six months ended September 30, 2009, net cash used in operating activities was $396,834, predominately attributable to the operating loss of $393,278 and partially offset by changes in operating assets and liabilities.

For the six months ended September 30, 2009, cash flows provided by investing activities related to the repayment of a receivable from the former shareholders of ITG and the return of funds held in escrow.

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, 2010 and fiscal years ending thereafter are as follows:

	Capital			Operating
	Leases			Leases
2010	$	10,762		$	106,000
2011		21,523			176,000
2012		8,004			128,000
2013		—			94,000
2014		—			5,000
Total minimum lease payments		40,289		$	509,000
Less: Amounts representing interest		(3,515	)
Present value of minimum lease payments		36,774
Less: Current portion		(18,879	)
Long-term portion of capital leases	$	17,895

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

We do not have any off-balance sheet arrangements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are subject to interest rate risks that arise from normal business operations. Most of our cash and cash equivalents are invested at variable rates of interest and decreases in market interest rates have caused a related significant reduction in our interest income over prior periods.

Item 4T. 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, 2009, we carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information required to be included in our periodic SEC filings.

(b) Changes in Internal Controls over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the quarter ended September 30, 2009 that have materially affected, or are reasonably likely to materially affect, the internal controls over financial reporting.

We are aware that there is a lack of segregation of duties due to the small number of employees dealing with general administrative and financial reporting matters. However, we have decided that considering the employees involved and the control procedures in place, risks associated with such lack of segregation are mitigated by active management involvement 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 10.17	Lease Agreement, dated October 19, 2009, with respect to the Interactive Therapy Group Consultants, Inc. office located at 1870 South Winton Road, Rochester, NY
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 13, 2009	By:	/s/ Gary Gelman
		Gary Gelman
		Chairman of the Board, President and Chief Executive Officer
Date: November 13, 2009	By:	/s/ Gary J. Knauer
		Gary J. Knauer
		Chief Financial Officer, Treasurer and Secretary

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EX-10.17

EXHIBIT 10.17

LEASE AGREEMENT

     THIS Lease Agreement (the “Lease) entered into this 19th day of October, 2009, between Gallina Cambridge, LLC, 1870 South Winton Road, Suite 220, Rochester, New York 14618, as LESSOR, and Interactive Therapy Group Consultants, Inc., 1 Adler Drive, East Syracuse, New York 13057, as LESSEE. WITNESSETH THAT: The LESSOR, having full authority to make the agreement hereinafter set forth, does hereby demise and lease unto the LESSEE, and the LESSEE does hereby hire and take from the LESSOR those certain premises located in the Town of Brighton, County of Monroe, and State of New York, described as follows:

     Being a parcel of land, with improvements, on the east side of South Winton Road (Cambridge Place), Lot 4, (the “Property”) together with a portion of the 33,993 rentable square foot office building thereon, (the “Building”), being identified as 1870 South Winton Road, Suite 100, containing approximately 2,733 rentable square feet. More particularly identified by the lined portion on the attached plot plan, which shall be made a part hereof and designated Exhibit A (the “Demised Premises”). The Demised Premises shall be built out in accordance with the attached Building Specifications (Exhibit B) and Floorplan (Exhibit C).

