UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 10-Q

x
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: 000-52320
 
SENTISEARCH, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
 
20-5655648
(State or other jurisdiction of incorporation or organization)
  
(I.R.S. Employer Identification No.)
     
1217 South Flagler Drive, 3 rd Floor
West Palm Beach, FL
 
 
33401
(Address of principal executive office)
 
(Zip Code)
 
(561) 653-3284
(Registrant's telephone number, including area code)  
 
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 12 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   x     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 the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o
Accelerated Filer o
   
Non-Accelerated Filer o
(Do not check if a smaller reporting company )
Smaller Reporting Company   x

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

As of November 13, 2009, the Company had outstanding 12,747,644 shares of Common Stock.

 
 
 

 
TABLE OF CONTENTS
 SENTISEARCH, INC.
 FORM 10-Q

   
Page
 
PART I FINANCIAL INFORMATION
     
ITEM 1 Financial Statements
    3  
ITEM 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations
    14  
ITEM 3 Quantitative and Qualitative Disclosures About Market Risk
    19  
ITEM 4 Controls and Procedures
    19  
PART II OTHER INFORMATION
       
ITEM 6 Exhibits
    20  
SIGNATURES
    21  
 
 
2
 


PART I- FINANCIAL INFORMATION
 
Item 1.  Financial Statements.
 
SENTISEARCH, INC.
 (A Development Stage Company)
 Balance Sheets

   
September 30,
   
December 31,
 
   
2009
   
2008
 
   
(Unaudited)
       
             
ASSETS
           
Current Assets
           
Cash and cash equivalents
  $ 17,716     $ 198,187  
Security deposit
    4,170       4,170  
Total Current Assets
      21,886          202,357  
                 
Other Assets
               
License and patent costs
    549,116       515,722  
Less: accumulated amortization
       (491,173 )        (426,067 )
Total Other Assets
      57,943          89,655  
                 
Total Assets
  $ 79,829     $  292,012  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
               
Current Liabilities
               
Accounts payable and accrued expenses
  $ 234,419     $ 125,352  
Loan payable – related party
    25,000       -  
Total Current Liabilities
      259,419          125,352  
                 
Stockholders' Equity (Deficiency)
               
Common stock — $0.0001 par value, 20,000,000 shares authorized, 12,747,644 and 12,747,644 shares outstanding
    1,275       1,275  
Additional paid-in capital
    1,961,616       1,955,791  
Deficit accumulated during development stage
       (2,142,481 )        (1,790,406 )
                 
Total Stockholders' Equity (Deficiency)
      (179,590 )        166,660  
                 
Total Liabilities and Stockholders' Equity (Deficiency)
  $ 79,829     $  292,012  
 
See notes to financial statements.

 
3
 

SENTISEARCH, INC.
 (A Development Stage Company)
 Statements of Operations (Unaudited)

                           
For the period
 
                           
April 10, 2000
 
                           
(Commencement
 
   
For the three months
   
For the nine months
   
of Business)
 
   
Ended September 30,
   
Ended September 30,
   
to September 30,
 
   
2009
   
2008
   
2009
   
2008
   
2009
 
Revenues
  $ -     $ -     $ -     $ -     $ -  
Direct costs
    -       -       -       -       -  
Income after direct costs
    -       -       -       -       -  
                                         
Operating expenses:
                                       
General and administrative
    93,112       161,925       287,381       492,496       1,637,210  
Amortization of license and patent costs
    24,022       14,408       65,108       38,290       491,175  
      117,134       176,333       352,489       530,786       2,128,385  
Other (income) expense:
                                       
Interest (income)
    (2 )     -       (497 )     -       (2,909 )
Interest and financing expense
    83       -       83       6,519       17,005  
      81       -       (414 )     6,519       14,096  
                                         
Net loss before provision for income taxes
    (117,215 )     (176,333 )     (352,075 )     (537,305 )     (2,142,481 )
                                         
Income taxes
    -       -       -       -       -  
                                         
Net loss
  $ (117,215 )   $ (176,333 )   $ (352,075 )   $ (537,305 )   $ (2,142,481 )
                                         
Basic and diluted loss per share
  $ (0.01 )   $ (0.01 )   $ (0.03 )   $ (0.06 )        
Weighted average shares outstanding — basic and dilutive
    12,747,644       12,718,303       12,747,644       9,501,826          

See notes to financial statements.

 
4
 

 
SENTISEARCH, INC.
 (A Development Stage Company)
 Statements of Changes in Stockholders’ Equity (Deficiency)

   
Common Stock
         
Additional
             
   
Shares
   
Amount
   
Subscription
Receivable
   
Paid-in
Capital
   
Accumulated
 Deficit
   
Total
 
Balance - April 10, 2000 (Commencement of Predecessor Business)
    -     $ -     $ -     $ -     $ -     $ -  
Net loss
    -       -       -       -       (47,763 )     (47,763 )
Balance - December 31, 2000
    -       -       -       -       (47,763 )     (47,763 )
Net loss
    -       -       -       -       63,169 )     (63,169 )
Balance - December 31, 2001
    -       -       -       -       (110,932 )     (110,932 )
Net loss
    -       -       -       -       (65,936 )     (65,936 )
Balance - December 31, 2002
    -       -       -       -       (176,868 )     (176,868 )
Net loss
    -       -       -       -       (77,083 )     (77,083 )
Balance - December 31, 2003
    -       -       -       -       (253,951 )     (253,951 )
Net loss
    -       -       -       -       (109,169 )     (109,169 )
Balance - December 31, 2004
    -       -       -       -       (363,120 )     (363,120 )
Net loss
    -       -       -       -       (60,870 )     (60,870 )
Balance - December 31, 2005
    -       -       -       -       (423,990 )     (423,990 )
Net loss
    -       -       -       -       (320,747 )     (320,747 )
Balance - October 2, 2006
    -       -       -       -       (744,737 )     (744,737 )
Issuance of common stock - October 3, 2006
    7,694,542       769       (769 )     -       -       -  
Additional contribution of capital - October 10, 2006
    -       -       769       249,231       -       250,000  
Contribution to capital of License costs and assumption of liability - October 10, 2006
    -       -       -       749,334       -       749,334  
Net loss
    -       -       -       -       (116,822 )     (116,822 )
Balance - December 31, 2006
    7,694,542       769       -       998,565       (861,559 )     137,775  
Stock-based compensation expense
    -       -       -       1,490       -       1,490  
Net loss
    -       -       -       -       (286,544 )     (286,544 )
Balance - December 31, 2007
    7,694,542       769       -       1,000,055       (1,148,103 )     (147,279 )
Issuance of common stock - June 24, 2008
    5,053,102       506       -       927,194       -       927,700  
Stock-based compensation expense
    -       -       -       28,542       -       28,542  
Net loss
    -       -       -       -       (642,303 )     (642,303 )
Balance - December 31, 2008
    12,747,644       1,275       -       1,955,791       (1,790,406 )     166,660  
Stock-based compensation expense (unaudited)
    -       -       -       5,825       -       5,825  
Net loss (unaudited)
    -       -       -       -       (352,075 )     (352,075 )
Balance – September  30, 2009 (unaudited)
    12,747,644     $ 1,275     $ -     $ 1,961,616     $ (2,142,481 )   $ (179,590 )
 
