SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-KSB

MARK ONE:
[X]      Annual Report under Section 13 or 15(d) of the Securities  Exchange Act
         of 1934 [Fee Required] For the fiscal year ended December 31, 1999

[ ]      Transition  Report  under  Section  13 or  15(d)  of the  Securities
         Exchange Act of 1934 For the transition  period from  _________________
         to _________________.

                          Commission file number 1-7986
                                                 ------

                          KENT FINANCIAL SERVICES, INC.
                    ----------------------------------------
                 (Name of small business issuer in its charter)

        Delaware                                                75-1695953
-------------------------------                               --------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

           376 Main Street, P.O. Box 74, Bedminster, New Jersey 07921
           -----------------------------------------------------------
             (Address of principal executive offices with Zip Code)

          Issuer's telephone number, including area code (908) 234-0078
                                                         --------------

         Securities registered under Section 12(b) of the Exchange Act:

                                      NONE

         Securities registered under Section 12(g) of the Exchange Act:

                     Common Stock, par value $.10 per share

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the issuer was required to file such  reports),  and (2) has
been subject to such filing requirements for the past 90 days. Yes X   No
                                                                  ---    ---

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained  to  the  best  of  registrant's  knowledge  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]

     Issuer's  revenues  for the  fiscal  year  ended  December  31,  1999  were
approximately $4.8 million.

     At  February  29,  2000,  there  were  1,883,264  shares  of  common  stock
outstanding.   The  aggregate   market  value  of  the  voting  shares  held  by
non-affiliates  of the registrant,  based on the closing bid price of such stock
on such date as reported by NASDAQ, was approximately $3.7 million.

     Transitional Small Business Disclosure Format Yes    No X
                                                      ---   ---




<PAGE>



                                     PART I

Item 1.       DESCRIPTION OF BUSINESS
              -----------------------

General
-------

     The principal business of Kent Financial  Services,  Inc. (the "Company" or
"Kent") is the operation of its wholly-owned subsidiary, T.R. Winston & Company,
Inc.  ("Winston"),  a securities  broker-dealer  licensed in all states  (except
Alaska)  and the  District  of  Columbia.  Winston  is a member of the  National
Association of Securities  Dealers,  Inc.  ("NASD") and the Securities  Investor
Protection  Corporation.  All clearing  arrangements  for Winston are  conducted
pursuant to an agreement with Bear Stearns Securities Corporation,  an unrelated
major  broker-dealer  which is a member  of the New York  Stock  Exchange,  Inc.
Winston conducts various  activities  customary for broker-dealers of comparable
size  including  buying and selling  securities for customer  accounts,  trading
securities  in the  over-the-counter  market  and  providing  various  corporate
finance  services  including   underwritings,   private   placements,   mergers,
acquisitions and similar transactions.  Winston has three offices in New Jersey,
and one office in each of California,  Texas and New  Hampshire.  As of December
31, 1999,  Winston's  equity capital was $944,000,  all of which was advanced by
Kent or generated by Winston's  earnings.  Winston had regulatory net capital at
that same date,  pursuant to the  provisions of Rule 15c3-1 under the Securities
Exchange Act of 1934, of $721,000,  which was $610,000 in excess of the required
minimum net capital.  Winston is exempt from the customer protection  provisions
of Rule 15c3-3 (the "Rule") under the 1934 Act as its  activities are limited to
those set forth in the  conditions  appearing in  paragraphs  (k)(2)(ii)  of the
Rule.

     The Company  also  invests  through  Asset Value Fund  Limited  Partnership
("AVF"),  which was  originally  founded in February 1991 to provide  investment
advisory and management services and was funded at that time with $5 million. As
of December 31, 1999, the equity capital of AVF was approximately $11.8 million.
Currently  AVF is a wholly-owned  by the  Company.  AVF  primarily  invests in a
limited  number of portfolio  companies,  the securities of which are considered
undervalued  by AVF's  management.  As of December 31, 1999,  AVF held 19 equity
investments,  of which four  consisted of owning more than 5% of the  investee's
outstanding  capital stock.  AVF owns more than 38% of Cortech,  Inc., a company
supervising the exploitation of its technology by third parties and also seeking
a new business;  26% of General Devices, Inc., a non-operating company seeking a
new business;  19% of Golf Rounds.com,  Inc., an internet content provider;  and
16% of Gish Biomedical, Inc., a manufacturer of medical devices.

     The  securities  business  is, by its  nature,  subject to  various  risks,
particularly  in  volatile  or illiquid  markets,  including  the risk of losses
resulting  from the  underwriting  or ownership of securities,  customer  fraud,
employee  errors and  misconduct,  failures in connection with the processing of
securities   transactions  and  litigation.   The  Company's  business  and  its
profitability  are affected by many factors,  including the volatility and price
level of the  securities  markets;  the  volume,  size and timing of  securities
transactions;  the  demand  for  investment  banking  services;  the  level  and
volatility of interest rates; the availability of credit;  legislation affecting
the  business and  financial  communities;  and the economy in general.  Markets
characterized  by low trading volumes and depressed  prices  generally result in
reduced commissions and lower investment banking revenues as well as losses from
declines in the market  value of  securities  positions.  In  addition,  Kent is
likely to be adversely affected by negative economic developments in New Jersey,
the Mid-Atlantic  region or the financial services industry in general.  Reduced


                                      I-1


<PAGE>



volume and prices  generally  result in lower  investment  banking  revenues and
commissions  and may  result in losses  from  declines  in the  market  value of
securities held in trading, investment and underwriting positions. In periods of
relatively low business activity for the Company,  profitability  will likely be
adversely  affected because a significant  portion of the Company's expenses are
fixed.

Competition
-----------

     The Company is engaged in an extremely  competitive  business.  Competitors
include, with respect to one or more aspects of its business,  all of the member
organizations  of the New York Stock  Exchange and other  registered  securities
exchanges,  all members of the NASD,  commercial banks,  thrift institutions and
financial  consultants.  Most of these  organizations  have  substantially  more
employees and greater  financial  resources  than the Company.  The Company also
competes for  investment  funds with banks,  insurance  companies and investment
companies.  Discount  brokerage  firms  and  on-line  Internet  brokerage  firms
oriented to the retail market,  including firms affiliated with commercial banks
and thrift  institutions,  are devoting  substantial  funds to  advertising  and
direct  solicitation of customers in order to increase their share of commission
dollars  and other  securities-related  income.  The Company  typically  has not
engaged in extensive advertising programs for this type of business.

     In  addition  to  competition  from  firms  traditionally  engaged  in  the
financial  services  business,  there has been increasing  competition in recent
years from other sources, such as commercial banks, insurance companies, on-line
financial  services  providers,  sponsors  of mutual  funds and other  companies
offering financial services both in the United States and on a world-wide basis.
The  financial   services  industry  has  also  experienced   consolidation  and
convergence  in recent  years,  as  institutions  involved  in a broad  range of
financial services  industries,  such as investment  banking,  brokerage,  asset
management, commercial banking and insurance have merged. This convergence trend
is expected to continue,  and could result in the Company's  competitors gaining
greater  capital and other  resources,  a broader range of products and services
and/or more geographic  diversity.  In November 1999, the Gramm-Leach Bliley Act
was passed in the United States,  effectively  repealing certain sections of the
1933 Glass-Steagall  Act. Its passage allows commercial banks,  securities firms
and insurance firms to affiliate, which may accelerate consolidation and lead to
increasing  competition in markets  traditionally  dominated by investment banks
and retail securities firms.

Employees
---------

     As of December  31,  1999,  the Company  and its  subsidiaries  employed 24
people of whom 18 are registered securities brokers.

Item 2.       DESCRIPTION OF PROPERTY
              -----------------------

Corporate and Branch Offices
----------------------------

     The Company and certain of its  affiliates  occupy the Company's  corporate
office  building  and share  direct  occupancy  costs.  The office  building  is
collateral  for a mortgage  loan with a balance  of  approximately  $700,000  at
December  31,  1999,  bearing  interest  on that date at the rate of 7.875%  per
annum.  The  mortgage  loan is payable to a bank in equal  monthly  payments  of
$5,345 including interest, through November 2024.


                                      I-2


<PAGE>



     Effective  February 1, 1999,  an  affiliate  entered into an extension of a
lease  agreement with the Company for office space for a five-year  period.  The
Company's  aggregate  rental income from this arrangement was $43,000 in each of
the years ended 1999 and 1998.  Winston  leases space for its Los Angeles office
from its clearing broker- dealer.

Item 3.       LEGAL PROCEEDINGS
              -----------------

Environmental Matters - Texas American Petrochemicals, Inc. ("TAPI")"
---------------------------------------------------------------------

Texas Water Commission

     In January 1988,  pursuant to Section 13 of the Texas Solid Waste  Disposal
Act,  the Texas Water  Commission  ("TWC")  listed on the Texas  Register a site
identified by the TWC as the "Texas  American Oil Site"  located in  Midlothian,
Ellis County,  Texas as a hazardous waste facility.  The site was owned by Texas
American Oil  Corporation,  a formerly  wholly-owned  subsidiary of the Company,
prior to ownership being  transferred to TAPI. TAPI has been notified by the TWC
that TAPI is a  potentially  responsible  party  ("PRP") for the site.  Early in
1990, TAPI declined a request by the TWC to perform a remedial  investigation at
the site. The TWC has not issued an Administrative  Order or instituted a formal
proceeding. TAPI has notified the TWC that TAPI has limited financial resources.

