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, 2000

[ ]      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,  2000  were
approximately $4.5 million.

     At  February  28,  2001,  there  were  1,760,392  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 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  that 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 two offices in New Jersey,
and one office in each of California,  Texas and New  Hampshire.  As of December
31, 2000,  Winston's  equity capital was $871,000,  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 $786,000,  which was $686,000 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 1991 to provide investment advisory and
management  services and was funded at inception with $5 million. As of December
31, 2000, the equity capital of AVF was approximately  $11.2 million.  Currently
AVF is 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, 2000, AVF held 15 equity  investments,  of which
four  consisted  of owning more than 5% of the  investee's  outstanding  capital
stock.  AVF owns more than 39% of  Cortech,  Inc.,  a  company  supervising  the
exploitation of its technology by third parties and also seeking a new business;
23% of General Devices, Inc., a non-operating company seeking a new business; 5%
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
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.

                                       I-1

<PAGE>



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,  2000,  the Company  and its  subsidiaries  employed 18
people of whom 15 are registered with the NASD.

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  $690,000  at
December  31,  2000,  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.

     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 2000 and 1999.  Winston  leases space for its Los Angeles office
from its clearing broker-dealer.

                                       I-2

<PAGE>



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

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

     In January, 1988, an inactive subsidiary of the Company, TAPI, was notified
by  environmental  regulators  in  Texas  ("Texas  Regulators")  that  it  was a
potentially  responsible party ("PRP") in connection with a hazardous waste site
in the state.  TAPI  advised  the Texas  Regulators  that TAPI had no assets and
could not conduct a remedial  investigation  of the site.  Since that time,  the
Texas  Regulators  performed  their own  investigation  of the site and recently
proposed a remedial action to stabilize any  contaminants by covering the ground
with a clay cap and establishing a long-term maintenance and monitoring system.

     TAPI  was  also  part  of a  large  group  of PRPs  conducting  a  remedial
investigation  at another  allegedly  contaminated  site but  dropped  out after
notifying the other PRPs that it had no assets.

     The Company does not believe it has any liability in connection  with these
environmental matters.

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

Winston Legal Matters

     In July 2000, T.R. Winston and two Winston officers were notified that NASD
Regulation,  Inc.("NASDR"),  District 9  intended  to  recommend  that the NASDR
authorize  a  disciplinary  proceeding  against  Winston  and  the  two  Winston
officers.  In  January  2001,  the  NASDR  accepted  from  Winston  a letter  of
Acceptance,  Waiver and Consent ("AWC"), which alleged violations for failure to
establish,   maintain  and  enforce  adequate  written  supervisory   procedures
regarding  trading and  market-making,  alleged failure to have a supervisor who
was Series 55 registered, alleged failures to report, accept, or decline certain
trades within  specified time periods,  and alleged failures to maintain records
for certain  principal  transactions.  Pursuant  to the terms of the AWC,  while
neither admitting nor denying the allegations, Winston consented to the findings
contained in the AWC and a censure, and paid the NASDR a fine of $20,000.  NASDR
did not recommend charges against the two Winston officers.

     In the fourth quarter of 2000, Winston recovered  approximately $257,000 as
a plaintiff in the NASDAQ Market-Makers  Antitrust Litigation which alleged that
certain  defendants  conspired  to fix  spreads  in the  purchase  and  sale  of
securities which damaged Winston.

                                       I-3

<PAGE>




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

     The Company held its Annual  Meeting of  Stockholders  on November 6, 2000.
Management's  nominees,  Messrs.  Paul O. Koether,  Mathew E. Hoffman,  Casey K.
Tjang,  M.  Michael  Witte  and Qun Yi  Zheng,  were  elected  to the  Board  of
Directors.

     The following is a vote tabulation for all nominees:

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


                  Paul O. Koether                    975,454              -
                  Mathew E. Hoffman                  975,454              -
                  Casey K. Tjang                     975,454              -
                  M. Michael Witte                   975,454              -
                  Qun Yi Zheng                       975,454              -



                                       I-4

<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.  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:

         2000
         ----

         First Quarter                            $ 5 11/16           $ 3 11/16
         Second Quarter                           $ 4 5/8             $ 4
         Third Quarter                            $ 4 15/16           $ 4 1/16
         Fourth Quarter                           $ 4 7/16            $ 3 1/2

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

     As of February 28, 2001, the Company had approximately  1,800  stockholders
of record of its common stock.  The closing price of the common stock was $3 7/8
on February 28, 2001.