See notes to financial statements.

 
5
 

SENTISEARCH, INC.
 (A Development Stage Company)
 Statements of Cash Flows (Unaudited)

               
For the period
April 10, 2000
 
               
(Commencement
 
   
For the
   
of Business)
 
   
Nine months ended
   
Through
 
   
September 30,
   
September 30,
 
   
2009
   
2008
   
2009
 
                   
Cash flows from operating activities
                 
Net loss
  $ (352,075 )   $ (537,305 )   $ (2,142,481 )
Adjustments to reconcile net loss to net cash provided by operating activities:
                       
Stock-based compensation expense
    5,825       25,047       35,857  
Amortization
    65,106       38,290       491,173  
Increase in security deposit
    -       (4.170 )     (4,170 )
                         
Increase (decrease) in accounts payable and accrued expenses
    109,067       (18,139 )     551,293  
                         
Net cash used in operating activities
    (172,077 )     (496,277 )     (1,068,328 )
                         
Cash flows from investing activities
                       
Investment in patents
    (33,394 )     (17,266 )     (108,491 ) 
                         
Net cash used in investing activities
    (33,394 )     (17,266 )     (108,491 ) 
                         
Cash flows from financing activities
                       
(Repayment)proceeds of notes payable - related parties
    -       (25,325 )     154,675  
Proceeds from loan payable - related party
    25,000       -       25,000  
Proceeds from due to related party
    -       106,914       106,914  
Proceeds from issuance of common stock, net of offering costs
    -       657,946       907,946  
                         
Net cash provided by financing activities
    25,000       739,535       1,194,535  
                         
(Decrease) increase in cash and cash equivalents
    (180,471 )     225,992       17,716  
Cash and cash equivalents — beginning of period
    198,187       42,500       -  
                         
Cash and cash equivalents — end of period
  $ 17,716     $ 268,492     $ 17,716  
                         
Supplemental schedule of non-cash investing and financing activities:
                       
Assumption of liability by Sentigen Holding Corp. 
  $ -     $ -     $ 308,709  
                         
Stock of Sentigen Holding Corp. issued for license costs
  $ -     $ -     $ 440,625  
                         
Conversion of notes payable ($154,675) and accrued interest ($8,165) to common stock
  $ -     $ 162,840     $ 162,840  
                         
Conversion of due to related party for common stock
  $ -     $ 106,914     $ 106,914  

See notes to financial statements.

 
6
 

Notes to Financial Statements
 
1.  Organization and Nature of Operations
 
 SentiSearch, Inc. (“we,” “our”, “SentiSearch,” and “the Company”) was a wholly-owned subsidiary of Sentigen Holding Corp. (“Sentigen”) until the December 1, 2006 “spin-off”, discussed below. We are a development stage company and have a limited operating history. We were incorporated in the State of Delaware on October 3, 2006 to hold the olfaction intellectual property assets of Sentigen and its subsidiaries.
 
On October 10, 2006, in connection with its merger with Invitrogen Corporation, Sentigen separated its olfaction intellectual property assets from the businesses being acquired by Invitrogen Corporation. The distribution of SentiSearch shares to the shareholders of Sentigen, commonly referred to as a “spin-off,” took place immediately prior to the consummation of the merger. In connection with the distribution, on October 10, 2006, we entered into a distribution agreement with Sentigen, pursuant to which Sentigen contributed $250,000 to our capital. Also on October 10, 2006, we entered into a contribution agreement with Sentigen, pursuant to which Sentigen transferred to us all of its olfaction intellectual property. The olfaction intellectual property assets primarily consist of an exclusive license agreement with The Trustees of Columbia University in the City of New York (“Columbia”), dated April 10, 2000 (the “Columbia License”), and certain patent applications titled “Nucleic Acids and Proteins of Insect or 83b odorant receptor genes and uses thereof.”
 
During July 2007, we were issued two patents in the United States. During November 2007, we were issued one patent in Australia and during April 2008, we were issued one patent in Mexico. Three of these patents were issued directly to us and the other patent was issued under the Columbia License. All of the issued patents cover nucleic acid molecules which encode insect odorant receptor proteins, including numerous variations on insect odorant receptor coding sequence. The patents cover any nucleic acid molecule as long as the protein it encodes contains a short segment of amino acids, linked together.
 
While we believe our technology capabilities in the olfaction area are substantial, up to this point, we have incurred substantial operating losses. There have been no revenues from operations to date. Although we have an exclusive license agreement with Columbia, only one patent has been issued under the Columbia License and we cannot provide any assurance that our additional patent applications will be successful. We intend to continually review the commercial validity of our olfaction technology in order to make the appropriate decisions as to the best way to allocate our limited resources.
 