Other Environmental Matters

     TAPI has been  identified as a PRP at another waste  disposal site operated
by an  unrelated  party.  In the past,  TAPI had  participated  in the PRP group
investigating the site, but is not doing so at the current time.

     The Company  believes that it should have no liability in  connection  with
TAPI's environmental matters.

Other Legal Matters
-------------------

Winston Legal Matters

     In the normal  course of business,  Winston at December 31, 1999,  had been
named as a respondent in two  arbitrations,  one of which was settled in January
2000.  Although the ultimate outcome of the open action cannot be ascertained at
this time, it is the opinion of  management,  after  consultation  with counsel,
that the  resolution of such action will not have a material  adverse  effect on
the financial statements.

Item 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
              ---------------------------------------------------

     The Company held its Annual  Meeting of  Stockholders  on November 1, 1999.
Management's  nominees,  Messrs.  Paul O. Koether,  Mathew E. Hoffman,  Casey K.
Tjang and M. Michael Witte, were elected to the Board of Directors.

     The following is a vote tabulation for all nominees:

                                         FOR             WITHHELD
                                       -------           --------


            Paul O. Koether            964,454              -
            Mathew E. Hoffman          964,454              -
            Casey K. Tjang             964,454              -
            M. Michael Witte           964,454              -



                                      I-3


<PAGE>



                                     PART II
                                     -------

Item 5.       MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
              --------------------------------------------------------

     The Company's common stock trades on the National Association of Securities
Dealers,  Inc. Automated Quotations System ("NASDAQ") Small Cap Market under the
symbol "KENT".

     The table below  lists the high and low bid prices for the common  stock as
reported by NASDAQ for the periods indicated, adjusted for the two-for-one stock
split distributed on November 9, 1998. These prices represent quotations between
dealers and do not include retail markups, markdowns or commissions, and may not
represent actual transactions.

                                          High              Low
                                         ------            -----

Calendar Quarter:

      1999
      ----

      First Quarter                     $ 7 1/2          $ 2 1/4
      Second Quarter                    $ 7 1/2          $ 3
      Third Quarter                     $ 4 7/16         $ 3 3/4
      Fourth Quarter                    $ 4              $ 3 5/8

      1998
      ----

      First Quarter                     $ 2 13/16        $ 2 11/16
      Second Quarter                    $ 3 3/8          $ 2 15/16
      Third Quarter                     $ 3 3/4          $ 3
      Fourth Quarter                    $ 5 13/16        $ 3 1/8
---------------

     As of February 29, 2000, the Company had approximately  1,813  stockholders
of record of its common  stock.  The closing price of the common stock was $4 on
February 29, 2000.

     The Company did not pay  dividends in 1999 or 1998 and does not  anticipate
paying dividends in the foreseeable future.

Item 6.       MANAGEMENT'S DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
              ------------------------------------------------------------------
              RESULTS OF OPERATIONS
              ---------------------

Liquidity and Capital Resources
-------------------------------

     At  December  31,  1999,  the  Company  had  consolidated   cash  and  cash
equivalents of approximately $4 million. The cash equivalents were U.S. Treasury
Bills with original maturities of three months or less, with yields ranging from
4.98% to 5.37%.  The Company had  securities  owned valued at  approximately  $9
million  at  December  31,  1999.  See  Notes 1 and 3 of Notes  to  Consolidated
Financial  Statements for additional  information on the valuation of securities
owned.  At  that  same  date,  the  Company's   mortgage  note  payable  on  its
headquarters   facility  had  a  remaining  principal  amount  of  approximately
$700,000. The loan currently bears interest at the rate of 7.875% with principal
payments  amortized over  twenty-five  years. The loan matures in November 2024.
The Company believes that its liquidity is adequate for future operations.


                                      II-1


<PAGE>



     Net cash of  approximately  $3.9  million was used in  operations  in 1999,
compared to net cash  provided by operations  of  approximately  $1.6 million in
1998. The principal  reason for the decrease was the change in securities  owned
in 1999 compared to 1998,  partially offset by the change in net receivable from
the clearing  broker.  In 1999, the change in securities owned and the change in
receivable from the clearing  broker used net cash of $4.0 million,  compared to
cash  generated of $1.4 million in 1998.  Cash flows from  operating  activities
include net income of  $409,000  and  $532,000  in 1999 and 1998,  respectively.
These amounts were offset by the change in unrealized gains on securities owned.
Unrealized gains and losses are included in consolidated operations,  but do not
utilize or generate cash flows.

     During 1999, the Company repurchased 100,168 shares of its common stock for
an aggregate cost of $395,000.  In 1998, the Company  repurchased  33,692 shares
for an  aggregate  cost of  approximately  $124,000.  All shares  acquired  were
purchased at market  prices and have been canceled and returned to the status of
authorized and unissued shares.  In 1999, the Company issued 8,000 shares by way
of options being exercised for proceeds of $18,000.

Results of Operations
---------------------

     The  Company  had net income in 1999 of  $409,000,  or $.21 basic and fully
diluted earnings per share,  compared to a net income of $532,000, or $.27 basic
and fully diluted  earnings per share, in 1998. Total brokerage  revenue,  which
consisted of commissions and principal  trading  transactions  and  underwriting
fees,  was  approximately  $3.4 million in 1999,  an increase of $800,000 or 31%
from 1998 total brokerage revenue of $2.6 million. Brokerage expenses (including
all fixed and variable expenses) increased by $451,000, or 25% from $1.8 million
in 1998 to $2.2 million in 1999.  Net  brokerage  income of $1.2 million in 1999
represented  an increase  of  $400,000,  or 50%,  from net  brokerage  income of
$800,000 in 1998. The overall  increase in the total  brokerage  revenue,  total
brokerage  expense and net brokerage  income is attributable to improved overall
market conditions in 1999 compared to 1998.

     Net investing  gains were  $234,000 in 1999, a decrease of $1,417,000  from
the net  investing  gains in 1998 of  $1,651,000.  The decrease in net investing
gains  was  due to a  decrease  in  realized  gains  on  the  sale  of  selected
investments in the investment portfolio during 1999 as compared to 1998.

     Interest,  dividends  and  other  income  totaled  $1,194,000  in 1999  and
$979,000 in 1998.  The increase  was  primarily  the result of an  extraordinary
dividend of $427,500  received by AVF from one of its portfolio  investments and
lower interest income caused by lower invested balances of cash equivalents.

     General and  administrative  expenses were $2.2 million in 1999, a decrease
of  approximately  $400,000 or 15% from the $2.6 million  recorded in 1998.  The
majority of the  decrease  was a result of the  following  items:  (i)  $200,000
provision  for start up costs of an  investment  in 1998 in a company  that will
provide telephone services in the New England region,  (ii) $130,000 in expenses
incurred in connection with a proxy solicitation for one of the securities owned
by AVF in 1998, and (iii) $75,000 of business  development expenses in 1998, not
incurred in 1999.

     In the fourth  quarter of 1999  management  changed its estimate for income
taxes payable  previously accrued for open tax years. This resulted in an income
tax  benefit  of  $249,000.  See  Note  5 of  Notes  to  Consolidated  Financial
Statements regarding income taxes.


                                      II-2


<PAGE>



Market Risk
-----------

     Market risk  represents  the  potential  loss as a result of  absolute  and
relative  price  movements in financial  instruments  due to changes in interest
rates,  foreign exchange rates, equity prices, and other factors.  The Company's
exposure to market risk is directly  related to securities  holdings.  Each day,
position and  exposure  reports are  prepared by the  operations  manager in the
group  engaged in trading  activities  for traders and group  management.  These
reports are independently  reviewed by the Company's corporate accounting group.
The  position  report is  distributed  to  management  throughout  the  Company,
including  the Chief  Executive  Officer,  and it enables  senior  management to
control  inventory  levels and monitor results of the trading group. The Company
also reviews and monitors inventory aging, pricing, concentration and securities
ratings.  In addition to position  and exposure  reports the Company  produces a
daily revenue report that summarizes the trading, interest,  commissions,  fees,
underwriting  and other  revenue  items for each of the business  groups.  Daily
revenue is reviewed for various risk  factors and is  independently  verified by
the corporate  accounting  group.  The daily revenue  report is  distributed  to
various  levels  of  management  throughout  the  Company,  including  the Chief
Executive Officer,  and together with the position and exposure report,  enables
senior management to monitor and control overall activity of the trading groups.
Since its  inception,  neither the Company  nor its  subsidiaries  has traded or
otherwise transacted in derivatives.

     The fair value of  securities  at December  31, 1999 was  approximately  $9
million as to its long  positions  and  approximately  $719,000  as to its short
positions.  The potential change in fair value, using a hypothetical 10% decline
in prices,  is estimated to be a $900,000  loss as to its long  positions  and a
$72,000  gain as to its short  positions  as of December  31,  1999.  Two of the
Company's long positions, Cortech, Inc., and Gish Biomedical, Inc., were carried
at $4,112,000 and $1,831,000,  respectively.  For working capital purposes,  the
Company invests in U.S. Treasury Bills or maintains interest bearing balances in
its trading  accounts  with its clearing  broker,  which are  classified as cash
equivalents  and  receivable  from  clearing   broker,   respectively,   in  the
consolidated financial statements.