     TO HAVE AND TO HOLD the same for a term beginning on the 1st day of December, 2009, and ending on the 31st day of January, 2013 and the LESSEE hereby agrees to pay thereof a annual rental (hereinafter referred to as “Base Rent”): for the period December 1, 2009 thru January 31, 2011, of Forty Thousand Nine Hundred Ninety Five and 50/100 Dollars ($40,995.00), payable in equal monthly installments of Three Thousand Four Hundred Sixteen and 25/100 Dollars ($3,416.25); for the period February 1, 2011 thru January 31, 2012 of Forty Three Thousand Seven Hundred Twenty Eight and 00/100 Dollars ($43,728.00), payable in equal monthly installments of Three Thousand Six Hundred Forty Four and 00/100 Dollars ($3,644.00); and for the period February 1, 2012 thru January 31, 2013 of Forty Six Thousand Four Hundred Sixty One and 00/100 Dollars ($46,461.00), payable in equal monthly installments of Three Thousand Eight Hundred Seventy One and 75/100 Dollars ($3,871.75), all payable in advance on the first business day of each month during the said term at the office of the LESSOR at 1870 South Winton Road, Suite 220, Rochester, New York 14618. The first monthly installment of the stipulated rental payments shall be paid to the LESSOR upon the execution of this Lease. In addition, upon the execution of this Lease, the LESSEE shall pay to the LESSOR the additional sum of Three Thousand Eight Hundred Seventy One and 75/100 Dollars ($3,871.75) to be retained by the LESSOR as security deposit for the faithful performance by the LESSEE of the covenants and conditions of this Lease. Provided that the LESSEE has duly performed all the covenants and conditions of the Lease, upon only the expiration of the Lease or any extension thereof, and after inspection of the Demised Premises by the LESSOR and the LESSEE (if the LESSEE so desires), the security deposit will be returned to the LESSEE. The security deposit may be used by the LESSOR and applied towards the remedy of any default by the LESSEE of any of the covenants and conditions of this Lease; however, it is not to be construed as a limitation of the LESSOR’S rights under the Lease. It is further agreed that LESSEE shall waive it’s right to offset or utilize the security deposit for the payment of rent or Additional Rent, or to offset rental or Additional Rent payments due LESSOR under this Lease for any reason.

     Notwithstanding the foregoing, LESSEE shall not be required to pay Base Rent for the months of December, 2009 and January, 2010, only.

     PROVIDED ALWAYS, that this Lease is entered into upon the following terms and conditions, all of which the parties hereto covenant to keep and perform.

1. The LESSEE will not damage or destroy the Demised Premises and will conform with all applicable laws and ordinances respecting the use and occupancy thereof, provided that the LESSEE shall in no event be required to make any alterations, additions or improvements to the Demised Premises. The LESSEE is hereby permitted to use and occupy the Demised Premises for its lawful business purpose of general office space. Nothing herein contained shall be construed to relieve the LESSEE from making such repairs and alterations which may be required under the provisions of this Lease.

2. INSPECTION

     The LESSOR may enter upon the Demised Premises at all reasonable times upon reasonable notice to inspect the condition thereof, but such right shall not be exercised in a manner to interfere unreasonably with the business of the LESSEE.

3. POSSESSION

     The LESSOR hereby agrees to deliver physical possession of the Demised Premises to LESSEE at the commencement of the Lease term. The LESSOR will warrant and defend the LESSEE in the enjoyment and peaceful possession of the Demised Premises during the term hereof.

4. WAIVERS

     It is agreed that the waiving of any of the covenants of this Lease by either party shall be limited to the particular instance and shall not be deemed to waive any other breaches of such covenant.

5. OPTION TO EXTEND TERM

     The LESSEE may at its sole election extend this Lease, and all the terms and conditions, subject to Paragraph 31 of this Lease, for one (1) successive period(s) of two (2) year(s), upon written notice to the LESSOR at no later than one hundred eighty (180) days prior to the expiration of the original term or extension hereof. If any option as herein before provided, is not exercised by LESSEE, as herein before provided, this Lease shall terminate absolutely at the expiration date of the initial term, or the then current option period, without further notice by either party to the other.

6. HOLDING OVER

     At a minimum of thirty (30) days prior to the expiration of the term of this Lease, or of the term of any extension thereof, LESSEE shall provide LESSOR with written notice of its intention to hold over for any reason, and it is hereby agreed that, in the absence of a written agreement to the contrary, such tenancy shall be from month to month only, terminable upon thirty (30) days written notice by either party. The rental for each month of such hold over period shall be an amount equal to 1.25 times the rent for the last month of the expired Lease term.

7. ASSIGNMENT/SUBLET

     The LESSEE may assign this Lease or sublet the Demised Premises in whole or in part to its parent company or to any subsidiary or affiliated company without the consent of the LESSOR. For any assignment or subletting other than the foregoing, the LESSOR’s written consent shall be required, which consent it agrees it will not unreasonably withhold, provided that the assignee or sublessee is of comparable financial strength to LESSEE and is a user compatible with the other tenancies of the Building. It being understood, however, that in the event of an assignment to parent company, a subsidiary or an affiliated company, that no further assignment may be made without the written consent of LESSOR, subject to the above referenced qualifications.