2. Basis of Presentation
 
The financial statements for the period April 10, 2000 (Commencement of Business) to September 30, 2009 differ from the results of operations, financial condition and cash flows that would have been achieved had we been operated independently during the periods from April 10, 2000 through September 30, 2009. Our business was operated within Sentigen as part of its broader corporate organization rather than as a stand-alone company. Our historical financial statements do not reflect the expense of certain corporate functions that we would have needed to perform if we were not a wholly-owned subsidiary.
 
We are a development stage company whose planned principal operations have not yet commenced. We intend to establish a new business. We have not generated any revenues from operations and have no assurance of any future revenues. All losses accumulated since commencement of our business have been considered as part of our development stage activities.
 
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. The Company has had no revenue and has incurred accumulated net losses during the development stage of $2,142,481. The Company may need substantial amounts of additional financing to commercialize the research programs undertaken, for which financing may not be available on favorable terms, or at all. The Company’s ability to obtain financing and realize revenue depends upon the status of future business prospects, as well as conditions prevailing in the capital markets. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon management’s plan to raise additional capital from financings, including debt financings and/or the sale of securities and, ultimately, income from operations. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities.

 
7
 

3.  Summary of Significant Accounting Policies
 
a.
Interim Period - The accompanying interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, the instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, the interim financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of September 30, 2009, and the results of operations, changes in stockholders’ equity and cash flows for the nine months ended September 30, 2009. The results for the nine months ended September 30, 2009 are not necessarily indicative of the results to be expected for any subsequent quarter or the entire fiscal year ending December 31, 2009.
 
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the Securities and Exchange Commission’s (“SEC”) rules and regulations.
 
These unaudited financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, 2008 as included in the Company’s report on Form 10-K for the year ended December 31, 2008. There have been no changes in significant accounting policies since December 31, 2008.
 
b.
Cash and Cash Equivalents – Cash and cash equivalents include liquid investments with maturities of three months or less at the time of purchase.
 
c.
Concentration of Credit Risk - Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable.  The Company maintains its cash accounts at high quality financial institutions with balances, at times, in excess of federally insured limits. As of September 30, 2009, the Company had no cash balances in excess of federally insured limits. Management believes that the financial institutions that hold the Company’s deposits are financially sound and therefore pose minimal credit risk.  In May 2009, Congress temporarily increased FDIC deposit insurance from $100,000 to $250,000 per depositor through December 31, 2013.
 
d.
License and Patent Costs – The costs of intangible assets that are purchased from others for use in research and development activities and that have alternative future uses (in research and development projects or otherwise) are capitalized in accordance with the accounting standards.  The amortization of those intangible assets used in research and development activities is a research and development cost.  However, the costs of intangibles that are purchased from others for a particular research and development project and that have no alternative future uses (in other research and development projects or otherwise) and therefore no separate economic values are research and development costs at the time the costs are incurred.  We determined that the licensing costs arising from our exclusive licensing agreement with The Trustees of Columbia University is expected to provide alternative future uses and, accordingly, the costs associated with this agreement have been capitalized and are being amortized on a straight-line basis through April 2010 (see Note 4).
 
e.
Impairment – Intangible and long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable.  A review for impairment includes comparing the carrying value of an asset to an estimate of the undiscounted net future cash inflows over the life of the asset or fair market value.  An asset is considered to be impaired when the carrying value exceeds the calculation of the undiscounted net future cash inflows or fair market value.  An impairment loss is defined as the amount of the excess of the carrying value over the fair market value of the asset.  We believe that none of our intangible and long-lived assets are impaired as of September 30, 2009 (see Note 4).
 
 
8
 
 
f.
Estimates – The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
 
g.
Income Taxes – Certain income and expense items are accounted for differently for financial reporting and income tax purposes.  Deferred tax assets and liabilities are determined based on the difference between the financial statement and income tax basis of assets and liabilities and the tax effect of net operating loss and tax credit carry-forwards applying the enacted statutory tax rates in effect for the year in which the differences are expected to reverse.  Valuation allowances are established if it is determined to be more likely than not that deferred tax assets will not be recovered.  The Company recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense.
 
h.
Loss Per Share – The accompanying financial statements include loss per share calculated on a “pro-forma” basis as if we were a separate entity from the period April 10, 2000 (commencement of business) until October 3, 2006 (our date of incorporation).  Basic loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding.  Diluted loss per share include the effects of securities convertible into common stock, consisting of stock options, to the extent such conversion would be dilutive.  Accounting standards prohibits adjusting the denominator of diluted Earnings Per Share for additional potential common shares when a net loss from continuing operations is reported.  The assumed exercise of common stock equivalents was not utilized for the nine months ended September 30, 2009 since the effect would be anti-dilutive.  As of September 30, 2009, 575,000 options were outstanding of which 441,667 were exercisable.
 
i.
Fair Value of Financial Instruments – The carrying value of cash and cash equivalents and accounts payable and accrued expenses approximates fair value because of the short-term maturity of those instruments.
 
j.
Stock-Based Compensation – Stock-based compensation expense represents share-based payment awards granted subsequent to December 31, 2005, based upon the grant dates estimated fair value.  The Company recognizes compensation expense for stock option awards on a straight-line basis over the requisite service period of the award.  Stock-based compensation expense is recognized based upon awards ultimately expected to vest, reduced for estimated forfeitures.  Forfeitures are to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
 
The expected term of stock options represents the average period the stock options are expected to remain outstanding.  The expected stock price volatility for the Company’s stock options was determined by examining the historical volatilities for industry peers for periods that meet or exceed the expected term of the options, using an average of the historical volatilities of the Company’s industry peers as the Company did not have sufficient trading history for the Company’s common stock. The Company will continue to analyze the historical stock price volatility and expected term assumption as more historical data for the Company’s common stock becomes available. The risk-free interest rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of the Company’s stock options. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts.
 
The Company accounts for its issuances of stock-based compensation to non-employees for services using the measurement date guidelines enumerated in the accounting standards.. Accordingly, the value of any awards that were vested and non forfeitable at their date of issuance were measured based on   the fair value of the equity instruments at the date of issuance. The non-vested portion of awards that are subject to the future performance of the counterparty are adjusted at each reporting date to their fair values based upon the then current market value of the Company’s stock and other assumptions that management believes are reasonable. The Company believes that the fair value of the stock options issued to non-employees is more reliably measurable than the fair value of the services rendered. The fair value of the stock options granted was calculated using the Black-Scholes option pricing model.