     The Company did not pay  dividends in 2000 or 1999 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,  2000,  the  Company  had  consolidated   cash  and  cash
equivalents of approximately  $3.8 million.  The cash  equivalents  consisted of
U.S.  Treasury  Bills with  original  maturities  of three months or less,  with
yields ranging from 6.04% to 6.36%.  The Company had securities  owned valued at
approximately  $8.2 million at December 31, 2000.  See Notes 1 and 3 of Notes to
Consolidated Financial Statements for additional information on the valuation of
securities  owned.  The  Company's  mortgage  note  payable on its  headquarters
facility had a remaining principal amount of approximately  $690,000 at December
31, 2000. 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  $300,000  was provided by  operations  in 2000,
compared to net cash used in operations of  approximately  $3.9 million in 1999.
The principal reasons for the increase was the change in the value of securities
owned at year end in 2000 compared to 1999 and the increase in unrealized  gains
on securities  owned.  Unrealized  gains and losses are included in consolidated
operations, but do not utilize or generate cash flows.

     During 2000, the Company repurchased 138,554 shares of its common stock for
an aggregate cost of approximately  $579,000.  In 1999, the Company  repurchased
100,168  shares for an  aggregate  cost of  approximately  $395,000.  All shares
acquired were  purchased at market prices and have been canceled and returned to
the status of authorized and unissued shares.

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

     The  Company  had a net loss in 2000 of  $357,000,  or $.19 basic and fully
diluted loss per share,  compared to net income of  $409,000,  or $.21 basic and
fully  diluted  earnings per share,  in 1999.  Total  brokerage  revenue,  which
consisted of commissions and principal  trading  transactions was  approximately
$3.8 million in 2000,  an increase of $354,000 or 10% from 1999 total  brokerage
revenue of $3.4 million.  Brokerage  expenses  (including all fixed and variable
expenses)  increased  by  $316,000,  or 14% from  $2.2  million  in 1999 to $2.5
million in 2000.  Net  brokerage  income was  approximately  the same in 2000 as
compared to 1999 which reflects the continued pressure on operating margins that
is being experienced by the Company and the industry in general.

     Net investing losses were $721,000 in 2000, a decrease of $955,000 from the
net investing  gains in 1999 of $234,000.  This  fluctuation is principally  the
result  of a  decline  in the  carrying  value of  selected  investments  in the
investment portfolio. As of February 28, 2001 the Company experienced a recovery
of approximately $210,000 in these carrying values.

     Commencing  in January 2000 an  administrative  fee of $15,000 per month is
paid to the Company by an affiliate  for  management  services  performed by the
Company on behalf of the affiliate. These services include corporate governance,
financial management and accounting services.

     Interest,  dividends  and  other  income  totaled  $1,018,000  in 2000  and
$1,194,000 in 1999.  The decrease was  primarily the result of an  extraordinary
dividend of $427,500  received by AVF from one of its portfolio  investments  in
1999,   offset  by  higher  interest  income  from  invested  balances  of  cash
equivalents.

     General and  administrative  expenses were $1.8 million in 2000, a decrease
of  approximately  $325,000 or 15% from the $2.2 million  recorded in 1999.  The
majority of the decrease was a result of reduced compensation expense.

     In the fourth quarter of 2000, Winston recovered  approximately $257,000 as
a plaintiff in the NASDAQ Market-Makers  Antitrust Litigation which alleged that
certain  defendants  conspired  to fix  spreads  in the  purchase  and  sale  of
securities which damaged Winston.

     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, 2000 was  approximately  $8
million for its long  positions.  The  potential  change in fair value,  using a
hypothetical 10% decline in prices,  is estimated to be an $800,000 loss for its
long  positions as of December 31, 2000.  Two of the Company's  long  positions,
Cortech,  Inc.,  and Gish  Biomedical,  Inc.,  were  carried at  $5,297,000  and
$397,000,  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.