     No assignment or sublease shall release LESSEE from any liabilities under this Lease. LESSEE agrees to keep the Demised Premises in continuous operation, during normal business hours, during the term of this lease. Failure to do so, shall be a default under this Lease.

     LESSEE shall pay all of the LESSOR’S costs, charges and expenses, including reasonable attorney’s fees, incurred in connection with any assignment or sublease requested or made by LESSEE.

8. ADDRESSES FOR NOTICES

     All notices given by either party hereto to the other under any of the provisions hereof shall be sent certified mail with adequate postage affixed, addressed to the LESSEE at American Claims Evaluation, Inc., One Jericho Plaza, Jericho, NY 11753, and to the LESSOR at 1870 South Winton Road, Suite 220, Rochester, New York 14618.

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9. FIXTURES

     If the LESSEE shall install at its expense any shelving, light fixtures, portable or temporary partitions, air conditioners, voice/data cabling, advertising sign, roof antennas, satellite dishes or any trade or business fixtures or equipment, any articles so installed shall be the property of the LESSEE which the LESSEE at its election may, and at the request of the LESSOR will, remove at the termination of this agreement or any renewal or extension thereof, provided that in such removal the LESSEE shall satisfactorily repair any damages occasioned to the Demised Premises.

10. ALTERATIONS/ADDITIONS

     LESSEE may make, at its own cost and expense alterations and additions to Demised Premises with written consent of LESSOR first obtained, which permission shall not be unreasonably withheld. Such alterations or additions to remain the property of the LESSEE, to be insured by LESSEE, which the LESSEE at its election may, and at the request of the LESSOR will, remove at termination of this agreement or any extension hereof, provided that in such removal the LESSEE shall repair any damage occasioned to the Demised Premises.

11. DAMAGES TO STRUCTURE

     That in case of damage or injury to the said Demised Premises, said damage or injury being caused by the carelessness, gross negligence, or improper conduct on the part of the said LESSEE, its agents or employees, the said LESSEE shall cause the said damage or injury to be repaired as speedily as possible at its own cost and expense.

12. DAMAGE LESSOR’S LIABILITY

     It is expressly agreed and understood by and between the parties to this agreement, that the LESSOR shall not be liable for any damage or injury by water, which may be sustained by the LESSEE, or other person, or for any other damage or injury resulting from the carelessness, negligence, or improper conduct on the part of the LESSEE, or its agents or employees, or by reason of breakage, or obstruction of water or soil pipes, or other leakage in or about said Building, or by reason of riots, strikes, or felonious or attempted felonious entry, unless such damage is caused by LESSOR’s negligence.

13. DAMAGE BY FIRE

     That the LESSEE shall, in case of fire, give immediate notice thereof to the LESSOR who shall thereupon cause the damage to be repaired with reasonable speed; but if the fire damage is so extensive that it cannot be rendered tenantable and put in good repair within sixty (60) days, then either party shall, on ten (10) days written notice of his intention, have the option to terminate this Lease and accrued rent shall be paid up to the time of the fire. It is, however, agreed that, if without fault, neglect or improper conduct of the LESSEE, its agents, servants or employees, only a portion of the Demised Premises shall be rendered untenantable by fire, the elements, or otherwise, the LESSEE shall continue to pay rent only for such portion of the Demised Premises as may reasonably be occupied during the time required to make the necessary repairs, and during the time of such partial occupancy the LESSEE shall pay rental in such proportion to the entire rental herein reserved that the space actually occupied bears to the entire space herein leased. LESSOR’S obligation to restore the Demised Premises is expressly conditioned upon availability of adequate insurance proceeds for restoration. In the event adequate insurance proceeds are not available, LESSOR, in its sole discretion, may terminate the Lease. LESSOR’S obligation to restore Demised Premises are contingent on LESSEE being in full compliance with all Lease covenants. LESSOR is not obligated to restore LESSEE’S leasehold improvements.