9
 
4.  Exclusive License Agreement
 
On April 10, 2000, Sentigen Biosciences, Inc. (“Sentigen Biosciences”), a wholly-owned subsidiary of Sentigen, entered into the Columbia License.
 
In consideration of the Columbia License, Columbia was issued 75,000 shares of Sentigen common stock and will receive royalties of 1% of the net sales of any licensed products or services.  The Columbia License had certain minimum funding requirements, all of which have been satisfied.
 
On October 10, 2006, we entered into a contribution agreement with Sentigen pursuant to which Sentigen transferred to us all of its olfaction intellectual property, including the Columbia License.  On October 17, 2006, Columbia consented to the assignment of the Columbia License from Sentigen Biosciences to SentiSearch subject to certain conditions, all of which have already been satisfied to the extent currently required.
 
The value of this license agreement is recorded as license costs, net of accumulated amortization on the accompanying balance sheet.  The original value of the license costs reflects the closing share price of Sentigen’s  common stock on April 10, 2000.  The value of the license costs, net of amortization as of September 30, 2009 was $19,091.
 
Intangible and long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable.  A review of our olfaction technology was performed by Charter Capital Advisers, Inc. in August 2006 which concluded that the estimated range of fair value was $120,000 to $190,000.  An impairment loss of $122,996 was recognized as amortization expense in August 2006 as the amount of the excess of the carrying value over the fair market value of the asset.
 
The license costs are being amortized on a straight line basis through April 2010.  Expected amortization costs of the license agreement over the next twelve months is $19,091.

5.  Patent Costs
 
During July 2007, we were issued two patents in the United States. During November 2007, we were issued a patent in Australia and during May 2008, we were issued a patent in Mexico.  One of the U.S. patents, the Australia and Mexico patents were issued directly to us and the other U.S. patent was issued under the Columbia License.  All of the issued patents cover nucleic acid molecules which encode insect odorant receptor proteins, including numerous variations on insect odorant receptor coding sequence.  The patents cover any nucleic acid molecule as long as the protein it encodes contains a short segment of amino acids, linked together.
 
The original value of the patent costs, mainly consisting of legal fees in the amount of $108,491, is recorded as patent costs, net of accumulated amortization on the accompanying balance sheet.  The value of the patent costs, net of amortization as of September 30, 2009 was $38,852.
 
The patent costs are being amortized on a straight line basis through April 2010, the remaining term of the license costs.  Expected amortization costs of the patent costs over the next twelve months is $38,852.

 
10
 

6.  Share-Based Payments
 
On May 16, 2007, the Company granted options to purchase 50,000 shares of its common stock at an exercise price of $0.18 per share to a director.  The fair value of the underlying common stock at the date of grant was $0.18 per share.  The options vested immediately and have a five year term.  Assumptions related to the estimated fair value of these stock options on their date of grant, which the Company estimated using the Black-Scholes option pricing model, are as follows:  risk-free interest rate of approximately 5%; expected divided yield of zero percent; expected option life of two and one-half years; and expected volatility of approximately 17%.  The aggregate grant date fair value of the award amounted to $1,490.
 
  On March 27, 2008 and May 14, 2008, the Company granted options to purchase an aggregate of 425,000 and 100,000 shares of its common stock to four individuals for consulting services rendered to the Company and a director, respectively, each at an exercise price of $.19 per share and term of ten years. The terms of the consulting arrangements are for five years.  The fair value of the underlying common stock at the date of grant was $.07 per share. The options granted on March 27, 2008 vested as follows: 158,334 immediately, 133,333 on the first anniversary and 133,333 on the second anniversary. The options granted on May 14, 2008 vested upon stockholder approval to amend the certificate of incorporation to increase the number of authorized shares which occurred at the annual meeting of stockholders held on June 24, 2008, and have a term of ten years unless cancelled earlier upon director’s removal or resignation from the board. Assumptions related to the estimated fair value of these stock options on their date of grant, which the Company estimated using the Black-Scholes option pricing model, are as follows: risk-free interest rate of approximately 4%; expected dividend yield of zero percent; expected option life of ten years; and expected volatility of approximately 17%. The aggregate grant date fair value of the award amounted to $36,698.  The Company recorded $5,825 of consulting expense during the nine months ended September 30, 2009 with respect to these awards.
 
  Total compensation expense recognized for the nine months ended September 30, 2009 amounted to $5,825.  The stock-based compensation expense will fluctuate as the fair market value of the common stock fluctuates. Total unamortized compensation expense related to unvested stock options at September 30, 2009 amounted to $2,330 and is expected to be recognized over a weighted average period of approximately one year.
 
The following table summarizes information on all common stock purchase options issued by us for the nine months ended September 30, 2009:

  
 
September 30, 2009
  
  
 
Number
 
Weighted Average
Exercise Price
  
             
Outstanding, December 31, 2008
 
575,000
 
$
0.19
 
Granted
 
-
   
-
 
             
Outstanding,  September 30, 2009
 
575,000
 
$
0.19
 
             
Exercisable, September 30, 2009
 
441,667
 
$
0.19
 
 
The number and weighted average exercise prices of all common stock purchase options as of September 30, 2009 are as follows:

  
Range   of Exercise
Prices
 
Remaining   Number
Outstanding
 
Weighted   Average
Contractual   Life   (Years)
 
Weighted   Average
Exercise   Price
 
                         
 
$0.18 to $0.19
   
575,000
   
8.0
 
 $
0.19
 
 
 
11
 

All options were issued at an option price equal to the market price on the date of the grant.  In addition, none of the options currently outstanding have any intrinsic value.

The Company issues new shares of common stock upon exercise of stock options.
 