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

     In January 2000, T.R. Winston Capital, Inc.("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  ("DCM  Shares").  In April 2000,
Wincap's  stockholders  negotiated a definitive agreement for the sale. In July,
2000  regulatory  approval for the sale was obtained and the closing of the sale
was completed.

     Winston  received  for  its  proportionate  ownership  interest  in  Wincap
approximately  $52,000 in cash. In addition  Winston received 25,000 DCM Shares.
Because Winston's investment in Wincap approximated the amount of cash received,
Winston did not record any material gain or loss in connection with the sale.

                                      II-3

<PAGE>



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

         The financial statements filed herein are listed below:

         Independent Auditors' Report

         Financial Statements:

                  Consolidated Balance Sheet - December 31, 2000

                  Consolidated Statements of Operations -
                           Years ended December 31, 2000 and 1999

                  Consolidated Statements of Stockholders' Equity -
                           Years ended December 31, 2000 and 1999

                  Consolidated Statements of Cash Flows -
                           Years ended December 31, 2000 and 1999

                  Notes to Consolidated Financial Statements -
                           Years ended December 31, 2000 and 1999





                                      II-4

<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, 2000, 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 auditing standards generally accepted
in the  United  States of  America.  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, 2000, and the results of their operations and their
cash flows for each of the two years in the period  then  ended,  in  conformity
with accounting principles generally accepted in the United States of America.




/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
March 16, 2001
New York, New York

                                       F-1

<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                 ($000 Omitted)


                                                              December 31,
                                                                 2000
                                                              ------------

Assets
------

Cash and cash equivalents                                       $ 3,812
Securities owned                                                  8,233
Receivable from clearing broker                                     328

Property and equipment:
  Land and building                                               1,447
  Office furniture and equipment                                    273
                                                                -------
                                                                  1,720
  Accumulated depreciation                                     (    614)
                                                                -------
  Net property and equipment                                      1,106
Other assets                                                        202
                                                                -------
         Total assets                                           $13,681
                                                                =======

Liabilities and Stockholders' Equity
------------------------------------

Liabilities:
  Accounts payable                                              $   131
  Accrued expenses                                                  935
  Mortgage payable                                                  690
  Accrual for previously discontinued operations                    273
                                                                -------
         Total liabilities                                        2,029
                                                                -------

Contingent liabilities (Note 4)

Stockholders' equity:
Preferred stock without par value,
  500,000 shares authorized;
  none outstanding                                                    -
Common stock, $.10 par value,
  4,000,000 shares authorized;
  1,782,260 shares outstanding                                      178
Additional paid-in capital                                       14,095
Accumulated deficit                                            (  2,621)
                                                                -------
         Total stockholders' equity                              11,652
                                                                -------
         Total liabilities and stockholders' equity             $13,681
                                                                =======





          See accompanying notes to consolidated financial statements.

                                       F-2

<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                      ($000 Omitted, except per share data)


                                                      Year ended December 31,
                                                      -----------------------
                                                       2000             1999
                                                      ------           ------

Revenues:
   Brokerage commissions and fees                    $ 1,806          $ 2,259
   Principal transactions:
      Trading                                          1,958            1,151
      Investing gains (losses)                      (    721)             234
   Management fee income                                 180                -
   Litigation settlement                                 257                -
   Interest, dividends and other                       1,018            1,194
                                                     -------          -------
              Total revenues                           4,498            4,838
                                                     -------          -------

Expenses:
   Brokerage                                           2,539            2,223
   General, administrative and other                   1,827            2,153
   Interest                                              462              302
                                                     -------          -------
              Total expenses                           4,828            4,678
                                                     -------          -------

Earnings (loss) before income taxes                 (    330)             160
Provision (benefit) for income taxes                      27         (    249)
                                                     -------          -------
Net earnings (loss)                                 ($   357)         $   409
                                                     =======          =======

Basic net earnings (loss) per common share          ($   .19)         $   .21
                                                     =======          =======

Diluted net earnings (loss) per common share        ($   .19)         $   .21
                                                     =======          =======

Weighted average number of common shares
  outstanding (in 000's)                               1,849            1,942
                                                     =======          =======


          See accompanying notes to consolidated financial statements.

