DEF 14A 1 file001.htm DEFINITIVE PROXY

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

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[ ] Preliminary Proxy Statement
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AMERICAN CLAIMS EVALUATION, INC.
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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[x] No fee required.

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AMERICAN CLAIMS EVALUATION, INC.
ONE JERICHO PLAZA
JERICHO, NEW YORK 11753

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON OCTOBER 6, 2004

To the Shareholders of American Claims Evaluation, Inc.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of American Claims Evaluation, Inc., a New York corporation, will be
held at the offices of Hartman & Craven LLP, 488 Madison Avenue, New York, New
York 10022 on Wednesday, October 6, 2004 at 10:00 a.m., local time, to consider
and act upon the following matters:

(1) To elect three Directors to the Board of Directors;

(2) To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.

Only shareholders of record at the close of business on August 30, 2004 will be
entitled to notice of, and to vote at, the Annual Meeting or at any adjournment
thereof.

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING,
PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS SOON AS
POSSIBLE IN THE ENVELOPE PROVIDED.

By Order of the Board of Directors,

GARY J. KNAUER
Secretary

September 7, 2004

AMERICAN CLAIMS EVALUATION, INC.
ONE JERICHO PLAZA
JERICHO, NEW YORK 11753

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

OCTOBER 6, 2004

General

This Proxy Statement and the accompanying Proxy Card are being furnished in
connection with the solicitation by the Board of Directors of American Claims
Evaluation, Inc. (the "Company") of proxies to be voted at the Annual Meeting of
Shareholders (the "Annual Meeting") to be held at 10:00 a.m. (New York time) on
Wednesday, October 6, 2004 at the offices of Hartman & Craven LLP, 488 Madison
Avenue, New York, New York 10022 and at any adjournments thereof, with respect
to the matters referred to in the accompanying notice. This Proxy Statement and
the accompanying Proxy Card are first being mailed to shareholders on or about
September 8, 2004.

The Company's common shares, par value $.01 per share ("Shares"), are the only
outstanding class of voting securities. Holders of record at the close of
business on August 30, 2004 are entitled to notice of, and to vote at, the
Annual Meeting and any adjournment thereof. At the close of business on August
30, 2004, there were issued and outstanding 4,859,800 Shares, each entitled to
cast one vote per Share. The holders of a majority of the issued and outstanding
Shares entitled to vote shall constitute a quorum at the Annual Meeting for the
transaction of business. The election of directors, as described in the
accompanying notice, requires the vote of a plurality of votes cast at the
Annual Meeting. For purposes of determining whether proposals have received a
majority vote, abstentions will not be included in the vote totals and, in
instances where brokers are prohibited from exercising discretionary authority
for beneficial owners who have not returned a proxy ("broker non-votes"), those
votes will not be included in the vote totals. Therefore, abstentions and broker
non-votes will be counted in the determination of a quorum and will have no
effect on the vote for the election of Directors. BECAUSE OF THE PERCENTAGE OF
BENEFICIAL OWNERSHIP OF SHARES HELD BY DIRECTORS AND MANAGEMENT, ELECTION OF THE
DIRECTORS NOMINATED AND REFERRED TO IN THIS PROXY STATEMENT IS ASSURED.

Revocability of Proxies

The attendance of a shareholder at the Annual Meeting will not automatically
revoke such shareholder's proxy. However, a shareholder may revoke a proxy at
any time prior to its exercise by (1) delivering to the Secretary of the Company
a written notice of revocation prior to the Annual Meeting, (2) delivering to
the Secretary of the Company before the Annual Meeting a duly executed proxy
bearing a later date, or (3) attending the Annual Meeting, filing a written
notice of revocation with the secretary of the meeting and voting in person.

Solicitation of Proxies

In addition to solicitation by mail at the Company's expense, directors,
officers and employees of the Company may solicit proxies for the Annual Meeting
from the shareholders of the Company personally or by telephone or telegram
without additional remuneration therefor, but at the Company's cost for all
out-of-pocket expenses. The Company will also provide persons, firms, banks and
corporations holding Shares in their names or in the names of nominees, which in
either case are beneficially owned by others, proxy material for transmittal to
such beneficial owners.

SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the current
beneficial ownership of the Company's Shares as of August 30, 2004 by (i) each
person known by the Company to beneficially own more than 5% of such Shares,
(ii) each director, nominee for director of the Company, and each named
executive officer of the Company, and (iii) all directors and executive officers
of the Company as a group. The percentages have been calculated by taking into
account all Shares owned on the record date as well as all such Shares with
respect to which such person has the right to acquire beneficial ownership at
such date or within 60 days thereafter. Except as otherwise indicated, all
persons listed below have sole voting and sole investment power with respect to
all Shares shown as beneficially owned by them.

Amount and Nature
Name and Address of Beneficial Percent of
of Beneficial Owner Ownership (1)(4) Class (1)
----------------------------------------- --------------------------- ----------------------

Gary Gelman (2) 3,446,400 63.7%
Peter Gutmann (2) 116,000(3) 2.4%
Edward M. Elkin (2) 76,000 1.5%
Gary J. Knauer (2) 138,750 2.8%
J. Morton Davis 388,024(5) 8.0%
Kinder Investments, L.P. 292,500(6) 6.0%
All executive officers and directors
as a group (four persons) 3,777,150 66.3%

(1) Based on a total of 4,859,800 Shares issued and outstanding as of
August 30, 2004. In addition, 834,750 Shares which directors and
executive officers described in the table have the right to acquire
within 60 days of such date pursuant to the exercise of options granted
under the Company's stock option plans are included since these are
deemed outstanding for the purpose of computing the percentage of
Shares owned by such persons in accordance with the provisions of Rule
13d-3(d)(1)(i) promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act").

(2) Address is c/o American Claims Evaluation, Inc., One Jericho Plaza,
Jericho, NY 11753.

(3) Includes 4,000 Shares owned by the wife of Mr. Gutmann, as to which
beneficial ownership is disclaimed.

(4) Includes the presently exercisable portions of outstanding stock
options (aggregating 834,750 Shares) which, in the case of Messrs.
Gelman, Gutmann, Elkin, and Knauer are 550,000, 70,000, 76,000 and
138,750 Shares, respectively.

(5) 386,924 of these Shares are owned of record by D.H. Blair Investment
Banking Corp., whose address is 44 Wall Street, New York, NY ("Blair
Investment"). Mr. J. Morton Davis, the sole shareholder of Blair
Investment, has reported that Blair Investment's Shares may be deemed
to be beneficially owned by him. Mr. Davis owns 1,100 Shares directly.

(6) These Shares are owned of record by Kinder Investments, L.P.
("Kinder"), Nesher, LLC, the general partner of Kinder ("Nesher") and
Dov Perlysky, the managing member of Nesher ("Perlysky"). The reporting
parties' business address is 100 Park Avenue, New York, NY. Nesher and
Kinder may be deemed to beneficially own 292,500 Shares. Perlysky may
be deemed to beneficially own 292,572 Shares, consisting of 292,500
Shares owned directly by Kinder and 72 Shares owned directly by
Perlysky's wife.

PROPOSAL ONE

ELECTION OF DIRECTORS

Three directors are to be elected at the Annual Meeting to hold office until the
next Annual Meeting of Shareholders and until their respective successors have
been elected and qualified or until their prior death, resignation or removal.
The by-laws provide that the Board of Directors shall consist of no less than
three and no more than seven members, with the actual number to be established
by resolution of the Board of Directors. The current Board of Directors has by
resolution established the number of directors at three.

Unless a proxy specifies that it is not to be voted in favor of a nominee for
director, it is intended that the Shares represented by the proxy will be voted
in favor of the nominees listed below. In the event that any nominee shall be
unable to serve, it is intended that the proxies will be voted for the nominees
designated by the Board of Directors. The Company believes that all nominees
will be able to serve.

The following table sets forth certain information with respect to each nominee
for election as a director. There are no arrangements or understandings between
the Company and any director or nominee pursuant to which such person was
elected or nominated to be a director of the Company. Each nominee is currently
serving as a director of the Company. For information with respect to security
ownership of directors, see "SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT."