14. WAIVER OF SUBROGATION

     LESSOR and LESSEE hereby release each other of any claims for property damage to the extent that such damage may be covered under the terms of their respective property insurance policies. Each party agrees to require its insurance carrier to include waiver of subrogation clauses in its property insurance policies.

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15. LESSEE’S MAINTENANCE

     Except as hereinafter provided, the LESSEE agrees throughout the term of this Lease at its own cost and expense and in a manner satisfactory to the LESSOR, to keep and maintain the Demised Premises in good repair inside, including but not limited to floors, flooring, walls, plumbing and electrical systems and any exterior damage caused by LESSEE; and the LESSEE hereby agrees to maintain the Demised Premises and all portions and parts thereof in a manner equal to the maintenance of similar quality office buildings in Monroe County, normal wear and tear not withstanding. In the event that the LESSEE shall fail immediately to maintain, repair and care for the Demised Premises and make such repairs and replacements or render such care to the Demised Premises as are herein above required, after fifteen (15) days written notice and demand of same by LESSOR, LESSOR may make such repairs or perform such maintenance, and any sum so expended or liability incurred by the LESSOR shall be immediately due from the LESSEE as Additional Rent, and LESSEE further agrees upon the expiration or other termination of this Lease, or any renewal thereof, that he shall peacefully quit and surrender to LESSOR the Demised Premises broom clean, in good order and condition, ordinary wear and tear by the elements excepted and it is further understood and agreed that the LESSOR shall be responsible for structural repairs not occasioned by any fault, neglect or omission of the LESSEE.

All business machines and mechanical equipment installed by LESSEE in the Demised Premises shall be placed and maintained by LESSEE at LESSEE’S expense, in a setting sufficient, in LESSOR’S judgement, to absorb and prevent vibration, noise and annoyance to other tenants in the Building of which the Demised Premises are a part.

16. REPAIRS BY LESSOR

     The LESSOR represents that both the interior and exterior of the Demised Premises, including walls, roof, foundation and other structural portions of the Building, are in good condition and repair and the LESSOR, at his expense will make all necessary repairs to the aforementioned Building components. Additionally, LESSOR at its sole cost and expense, will maintain and repair: all plumbing and lighting fixtures outside the Demised Premises, the entire heating and air conditioning system servicing the Demised Premises and Building, and all Building common areas and other Building systems.

17. FIRE INSURANCE

     The LESSOR will carry adequate fire, extended coverage and operational all risk insurance on the Building. If by reason of the use of the Demised Premises by the LESSEE the rates for the insurance of the Demised Premises against loss by fire, extended coverage and operational risk are increased as compared with the rates now in effect, the LESSEE agrees to pay as Additional Rent, any excess premiums caused thereby; such Additional Rent to become due immediately upon effecting the insurance by the LESSOR and payable with the next succeeding installment of rent. The LESSEE shall pay for all such excess insurance premiums as though LESSEE occupies the entire building.

18. SIGNS

     The LESSEE shall neither place, or cause, or allow to be placed, any sign or signs of any kind whatsoever at, in or about the entrance to said Demised Premises or any other part of same, except in or at such place or places as may be indicated by the LESSOR and consented to by it, which consent shall not be unreasonably withheld.

19. CONSENT

     Whenever in this Lease, a right of the LESSEE is contingent upon prior consent or approval of the LESSOR, the LESSOR covenants that he will not unreasonably withhold such consent.

20. ADDITIONAL RENT

     LESSOR to be responsible for all Real Estate Taxes, and Common Area Maintenance Charges, including snow removal, landscaping, water, refuse, insurance, exterior window cleaning, building maintenance, management, common janitorial, Common/Demised Premises electric and natural gas consumption, related to the Property.

