UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 FORM
10-Q
 
 x
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
quarterly period ended: March 31,
2008
 
 OR
 
  ̈
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
transition period from ____________ to ___________.
 
 Commission
File No.: 0-20726
 
 Kent
International Holdings, Inc.
 (Exact
name of registrant as specified in its charter)
 
 Nevada
              20-4888864(State
      or other jurisdiction of incorporation or organization)
              (I.R.S.
      Employer Identification No.)
 
 211 Pennbrook Road, P.O. Box
97, Far Hills, New Jersey 07931
 (Address
of principal executive offices)
 
 (908)
766-7222
 (Registrant's
telephone number)
 
 Indicate
by check mark whether the registrant (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 registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90
days.
 Yes x     No
 ̈
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer”,
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check One)
 Large
accelerated filer  ̈
Accelerated filer  ̈
Non-accelerated filer   ̈  Small
reporting company x
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
 Yes x     No
 ̈
 
 State the
number of shares outstanding of each of the issuer's classes of common equity as
of the latest practicable date:  As of May 1, 2008, the issuer had
3,567,956 shares of its common stock, par value $.002 per share,
outstanding.
  
 
  KENT INTERNATIONALHOLDINGS, INC.
 FORM
10-Q
 For The
Quarterly Period Ended March 31, 2008
 Table Of
Contents
 
 Page
                NumberPART I.
      FINANCIAL INFORMATIONItem 1.
              Financial StatementsBalance Sheet as of March 31, 2008 and December 31,
      2007
              3Statements of Operations Three Months Ended March 31, 2008
      and 2007
              4Statements of Cash Flows Three Months Ended March 31, 2008
      and 2007
              5Notes to Financial Statements
              6Item 2.
              Management's Discussion and Analysis of Financial Condition
      and Results of Operations
              8Item 3.
              Quantitative and Qualitative Disclosure About Market
      Risk
              11Item 4.
              Controls and Procedures
              11PART
      II. OTHER INFORMATIONItem 1.
              Legal Proceedings
              12Item 2.
              Unregistered Sales of Equity Securities and Use of
      Proceeds
              12Item 3.
              Defaults Upon Senior Securities
              12Item 4.
              Submission of Matters to a Vote of Security
      Holders
              12Item 5.
              Other Information
              12Item 6.
              Exhibits
              12Signatures
              13
  2
 Table of Contents
  PART
      I.
              FINANCIAL
INFORMATION
 ITEM
      1.
              Financial
      Statements
 
 KENT
INTERNATIONAL HOLDINGS, INC.
 BALANCE
SHEETS
 (in
000’s, except share and per share amounts)
 
 ASSETS
              
              March 31, 2008(Unaudited)
              
              
              December 31, 2007Current
      Assets:Cash
      and cash equivalents
              
              $
              33
              
              
              $
              28Short-term
      investments
              
              
              10,534
              
              
              
              10,550Prepaid
      expenses and other current assets
              
              
              2
              
              
              
              8Total
      current assets
              
              
              10,569
              
              
              
              10,586Property
      and equipment, net of accumulated depreciation of $2
              
              
              6
              
              
              
              6Other
      assets
              
              
              6
              
              
              
              6Total
      assets
              
              $
              10,581
              
              
              $
              10,598LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilities:Accounts
      payable and accrued expenses
              
              $
              44
              
              
              $
              30Stockholders'
      equity:Preferred
      stock, $.002 par value;  2,000,000 shares authorized; none
      outstanding
              
              
              -
              
              
              
              -Common
      stock, $.002 par value; 10,000,000 shares authorized; 3,567,956 shares
      issued and outstanding
              
              
              7
              
              
              
              7Additional
      paid-in capital
              
              
              99,368
              
              
              
              99,369Accumulated
      deficit
              
              
              (88,838
              )
              
              
              (88,808
              )Total
      stockholders' equity
              
              
              10,537
              
              
              