Name Age Position(s) with the Company
--------------------------------- ----------- ---------------------------------------

Gary Gelman 57 Chairman of the Board,
President and
Chief Executive Officer

Edward M. Elkin, M.D. 65 Director

Peter Gutmann 75 Director

Nominees for Election as Directors

Gary Gelman, the founder of the Company, has been Chairman of the Board since
July 1, 1985, and President, Chief Executive Officer and a director since
inception. Mr. Gelman served as Treasurer from inception to October 1991. Since
1973, Mr. Gelman has also been Chief Executive Officer and a principal of
American Para Professional Systems, Inc., which provides nurses who perform
physical examinations of applicants for life and/or health insurance for
insurance companies. He received a B.A. from Queens College. Since 1996, Mr.
Gelman has been Chairman of the Board of Directors of Misonix, Inc., a publicly
traded company engaged in the design, development and manufacturing of
ultrasonic devices including medical instruments.

Edward M. Elkin, M.D. has been a director of the Company since July 1, 1985. For
more than the past five years, Dr. Elkin has been performing services relating
to utilization review and quality assurance in hospitals for the New York State
Department of Health. He is certified by the American Board of Pediatrics and
the American Board of Quality Assurance and Utilization Review Physicians. He
received his B.A. from Harvard College and his M.D. from New York University
School of Medicine.

Peter Gutmann has been a director of the Company since July 1, 1985. For more
than the past twenty years, he has been a Professor of Economics and Finance at
Baruch College, City University of New York and was Chairman of the Economics
and Finance Department from 1971 to 1977. He received a B.A. from Williams
College, a B.S. from Massachusetts Institute of Technology, an M.A. from
Columbia University and a PhD. from Harvard University.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPROVAL OF THESE
NOMINEES FOR ELECTION AS DIRECTORS.

Meetings and Committees of the Board

The Board of Directors held three meetings during the fiscal year commencing
April 1, 2003 and ending March 31, 2004 ("Recent Fiscal Year"). All of the
nominees were members of the Board of Directors during the Recent Fiscal Year
and attended all three meetings.

As a matter of policy, members of the Board of Directors are required to make
every reasonable effort to attend the Annual Meeting. All members of the Board
of Directors attended the Company's 2003 Annual Meeting of Shareholders held on
October 7, 2003.

The Audit Committee of the Board of Directors, a separately-designated standing
audit committee established in accordance with section 3(a)(58)(A) of the
Exchange Act and consisting of Messrs. Gutmann and Elkin, held four meetings
during the Recent Fiscal Year. The Audit Committee's primary responsibilities
are to: (i) review the Company's financial reporting principles and policies and
its internal control systems, (ii) review and monitor the performance and
independence of the Company's independent auditors, (iii) provide an open avenue
of communication among the independent auditors, financial and senior management
and the Board of Directors and (iv) appoint, evaluate, compensate and where
appropriate, terminate and replace the Company's independent auditors. The Audit
Committee is entirely made up of independent directors as required under Rule
4350(d) of the National Association of Securities Dealers' ("NASD") listing
standards. The Audit Committee is governed by a written charter approved by the
Board of Directors.

Director Nomination Policy

The Company does not currently have a standing Nominating Committee or a formal
Nominating Committee Charter. Currently, both independent members of the Board,
rather than a nominating committee, approve or recommend to the full Board those
persons to be nominated. The Board believes that the current method of
nominating directors is appropriate because it complies with applicable NASD
listing standards.

The Board has, by resolution, adopted a director nomination policy. The purpose
of the policy is to describe the process by which candidates for inclusion in
the Company's recommended slate of director nominees are selected. The director
nomination policy is administered by the Board.

In the ordinary course, absent special circumstances or a change in the criteria
for Board membership, the incumbent directors who continue to be qualified for
Board service and are willing to continue as directors are renominated. If the
Board thinks it is in the best interest of the Company to nominate a new
individual for director in connection with an annual meeting of shareholders, or
if a vacancy occurs between annual shareholder meetings, the Board will seek
potential candidates for Board appointments who meet criteria for selection as a
nominee and have the specific qualities or skills being sought. Director
candidates will be selected based on input from members of the Board, senior
management of the Company and, if deemed appropriate, a third-party search firm.