     The fair value of  securities  at December  31, 1998 was $5.1 million as to
its long  positions  and $1.4 million as to its short  positions.  The potential
change in fair value,  using a hypothetical 10% decline in prices,  is estimated
to be a $510,000  loss as to its long  positions  and a $140,000  gain as to its
short positions as of December 31, 1998.

Sale Of Subsidiary
------------------

     In July 1998,  Winston,  its then  wholly-owned  subsidiary  T. R.  Winston
Capital, Inc. ("Wincap"),  and an unrelated third party ("Third Party"), entered
into a stock  purchase  agreement  ("Agreement").  The Agreement  provided among
other  things,  for the  Third  Party to  contribute  to the  capital  of Wincap
$800,000  in return for an 80%  ownership  interest.  The  balance of equity was
owned 10% by Winston and 10% by an officer of Winston who  introduced  the Third
Party.  The  transaction  closed in May 1999,  after the change in  control  was
approved by the NASD. The difference of $13,000  between the original book value
of the Company's investment in Wincap and the subsequent value of the 10% equity
interest of Wincap upon  completion of the transaction was charged to additional
paid-in capital. No gain or loss was recorded on the transaction.  Subsequent to
the sale,  Winston has  accounted  for its 10%  investment  in Wincap  under the
equity  method  because one of Winston's  officers  holds an  additional  10% of
Wincap.

     At December 31, 1999,  total assets of Wincap  amounted to $531,911,  total
liabilities amounted to $8,112, and net income for 1999 was $11,715. In December
1999,  Wincap  purchased  50% of its  Common  Stock  outstanding  which  reduced
Winston's investment in Wincap from $102,524 to $52,524.

                                      II-3

<PAGE>




     Winston has agreed to provide management services to Wincap. These services
will consist of all services necessary for the operation of Wincap's  securities
business. Winston will receive as compensation for the services, 60% of Wincap's
gross commissions as defined in the Agreement.  From the date of sale of Wincap,
there were no such commissions as defined.

Subsequent Event
----------------

     In January 2000, Wincap  stockholders signed a letter of intent with Direct
Capital Markets.com, Inc. ("DCM") to sell all outstanding shares in exchange for
75,000  unregistered,  non-marketable  shares  of  DCM's  Series  C  Convertible
Preferred Stock.  Wincap's  stockholders are currently  negotiating a definitive
agreement for the sale.  Until this  definitive  agreement is executed,  neither
Wincap's stockholders nor DCM is legally bound to proceed with the sale.

Year 2000 Matters
-----------------

     The Year 2000 Issue is the result of computer  programs being written using
two digits rather than four to define the applicable  year. Any of the Company's
computer programs that have  time-sensitive  software may recognize a date using
"00" as the year 1900 rather than the year 2000.  This could have  resulted in a
system failure or miscalculations causing disruptions of operations,  including,
among other things, a temporary  inability to process  transactions or engage in
similar normal business activities.

     The Year 2000 Issue did not pose any operational problems for the Company's
internal computer systems.

     The  total  cost of the Year  2000  plan was not  material  and was  funded
through operating cash flows and expensed as incurred. The costs incurred, which
consisted  principally of  professional  fees,  were  approximately  $14,000 and
$6,000 for 1999 and 1998, respectively.


                                      II-4

<PAGE>



Item 7.   FINANCIAL STATEMENTS
          --------------------

         The financial statements filed herein are listed below:

         Independent Auditors' Report

         Financial Statements:

                  Consolidated Balance Sheet - December 31, 1999

                  Consolidated Statements of Operations -
                           Years ended December 31, 1999 and 1998

                  Consolidated Statements of Stockholders' Equity -
                           Years ended December 31, 1999 and 1998

                  Consolidated Statements of Cash Flows -
                           Years ended December 31, 1999 and 1998

                  Notes to Consolidated Financial Statements -
                           Years ended December 31, 1999 and 1998







                                      II-5

<PAGE>










                                                   Deloitte & Touche LLP
                                                   Two World Financial Center
                                                   New York, New York 10281-1414





INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders of
Kent Financial Services, Inc.

We have audited the  accompanying  consolidated  balance sheet of Kent Financial
Services, Inc. and Subsidiaries (the "Company") as of December 31, 1999, and the
related consolidated  statements of income, changes in stockholders' equity, and
cash  flows  for  each  of  the  two  years  in the  period  then  ended.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the consolidated  financial statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as evaluating the overall  consolidated  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material respects,  the financial position of Kent Financial Services,  Inc. and
Subsidiaries at December 31, 1999, and the results of their operations and their
cash flows for each of the two years in the period ended  December 31, 1999,  in
conformity with generally accepted accounting principles.




/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
March 21, 2000
New York, New York

                                       F-1


<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
                                     ASSETS

                                 ($000 Omitted)


                                                               December 31,
                                                                   1999
                                                               ------------

Cash and cash equivalents                                         $ 4,043
Securities owned                                                    9,013
Receivable from clearing broker                                       939

Property and equipment:
  Land and building                                                 1,447
  Office furniture and equipment                                      265
                                                                  -------
                                                                    1,712

  Accumulated depreciation                                       (    538)
                                                                  -------
  Net property and equipment                                        1,174

Other assets                                                          280
                                                                  -------
      Total assets                                                $15,449
                                                                  =======






          See accompanying notes to consolidated financial statements.

                                       F-2

<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                 ($000 Omitted)



                                                                 December 31,
                                                                     1999
                                                                 ------------

Liabilities:
  Securities sold, not yet purchased                               $   719
  Accounts payable                                                     210
  Accrued expenses                                                     961
  Mortgage payable                                                     700
  Accrual for previously discontinued operations                       318
                                                                   -------
      Total liabilities                                              2,908
                                                                   -------

Contingent liabilities (Notes 3 and 4)

Stockholders' equity:
Preferred stock without par value,
  500,000 shares authorized;
  none outstanding                                                       -
Common stock, $.10 par value,
 4,000,000 shares authorized;
 1,899,814 shares outstanding                                          190
Additional paid-in capital                                          14,615
Accumulated deficit                                               (  2,264)
                                                                   -------
      Total stockholders' equity                                    12,541
                                                                   -------
      Total liabilities and stockholders' equity                   $15,449
                                                                   =======








          See accompanying notes to consolidated financial statements.

                                       F-3

<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                      ($000 Omitted, except per share data)


                                                      Year ended December 31,

                                                      1999               1998
                                                    --------           --------

Revenues:
   Brokerage commissions and fees                   $ 2,259             $ 1,697
   Principal transactions:
      Trading                                         1,151                 703
      Investing gains                                   234               1,651
   Underwriting and placement fees,
      net of related expenses                             -                 153
   Interest, dividends and other                      1,194                 979
                                                    -------             -------
             Total revenues                           4,838               5,183
                                                    -------             -------

Expenses:
    Brokerage                                         2,223               1,772
    General, administrative and other                 2,153               2,596
    Interest                                            302                 280
                                                    -------             -------
             Total expenses                           4,678               4,648
                                                    -------             -------

Earnings before income taxes                            160                 535
Provision (benefit) for income taxes               (    249)                  3
                                                    -------             -------
Net earnings                                        $   409             $   532
                                                    =======             =======

Basic net earnings per common share                 $   .21             $   .27
                                                    =======             =======

Diluted net earnings per common share               $   .21             $   .27
                                                    =======             =======

Weighted average number of common shares
  outstanding (in 000's)                              1,942               2,003
                                                    =======             =======






          See accompanying notes to consolidated financial statements.

                                       F-4


<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                                 ($000 Omitted)

<TABLE>




                                                          Additional                              Total
                                           Common          Paid-In         Accumulated        Stockholders'
                                            Stock          Capital           Deficit             Equity
                                           ------         ----------       -----------        ------------

<S>                                       <C>              <C>              <C>                 <C>

Balance, December 31, 1997                 $  202           $15,117         ($ 3,205)            $12,114

Repurchase and cancellation

  of common stock                         (     3)         (    121)               -            (    124)

Net earnings                                    -                 -              532                 532
                                           ------           -------          -------             -------

Balance, December 31, 1998                    199            14,996         (  2,673)             12,522

Adjustment in connection
  with the sale of
  a previously
  consolidated subsidiary                       -          (     13)               -            (     13)

Issuance of common stock                        1                17                -                  18

Repurchase and cancellation
  of common stock                         (    10)         (    385)               -            (    395)

Net earnings                                    -                 -              409                 409
                                           ------           -------          -------             -------

Balance, December 31, 1999                 $  190           $14,615         ($ 2,264)            $12,541
                                           ======           =======          =======             =======



</TABLE>





          See accompanying notes to consolidated financial statements.