                                       F-3

<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                                 ($000 Omitted)

<TABLE>

<S>                                            <C>            <C>              <C>              <C>
                                                              Additional                            Total
                                               Common           Paid-In         Accumulated      Stockholders'
                                               Stock            Capital           Deficit           Equity
                                               ------         ----------       -----------        --------


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

Issuance of common stock                            2                45                -                47

Repurchase and cancellation
  of common stock                             (    14)         (    565)               -          (    579)

Net loss                                            -                 -         (    357)         (    357)
                                               ------           -------          -------           -------

Balance, December 31, 2000                     $  178           $14,095         ($ 2,621)          $11,652
                                               ======           =======          =======           =======

</TABLE>





          See accompanying notes to consolidated financial statements.

                                       F-4

<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 ($000 Omitted)

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

                                                                   Year Ended December 31,
                                                                  -------------------------
                                                                   2000               1999
                                                                  ------             ------
Cash flows from operating activities:
    Net earnings (loss)                                         ($   357)           $   409
    Adjustments to reconcile net earnings to net
        cash provided by (used in) operating activities:
          Depreciation and amortization                               77                 64
          Unrealized (gains) losses on securities owned              780           (    326)
    Change in operating assets and liabilities:
        Change in securities owned                              (    720)          (  4,333)
        Change in net receivable from clearing broker                692                330
        Change in accounts payable and accrued expenses         (    252)               266
        Change in income taxes payable                                21           (    261)
        Other, net                                                    78           (     86)
                                                                 -------            -------
        Net cash provided by (used in) operating
          activities                                                 319           (  3,937)
                                                                 -------            -------

Cash flows from investing activities:
    Purchase of property and equipment                          (      8)          (     24)
    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                       (      8)          (     82)
                                                                 -------            -------

Cash flows from financing activities:
    Repurchase of common stock                                  (    579)          (    395)
    Issuance of common stock                                          47                 18
    Payments on loan                                            (     10)          (    478)
    Loan proceeds                                                      -                700
                                                                 -------            -------
        Net cash used in financing activities                   (    542)          (    155)
                                                                 -------            -------

Net decrease in cash and cash equivalents                       (    231)          (  4,174)
Cash and cash equivalents at beginning of period                   4,043              8,217
                                                                 -------            -------
Cash and cash equivalents at end of period                       $ 3,812            $ 4,043
                                                                 =======            =======

Supplemental Disclosures of Cash Flow Information:
    Cash paid for:
        Interest                                                 $   462            $   302
                                                                 =======            =======
        Taxes                                                    $     5            $    28
                                                                 =======            =======
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       F-5

<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 2001 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  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-6

<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


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-7

<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
National   Association  of  Securities  Dealers,  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 $100,000. At December 31, 2000, Winston had net capital,
as defined, of $786,000 which was $686,000 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
   ----------------

Securities  owned as of December 31, 2000,  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):

             Marketable equity  securities
                Portfolio  Positions of Greater
                than 5% of outstanding common stock:
                        Cortech, Inc.                                 $5,297
                        Gish Biomedical, Inc.                            397
                        Golf Rounds.com, Inc.                            194
                        General Devices, Inc.                             63
                All other portfolio positions                          2,218
                Held for resale to customers                              34
             Mutual funds                                                 30
                                                                      ------
             Aggregate market                                         $8,233
                                                                      ======

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

Leases
------

The Company leases  certain  office space for a monthly rental of  approximately
$7,800,  however,  this lease is cancelable with 90 days notice.  Future minimum
rental requirements under the terms of this lease are approximately  $23,400 for
2001.

                                       F-8

<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 2000 and 1999 was approximately  $42,000
and $51,000, respectively.

Aggregate  net rent  expense for the years ended  December 31, 2000 and 1999 was
approximately $53,000 and $52,000, 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
and the other was settled in December  2000. The resolution of these actions did
not have a material adverse effect on the consolidated financial statements.