Candidates for Board membership must possess the background, skills and
expertise to make significant contributions to the Board, to the Company and its
shareholders. Desired qualities to be considered include substantial experience
in business or administrative activities; breadth of knowledge about issues
affecting the Company; and ability and willingness to contribute special
competencies to Board activities. The independent members of the Board also
consider whether members and potential members are independent under the NASD
listing standards. In addition, candidates should posses the following
attributes: personal integrity; absence of conflicts of interest that might
impede the proper performance of the responsibilities of a director; ability to
apply sound and independent business judgment; sufficient time to devote to
Board and Company matters; ability to fairly and equally represent all
shareholders; reputation and achievement in other areas; independence under
rules promulgated by the Securities and

Exchange Commission (the "SEC") and the NASD listing standards; and diversity of
viewpoints, background and experiences.

The Board of Directors intends to review the director nomination policy from
time to time to consider whether modifications to the policy may be advisable as
the Company's needs and circumstances evolve, and as applicable legal or listing
standards change. The Board may amend the director nomination policy at any
time.

Shareholder Nominations

The Board will consider director candidates recommended by shareholders and will
evaluate such director candidates in the same manner in which it evaluates
candidates recommended by other sources. In making recommendations for director
nominees for the annual meeting of shareholders, the Board of Directors will
consider any written recommendations of director candidates by shareholders
received by the Corporate Secretary of the Company no later than 90 days before
the anniversary of the previous year's annual meeting of shareholders, except
that if no annual meeting was held in the previous year or if the date of the
annual meeting is advanced by more than 30 days prior to, or delayed by more
than 60 days after such anniversary date, notice must be received by the 10th
day following the date that public disclosure of the date of the annual meeting
is given to shareholders. Recommendations must be mailed to American Claims
Evaluation, Inc., One Jericho Plaza, Jericho, NY 11753, Attention: Corporate
Secretary, and include all information regarding the candidate as would be
required to be included in a proxy statement filed pursuant to the proxy rules
promulgated by the SEC if the candidate were nominated by the Board of Directors
(including such candidate's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected). The shareholder
giving notice must provide (i) his or her name and address, as they appear on
the Company's books, and (ii) the number of shares of the Company which are
beneficially owned by such shareholder. The Company may require any proposed
nominee to furnish such other information it may require to be set forth in a
shareholder's notice of nomination which pertains to the nominee.

Communications with Directors

The Board of Directors welcomes communications from its shareholders and other
interested parties and has adopted a procedure for receiving and addressing
those communications. Stockholders and other interested parties may communicate
any concerns they may have about the Company directly to either the full board
of directors or one or more directors by mailing their communications to the
Company at the following address: [Director], American Claims Evaluation, Inc.,
One Jericho Plaza, Jericho, NY 11753, Attention: Corporate Secretary (Board
Matters). The Corporate Secretary promptly will forward all shareholder
communications and other communications from interested parties unopened to the
intended recipient.

Director Compensation

The Company's policy is to pay its non-employee directors an annual fee of
$1,000 and a uniform fee of $400 for each Board of Directors' meeting and/or
Audit Committee meeting attended in person.

Components of Compensation

The Company does not have a standing Compensation Committee. However, both
independent members of the Board, rather than a formal committee, review
executive compensation. The executive compensation philosophy emphasizes
providing an executive compensation package that enables the Company to attract,
motivate and retain talented executives, primarily through aligning the
financial interests of executives with long-term total shareholder return,
particularly though stock options. The executive compensation program consists
of both base salaries and long-term incentives.

The executive officers receive base salaries as compensation for their job
performance, abilities, knowledge and experience. Apart from contractual
commitments, the Company intends to maintain base salaries at below competitive
levels in the marketplace until the Company is cash flow positive.

The Company also believes that stock option plans provide an excellent vehicle
for rewarding performance by Company executives and retaining their services for
the future.

Section 16(a) Beneficial Ownership Reporting Compliance

Under Section 16(a) of the Exchange Act, the Company's directors, its executive
officers and any person holding more than 10% of the Company's Shares are
required to report their ownership of the Company's Shares and any changes in
that ownership to the SEC. Based on its review of the copies of such forms it
has received, except as set forth below, the Company believes that all Section
16(a) filing requirements applicable to its directors, executive officers and
greater than 10% beneficial owners were complied with on a timely basis. One
director, Edward M. Elkin, has failed to file one Form 4 with regard to two
trades. He is the process of correcting such deficiency.