                                       F-5

<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 ($000 Omitted)

<TABLE>



                                                             Year Ended December 31,
                                                            ------------------------
                                                             1999              1998
                                                            -------           ------
Cash flows from operating activities:
<S>                                                        <C>              <C>

  Net earnings                                              $   409          $   532
  Adjustments to reconcile net earnings to net
     cash provided by (used in) operating activities:
     Depreciation and amortization                               64               53
     Unrealized gains on securities owned                  (    326)        (    577)
  Change in operating assets and liabilities:
     Change in securities owned                            (  4,333)           2,633
     Change in net receivable from clearing broker              330         (  1,200)
     Change in accounts payable and accrued expenses            266               84
     Change in income taxes payable                        (    261)               3
     Other, net                                            (     86)              95
                                                            -------          -------
     Net cash provided by (used in) operating
       activities                                          (  3,937)           1,623
                                                            -------          -------

Cash flows from investing activities:

  Purchase of property and equipment                       (     24)        (     11)
  Net assets other than cash of a previously
     consolidated subsidiary                                     27                -
  Net cash related to a previously
     consolidated subsidiary                               (     85)               -
                                                            -------          -------
  Net cash used in investing activities                    (     82)        (     11)
                                                            -------          -------

Cash flows from financing activities:

  Repurchase of common stock                               (    395)        (    124)
  Issuance of common stock                                       18                -
  Payments on loan                                         (    478)        (     39)
  Loan proceeds                                                 700                -
                                                            -------          -------
     Net cash used in financing activities                 (    155)        (    163)
                                                            -------          -------

Net increase (decrease) in cash and cash equivalents       (  4,174)           1,449
Cash and cash equivalents at beginning of period              8,217            6,768
                                                            -------          -------
Cash and cash equivalents at end of period                  $ 4,043          $ 8,217
                                                            =======          =======

Supplemental Disclosures of Cash Flow Information:
  Cash paid for:
     Interest                                               $   302          $   280
                                                            =======          =======
     Taxes                                                  $    28          $    31
                                                            =======          =======






</TABLE>


          See accompanying notes to consolidated financial statements.

                                       F-6


<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   ------------------------------------------

Principles of Consolidation
---------------------------

The  consolidated  financial  statements  include the accounts of Kent Financial
Services, Inc. (the "Company" or "Kent") and its wholly-owned subsidiaries, T.R.
Winston  &  Company,  Inc.  ("Winston"),  Texas  American  Petrochemicals,  Inc.
("TAPI") and Asset Value Management, Inc. and its respective subsidiaries, Asset
Value Fund Limited Partnership ("AVF"), a  limited  partnership, and Asset Value
Holdings,  Inc.  TAPI  is  inactive.  All  material  intercompany  balances  and
transactions have been eliminated in consolidation.

Cash Equivalents
----------------

The Company  considers as cash equivalents all short-term  investments which are
highly liquid and readily exchangeable for cash at amounts equal to their stated
value.  Cash  equivalents  consist entirely of U. S. Treasury Bills that matured
through March 2000 and were  reinvested  for an additional 90 days. All cash and
cash  equivalents  are on deposit  either with a major money center bank or with
the clearing broker.

Securities Owned
----------------

Securities  owned and  securities  sold, but not yet purchased are recorded on a
trade date basis and are valued at fair value.

The Company takes proprietary  trading securities  positions to satisfy customer
demand  for  Nasdaq  market  and  over-the-counter   securities.   Realized  and
unrealized  gains and losses from  holding  proprietary  trading  positions  for
resale to customers are included in principal transaction trading revenues.  The
Company also holds from time to time principal  investment  securities which are
recorded at quoted  market  prices or at fair value as  determined by management
based on other  relevant  factors.  The net  change in  market or fair  value of
investment  securities  owned is included in  principal  transactions  investing
revenues.  Substantially  all  securities are owned by AVF and consist of equity
securities valued at market value.

Property and Equipment
----------------------

The Company records all property and equipment at cost. Depreciation is computed
using the straight-line method over the estimated useful lives of the individual
assets generally ranging from three to thirty-nine years.

Fair Value of Financial Instruments
-----------------------------------

Substantially  all assets and liabilities are stated at fair value or at amounts
which approximate fair value.

                                       F-7

<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



Investment Banking Revenues
---------------------------

Investment  banking  revenues include gains,  losses,  and fees net of syndicate
expenses  arising  from  securities  offerings  in which the Company  acts as an
underwriter or agent.  Investment  banking  management  fees are recorded on the
offering date, sales  concessions on the settlement date, and underwriting  fees
at the  time  the  underwriting  is  completed  and  the  income  is  reasonably
determined. During 1999, the Company had no investment banking activities.

Interest Income and Expenses
----------------------------

Winston  receives  interest income on its credit balances at the clearing broker
and is charged interest expense on its debit balances at the clearing broker.

Income Taxes (Benefit)
---------------------

The Company  utilizes the asset and liability  method of  accounting  for income
taxes.  Under  the  asset  and  liability  method,  deferred  income  taxes  are
recognized for the tax consequences of temporary differences by applying enacted
statutory  tax rates  applicable  to future  years to  differences  between  the
financial  statement  carrying  amounts and the tax bases of existing assets and
liabilities. The Company and its subsidiaries file a consolidated federal income
tax return.

Earnings Per Common Share
-------------------------

Earnings per common share is calculated  based on the weighted average number of
shares  outstanding.  Diluted earnings per share includes the assumed conversion
of shares issuable upon exercise of options, where appropriate.

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 date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual   results  could  differ  from  those   estimates.   Estimates  that  are
particularly  susceptible to change include  assumptions used in determining the
fair value of securities owned and non-readily marketable securities.

                                       F-8

<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


2.   SECURITIES BROKERAGE BUSINESS
     -----------------------------

The Company's business is comprised  principally of the operation of Winston and
the management of AVF.  Winston is a licensed  securities  broker-dealer  in all
states (except Alaska) and the District of Columbia and is a member of the NASD,
and the Securities  Investor  Protection  Corporation.  Winston  conducts retail
securities   brokerage,   trading  and  investment   banking   activities.   All
safekeeping,   cashiering,  and  customer  account  maintenance  activities  are
provided by an unrelated  broker-dealer,  Bear Stearns  Securities  Corporation,
pursuant to a clearing agreement.

Pursuant  to the net capital  provisions  of Rule  15c3-1  under the  Securities
Exchange Act of 1934 ("1934 Act"),  Winston is required to maintain  minimum net
capital, as defined, of $111,000. At December 31, 1999, Winston had net capital,
as defined, of $721,000 which was $610,000 in excess of the required minimum.

Winston is exempt from the customer  protection  provisions of Rule 15c3-3 under
the 1934 Act as its  activities are limited to those set forth in the conditions
appearing in paragraphs (k)(2)(ii) of the Rule.

AVF is an investment partnership whose primary purpose is to make investments in
a limited number of companies whose securities are considered undervalued by the
partnership's management.

3.   SECURITIES OWNED AND SECURITIES SOLD NOT YET PURCHASED
     ------------------------------------------------------

Securities owned and securities sold not yet purchased  as of December 31, 1999,
consisting  of  proprietary  trading  positions  held for  resale  to  customers
and  portfolio  positions  (equity  securities)  held for  capital  appreciation
consist of the following (in 000's):

                                                                  Sold,
                                                                 Not Yet
                                                 Owned          Purchased
                                                 -----          ---------

Marketable  equity  securities
  Portfolio  Positions  of
  greater  than  5%  of
  outstanding common stock:
     Cortech, Inc.                               $4,112          $   -
     Gish Biomedical, Inc.                        1,831              -
     Golf Rounds.com, Inc.                          525              -
     General Devices, Inc.                           51              -
     All other portfolio positions                2,191            719
  Held for resale to customers                      233              -
Mutual funds                                         70              -
                                                 ------          -----
Aggregate market                                 $9,013          $ 719
                                                 ======          =====

4. COMMITMENTS AND CONTINGENCIES
   -----------------------------

Leases
------

The Company leases  certain  office space for a monthly rental of  approximately
$7,500,  however,  this lease is cancellable with 90 days notice. Future minimum
rental requirements under the terms of this lease are approximately  $22,500 for
2000.

                                       F-9

<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Winston  subleases  part of its premises at one  location to several  subtenants
under  sublease terms  substantially  equivalent to Winston's  lease  agreement.
Rental income under these agreements in 1999 and 1998 was approximately  $51,000
and $65,000, respectively.

Aggregate  net rent  expense for the years ended  December 31, 1999 and 1998 was
approximately $52,000 and $28,000, respectively.

Legal Matters
-------------

In the normal course of business,  Winston at December 31, 1999,  had been named
as a respondent in two  arbitrations,  one of which was settled in January 2000.
Although the ultimate  outcome of the open action cannot be  ascertained at this
time, it is the opinion of management, after consultation with counsel, that the
resolution  of such  action  will  not have a  material  adverse  effect  on the
consolidated financial statements.