In July 2000,  T. R. Winston and two Winston  officers  were  notified that NASD
Regulation,  Inc.  ("NASDR"),  District 9 intended to  recommend  that the NASDR
authorize  a  disciplinary  proceeding  against  Winston  and  the  two  Winston
officers.  In  January  2001,  the  NASDR  accepted  from  Winston  a letter  of
Acceptance,  Waiver and Consent ("AWC"), which alleged violations for failure to
establish,   maintain  and  enforce  adequate  written  supervisory   procedures
regarding  trading and  market-making,  alleged failure to have a supervisor who
was Series 55 registered, alleged failures to report, accept, or decline certain
trades within  specified time periods,  and alleged failures to maintain records
for certain  principal  transactions.  Pursuant  to the terms of the AWC,  while
neither admitting nor denying the allegations, Winston consented to the findings
contained in the AWC and a censure, and paid the NASDR a fine of $20,000.  NASDR
did not recommend charges against the two Winston officers.

In the fourth quarter of 2000,  Winston  recovered  approximately  $257,000 as a
plaintiff in the NASDAQ  Market-Makers  Antitrust  Litigation which alleged that
certain  defendants  conspired  to fix  spreads  in the  purchase  and  sale  of
securities which damaged Winston.

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

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

                                                          ($000 Omitted)
                                                       Year Ended December 31,
                                                      -------------------------
                                                       2000               1999
                                                      ------             ------

         Federal-Current                               $  3              ($261)
         State-Current                                   24                 12
         Deferred                                         -                  -
                                                       ----               ----
         Total                                         $ 27              ($249)
                                                       ====               ====










                                       F-9

<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Total  income tax expense  (benefit)  for the years ended  December 31, 2000 and
1999 is different from the amount computed by multiplying  total earnings (loss)
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,
                                                       ------------------------
                                                        2000              1999
                                                       ------            ------

Income tax expense computed at
   statutory rates on total earnings (loss)
      before income taxes                            ($  112)            $  54

Increase (decrease) in tax from:
     State income tax, net of Federal benefit             16                 8
     Change in estimate of income taxes payable            -            (  249)
     Other, net                                            7                 -
     Expiration of General Business Credits
         and state net operating loss carryforwards    1,061                 -
     Decrease in valuation allowance                 (   945)           (   62)
                                                      ------             -----

         Total tax expense (benefit)                  $   27            ($ 249)
                                                      ======             =====


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, 2000 are as follows:

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

      Deferred tax assets:
               Operating loss carryforwards                         $ 2,596
               Alternative minimum tax credit carryforward              961
               Mark-to-market valuation adjustments                     379
               Deferred Compensation                                    151
               Other                                                    122
                                                                    -------
                                                                    $ 4,209
      Valuation allowance                                          (  4,209)
                                                                    -------
      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, 2000, the valuation allowance decreased by $945,000, principally as
a result of the expiration of state net operating loss carryforwards and federal
credit carryforwards and the generation of new deferred tax liabilities.

                                      F-10

<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Significant  carryforward  balances  for  Federal  income  tax  purposes  as  of
December 31, 2000 are: ($000 omitted)


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

         Net operating loss                           $ 6,923      2006-2014
         Alternative minimum tax credit               $   961            N/A

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

The mortgage loan 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.

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  ("1996
Plan").  As of March 21, 2000 all shares  including  24,165  shares  repurchased
during 2000 had been acquired  under this 1996 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("2000  Plan"). As of December 31, 2000,  114,389 shares have been
acquired  under the 2000 Plan and have been  canceled and returned to the status
of authorized but unissued shares.

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.  No  options  are
outstanding at December 31, 2000.

                                      F-11

<PAGE>




                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



The following table summarizes option transactions under this plan:

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

         Options outstanding at December 31, 1998          50,000      $2.25000
         Options granted in 1999                                -             -
         Options exercised in 1999                        ( 8,000)      2.25000
                                                           ------
         Options outstanding at December 31, 1999          42,000       2.25000

         Options granted in 2000                                -             -
         Options exercised in 2000                        (21,000)      2.25000
         Options forfeited in 2000                        (21,000)      2.25000
                                                           ------

         Option outstanding at December 31, 2000                -             -
                                                           ======


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
$240,000 in December  2000)  ("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 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  his Base Salary 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  (adjusted to $190,000 in December  2000),
the terms being identical to that of the Chairman's agreement.

The Company accrues for the contingent payments under these Agreements.