Code of Ethics

The Company has adopted a Code of Ethics (the "Code of Ethics") that applies to
its Chief Executive Officer, Chief Financial Officer, Directors and employees.
The Code of Ethics is designed to focus our officers, directors and employees on
areas of ethical risk, provide guidance to personnel to help them recognize and
deal with ethical issues, provide a mechanism to report unethical conduct and
help to foster a culture of honesty and accountability for adherence to the Code
of Ethics. Any amendments or waivers to the Code of Ethics will be promptly
disclosed as required by applicable laws, rules and regulations of the SEC.

EXECUTIVE OFFICERS OF THE COMPANY

The executive officers of the Company are as follows:

Name Age Position
--------------------- ----------- -------------------------
Gary Gelman 57 Chairman of the Board,
President and
Chief Executive Officer

Gary J. Knauer 45 Chief Financial Officer,
Treasurer and Secretary

For a description of Mr. Gelman's business experience, see "ELECTION OF
DIRECTORS-Nominees for Election as Directors."

Gary J. Knauer joined the Company as its Controller in July 1991 and has served
as Chief Financial Officer and Treasurer since October 1991 and as Secretary
since March 1993. Before joining the Company, Mr. Knauer was employed from
October 1984 to June 1991 by the accounting firm of KPMG LLP. He is a Certified
Public Accountant and holds a B.S. from Binghamton University. Since February
1994, Mr. Knauer has also served as Chief Financial Officer of American Para
Professional Systems, Inc.

Each of the Company's executive officers is to serve until the next Annual
Meeting of Shareholders or until his earlier resignation or removal.

EXECUTIVE COMPENSATION

The following table sets forth all compensation paid or accrued to the Company's
Chief Executive Officer and another executive officer (the "Named Executive
Officers") with annual compensation exceeding $100,000 for the fiscal years
ended March 31, 2004, 2003 and 2002:

Long-Term
Compensation
Annual Compensation Awards
------------------------------------------ -------------------
Other Annual Securities All Other
Name and Fiscal Salary Bonus Compensation Underlying Compensation
Principal Position Year ($) ($) ($)(1) Options (#) ($)(2)
----------------------- --------- ------------- --------- ------------------ ------------------- -------------------

Gary Gelman
Chairman, 2004 $244,311 - - 100,000 $2,514
President 2003 244,311 - - 500,000 2,496
and CEO 2002 244,311 - - - 2,546
Gary J. Knauer
Treasurer, 2004 $119,881 - - 30,000 $1,810
Secretary 2003 111,462 - - 50,000 1,672
and CFO 2002 106,081 - - - 1,340

(1) The aggregate of all perquisites and other personal benefits provided
by the Company were not greater than either $50,000 or 10% of the total
annual salary and bonus reported in this table for the respective Named
Executive Officers.

(2) Consists of matching contributions made by the Company under the
Company's 401(k) plan.

Employment Agreements

Mr. Gelman's employment agreement with the Company provides for him to be
employed as Chairman of the Board of Directors and Chief Executive Officer at an
annual salary of $238,800. In addition, Mr. Gelman is entitled to participate in
all employee benefit programs and other policies and programs of the Company.
Mr. Gelman is not required to devote any specific number of hours to the
business of the Company. He is subject to a non-competition and non-disclosure
covenant for a period of three years following termination of employment with
the Company. The employment agreement is in effect through June 6, 2005, and is
automatically renewable for successive one year terms unless the Company or Mr.
Gelman gives the other notice of intention to terminate the agreement at the end
of the then-current term.

The following table summarizes the grants of stock options made during Fiscal
2004 to the Named Executive Officers:

OPTION GRANTS IN LAST FISCAL YEAR

% of Total
Options
Number of Granted to
Securities Underlying Employees in Exercise Expiration
Name Options Granted (#) Fiscal Year Price ($/sh) Date
----------------------------- --------------------------- ----------------- --------------- --------------

Gary Gelman 100,000 76.9% $1.70 10/7/2013
Chairman,
President and CEO

Gary J. Knauer 30,000 23.1% $1.70 10/7/2013
Treasurer,
Secretary and CFO

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES

The following table summarizes the number and value of unexercised stock options
at March 31, 2004 for the Named Executive Officers:

Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Shares Value FY-End (#) FY-End ($)(1)
Acquired Realized Exercisable/ Exercisable/
Name on Exercise (#) ($) Unexercisable Unexercisable
----------------------------- -------------------- ------------ ------------------------- -------------------------

Gary Gelman
Chairman,
President and CEO - - 1,150,000/- $1,779,000/-
Gary J. Knauer
Treasurer,
Secretary and CFO - - 111,250/68,750 $141,200/$113,300

(1) The closing price of the Company's Shares on March 31, 2004 as reported
by the Nasdaq SmallCap Market was $3.36 per Share.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table sets forth information as of March 31, 2004 with respect to
compensation plans under which Shares of the Company may be issued.