7.  Recently Adopted Accounting Pronouncements
 
In June 2009, the Financial Accounting Standards Board (“FASB”) issued The FASB Accounting Standards Codification and the Hierarchy of Generally Ac cepted Accounting Principles, which established the FASB Accounting Standards Codification (the “ASC” or “Codification”) as the source of authoritative principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”).  Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants.  This standard is effective for financial statements issued for interim and annual periods ending after September 15, 2009.  The adoption of this standard did not have a material impact on our financial statements.  References to authoritative accounting literature contained in our financial statements will be made in accordance with the ASC commencing with this quarterly report for the period ending September 30, 2009.
 
On January 1, 2009, we adopted ASC 350-30, “Determination of the Useful Life of Intangible Assets”. ASC 350-30 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset in order 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. The adoption had no impact on our financial statements.
 
On May 28, 2009, we adopted ASC 855-10, “Subsequent Events”. The Codification does not require significant changes regarding recognition or disclosure of subsequent events, but does require disclosure of the date through which subsequent events have been evaluated for disclosure and recognition. The Codification is effective for financial statements issued after June 15, 2009. The adoption did not have a significant impact on our financial statements (see note 11).
 
On April 1, 2009, we adopted ASC 825-10 and ASC 270-10, “Interim Disclosures about Fair Value of Financial Instruments.” The Codification requires disclosures about fair value of financial instruments for interim reporting periods as well as in annual financial statements. The Codification is effective for interim and annual reporting periods ending after June 15, 2009.  The adoption did not have a significant impact on our financial statements.
 
On April 1, 2009, we adopted ASC 320-10, “Recognition and Presentation of Other-Than-Temporary Impairments.” The Codification amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. The Codification does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities.  The Codificaton is effective for interim and annual reporting periods ending after June 15, 2009. The adoption did not have a significant impact on our financial statements.
 
On April 1, 2009, we adopted ASC 820-10, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and identifying Transactions That Are Not Orderly.”  The Codification provides additional guidance for estimating fair value when the volume and activity for the asset or liability have significantly decreased. This Codification also includes guidance on identifying circumstances that indicate a transaction that is not orderly. The Codification is effective for interim and annual reporting periods ending after June 15, 2009.  The adoption did not have a significant impact on our financial statements.
 
8. Recently Issued Accounting Pronouncements
 
Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

 
12
 
 
9. Commitments and Contingencies
 
The Company leases property for office space in West Palm Beach, Florida pursuant to a sublease that expires June 2010.  The sublease has a term of one year, with an option to renew for an additional year.  The sublease requires twelve monthly payments of approximately $1,390.
 
10. Related Party Transactions
 
On September 10, 2009, the Company entered into a loan agreement with the Chief Executive Officer in the amount of $25,000 (the “September Loan”).  The loan bore interest at 6% per annum and was amended as described below.
 
On October 20, 2009 a newly appointed Director was granted options to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.05 per share.  The options vested immediately and have a ten year term.
 
 On October 26, 2009, the Company issued to each of four individuals $50,000 subordinated convertible promissory notes (the “Notes”) (an aggregate principal amount of $200,000 of Notes). The individuals included the Company’s Chief Executive Officer and Chairman of the Board of Directors, another director and one of the Company’s greater than 5% stockholders. The  $50,000 principal amount of Notes issued to the Chief Executive Officer and Chairman of the Board represent $25,000 of new funds received and a rollover of the September  Loan.  The Notes bear interest of 4% per annum and are payable on demand on the earlier of (i) the date on which the Company publicly announces a joint venture or strategic relationship, the execution of a license, or similar agreement with a third-party with respect to the Company’s technology and (ii) the date on which the Company files with the SEC its annual report on Form 10-K, which includes audited financial statements for the year ending December 31, 2009, such date referred to as the target date.  The holders may convert the outstanding principal amount of the Notes and accrued and unpaid interest thereon into shares of the Company’s common stock at any time commencing on the fifth trading day immediately following the target date at the conversion price in effect on such date.  The conversion price shall be the greater of (i) the average of the closing sale price of the Company’s common stock for the five trading days immediately following the target date and (ii) $0.05 per share.
 
  11. Subsequent Events
 
Subsequent events have been evaluated through November 16, 2009, the date the financial statements were issued.
 
13
 
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-looking Information

The following discussion should be read in conjunction with our Consolidated Financial Statements and Notes thereto, included elsewhere within this report. This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, including statements using terminology such as “can”, “may”, “believe”, “designed to”, “expect”, “intend to,” “plan”, “anticipate”, “estimate”, “potential” or “continue”, or the negative thereof or other comparable terminology regarding beliefs, plans, expectations or intentions regarding the future. You should read statements that contain these words carefully because they:
 
•
discuss our future expectations;

•
contain projections of our future results of operations or of our financial condition; and

•
state other “forward-looking” information.

We believe it is important to communicate our expectations. However, forward-looking statements involve risks and uncertainties and our actual results and the timing of certain events could differ materially from those discussed in or implied by  forward-looking statements as a result of certain factors, including those set forth under our Annual Report on Form 10-K for the year ended December 31, 2008. All forward-looking statements and risk factors included in this document are made as of the date hereof, based on information available to us as of the date thereof, and we assume no obligations to update any forward-looking statement or risk factor, unless we are required to do so by law.
 
Introduction
 
SentiSearch, Inc. (“SentiSearch” or “we” or “us” or “our” or the “Company”) is a Delaware corporation that was incorporated on October 3, 2006. We were previously a wholly-owned subsidiary of Sentigen and were incorporated solely for the purposes of holding the olfaction intellectual property assets of Sentigen and its then subsidiary, Sentigen Biosciences. Prior to the merger between Sentigen and Invitrogen Corporation (“Invitrogen”) that was consummated on December 1, 2006, Sentigen separated its olfaction intellectual property assets from the businesses to be acquired by Invitrogen. This separation was accomplished through the contribution of Sentigen’s olfaction intellectual property assets to us on October 10, 2006 and the subsequent spin-off in which Sentigen distributed 100% of its ownership interest in us to its then stockholders on December 1, 2006. As a result of this spin-off, we became a public, stand-alone company.
 