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     LESSEE to pay its proportionate share (8.04%) of all increases over the Base Year of 2010 for Real Estate Taxes and Common Area Maintenance Charges for the Property, as Additional Rent. Partial years or months shall be prorated. LESSOR will, upon request, provide LESSEE with back up documentation sufficient to confirm increases in Real Estate Taxes and Common Area Maintenance Charges. Increases in Real Estate Taxes shall be billed in September and January when bills are issued by the taxing authorities. Increases in snowplowing will be billed at the end of the season in April. Increases in lawn maintenance will be billed at the end of the season in November. Increases in all other Common Area Maintenance Charges will be billed annually on each anniversary of the Lease for the prior Lease year.

     Base Year Real Estate Taxes and Common Area Maintenance Charges are estimated as follows:

Real Estate Taxes	$3.65/SF
Snow	$.15/SF
Lawn	$.18/SF
Refuse	$.11SF
Management	$.50/SF
Insurance	$.10/SF
Maintenance	$1.00/SF
Water	$.04/SF
Common /Demised Premises Electric	$2.45/SF
Natural Gas	$.35/SF
Common Janitorial	$.15/SF

     Provided that any of the above described services to the Demised Premises (not including Common Areas) would be separately available to LESSEE, LESSOR may at any time elect to discontinue furnishing any of the hereinabove described services and upon written thirty (30) days notice from LESSOR to LESSEE, LESSOR may require LESSEE to contract directly with utility company or other company or LESSOR for any such service and any charges incurred by LESSEE as a result of LESSOR’S furnishing such service shall be eliminated from the annual rental payments accordingly. Any cost of separating utility service(s) shall be borne by LESSOR.

     During all business hours, LESSEE shall operate the heating, ventilation and air conditioning equipment serving the Demised Premises so that temperatures within the premises are maintained in accordance with standards established or to be reasonably established by LESSOR.

21.	BUILDNG SERVICES:
	Public service connections into said Building including electricity, gas, sewer and water, shall be provided by LESSOR.

(a)	LESSEE shall be responsible, at its own cost and expense, for the cost of cleaning service (janitorial) in the Demised Premises during the times and in the manner that those services are customarily furnished in comparable office buildings in the area. LESSEE shall keep the Demised Premises in a clean and orderly condition, and LESSOR shall have the right, at reasonable hours, to inspect the Demised Premises to determine that said premises are being kept in a clean and orderly condition. LESSEE shall also be responsible for lighting replacement within the Demised Premises and for supplies for restrooms located within the Demised Premises.
(b)	LESSEE shall be responsible for the cost of all telephone service, data service, and security service within the Demises Premises.
(c)	LESSOR shall be responsible, at its own cost and expense, for the cost of providing the following Building Services:

i.	Electricity for lighting and operation of equipment and for heat and air conditioning, including all wiring and outlets, in all common areas and the Demised Premises;
ii.	Lighting replacement in common areas;

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iii.	Water service for hot and cold water, for drinking, bathroom and other fixtures in the Demised Premises; and
iv.	Outside window cleaning in accordance with standards set for the building but in any event not less than two times per year.

(d) LESSOR will not be liable to LESSEE or any other person or entity, for direct or consequential damage, or otherwise, for any failure to supply any heat, air conditioning, elevator, cleaning, lighting, security, or other service at such times as may be necessary by reason of accident, unavailability of employees, repairs, alterations or improvements, strikes, lockouts, riots, acts of God, governmental preemption in connection with a national or local emergency, any rule, order, or regulation of any governmental agency, conditions of supply and demand that make any product unavailable, LESSOR’S compliance with any mandatory governmental energy conservation program, the request, consent or acquiescence of LESSEE, or any other happening beyond the control of LESSOR. LESSOR will not be in default under this Lease or be liable for any damages directly or indirectly resulting from, nor will the rental reserved in this section be abated by reason of the installation, use, or interruption of use of any equipment in connection with the furnishing of any of the services described herein.