Number of
Number of securities to Weighted-average exercise securities remaining
be issued upon exercise price of outstanding available for future
of outstanding options, options, warrants and issuance under equity
Plan category warrants and rights rights compensation plans
------------- ------------------- ------------------------- ------------------

Equity compensation plans
approved by security
holders 1,508,500 $1.89 59,000
Equity compensation plans
not approved by security
holders 0 N/A 0
Total 1,508,500 $1.89 59,000

AUDITORS

On August 12, 2004, the Company dismissed KPMG LLP ("KPMG") as its independent
auditors. The reports of KPMG on the Company's financial statements as of and
for each of the fiscal years ended March 31, 2004 and 2003 did not contain an
adverse opinion or disclaimer of opinion, nor were they qualified or modified as
to uncertainty, audit scope or accounting principles.

In connection with the audits of the fiscal years ended March 31, 2004 and 2003,
there were no disagreements with KPMG on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure,
which, if not resolved to KPMG's satisfaction, would have caused KPMG to make
reference to the subject matter of the disagreement in connection with their
report on the Company's consolidated financial statements for such years.

On August 12, 2004, the Board of Directors, upon approval of its Audit
Committee, ratified the appointment of J.H. Cohn LLP as the Company's
independent registered public accounting firm to conduct an audit of the
Company's financial statements for the fiscal year ending March 31, 2005.

Representatives of J.H. Cohn LLP are expected to be present at the Annual
Meeting to respond to appropriate questions from shareholders and will be given
the opportunity to make a statement if they so desire. Representatives from KPMG
are not expected to be present or otherwise available for comment.

Audit Fees

The aggregate fees billed for professional services rendered by KPMG for the
audits of the Company's consolidated financial statements for the fiscal years
ended March 31, 2004 and 2003 and the reviews of the consolidated financial
statements included in the Company's quarterly reports on Form 10-QSB during the
fiscal years ended March 31, 2004 and 2003 were $32,000 and $26,000,
respectively.

Audit-Related Fees

The Company did not engage KPMG to provide any audit-related services to the
Company during the fiscal years ended March 31, 2004 and 2003.

Tax Fees

The Company did not engage KPMG to provide any tax services to the Company
during the fiscal years ended March 31, 2004 and 2003.

All Other Fees

The Company did not engage KPMG to provide any other professional services to
the Company during the fiscal years ended March 31, 2004 and 2003.

The Audit Committee's policy is to pre-approve all audit services and all
non-audit services that the Company's independent auditor is permitted to
perform for the Company under applicable federal securities regulations.

The Audit Committee has furnished the following report. The information
contained in the "Audit Committee Report" is not deemed to be "soliciting
material" or to be "filed" with the SEC, nor is such information to be
incorporated by reference into any future filings under the Securities Act of
1933, as amended, or the Exchange Act, except to the extent that the Company
specifically incorporates it by reference into such filing.

AUDIT COMMITTEE REPORT

The Audit Committee has reviewed and discussed the audited financial statements
of the Company for the fiscal year ended March 31, 2004 with the Company's
management. Management represented to the Audit Committee that the Company's
financial statements were prepared in accordance with generally accepted
accounting principles, and the Audit Committee has reviewed and discussed the
financial statements with the independent accountants. The Audit Committee has
discussed with the independent accountants the matters required to be discussed
by Statement on Auditing Standards No. 61 (Communications with Audit
Committees).

The Audit Committee has also received the written disclosures required by
Independence Standards Board Standard No. 1 (Independence Discussion with Audit
Committees), and discussed with the accountants their independence from the
Company and its management.