5. INCOME TAXES
   ------------

The components of income tax expense (benefit) are as follows:

                                                      ($000 Omitted)
                                                 Year Ended December 31,
                                                -------------------------
                                                 1999               1998
                                                -------           -------

         Federal-Current                         ($261)            ($ 29)
         State-Current                              12                32
         Deferred                                    -                 -
                                                  ----              ----

         Total                                   ($249)             $  3
                                                  ====              ====



Total  income tax expense  (benefit)  for the years ended  December 31, 1999 and
1998 is different from the amount computed by multiplying  total earnings before
income taxes by the  statutory  Federal  income tax rate of 34%. The reasons for
these differences and the related tax effects are:

                                                           ($000 Omitted)
                                                       Year Ended December 31,
                                                      ------------------------
                                                       1999              1998
                                                      ------            ------

Income tax expense computed at
   statutory rates on total earnings
      before income taxes                             $  54              $ 182

Increase (decrease) in tax from:
     Valuation allowance on net operating
       loss carryforward                             (   62)            (  190)
     State income tax, net of Federal benefit             8                 21
     Change in estimate of income taxes payable      (  249)                 -
     Other, net                                           -             (   10)
                                                      -----              -----

         Total tax expense (benefit)                 ($ 249)             $   3
                                                      =====              =====



                                      F-10

<PAGE>





                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


In the fourth  quarter of 1999  management changed its estimate for income taxes
payable previously accrued for open tax years.

The tax effects of significant  items  comprising the Company's net deferred tax
asset at December 31, 1999 are as follows:

                                                                 ($000 Omitted)
                                                                  ------------

         Deferred tax assets:
               Operating loss carryforwards                          $ 2,845
               Alternative minimum tax credit carryforward               958
               General business credit carryforwards                     990
               Mark-to-market reserves                                   153
               Other                                                     208
                                                                     -------
                                                                     $ 5,154
                                                                     =======

         Valuation allowance                                        ($ 5,154)
                                                                     =======

         Net deferred tax asset                                      $     -
                                                                     =======


Deferred  tax assets  reflect the net effects of  operating  loss and tax credit
carryforwards  and the  temporary  differences  between the carrying  amounts of
assets and liabilities for financial statement purposes and the amounts used for
income tax purposes. Due to the uncertainty of realizing its deferred tax asset,
a  valuation  allowance  of an equal  amount is  maintained.  For the year ended
December 31, 1999, the valuation allowance  decreased by approximately  $62,000,
principally  as  a  result  of  the  expiration  of  state  net  operating  loss
carryforwards and the generation of new deferred tax liabilities.

Significant carryforward balances for Federal income tax purposes as of December
31, 1999 are:

                                                    ($000 Omitted)
                                                 -----------------------

                                                             Expiration
                                                  Amount        Years
                                                 --------    -----------

         Net operating loss                      $ 6,765     2006-2014
         General business tax credit             $   990          2000
         Alternative minimum tax credit          $   958           N/A









                                      F-11

<PAGE>




                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



6. MORTGAGE PAYABLE
   ----------------

In November  1999,  the Company  refinanced  its mortgage  loan with a financial
institution.  The  new  mortgage  loan  of  $700,000  is  collateralized  by the
Company's  headquarters  facility and bears interest at the rate of 7.875%.  The
mortgage  loan is  payable in equal  monthly  installments  of $5,345  including
interest,  through  November  2024.  The  mortgage  which was in force until the
refinancing in November 1999 bore an interest rate of 7.05%.

7. CAPITAL STOCK
   -------------

Common Stock Repurchases
------------------------

On March 26, 1996,  the Board of Directors  approved a plan to  repurchase up to
300,000 shares of the Company's  common stock at prices deemed  favorable in the
open  market  or  in  privately   negotiated   transactions  subject  to  market
conditions,  the  Company's  financial  position and other  considerations.  All
shares acquired through December 31, 1999 have been canceled and returned to the
status of authorized but unissued shares. As of December 31, 1999 275,835 shares
have  been  acquired  under  this  repurchase  plan and have been  canceled  and
returned to the status of authorized but unissued  shares.  In February 2000 the
Board of Directors approved a new plan to repurchase up to an additional 200,000
shares of the  Company's  common  stock at prices  deemed  favorable in the open
market or in privately negotiated transactions subject to market conditions, the
Company's financial position and other considerations.

Common Stock Options
--------------------

The  Non-Qualified  Stock Option Plan adopted by the stockholders of the Company
in 1987 provides for a maximum of 133,332  shares of common stock of the Company
to be issued to key executives, including officers and directors of the Company,
at the discretion of the Board of Directors. Options under this plan expire five
years from the date of grant and are exercisable as to one-half of the shares on
the date of grant and, as to the other half, after the first  anniversary of the
date of grant,  or at such other time, or in such other  installments  as may be
determined  by the  Board  of  Directors  at the  time  of  grant.  The  options
outstanding  at  December  31,  1999,  were  granted in 1995 and will  expire at
various times during 2000.

                                      F-12

<PAGE>




                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



The following table summarizes option transactions under this plan for 1999:

                                                                       Average
                                                         Shares         Price
                                                        -------        -------

       Options outstanding at December 31, 1997          60,000        $2.15625
       Options granted in 1998                                -               -
       Options exercised in 1998                        (10,000)        1.68750
       Options forfeited in 1998                              -               -
                                                         ------        --------

       Options outstanding at December 31, 1998          50,000        $2.25000

       Options granted in 1999                                -               -
       Options exercised in 1999                        ( 8,000)        2.25000
       Options forfeited in 1999                              -               -
                                                         ------        --------

       Option outstanding at December 31, 1999           42,000        $2.25000
                                                         ======        ========


The  Company  does not accrue  compensation  expense  for the  issuance of stock
options  granted in accordance  with its  accounting  policy,  which is based on
Accounting  Principles  Board  Opinion No. 25,  "Accounting  for Stock Issued to
Employees."

8. COMPENSATION ARRANGEMENTS
   -------------------------

In  April  1990,  the  Company   entered  into  an  employment   agreement  (the
"Agreement") with the Company's Chairman for a three-year term commencing April,
1990 (the  "Effective  Date")  at an annual  salary  of  $175,000  (adjusted  to
$200,000 in December  1993),  which may be  increased  but not  decreased at the
discretion of the Board of Directors.  The term is to be automatically  extended
one day for  each day  elapsed  after  the  Effective  Date.  The  Chairman  may
terminate his employment under the Agreement under certain conditions  specified
in the Agreement and the Company may terminate the Chairman's  employment  under
the Agreement for cause. In the event of the Chairman's death during the term of
the Agreement,  his beneficiary  shall be paid a death benefit equal to $200,000
per year for three  years  payable  in equal  monthly  installments.  Should the
Chairman become "disabled" (as such term is defined in the Agreement) during the
term of the Agreement he shall be paid an annual disability payment equal to 80%
of his base salary in effect at the time of the  disability.  In September 1999,
the Company  entered into an employment  agreement with the Company's  Executive
Vice President for a three-year  term  commencing  September,  1999 at an annual
salary  of  $180,000,  the  terms  being  identical  to that  of the  Chairman's
agreement.  The  Company has accrued  for the  contingent  payments  under these
Agreements.

                                      F-13

<PAGE>




                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



9. PREVIOUSLY DISCONTINUED OPERATIONS
   ----------------------------------

In January 1988,  pursuant to Section 13 of the Texas Solid Waste  Disposal Act,
the  Texas  Water  Commission  ("TWC")  listed  on  the  Texas  Register  a site
identified by the TWC as the "Texas  American Oil site"  located in  Midlothian,
Ellis County,  Texas as a hazardous waste facility.  The site was owned by Texas
American Oil  Corporation,  a formerly  wholly-owned  subsidiary of the Company,
prior to ownership being  transferred to TAPI. TAPI has been notified by the TWC
that TAPI is a potentially responsible party ("PRP") for the site. Early in 1990
the TWC requested that TAPI perform a remedial  investigation at the site, which
TAPI has declined.  The TWC has not issued an Administrative Order or instituted
a formal  proceeding.  TAPI has notified the TWC that TAPI has limited financial
resources.

In April 1989,  TAPI was  formally  notified  that the  Michigan  Department  of
Natural  Resources  deemed TAPI a responsible  party in connection  with alleged
environmental  problems at a site owned by TAPI. In the fourth  quarter of 1994,
TAPI entered  into a consent  judgment  with the State of Michigan.  The consent
judgment  provides for the payment by TAPI of approximately  $450,000 to satisfy
TAPI's  alleged  liability for past and future costs incurred and to be incurred
by the State of Michigan in  undertaking  remedial  environmental  activities at
TAPI's former refinery site in Michigan. Under the terms of the settlement, TAPI
paid $90,000 in the fourth  quarter of 1994 and $45,000 per year in 1995 through
1999. The Company is required to pay $45,000 in annual installments  through the
year 2002 without interest. The Company joined the consent judgment for the sole
purpose of assuring payments by TAPI.  Neither TAPI nor the Company admitted any
liability.  The  liability  had  been  accrued  for in  prior  years  as part of
discontinued operations.

TAPI has been  identified as a PRP at another Texas waste disposal site operated
by an unrelated  party. The Company believes that it should have no liability in
connection with TAPI's environmental matters.

10. TRANSACTIONS WITH RELATED PARTIES
    ---------------------------------

Rosenman  & Colin LLP  ("R&C")  performed  legal  work for the  Company  and its
affiliates  in 1999 and 1998.  Natalie  I.  Koether,  wife of the  Chairman  and
President of the Company is of counsel to R&C and also  employed by the Company.
Aggregate fees and expenses billed by R&C to the Company and its subsidiaries in
1999 and 1998  were  approximately  $47,000  and  $120,000,  respectively.  Mrs.
Koether  received  $150,000  and $170,000 in 1999 and  1998,respectively,  as an
employee.  She received no compensation  from R&C related to fees charged to the
Company for her time. The payable to R&C at December 31, 1999 was  approximately
$2,000.