22. COMMON AREAS:

     Common areas and facilities (hereinafter “Common Areas”) shall include all parking areas, access driveways, walkways, landscaped areas, and such other areas and facilities as may be furnished by LESSOR and designated for the benefit of the tenants in the building now or hereafter constructed on Property and their respective employees, guests and invitees. All Common Areas shall be subject to the exclusive control and management of LESSOR, and LESSOR shall have the right from time to time to establish, modify and enforce all reasonable rules and regulations with respect to such areas and facilities and the use thereof for the best interests of all tenants in the building. LESSOR shall perform, or arrange for the performance or furnishing of, all required gardening and landscaping; repair repaving and striping of parking areas; outside and common area lighting; sanitary control; rental and management office; removal of snow, trash, rubbish, garbage and other refuse, heating, ventilating and air conditioning, and repair and/or replacement of on-site water lines, sanitary sewer lines and storm water lines serving the Property.

23. WARRANTIES SUBROGATION

     The LESSOR agrees that the LESSEE shall be subrogated to all rights accruing in the LESSOR by virtue of any representation, warranty, or guarantee, with respect to the roof, plumbing and heating systems and any and all improvements to the Building in the event, and to the extent, that LESSEE has incurred any expense in connection with or as a result of said aforementioned items.

24. MORTGAGE SUBORDINATION/ESTOPPEL CERTIFICATES

     The Lease and the rights of the LESSEE thereunder, shall be subject and subordinate to any mortgage or mortgages, and to any renewals and replacements thereof, which may now be on, or which may hereafter be placed on Demised Premises, or on the property of which the Demised Premises may be a part. LESSEE agrees to confirm said subordination in writing, upon the request of LESSOR. LESSEE agrees to execute within ten (10) days of receipt from LESSOR, an Estoppel Certificate certifying that this Lease is in full force and effect and further confirming the terms of the Lease.

25. DEFAULTS

     The happening of any one or more of the following events shall constitute an Event of Default under this Lease:

(i) a default in the payment of any rent or additional rent or required payment due under this Lease, which default continues for a period of ten days;

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(ii)	a default in the performance of or compliance with any of the other terms or conditions contained or referred to in this Lease which continues for a period of thirty (30) days after written notice of the default from LESSOR to LESSEE, except for any default not capable of being remedied within the thirty (30) day period, in which event the time permitted to LESSEE to cure the default shall be extended for as long as shall be reasonably necessary to cure the default, provided LESSEE commences promptly and proceeds to cure the default and provided further that the period of time shall not be extended so as to jeopardize the interests of LESSOR in this Lease or so as to subject LESSOR or LESSEE to any civil or criminal liabilities;
(iii)	a filing by or against LESSEE of a petition in bankruptcy or insolvency, or for reorganization, or for the appointment of a receiver or trustee of all or a portion of LESSEE’S property or an assignment by LESSEE for the benefit of LESSEE’S creditors; or
(iv)	a levy upon or taking of the leasehold interest created by this Lease in execution, attachment or other process of law.

26. TERMINATION

a.	Termination After Default. Upon the occurrence of an Event of Default, and after giving of any notice required by subparagraph (ii) of Paragraph 25 and the expiration of any opportunity to cure accorded to LESSEE thereunder, LESSOR at any time thereafter may give written notice to LESSEE specifying the Event of Default and stating that this Lease shall terminate on the date specified in the notice, which shall be at least five days after giving of the notice, and upon the date specified in the notice, this Lease and all right of LESSEE hereunder shall terminate.
b.	Surrender of Demised Premises; Re-entry. Upon the termination of this Lease pursuant to Paragraph 26.1, LESSEE shall peaceably surrender the Demised Premises to LESSOR, and LESSOR may without notice re-enter the Demised Premises and repossess it by force, summary proceedings, or otherwise, and may dispossess LESSEE and remove LESSEE and all other persons and property from the Demised Premises and may have, hold, and enjoy the Demised Premises and the right to receive all rent due.
c.	Reletting. At any time after the termination of this Lease, LESSOR may relet the Demised Premises or any part thereof, in the name of LESSOR or otherwise, for any term and upon any conditions as LESSOR in LESSOR’S discretion may determine, and may collect the rent due. LESSOR shall in no way be responsible liable for any failure to relet the Demised Premises or any part of the Demised Premises or any failure to collect any rent due upon any reletting.
d.	Lessee Remains Liable. No termination of this Lease shall relieve LESSEE of LESSEE’S liabilities and obligations under this Lease, and the liabilities and obligations shall survive any termination. In the event of any termination, whether or not the Demised Premises or any part thereof shall have been relet, LESSEE shall pay to LESSOR the rent and additional rent required to be paid by LESSEE up to the time of the termination. Thereafter, LESSEE until the end of what would have been the Term in the absence of termination, shall be liable to LESSOR for and shall pay to LESSOR the amount of rent and additional rent which would be payable under this Lease by LESSEE if the Lease were still in effect, less the net proceeds to LESSOR of any reletting.