Based on the Audit Committee's review and discussions noted above, the Audit
Committee recommended to the Board of Directors that the Company's audited
financial statements be included in the Company's Annual Report on Form 10-KSB
for the fiscal year ended March 31, 2004 for filing with the SEC.

Respectfully submitted,
The Audit Committee
Peter Gutmann
Edward M. Elkin

CERTAIN MATTERS

On August 20, 2004, the Company entered into a seven-year noncancelable
operating sublease, commencing December 1, 2004, for office space with American
Para Professional Systems, Inc., an entity under the control of Mr. Gelman.
Basic rent under the sublease has been established as a pass-through with the
Company's cost being fixed at a cost equal to the pro-rata rent payable for the
subleased space by American Para Professional Systems, Inc. to the building's
landlord.

OTHER MATTERS

The Board of Directors is not aware of any other matters which are likely to be
brought before the Annual Meeting. However, in the event that any other matters
properly come before the Annual Meeting, it is intended that the persons named
in the accompanying proxy will vote the Shares represented by all properly
executed proxies on such matters in such manner as shall be determined by a
majority of the Board of Directors.

AN ANNUAL REPORT TO SHAREHOLDERS WILL ACCOMPANY THIS PROXY STATEMENT BUT IS NOT
TO BE CONSIDERED A PART HEREOF. THE COMPANY WILL PROVIDE, FREE OF CHARGE, TO ALL
SHAREHOLDERS A COPY OF ITS ANNUAL REPORT ON FORM 10-KSB (WITHOUT EXHIBITS) FOR
THE FISCAL YEAR ENDED MARCH 31, 2004, UPON WRITTEN REQUEST OF SUCH SHAREHOLDER
TO GARY J. KNAUER, SECRETARY, AMERICAN CLAIMS EVALUATION, INC., ONE JERICHO
PLAZA, JERICHO, NEW YORK 11753.

SHAREHOLDER PROPOSALS

Proposals by shareholders intended to be presented at the 2005 Annual Meeting of
Shareholders must be received by the Company on or before May 10, 2005 in order
to be included in the proxy statement for that meeting. It is suggested that
proponents submit their proposals by certified mail, return receipt requested,
addressed to the Secretary of the Company. Under the SEC's proxy rules, proxies
solicited by the Board of Directors for the 2005 Annual Meeting may be voted at
the discretion of the persons named in such proxies (or their substitutes) with
respect to any shareholder proposal not included in the Company's proxy
statement if the Company does not receive notice of such proposal on or before
July 25, 2005, unless the 2005 Annual Meeting is not held within 30 days before
or after the anniversary date of the 2004 Annual Meeting.

By Order of the Board of Directors,

Gary J. Knauer,
Secretary

September 7, 2004
Jericho, New York

PROXY

AMERICAN CLAIMS EVALUATION, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Gary Gelman, Peter Gutmann and Edward M. Elkin
as Proxies, each with the power to appoint a substitute, and hereby authorizes
them to represent and to vote, as designated below, all the Common Shares of
American Claims Evaluation, Inc. held of record by the undersigned on August 30,
2004 at the Annual Meeting of Shareholders to be held on October 6, 2004 or any
adjournment thereof.

PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY IN THE ENVELOPE PROVIDED

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1. Election of Directors: Gary Gelman, Peter Gutmann and Edward M. Elkin

FOR all WITHHOLD Instruction: To withhold authority
Nominees listed AUTHORITY to vote for any individual nominee or
(except as marked to vote for all nominees, write such name(s) in the
to the contrary) Nominees listed line(s) provided below:

[ ] [ ] -------------------------------------

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IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING. THIS PROXY, WHEN PROPERLY EXECUTED,
WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF
NO DIRECTION IS MADE, THE PROXY WILL BE VOTED FOR ALL NOMINEES LISTED.

PLEASE SIGN EXACTLY AS NAME APPEARS HEREON.

----------------------------------
(Signature)

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(Signature if held jointly)

Dated:
----------------------------

When shares are held by joint tenants, both should sign. When signing as
attorney, as executor, administrator, trustee, or guardian, please give full
title as such. If a corporation, please sign in full corporate name by President
or other authorized officer. If a partnership, please sign in partnership name
by authorized person. Please note any change in your address alongside the
address as it appears on the Proxy.

PLEASE MARK IN BLUE OR BLACK INK, SIGN, DATE AND
RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.