                                      F-14

<PAGE>




                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Since March 1990 certain non-subsidiary affiliates have rented office space from
the Company.  The Company's  aggregate rental income from these arrangements was
approximately $43,000 in 1999 and 1998.

The Company reimburses an affiliate for the direct cost of certain group medical
insurance,  and office supplies. Such reimbursements were approximately $159,000
and $164,000 during 1999 and 1998, respectively.

Eligible  employees can elect to participate in the Company's  qualified 401 (k)
Retirement Plan (the "Plan").  Employees may voluntarily contribute up to 15% of
their  compensation,  not to exceed the Internal Revenue Service limit which was
$10,000 for 1999 and 1998. The employees'  contributions are 100% vested and the
Company's contribution,  if any, vests over a six-year period in accordance with
the vesting schedule in the Plan. There was no employer matching contribution in
1999 or 1998.

Affiliates  of the Company  maintain  brokerage  accounts  with  Winston,  which
received  commissions from those affiliates  totaling  approximately  $4,000 and
$41,000 during 1999 and 1998, respectively.

11. OFF-BALANCE SHEET RISK
    ----------------------

The Company is engaged in various trading and brokerage activities, on an agency
and principal  basis.  The Company's  exposure to off-balance  sheet credit risk
occurs in the event a customer,  clearing agent or counterparty does not fulfill
their obligations arising from a transaction.

Securities  sold,  not yet  purchased  represent  obligations  of the Company to
deliver  securities,  at  contracted  prices,  thereby  creating a liability  to
purchase these securities in the market at prevailing prices. Accordingly, these
transactions  result  in  off-balance  sheet  risk,  as the  Company's  ultimate
obligation  to satisfy the sale of  securities  sold but not yet  purchased  may
exceed the amount recognized in the consolidated financial statements.

The Company is also engaged in various  investment  banking  activities in which
counterparties include broker-dealers, banks, and other institutional customers.
In the event counterparties do not fulfill their obligations, the Company may be
exposed to risk.  The risk of default  depends  on the  creditworthiness  of the
counterparty or issuer of the instrument.  It is the Company's policy to review,
as  necessary,  the credit  standing  of each  counterparty  or issuer  prior to
consummation of such transactions.

Winston  conducts  its  business on a fully  disclosed  basis with one  clearing
broker, Bear Stearns Securities Corporation,  on behalf of its customers and for
its own proprietary accounts, pursuant to a clearance agreement. At December 31,
1999,  substantially  all of the securities  owned and the total receivable from
clearing  broker are positions  with and amounts due from this clearing  broker.
The Company is subject to credit risk  should the  clearing  broker be unable to
pay this balance.

                                      F-15

<PAGE>




                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. SALE OF SUBSIDIARY
    ------------------

In July 1998, Winston,  its then wholly-owned  subsidiary T. R. Winston Capital,
Inc.  ("Wincap"),  and an unrelated third party ("Third Party"),  entered into a
stock  purchase  agreement  ("Agreement").  The Agreement  provided  among other
things,  for the Third Party to contribute to the capital of Wincap  $800,000 in
return for an 80%  ownership  interest  and Winston and an officer of Winston to
each receive a 10%  ownership  interest.  The closing of the  Agreement  and the
resultant  change in  control  were  effected  during  May 1999,  subsequent  to
receiving  NASD approval.  The  difference of $13,000  between the original book
value of Winston's  investment in Wincap and the resultant 10% investment in the
equity of Wincap upon  completion of the  transaction  was charged to additional
paid-in  capital. No gain or loss was recorded on the transaction. Subsequent to
the sale,  Winston has  accounted  for its 10%  investment  in Wincap  under the
equity  method  because one of Winston's  officers  holds an  additional  10% of
Wincap.

At  December  31,  1999,  total  assets of Wincap  amounted to  $531,911,  total
liabilities amounted to $8,112, and net income for 1999 was $11,715. In December
1999,  Wincap  purchased  50% of its  Common  Stock  outstanding  which  reduced
Winston's net investment in Wincap by $50,000.  At December 31, 1999,  Winston's
investment  in Wincap was  $52,524,  which is  included  in other  assets on the
consolidated balance sheet.

Winston has agreed to provide management services to Wincap. These services will
consist of all  services  necessary  for the  operation  of Wincap's  securities
business. Winston will receive as compensation for the services, 60% of Wincap's
gross commissions as defined in the Agreement.  From the date of sale of Wincap,
there were no such commissions as defined.

13. SEGMENT REPORTING
    -----------------

The Company has determined that it does not have reportable  operating segments.
The Company conducts stock brokerage and investment  banking  activities through
its wholly-owned  subsidiaries  Winston and AVF, as described in Note 2 of Notes
to the Consolidated Financial Statements. These wholly-owned subsidiaries do not
have  individual  segment  managers or discrete  financial data used to allocate
resources.

14. SUBSEQUENT EVENT
    ----------------

In January  2000,  Wincap  stockholders  signed a letter of intent  with  Direct
Capital Markets.com, Inc. ("DCM") to sell all outstanding shares in exchange for
75,000  unregistered,  non-marketable  shares  of  DCM's  Series  C  Convertible
Preferred Stock.  Wincap's  stockholders are currently  negotiating a definitive
agreement for the sale.  Until this  definitive  agreement is executed,  neither
Wincap's stockholders nor DCM is legally bound to proceed with the sale.

                                      F-16

<PAGE>




Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
        ---------------------------------------------
        ON ACCOUNTING AND FINANCIAL DISCLOSURE
        --------------------------------------

       None.







                                      II-6

<PAGE>



                                    PART III
                                    --------
Item 9.      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
             ------------------------------------------------------------

     All of the members of the current  Board of  Directors  were elected at the
1999 Annual  Meeting  and all will serve until the next Annual  Meeting or until
their  successors  have been elected and  qualify.  The  Company's  officers are
elected by and serve at the leave of the Board.

     None of the  executive  officers  of the  Company  is related to any other.
There is no arrangement or understanding  between any executive  officer and any
other person pursuant to which such officer was selected.

     The directors  and  executive  officers of the Company at February 29, 2000
were as follows:

              Name                       Age            Position Held
              ----                       ---            -------------

         Paul O. Koether                  63            Chairman, Director and
                                                        President

         Mathew E. Hoffman                46            Director

         Casey K. Tjang                   61            Director

         M. Michael Witte                 73            Director

         John W. Galuchie, Jr.            47            Executive Vice President
                                                        and Treasurer

         Mark Koscinski                   42            Vice President
------------------------------------


     Paul O. Koether is  principally  engaged in the following  businesses:  (i)
Chairman and director  since July 1987 and  President  since October 1990 of the
Company and the general partner since 1990 of Shamrock Associates,  ("Shamrock")
an investment  partnership  which is the principal  stockholder  of the Company,
(ii) various positions with affiliates of the Company,  including Chairman since
1990 and a registered representative since 1989 of T. R. Winston & Company, Inc.
("Winston");  and (iii) Chairman since April 1988,  President from April 1989 to
February 1997 and director since March 1988 of Pure World,  Inc., ("Pure World")
and since  December  1994 has been a director  and since  January  1995 has been
Chairman of Pure World's wholly-owned subsidiary,  Pure World Botanicals, Inc. a
manufacturer  and  distributor  of natural  products.  He is also Chairman and a
director  of Pure  World's  principal  stockholder,  Sun  Equities  Corporation,
("Sun") a private company. In September 1998, Mr. Koether was elected a director
and Chairman of Cortech, Inc.,("Cortech") a biopharmaceutical company seeking to
redeploy its' assets. Mr. Koether was a director of Golf Rounds.com, Inc.,("Golf
Rounds") an internet content provider from July 1992 to January 2000.

     Mathew E. Hoffman.  Since January 1997, he has been head of the  litigation
department of Todtman, Nachamie, Spizz & Johns, P.C. From May 1994 until January
1997 Mr. Hoffman was head of the litigation  department of the law firm of Rosen
& Reade.  His  articles  have been  published in the United  States,  Europe and
Japan.

                                      III-1

<PAGE>



     Casey K.  Tjang.  Since  December  1995,  he has  been  with  Leading  Edge
Packaging,  Inc., a marketing,  wholesaler and distribution  company of consumer
product  packagings in the following  capacities:  director and secretary  since
December 1995; Chief Financial  Officer since September 1996 and President since
September  1998.  From 1991 to 1995,  Mr. Tjang  served as  President  and Chief
Executive Officer of First Merchant Bankers, Inc., a privately-owned  investment
company,  whose  business is focused in the Asia  Pacific  rim, and from 1993 to
1995,  was an Executive  Director of Starlite  Holdings  Limited,  a printer and
manufacturer  of packaging  materials.  From March 1991 until February 1995, Mr.
Tjang was a director of Concord Camera Corp., which manufactures and distributes
camera equipment.