The olfaction intellectual property assets that we hold primarily consist of an exclusive worldwide license issued by Columbia, as described in more detail below (the “Columbia License”), and certain patent applications titled “Nucleic Acids and Proteins of Insect or 83b odorant receptor genes and uses thereof.” The olfaction intellectual property assets are also referred to herein as “our olfaction intellectual property.”  We are currently a development stage company and have a limited operating history. Other than with regard to the development and protection of our intellectual property, our planned principal operations have not commenced. We have not generated any revenues from operations and have no assurance of any future revenues. All losses accumulated since the commencement of our business have been considered as part of our development stage activities.
 
The Columbia License provides us with worldwide rights to certain of Columbia’s patent applications and other rights in the areas of insect chemosensation and olfaction. The Columbia License gives us an exclusive license to develop, manufacture, have made, import, use, sell, distribute, rent or lease (i) any product or service the development, manufacture, use, sale, distribution, rental or lease of which is covered by a claim of a patent licensed to us under the Columbia License or (ii) any product or service that involves the know-how, confidential information and physical materials conveyed by Columbia to us relating to the patents licensed from Columbia (collectively, the “Licensed Products/Services”). In addition to certain funding requirements by Sentigen, all of which were satisfied, in consideration of the Columbia License, Columbia was issued 75,000 shares of Sentigen common stock and will receive royalties of 1% of the net sales of any Licensed Products/Services.

 
14
 
 
The licenses granted to us under the Columbia License expire on the later of the date of expiration of the last to expire of the licensed patents relating to any Licensed Product/Service or ten years from the first sale of any Licensed Product/Service.
 
In addition to the Columbia License, we have certain patents and patent applications relating to nucleic acids and proteins of insect or 83b odorant receptor genes and their uses. These patents and patent applications relate to the isolation of a gene that appears to be ubiquitous among insects. This gene has been identified in various species of insects, including many that have a profound effect on agricultural production and human health. The identification of this gene, and the protein that it expresses, may enable the development of high-throughput screening methods to discover compounds that attract insects to a particular site (and away from one where their presence is undesirable), or develop materials that are distasteful to the insects’ sense of “smell,” thereby making agricultural products, for example, undesirable to them.
 
While we believe our technology capabilities in the olfaction area are substantial, up to this point, we have incurred substantial operating losses. There were no revenues from operations for the nine months ended September 30, 2009. As of September 30, 2009, we held three patents directly with another patent being issued under the Columbia License. We cannot provide any assurance that our additional patent applications will be successful. We intend to continually review the commercial validity of our olfaction technology in order to make the appropriate decisions as to the best way to allocate our limited resources.
 
Our Chief Executive Officer and board of directors are also seeking opportunities with non-profit agencies and with potential commercial partners to leverage our olfaction intellectual property for the development of control agents for biting insects, in particular, insect vectors of malaria and other diseases.
 
Critical Accounting Policies and Use of Estimates
 
The SEC defines critical accounting policies as those that are, in management’s view, important to the portrayal of our financial condition and results of operations and demanding of management’s judgment. Our critical accounting policies include impairment of intangibles.
 
Our intangible assets consist of license and patent costs of $549,116 as of September 30, 2009, as compared with $499,773 as of September 30, 2008 and are the result of the Columbia License and certain patents. The value of the Columbia License reflects the closing share price of Sentigen’s common stock on April 10, 2000 (the closing date of the Columbia License) multiplied by the 75,000 shares of Sentigen common stock issued to Columbia less accumulated amortization. The value of the license is subject to an amortization period of 10 years. Management reviews the value of the license for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be fully recoverable. A review for impairment was conducted by an outside firm that concluded the fair market value of the olfaction technology was between $120,000 and $190,000 as of August 2006. The license is considered to be impaired when the carrying value exceeds the calculation of the undiscounted net future cash inflows or fair market value. An impairment loss of $122,996 was recognized as amortization expense in August 2006 by Sentigen. We believe no further impairment loss is necessary as of September 30, 2009.
 
Results of Operations
 
General
 
We are a development stage company. Our planned principal operations have not yet commenced and we have one employee. We intend to establish a new business. We have not generated any revenues from operations and have no assurance of any future revenues. All losses accumulated since commencement of our business have been considered as part of our development stage activities.
 

 
15
 
 
Prior to the spin-off on December 1, 2006, our business was operated within Sentigen as part of its broader corporate organization rather than as a stand-alone company. Historically, Sentigen performed certain corporate functions for us. Our historical financial statements included herein do not reflect the expense of certain corporate functions we would have needed to perform if we were not a wholly-owned subsidiary. Following the spin-off, Sentigen no longer provided assistance to us and we are responsible for the additional costs associated with being an independent public company, including costs related to corporate governance, quoted securities and investor relations issues. Therefore, you should not make any assumptions regarding our future performance based on our financial statements.
 
Our financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities. Funding for the nine months ended September 30, 2009 was provided by the proceeds we received from the $750,000 financing we closed on May 9, 2008, the $145,980 financing we closed on June 20, 2008 with certain of our largest stockholders, including our Chief Executive Officer and Chairman and another member of our board of directors and a $25,000 loan to us by our Chief Executive Officer and Chairman in September 2009, referred to as the September loan. On July 9, 2008, two investors who participated in the May 9, 2008 and June 20, 2008 financings exercised their overallotment options for an aggregate amount of $54,020. In addition, certain of our indebtedness was cancelled in connection with the financings.
 
On October 26, 2009, we issued to each of four individuals $50,000 subordinated convertible promissory notes, referred to as the notes (an aggregate principal amount of $200,000 of notes). The individuals included our Chief Executive Officer and Chairman of the Board of Directors, another director and one of our greater than 5% stockholders. The $50,000 principal amount of notes issued to the Chief Executive Officer and Chairman of the Board represent $25,000 of new funds received and a rollover of the September loan.  The notes bear interest of 4% per annum and are payable on demand on the earlier of (i) the date on which we publicly announce a joint venture or strategic relationship, the execution of a license, or similar agreement with a third-party with respect to our technology and (ii) the date on which we file with the SEC our annual report on Form 10-K, which includes audited financial statements for the year ending December 31, 2009. For a more detailed description of the notes, see Liquidity and Capital Resources below.
 