27. LEGAL

     In the event of any default by the LESSOR or LESSEE under the terms of this Lease and either party institutes a legal proceeding to cure such default or any eviction proceeding, in addition to any other requirements under this Lease, the non-prevailing party shall be responsible for the payment of reasonable attorney’s fees and all court costs.

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28. HOLD HARMLESS

     The LESSEE shall provide to the LESSOR, prior to the occupancy of the Demised Premises, a certificate of liability insurance with a minimum of $1,000,000.00, combined single limit, for which the coverage includes Bodily Injury, Property Damage, Personal Injury and Contractual Liability, which shall also name the LESSOR as an additional insured. LESSEE’S policy shall also include: business interruption coverage and coverage for LESSEE’S contents and betterments. In addition, thereto, LESSEE will indemnify and save LESSOR harmless from any and all loss, cost and expense resulting from claims, for bodily injury, wrongful death and property damage arising out of or in any way connected with LESSEE’s use and occupancy of the Demised Premises or resulting from any act or omission of LESSEE with respect to Demised Premises used and occupied by LESSEE in common with others, unless such injury, death or damage results from the negligence of LESSOR or LESSOR’s agents, employees, servants or contractors, from structural defects, or from failure of LESSOR to perform LESSOR’s obligations under this Lease. The LESSOR shall have the right to approve of any insurance company that said certificate is issued by and reject certificates as not being a company licensed to do business in New York State. LESSEE shall also provide a clause of ten (10) days notice of cancellation by any company providing LESSOR with a certificate of insurance. If, in the event of non-notice by any company to LESSOR, LESSEE agrees to provide all primary insurance.

29. HIDDEN DEFECTS

     LESSEE shall not be responsible for repair or correction of hidden defects or latent conditions existing at the inception of this Lease.

30. COMPLETION OF PREMISES

     The LESSOR shall make every effort to complete the agreed improvements on said Demised Premises and deliver possession thereof to the LESSEE by, on, or about December 1, 2009.

31.	In the event that the LESSEE shall exercise its right of renewal option as contained in the Paragraph 5 designated as “Option to Extend Term”, the new Base Rent for the lease renewal term shall be Forty Nine Thousand One Hundred Ninety Four and 00/100 Dollars ($49,194.00 ) per annum.
32.	LATE FEE/LATE PAYMENTS

     A late fee of 2% per month, shall be paid as Additional Rent, if the Base Rent or any Additional Rent, is not received by the 10th day of the month or within 30 days of the billing date, respectively.

     If any Rent or Additional Rent is late two (2) or more times during any twelve (12) month period during the lease term, LESSEE shall permanently forfeit all rights to: assign or sublet the Demised Premises, to lease additional space, and to renew the lease term.

33. CONDEMNATION

     A. If the whole of the Demised Premises shall be taken for any public or quasi-public use under any statute or by right of eminent domain, or by private purchase in lieu thereof, then this Lease shall automatically terminate as of the date that title shall be taken. If any part of the Demised Premises shall be so taken so as to render the remainder thereof unusable for the purposes for which the Demised Premises were leased, then the LESSOR and LESSEE shall each have the right to terminate this Lease on thirty (30) days written notice to the other given within ninety (90) days after the date of such taking.