     M. Michael Witte. Since August 1980, he has been President of M. M. Witte &
Associates,  Inc.,  a  private  corporation  which  is  engaged  in oil  and gas
consulting  and  investment  management.  In November 1995 Mr. Witte was elected
Co-Chairman of The American Drilling Company, L.L.C., a position he subsequently
relinquished  after  his  election  on August  1,  1996 as  President  and Chief
Executive  Officer  of South  Coast Oil  Corporation,  a Los  Angeles  based oil
company  founded in 1921.  From April 1991 to June 1995 Mr. Witte was a director
of Search  Exploration,  Inc., a publicly held corporation until it was acquired
by Harken  Energy  Corporation,  which,  through  its  wholly-owned  subsidiary,
McCulloch   Energy,   Inc.   ("McCulloch")   was  engaged  in  the  acquisition,
exploration, development and production of oil and natural gas properties in the
United States.  Mr. Witte was Chairman of McCulloch from April 1991 through June
1995.

     John W. Galuchie,  Jr., a certified  public  accountant,  is engaged in the
following businesses: (i) the Company, as Executive Vice President and Treasurer
since September 1986 and a director from June 1989 to August 1993; (ii) Winston,
as President and Treasurer  since  January 1990 and a director  since  September
1989;  (iii) Pure  World,  as  Executive  Vice  President  since  April 1988 and
director from January 1990 until October 1994; and (iv) Cortech as President and
director since  September  1998.  Since  September 1999, Mr. Galuchie has been a
director of Gish Biomedical,  Inc. a medical device manufacturer.  In March 2000
Mr.  Galuchie  was named  Chairman.  Mr.  Galuchie  also served as a director of
HealthRite,  Inc., a nutritional  products  company,  from December 1998 to June
1999;  served as a director of NorthCorp  Realty  Advisors,  Inc., a real estate
asset manager,  from June 1992 until August 1996; and served as Vice  President,
Treasurer  and a  director  from July 1992 to January  2000 of Golf  Rounds.

     Mark Koscinski,  a certified public accountant,  is principally  engaged in
the following  businesses since August 1993: (i) the Company and Winston as Vice
President;  (ii) Pure World, as Senior Vice President;  and (iii) since December
1994, Pure World Botanicals, Inc., as director, Senior Vice President, Secretary
and Treasurer.  Mr. Koscinski has resigned from the Company  effective March 31,
2000.

     Section  16(a)  of the  Securities  Exchange  Act  requires  the  Company's
officers and directors and persons who own more than ten percent of a registered
class of the  Company's  equity  securities,  to file reports of  ownership  and
changes  in  ownership  on  Forms 3, 4 and 5 with the  Securities  and  Exchange
Commission ("SEC") and the National  Association of Securities Dealers ("NASD").
Officers and directors and greater than ten percent stockholders are required by
SEC  regulation to furnish the Company with copies of all Forms 3, 4 and 5 which
they file.

                                      III-2

<PAGE>



     Based solely on the Company's review of the copies of such forms it has
received, the Company believes that all its officers, directors and greater than
ten percent beneficial owners complied with all filing  requirements  applicable
to them with respect to transactions during fiscal 1999.

Item 10.     EXECUTIVE COMPENSATION
             ----------------------

     There is shown below  information  concerning the annual  compensation  for
services in all  capacities  to the Company for the fiscal years ended  December
31, 1999,  1998 and 1997,  for those  persons who were, at December 31, 1999 (i)
the chief executive officer and (ii) the other most highly compensated  officers
of  the  Company,   whose  annual  compensation  exceeds  $100,000  (the  "Named
Officers").


<TABLE>

                           Summary Compensation Table

                                                                                       Long-Term
Name and Principal                             Annual Compensation(1)(2)              Compensation        Other
                                     -------------------------------------------      ------------       -------
Officer                     Year      Salary           Bonus            Other(3)        Options(#)
<S>                         <C>      <C>               <C>              <C>                 <C>             <C>

Paul O. Koether             1999     $200,000          $     -          $200,471            -               -
Chairman, Presi-            1998     $200,000          $20,000          $171,161            -               -
dent and Chief              1997     $200,000          $65,000          $124,484            -               -
Executive Officer


John W. Galuchie, Jr.       1999     $175,833          $     -          $    412            -               -
Executive Vice Presi-       1998     $166,000          $30,000          $    194            -               -
dent and Treasurer          1997     $160,000          $ 8,000          $    386            -               -

</TABLE>


----------------------------------------------------

(1) The Company has no bonus or deferred  compensation plans and pays bonuses at
the discretion of the Board based on performance.

(2) The  individuals  named in the  table  above  received  incidental  personal
benefits  during the  fiscal  years  covered  by the  table.  The value of these
incidental  benefits  did not exceed the lesser of either  $50,000 or 10% of the
total  annual  salary and bonus  reported  for any of the Named  Officers.  Such
amounts are excluded from the table.

(3)  Represents  commissions  paid by  Winston  to  these  individuals  in their
capacity as  registered  representatives  for  securities  trades made for their
respective customers.

     There  were  no  stock  options  granted  pursuant  to the  Company's  1987
Non-Qualified  Stock  Option  Plan (the  "Plan")  during the fiscal  years ended
December 31, 1999, 1998 and 1997 to the Named Officers.

     Options may be granted by the Board of Directors to officers, directors and
employees of the Company or its subsidiaries.  The exercise price for the shares
shall not be less than the fair market  value of the Common Stock on the date of
grant. Options will expire five years from date of grant and will be exercisable
as to one-half of the shares on the

                                      III-3

<PAGE>



date of grant and as to the other half, after the first  anniversary of the date
of  grant,  or at such  other  time,  or in such  other  installments  as may be
determined  by the Board of  Directors  or a  committee  thereof  at the time of
grant. The options are non-transferable  (other  than by will or by operation of
the laws of  descent)  and are  exercisable  generally  only while the holder is
employed  by the Company or by a  subsidiary  of the Company or, in the event of
the holder's death or permanent disability while employed by the Company, within
one year after such death or disability.

     There were no outstanding options exercised or unexercised of the named
officers of December 31, 1999.

Remuneration of Directors
-------------------------

     Directors  who are not  employees  of the Company  receive a monthly fee of
$1,000 plus $200 for each day of  attendance  at board and  committee  meetings.
During  1999,  the  Company  paid  directors'  fees in the  aggregate  amount of
approximately $37,000.

Compensation Arrangements
-------------------------

     In April,  1990, the Company and Paul O. Koether entered into an employment
agreement  ("Agreement")  pursuant to which Mr.  Koether serves as the Company's
Chairman  for an  initial  three-year  term  ("Commencement  Date") at an annual
salary of $175,000 (changed to $200,000 in December 1993) ("Base Salary"), which
may be increased but not decreased at the  discretion of the Board of Directors.
The term is to be automatically  extended one day for each day elapsed after the
Commencement Date.

     Mr.  Koether may terminate his  employment  under the Agreement at any time
for "good reason" (defined below) within 36 months after the date of a Change in
Control (defined below) of the Company.  Upon his termination,  he shall be paid
the greater of the (i) Base Salary and any bonuses  payable  under the Agreement
through the  expiration  date of the  Agreement or (ii) an amount equal to three
times the  average  annual  Base  Salary  and  bonuses  paid to him  during  the
preceding five years.

     Change in  Control  is deemed to have  occurred  if (i) any  individual  or
entity,  other than  individuals  beneficially  owning,  directly or indirectly,
common  stock of the Company  representing  30% or more of the  Company's  stock
outstanding as of April,  1990, is or becomes the beneficial owner,  directly or
indirectly,  of  30%  or  more  of  the  Company's  outstanding  stock  or  (ii)
individuals  constituting  the Board of  Directors  on April,  1990  ("Incumbent
Board"),  including any person subsequently  elected to the Board whose election
or nomination  for election was approved by a vote of at least a majority of the
Directors  comprising  the  Incumbent  Board,  cease  to  constitute  at least a
majority of the Board.  "Good reason" means a  determination  made solely by Mr.
Koether,  in good  faith,  that as a result  of a Change  in  Control  he may be
adversely  affected  (i) in carrying out his duties and powers in the fashion he
previously enjoyed or (ii) in his future prospects with the Company.

     Mr.  Koether may also  terminate  his  employment  if the Company  fails to
perform its  obligations  under the Agreement  (including any material change in
Mr. Koether's duties,  responsibilities  and powers or the removal of his office
to a location more than five miles from its current  location)  which failure is
not cured within specified time periods.

     The Company may terminate Mr. Koether's  employment under the Agreement for
"cause" which is defined as (i) Mr. Koether's continued failure to substantially
perform his duties  under the  Agreement  (other than by reason of his mental or
physical incapacity or

                                      III-4

<PAGE>



the  removal of his office to a location  more than five miles from its  current
location)  which  is not  cured  within  specified  time  periods,  or (ii)  Mr.
Koether's  conviction  of any criminal act or fraud with respect to the Company.
The Company may not terminate Mr. Koether's  employment  except by a vote of not
less than 75 percent of the entire  Board of Directors at a meeting at which Mr.
Koether is given the opportunity to be heard.