                                      F-12

<PAGE>





                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



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

In January,  1988, an inactive subsidiary of the Company,  TAPI, was notified by
environmental regulators in Texas ("Texas Regulators") that it was a potentially
responsible  party  ("PRP") in  connection  with a  hazardous  waste site in the
state.  TAPI advised the Texas  Regulators that TAPI had no assets and could not
conduct  a  remedial  investigation  of the site.  Since  that  time,  the Texas
Regulators performed their own investigation of the site and recently proposed a
remedial action to stabilize any contaminants by covering the ground with a clay
cap and establishing a long-term maintenance and monitoring system.

TAPI was also part of a large group of PRPs conducting a remedial  investigation
at another allegedly contaminated site but dropped out after notifying the other
PRPs that it had no assets.

The  Company  does not believe it has any  liability  in  connection  with these
environmental matters.

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
2000. 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.

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

Rosenman  & Colin LLP  ("R&C")  performed  legal  work for the  Company  and its
affiliates  in 2000 and 1999.  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
2000 and 1999 were approximately $39,000 and $47,000, respectively. Mrs. Koether
received  $150,000  in each of 2000 and 1999 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, 2000 was approximately $26,000.

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 2000 and 1999.

                                      F-13

<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company reimburses an affiliate for the direct cost of certain group medical
insurance,  and office supplies. Such reimbursements were approximately $187,000
and $159,000 during 2000 and 1999, 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 ($10,500 in
2000 and $10,000 in 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
2000 or 1999.

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.

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,
2000,  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.

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

In January 2000, T. R. Winston Capital,  Inc.  ("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  ("DCM  Shares").  In April 2000,
Wincap's  stockholders  negotiated a definitive agreement for the sale. In July,
2000  regulatory  approval for the sale was obtained and the closing of the sale
was completed.

Winston   received  for   its   proportionate   ownership  interest   in  Wincap
approximately  $52,000 in cash. In addition  Winston received 25,000 DCM Shares.
Because Winston's investment in Wincap approximated the amount of cash received,
Winston did not record any material gain or loss in connection with the sale.

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

The Company has determined that it does not have reportable  operating segments.
The  Company  conducts  stock  brokerage  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.

                                      F-14

<PAGE>



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

         None.









                                      II-5

<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
2000 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 28, 2001
were as follows:

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

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

         Paul O. Koether                    64                Chairman, Director
                                                              and President

         Mathew E. Hoffman                  47                Director

         Casey K. Tjang                     62                Director

         M. Michael Witte                   74                Director

         Qun Yi Zheng, Ph.D.                43                Director

         John W. Galuchie, Jr.              48                Executive Vice President
                                                              and Treasurer

</TABLE>


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


     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 August 2000, he has been Executive Vice President of
Finance with Knowledgewindow, Inc., an e-learning provider of internet training.
From  December  1995  until  August  2000,  Mr.  Tjang was  employed  in various
positions including Director,  Secretary,  Chief Financial Officer and President
with Leading Edge  Packaging,  Inc., a marketing,  wholesaler  and  distribution
company  of  consumer  product  packagings.  On August  16,  2000  Leading  Edge
Packaging,  Inc., filed a Chapter XI petition under the United States Bankruptcy
Code.  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.

     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.

     Qun Yi Zheng,  Ph.D.  Since  November 2000 Dr. Zheng has been a director of
the Company. Since March, 1996 he has been Executive Vice President and Director
of Science and Technology at Pure World Botanicals,  Inc., and from August 2000,
a director of Cortech. From January 1995 to March 1996 he was Technical  Manager
at Hauser Nutraceuticals,  a division of Hauser Chemicals,  Inc., a manufacturer
and  distributor of  nutraceuticals.

     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;  (iv) Cortech as President and
director since September 1998; (v) a director of Gish Biomedical, Inc. a medical
device  manufacturer.  In March 2000 Mr. Galuchie was named  Chairman;  and (vi)
General Devices, Inc., as Chariman, President and director since September 2000,
a company seeking an operating business.  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.

     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 2000.

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, 2000,  1999 and 1998,  for those  persons who were, at December 31, 2000 (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").