     B. All compensation awarded or paid upon such a total or partial taking of the Demised Premises shall belong to and be the property of LESSOR without any participation by LESSEE; provided, however, that nothing contained herein shall be construed to preclude LESSEE from prosecuting any claim directly against the condemning authority in such condemnation proceedings for loss of business, and/or depreciation for damage to, and/or cost of removal of, and/or for the value of stock, and/or trade fixtures, furniture and other personal property belonging to LESSEE; provided, however, that no such claim shall diminish or otherwise adversely affect LESSOR‘s award. The current rental shall in any case be apportioned as of the date of actual possession by the condemning authority.

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34.	LESSEE covenants and agrees, at its sole cost and expense, to indemnify, protect, defend and save harmless LESSOR from and against any and all damages, losses, liabilities, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, actions, proceedings, costs, disbursements and/or expenses (including, without limitation, attorneys’ and experts’ fees, expenses and disbursements) of any kind or nature whatsoever which may at any time be imposed upon, incurred by or asserted or awarded against LESSOR relating to, resulting from or arising out of (a) the use of the Demised Premises for the storage, treatment, generation, transportation, processing, handling, production or disposal of any hazardous substance or as a landfill or other waste disposal site or for military, manufacturing or industrial purposes or for the storage of petroleum or petroleum based products, (b) the presence of any hazardous substance or a release or the threat of a release of any hazardous substance on, at or from the Demised Premises, (c) the failure to promptly undertake and diligently pursue to completion all necessary appropriate and legally authorized investigative, containment, removal, clean up and other remedial actions with respect to a release or threat of a release of any hazardous substance on, at or from the Demised Premises, (d) human exposure to any hazardous substance, noises, vibrations or nuisances of whatever kind to the extent the same arise from LESSEE‘s use or operation on the Demised Premises, (e) violation of any applicable environmental law, (f) non-compliance with any environmental permit or (g) a material misrepresentation or inaccuracy in any representation or warranty. The provisions of this paragraph shall survive the termination of the Lease.
35.	In order to more effectively secure to the LESSOR the rent and other terms herein provided, it is agreed as further condition of this Lease that the filing of any petition in bankruptcy, or assignment for the benefit of creditors by or against the LESSEE shall be deemed to constitute a breach of this Lease, and thereupon ipso facto and without entry or any other action by the LESSOR this Lease shall become and be terminated and notwithstanding any other provision of this Lease the damages for such breach in an amount equal to the amount of the rent reserved in this Lease for the residue to the term hereof, less the fair rental value of the Demised Premises for the residue of said term plus all costs of re-renting.
36.	LESSOR and LESSEE represent and warrant that there are no claims for brokerage commissions or finder’s fee in connection with the execution of this Lease, except as listed below, and each of the parties agree to indemnify the other against, hold it harmless from, all liabilities arising from any such claim (including, without limitation, the cost of counsel fees in connection therewith), except to Nothnagle Realtors, who has agreed per a separate agreement, to be compensated by LESSOR.
37.	LESSEE shall submit Corporate Financial Statements, and any appropriate and necessary notes or schedules, or adequate substitute financial information and/or banking references, upon reasonable request by LESSOR or LESSOR’S financial institution.

     This Lease and all the provisions hereof shall be binding upon and inure to the benefit of the successors and assigns of both parties hereto. The paragraph headings in this Lease are for convenience only and do not form a part of this Lease. They shall not limit or affect in any way the meaning of the paragraphs. This Lease shall be construed in accordance with the laws of the State of New York.

     IN WITNESS WHEREOF, the LESSOR and the LESSEE have executed this Lease. A memorandum of this Lease will be executed by the parties for filing in the Monroe County Clerk’s Office.

	Interactive Therapy Group Consultants, Inc.
DATE: October 19, 2009	BY:	/s/ Gary Gelman
		NAME: Gary Gelman
		TITLE: Chairman
	Gallina Cambridge, LLC
DATE: October 20, 2009	BY:	/s/ Andrew R. Gallina
		Andrew R. Gallina, Member

9

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 13, 2009

/s/ Gary Gelman  

Gary Gelman 

Chief Executive Officer 

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 13, 2009

/s/ Gary J. Knauer  

Gary J. Knauer 

Chief Financial Officer 

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, 2009 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 13, 2009

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.

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, 2009 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 13, 2009

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.