     In the event of Mr.  Koether's death during the term of the Agreement,  his
beneficiary  shall be paid a death  benefit equal to $200,000 per year for three
years  payable  in  equal  monthly  installments.   Should  Mr.  Koether  become
"disabled"  (as such term is  defined in the  Agreement)  during the term of the
Agreement  and either  long-term  disability  insurance  is not  provided by the
Company or such policy does not provide an annual benefit to age 70 equal to 80%
or more of Mr.  Koether's  base  salary,  he shall be paid an annual  disability
payment equal to 80% of his base salary in effect at the time of the disability.
Such payments shall continue until Mr. Koether attains the age of 70.

     In September  1999, the Company  entered into an Employment  Agreement with
the Company's Executive Vice President,  John W. Galuchie, Jr., for a three-year
term commencing September, 1999 at an annual salary of $180,000, the terms being
identical to that of the Chairman's Agreement.







                                      III-5

<PAGE>



Item 11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
             --------------------------------------------------------------

     The  following  table  provides  information  with respect to the Company's
common stock  beneficially owned as of February 29, 2000 by each director of the
Company,  by each person having beneficial  ownership of five percent or more of
the Company's common stock and by all directors and officers of the Company as a
group.

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

Paul O. Koether                          928,454(2)                    48.22%
 211 Pennbrook Road
 Far Hills, NJ 07931

Shamrock Associates                      834,940                       43.37%
 211 Pennbrook Road
 Far Hills, NJ 07931

Tweedy, Brown Company, LLC               183,836(3)                     9.55%
 52 Vanderbilt Avenue
 8th Floor
 New York, NY 10017

M. Michael Witte                          14,000                         *
 1120 Granville Avenue
 Suite 102
 Los Angeles, CA 90049

Casey K. Tjang                            20,000                        1.04%
 510 Tallwood Lane
 Greenbrook, NJ 08812

Mathew E. Hoffman                         14,000                         *
 62 Rosehill Avenue
 New Rochelle, NY 10804

John W. Galuchie, Jr.                     48,332(4)                     2.51%
 376 Main Street
 Bedminster, NJ 07921

Mark Koscinski                            10,000                         *
 376 Main Street
 Bedminster, NJ 07921

All Directors and Officers             1,006,454                       52.28%
 as a Group (6 persons)
-----------------------------------------
*Less than 1 percent.

(1)      The beneficial  owner has both sole voting and sole  investment  powers
         with respect to these shares except as set forth in this footnote or in
         other footnotes below.  Included in such number of Shares  beneficially
         owned are shares subject to options  currently  exercisable or becoming
         exercisable  within sixty days:  Mr. Witte (14,000  shares);  Mr. Tjang
         (14,000  shares);  Mr. Hoffman (14,000  shares);  and all directors and
         officers as a group (42,000 shares).

                                      III-6

<PAGE>



(2)      Includes  the  834,940 Shares beneficially owned by Shamrock Associates
         ("Shamrock"). As  a  general  partner  of  Shamrock, Mr. Koether may be
         deemed to own  these shares beneficially.  Includes 28,332 shares owned
         by Sun Equities Corporation ("Sun"), a private corporation of which Mr.
         Koether  is  the Chairman and a principal stockholder.  Includes 10,082
         shares held by Mr. Koether's IRA. Mr. Koether is also a limited partner
         of  Shamrock  and  may be deemed to own beneficially that percentage of
         the shares owned by Shamrock represented by his partnership percentage.
         Mr. Koether disclaims beneficial ownership of such shares.

(3)      According  to  Schedule  13 D/A filed on July 14, 1999 by Tweedy, Brown
         Company, LLC, TBK Partners, L.P. and Vanderbilt Partners, L.P.

(4)      Includes 28,332 Shares owned by Sun, a private corporation of which Mr.
         Galuchie  is a director and officer.  Mr. Galuchie disclaims beneficial
         ownership of such shares.

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
         ----------------------------------------------

     Rosenman & Colin LLP ("R&C")  performed  legal work for the Company and its
affiliates  in 1999 and 1998.  Natalie  I.  Koether,  wife of the  Chairman  and
President of the Company, is of counsel to R&C and also employed by the Company.
Aggregate fees and expenses billed by R&C to the Company and its subsidiaries in
1999 and 1998  were  approximately  $47,000  and  $120,000,  respectively.  Mrs.
Koether  received  $150,000 and $170,000 in 1999 and 1998,  respectively,  as an
employee.  She received no compensation  from R&C related to fees charged to the
Company  for her time.  The  accounts  payable to R&C at  December  31, 1999 was
approximately $2,000.

     Since March 1990 certain non-subsidiary affiliates have rented office space
from the Company.  The Company's aggregate rental income from these arrangements
was approximately $43,000 in 1999 and 1998.

     The Company  reimburses  an affiliate  for the direct cost of certain group
medical insurance,  and office supplies.  Such reimbursements were approximately
$159,000 and $164,000 during 1999 and 1998, respectively.

     Eligible employees can elect to participate in the Company's  qualified 401
(k) Retirement Plan (the "Plan"). Employees may voluntarily contribute up to 15%
of their  compensation,  not to exceed the Internal  Revenue Service limit which
was  $10,000  for 1999.  The  employees'  contributions  are 100% vested and the
Company's contribution,  if any, vests over a six-year period in accordance with
the vesting schedule in the Plan. There was no employer matching contribution in
1999.

     Affiliates of the Company maintain brokerage  accounts with Winston,  which
received  commissions from those affiliates  totaling  approximately  $4,000 and
$41,000 during 1999 and 1998, respectively.

                                      III-7

<PAGE>




                                     PART IV


Item 13.     EXHIBITS AND REPORTS ON FORM 8-K
             --------------------------------

     The following exhibits are filed as part of this report:

(a)      Exhibits
         --------

               3.1          Bylaws of the Registrant, as amended. (l)

               3.2(a)       Articles of Incorporation of Registrant,  as amended
                            (including  certificate  of  stock  designation  for
                            $2.575 Cumulative Convertible Exchangeable Preferred
                            Stock). (2)

               3.2(b)       Certificate  of   Amendment   to   Certificate    of
                            Incorporation. (3)

               3.2(c)       Certificate   of   Amendment   to   Certificate   of
                            Incorporation dated September 26, 1991. (4)

               10.1         1987 Non-Qualified Executive Stock Option Plan. (6)

               10.2         Employment  Agreement,  dated as of April 6, 1990 by
                            and  between  Texas  American Energy Corporation and
                            Paul 0. Koether. (7)

               10.3         Employment  Agreement, dated as of September 1, 1999
                            by  and  between  Kent Financial Services, Inc., and
                            John W. Galuchie, Jr. (8)

               21           Subsidiaries*

               27           Financial Data Schedule*

(b)      Reports on Form 8-K.
         --------------------

                  NONE

-------------------
*   Filed herewith.

(1)      Incorporated  by   reference   to  Texas  American  Energy  Corporation
         Registration Statement, as amended, on Form S-l, No. 33-11109.
(2)      Incorporated  by reference to Texas American  Energy  Corporation  Form
         10-K, for the fiscal year ended December 31, 1984.
(3)      Incorporated  by reference to Texas American  Energy  Corporation  Form
         10-K for the fiscal year ended December 31, 1987.
(4)      Incorporated  by  reference  to Kent Financial Services, Inc. Form 10-Q
         for the quarter ended September 30, 1991.
(5)      Intentionally left blank.
(6)      Incorporated  by  reference  to Texas American Energy Corporation Proxy
         Statement dated November 11, 1987.
(7)      Incorporated  by  reference  to Kent Financial Services, Inc. Form 10-Q
         for the quarter ended June 30, 1990.
(8)      Incorporated  by reference to Kent Financial Services, Inc. Form 10-QSB
         for the quarter ended September 30, 1999.




                                      IV-1

<PAGE>




                                   SIGNATURES

In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                          KENT FINANCIAL SERVICES, INC.


Dated:  March 29, 2000                    BY   /s/ Paul O. Koether
                                               -------------------
                                               Paul O. Koether
                                               Chairman of the Board, President
                                               and Director
                                               (Principal Executive Officer)

                                          BY   /s/ Mark Koscinski
                                               --------------------

                                               Mark Koscinski
                                               Vice President
                                               (Principal Financial and
                                               Accounting Officer)

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
dates indicated.

Dated:  March 29, 2000                         /s/ Paul O. Koether
                                               -------------------
                                               Paul O. Koether
                                               Chairman of the Board,
                                               President and Director
                                               (Principal Executive Officer)


Dated:  March 29, 2000                         /s/ Mathew E. Hoffman
                                               ---------------------
                                               Mathew E. Hoffman
                                               Director

Dated:  March 29, 2000                         /s/ M. Michael Witte
                                               --------------------
                                               M. Michael Witte
                                               Director

Dated:  March 29, 2000                         /s/ Casey K. Tjang
                                               ------------------
                                               Casey K. Tjang
                                               Director

                                      IV-2

<PAGE>






                                                                      EXHIBIT 21

                          KENT FINANCIAL SERVICES, INC.

                                  SUBSIDIARIES

Name of Subsidiary                                     State of Incorporation
------------------                                     ----------------------

Asset Value Holdings, Inc.                                   Delaware

Asset Value Management, Inc.                                 Delaware

Texas American Petrochemicals, Inc.                          Texas

T. R. Winston & Company, Inc.                                New Jersey

Kent Advisors, Inc.                                          New Jersey