                           Summary Compensation Table
<TABLE>
<S>                           <C>      <C>               <C>              <C>               <C>                   <C>


                                                                                             Long-Term

Name and Principal                         Annual Compensation(1)(2)                        Compensation           Other
                                       -----------------------------------                  ------------          -------
Officer                       Year      Salary           Bonus            Other(3)           Options(#)

Paul O. Koether               2000     $203,333          $25,000          $155,814                -                  -
Chairman, Presi-              1999     $200,000          $     -          $200,471                -                  -
dent and Chief                1998     $200,000          $20,000          $171,161                -                  -
Executive Officer


John W. Galuchie, Jr.         2000     $180,833          $12,500          $  1,203                -                  -
Executive Vice Presi-         1999     $175,833          $     -          $    412                -                  -
dent and Treasurer            1998     $166,000          $30,000          $    194                -                  -
</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, 2000, 1999 and 1998 to the Named Officers. All activity in the Plan
was completed as of December 31, 2000 and there were no  outstanding  options as
of December 31, 2000.

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  2000,  the  Company  paid  directors'  fees in the  aggregate  amount of
approximately $41,000.

                                      III-3

<PAGE>



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  $240,000 in  December 2000) ("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 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 the Base Salary 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  (changed to
$190,000 in December 2000),  the terms being identical to that of the Chairman's
Agreement.

                                      III-4

<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 28, 2001 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)                52.74%
 211 Pennbrook Road
 Far Hills, NJ 07931

Shamrock Associates                      834,940                   47.43%
 211 Pennbrook Road
 Far Hills, NJ 07931

Tweedy, Brown Company, LLC               155,086(3)                 8.81%
 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                             6,000                     *
 510 Tallwood Lane
 Greenbrook, NJ 08812

Mathew E. Hoffman                          7,000                     *
 62 Rosehill Avenue
 New Rochelle, NY 10804

John W. Galuchie, Jr.                     48,332(4)                 2.75%
 376 Main Street
 Bedminster, NJ 07921

Qun Yi Zheng                                   -                       -
 375 Huyler Street
 South Hackensack, NJ 07606

All Directors and Officers               975,454                   55.41%
 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.

(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

                                      III-5

<PAGE>



         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 February 13, 2001 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 2000 and 1999.  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
2000 and 1999 were approximately $37,000 and $47,000, respectively. Mrs. Koether
received  $150,000  in both 2000 and 1999,  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, 2000 was approximately $34,000.

     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 2000 and 1999.

     The Company  reimburses  an affiliate  for the direct cost of certain group
medical insurance,  and office supplies.  Such reimbursements were approximately
$187,000 and $159,000 during 2000 and 1999, 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 ($10,500
in 2000 and $10,000 in 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 2000 or 1999.

                                      III-6

<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  April 6, 1990  by  and
                           between Texas American Energy Corporation and Paul 0.
                           Koether. (7)

              10.3         Employment  Agreement,  dated  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.








                                      III-7

<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, 2001               BY       /s/ Paul O. Koether
                                              -------------------------
                                              Paul O. Koether
                                              Chairman of the Board, President
                                              and Director
                                              (Principal Executive Officer)

                                     BY       /s/ John W. Galuchie, Jr.
                                              -------------------------
                                              John W. Galuchie, Jr.
                                              Executive 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, 2001                        /s/ Paul O. Koether
                                              -------------------------
                                              Paul O. Koether
                                              Chairman of the Board,
                                              President and Director
                                              (Principal Executive Officer)


Dated:  March 29, 2001                        /s/ Mathew E. Hoffman
                                              -------------------------
                                              Mathew E. Hoffman
                                              Director

Dated:  March 29, 2001                        /s/ Casey K. Tjang
                                              -------------------------
                                              Casey K. Tjang
                                              Director

Dated:  March 29, 2001                        /s/ M. Michael Witte
                                              -------------------------
                                              M. Michael Witte
                                              Director

Dated:  March 29, 2001                        /s/ Qun Yi Zheng
                                              -------------------------
                                              Qun Yi Zheng
                                              Director

                                      IV-1

<PAGE>







                                                                    EXHIBIT 21

                          KENT FINANCIAL SERVICES, INC.

                                  SUBSIDIARIES

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

Asset Value Holdings, Inc.                                     Delaware

Asset Value Management, Inc.                                   Delaware

Kent Advisors, Inc.                                            New Jersey

Texas American Petrochemicals, Inc. (Inactive)                 Texas

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