Product Research and Development
 
We intend to continually review the commercial validity of the olfaction technology, in order to make the appropriate decisions as to the best way to allocate our limited resources. We currently do not have any research and development grant applications outstanding nor can we predict whether we will receive any research and development funding during the next twelve (12) months. We are unable at this time to predict a level of spending, if any, for product research and development activities during the next twelve (12) months, all of which will be dependent upon the implementation of our business plan. Our executive officer and board of directors have and intend to continue to seek opportunities with non-profit agencies and with potential commercial partners to leverage our olfaction intellectual property for the development of control agents for biting insects, in particular, insect vectors of malaria and other diseases.
 
Operating and Other Expenses
 
For the three months ended September 30, 2009, general and administrative costs were $93,112 compared to $161,925 for the three months ended September 30, 2008. The comparative decrease of $68,813 during the three months ended September 30, 2009 is primarily due to a decrease in professional fees of approximately $47,600,  a decrease of approximately $23,060 in travel expenses related to our prior year office relocation , and an increase in other expense of approximately $1,847.  For the nine months ended September 30, 2009, general and administrative expenses were $287,381 compared to general and administrative expenses of $492,496 for the nine months ended September 30, 2008.  The comparative decrease of $205,115 is primarily due to a decrease in professional fees of approximately $118,450, a decrease in travel expense of approximately $60,700, a decrease of approximately $8,200 in compensation expense and a decrease of approximately $17,765 in other expenses.

 
16
 

Amortization expense includes the amortization of our license and patent costs.  For the three months ended September 30, 2009 and 2008, amortization expense was $24,022 and $14,408, respectively. For the nine-months ended September 30, 2009 and 2008, amortization expense was $65,108 and $38,290, respectively.  For the period April 10, 2000 (Commencement of Predecessor Business) to September 30, 2009, amortization expense was $491,175.  The original value of the Columbia License of $440,625 reflects the closing share price of Sentigen’s common stock on April 10, 2000. The value of the patent costs of $108,491 mainly consists of legal and application fees. The value of the license and patent, net of amortization at September 30, 2009 and 2008, was $57,943 and $91,239, respectively.  The remaining licensing costs are being amortized on a straight line basis through April 2010.
 
Interest expense reflects the cost of our promissory notes issued on June 21, 2007, which were cancelled during the second quarter of 2008 and September 10, 2009. For the nine months ended September 30, 2009 and 2008 accrued interest on the promissory notes amounted to $83, and $6,519, respectively.
 
Liquidity and Capital Resources
 
We have incurred operating losses since inception. As of September 30, 2009, we had $17,716 in cash and cash equivalents, compared to $198,187 at December 31, 2008. At September 30, 2009 we had a working capital deficiency of $237,533, compared to working capital of $77,005 at December 31, 2008, a decrease of $314,538, mainly attributable to the operating expenses for the nine months ended September 30, 2009. Net cash used in operating activities for the nine months ended September 30, 2009 was $172,077, compared to $496,277 for the nine months ended September 30, 2008, a decrease of $324,200 mainly attributable to the decrease in operating losses.
 
During the second quarter of 2008, as previously disclosed, we closed on a financing for an aggregate amount of $950,000. On May 9, 2008, we closed on the first tranche of the financing, for an aggregate amount of $750,000, which consisted of cash in the amount of $563,986 and the conversion of $186,014 of indebtedness. Participants in the first tranche of the financing subscribed for an aggregate of 3,947,363 shares of common stock, based on the closing price of $0.19 per share of our common stock on the closing date. On June 20, 2008, we closed on the second tranche of the financing, for an aggregate amount of 200,000 of which $145,980 was subscribed for, consisting of cash in the amount of $62,240 and the conversion of $83,740 of indebtedness. Participants in the second tranche of the financing subscribed for an aggregate of 768,315 shares of common stock, based on the closing price of $0.19 per share of our common stock on the closing date. In the third quarter of 2008, two participants in the financing elected to exercise their over-allotment options, which consisted of cash in the amount of $54,020. The participants who exercised their over-allotment options subscribed for an aggregate of 337,424 shares of common stock, based on the closing price of $0.16 per share of our common stock on the closing date.  Issuance of the shares were subject to stockholder approval of the amendment to our certificate of incorporation to increase the number of shares of common stock, which was approved by the stockholders at our 2008 annual meeting on June 24, 2008.
 
Ten of our largest stockholders (each holding 50,000 or more shares of our common stock) subscribed in the May 2008 financing, of which the following are holders of 5% or more of our common stock: Joseph K. Pagano, Frederick R. Adler, Longview Partners L.P., The Joseph A. Pagano Jr. 2007 Trust and Samuel A. Rozzi, who subscribed for $122,325, $109,350, $112,125, $100,350 and $95,775, respectively. Also, Mr. Pagano serves as our Chairman and Chief Executive Officer, and Mr. Adler is a member of our Board of Directors. The general partner of Longview Partners L.P. is Susan Chapman, an adult daughter of Mr. Adler.
 
The funds raised in the financing were used for general working capital purposes, including the funding of research and development efforts and the pursuit of a joint venture or other form of collaboration with another entity or entities. Our ability to obtain financing and realize revenue depends upon the status of future business prospects, as well as conditions prevailing in the capital markets. It is possible that any such additional financing may be dilutive to current stockholders and the terms of any debt financings could contain restrictive covenants limiting our ability to do certain things, including paying dividends.

 
17
 

On June 21, 2007, we issued a demand promissory note in favor of each of Mr. Frederick R. Adler, Mr. Joseph K. Pagano, D.H. Blair Investment Banking Corp. and Mr. Samuel A. Rozzi (together, the “Lenders”), evidencing loans extended to us in the principal amount of $50,000, $50,000, $50,000 and $30,000, respectively, by the Lenders, for an aggregate amount of $180,000. The promissory notes accrued interest at Citibank N.A.’s reported prime rate plus 3%, which was due and payable at the time the principal amount of each respective promissory note becomes due. The promissory notes had a maturity date of June 22, 2009. Each Lender could demand the payment of all of the outstanding principal and interest of his or its respective promissory note at any time prior to the maturity date. At the time of the loan transaction, each of the Lenders was the beneficial owner of a significant number of shares of our common stock. In addition, Mr. Pagano is our Chief Executive Officer and the Chairman of our Board of Directors, and Mr. Adler is a member of our Board of Directors. On May 9, 2008, in connection with the first tranche of the financing discussed above, (i) $24,675 of the outstanding amount of Mr. Pagano’s promissory note was applied to the subscriptions made by Mr. Pagano and a trust for the benefit of his son; and (ii) $54,425, the entire outstanding amount of D.H. Blair Investment Banking Corp.’s promissory note, including principal and accrued interest, was applied to the subscriptions made by each of three affiliates of D.H. Blair Investment Banking Corp. On May 16, 2008, Mr. Pagano made a demand for repayment of the remaining outstanding principal and interest ($29,750) of his promissory note. On June 20, 2008, in connection with the second tranche of the financing discussed above (i) $30,000 of the outstanding principal amount of Mr. Rozzi’s promissory note was applied to the subscription made by Mr. Rozzi and he received a payment for $2,961 in accrued interest on July 10, 2008 and (ii) $53,740 of the outstanding amount of principal and accrued interest of Mr. Adler’s promissory note was applied to the subscription made by Mr. Adler and he received a payment for the remaining $1,195 in accrued interest. All of the promissory notes have been cancelled and there are no amounts outstanding to date.
 
On September 10, 2009 we borrowed $25,000 from our Chief Executive Officer and Chairman of the Board. This loan bore interest at 6% per annum, and has been amended as described below.
 
On October 26, 2009, we issued to each of four individuals $50,000 subordinated convertible promissory notes (an aggregate principal amount of $200,000 of notes). The individuals included our Chief Executive Officer and Chairman of the Board of Directors, another director and one of our greater than 5% stockholders. The $50,000 principal amount of notes issued to the Chief Executive Officer and Chairman of the Board represent $25,000 of new funds received and a rollover of the September loan.  The notes bear interest of 4% per annum and are payable on demand on the earlier of (i) the date on which we publicly announce a joint venture or strategic relationship, the execution of a license, or similar agreement with a third-party with respect to our technology and (ii) the date on which we file with the SEC our annual report on Form 10-K, which includes audited financial statements for the year ending December 31, 2009. The holders may convert the outstanding principal amount of the notes and accrued and unpaid interest thereon into shares of our common stock at any time commencing on the fifth trading day immediately following the target date at the conversion price in effect on such date.  The conversion price shall be the greater of (i) the average of the closing sale price of our common stock for the five trading days immediately following the target date and (ii) $0.05 per share.  We believe that our limited financial resources, inclusive of the foregoing amounts, are sufficient to fund operations and capital requirements for the remainder of 2009. We may, however, need substantial amounts of additional financing to commercialize the research programs undertaken by us, which financing may not be available on favorable terms, or at all.
 
Our ability to obtain financing and realize revenue depends upon the status of future business prospects, as well as conditions prevailing in the capital markets. These factors, among others, raise substantial doubt about our ability to continue as a going concern should we be unable to realize revenues from our olfaction technology or raise sufficient additional funds in the future.  It is likely that we will need to raise funds prior to April 2010.  If we are unable to raise such funds, we may need to cease our operations.  Additionally, if we raise additional funds by issuing equity securities, our then-existing stockholders will likely experience dilution, depending upon the terms and conditions of such financing.
 
Off-Balance-Sheet Arrangements
 
As of September 30, 2009, we did not have any off-balance-sheet arrangements, as defined in Item 303(a)(4) of Regulation S-K.
 
Inflation
 
At September 30, 2009, we had $0 floating rate debt outstanding. There was no significant impact on our operations as a result of inflation during the three-month period ended September 30, 2009.

 
18
 
 
Recent Accounting Pronouncements
 
See Note 7 to the financial statements included in Part I, Item 1 of this report.
 
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
 
Not applicable.
 
Item 4 . Controls and Procedures.
 
Disclosure Controls and Procedures
 
As of September 30, 2009, Mr. Joseph K. Pagano, who is our Chief Executive Officer, Secretary and Treasurer (and principal financial officer) evaluated the effectiveness of our "disclosure controls and procedures" as defined in Rules 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934 ("Disclosure Controls"). Based upon this evaluation, Mr. Pagano concluded that the Disclosure Controls were effective, as of the date of their evaluation, in reaching a reasonable level of assurance that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that any information relating to us that is required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive/financial officer, to allow timely decisions regarding required disclosure.
 
Changes in Internal Control Over Financial Reporting
 
During the fiscal quarter ended September 30, 2009, there were no changes in our  "internal  control over financial  reporting" as defined in Rules  13a-15(f) and 15d-15(f) of the Securities  Exchange Act of 1934 (“Internal Control”),  that have  materially affected or are reasonably likely to materially affect our Internal Control.


 
19
 

PART II- OTHER INFORMATION
 
Item 5 . Other Information .
 
In August 2009 the Company entered into a sublease with Muriel Siebert & Co., Inc. effective as of June 16, 2009 relating to the Company's executive offices. The sublease has a term of one year, with an option to renew for an additional year. The sublease requires monthly payments of approximately $1,390.
 
Item 6. Exhibits.

Exhibit
 
Description
     
10.1
  Sublease dated as of June 16, 2009 between the Registrant and Muriel Siebert & Co., Inc.
     
31
 
Certification of Chief Executive Officer and principal financial officer pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934.
     
32
 
Certification of Chief Executive Officer and principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
20
 

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.

Date:  November 16, 2009
SENTISEARCH, INC.
   
 
/s/ Joseph K. Pagano
 
Joseph K. Pagano, Chief Executive Officer and
Treasurer (principal executive and financial officer)
 
 
 

EXHIBIT INDEX
 
Exhibit
 
Description
     
10.1
  Sublease dated as of June 16, 2009 between the Registrant and Muriel Siebert & Co., Inc.
     
31
 
Certification of Chief Executive Officer and principal financial officer pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934.
     
32
 
Certification of pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
 
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