              10,568Total
      liabilities and stockholders' equity
              
              $
              10,581
              
              
              $
              10,598
 
 
 See
accompanying notes to financial statements.
  3
 Table of Contents
  KENT INTERNATIONAL HOLDINGS, INC.
 STATEMENTS
OF OPERATIONS
 (in
000’s, except per share amounts)
 (UNAUDITED)
 
 
 Three
      Months EndedMarch
      31,2008
              
              
              2007Revenues:Interest
              
              $
              84
              
              
              $
              134Expenses:General
      and administrative
              
              
              114
              
              
              
              200Loss
      before income taxes
              
              
              (30
              )
              
              
              (66
              )Provision
      for income taxes
              
              
              -
              
              
              
              -Net
      loss
              
              $
              (30
              )
              
              $
              (66
              )Basic
      and diluted net loss per common share
              
              $
              (0.01
              )
              
              $
              (0.02
              )Basic
      and diluted weighted average number of common shares
      outstanding
              
              
              3,568
              
              
              
              3,570
 
 
 See
accompanying notes to financial statements.
  4
 Table of Contents
  KENT INTERNATIONAL HOLDINGS, INC.
 STATEMENTS
OF CASH FLOWS
 (in
000’s)
 (UNAUDITED)
 
 
 Three
      Months EndedMarch
      31,2008
              
              
              2007Cash
      flows from operating activities:Net
      loss
              
              $
              (30
              )
              
              $
              (66
              )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
              
              
              1
              
              
              
              2Interest
      receivable on short-term investments
              
              
              (83
              )
              
              
              (132
              )Change
      in prepaid expenses and other current assets
              
              
              6
              
              
              
              (6
              )Change
      in accounts payable and accrued expenses
              
              
              13
              
              
              
              (2
              )Net
      cash used in operating activities
              
              
              (93
              )
              
              
              (204
              )Cash
      flows from investing activities:Acquisition
      of property and equipment
              
              
              
              
              
              
              (14
              )Sale
      of short-term investments
              
              
              98
              
              
              
              244Net
      cash provided by investing activities
              
              
              98
              
              
              
              230Cash
      flows from financing activities:Repurchase
      of common stock
              
              
              
              
              
              
              (6
              )Net
      cash used in financing activities
              
              
              -
              
              
              
              (6
              )Net
      increase in cash and cash equivalents
              
              
              5
              
              
              
              20Cash
      and cash equivalents at beginning of period
              
              
              28
              
              
              
              26Cash
      and cash equivalents at end of period
              
              $
              33
              
              
              $
              46Supplemental
      disclosure of cash flow information:Cash
      paid for:Taxes
              
              $
              -
              
              
              $
              -
 
 
 See
accompanying notes to financial statements.
  5
 Table of Contents
  KENT INTERNATIONAL HOLDINGS, INC.
 Notes To
Financial Statements
 (Unaudited)
 
 NOTE
A - Basis of Presentation
 
 The
accompanying unaudited financial statements of Kent International, Inc. (“Kent
International” or the “Company”) reflect all material adjustments consisting of
only normal recurring adjustments that, in the opinion of management, are
necessary for a fair presentation of results for the interim
periods.  Certain information and footnote disclosures required under
accounting principles generally accepted in the United States of America have
been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission, although the Company believes that the
disclosures are adequate to make the information presented not
misleading.  These financial statements should be read in conjunction
with the financial statements and notes thereto included in the Company’s Annual
Report on Form 10-KSB for the year ended December 31, 2007 as filed with the
Securities and Exchange Commission.
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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.
 
 The
results of operations for the three months ended March 31, 2008 are not
necessarily indicative of the results to be expected for the entire year or for
any other period.
 
 NOTE
B - Related Party Transactions
 
 A monthly
management fee of $21,000 is paid to Kent Financial Services, Inc. (“Kent”), a
Nevada corporation, for management services.  These services include,
among other things, periodic and other filings with the Securities and Exchange
Commission, evaluating merger and acquisition proposals, internal accounting and
shareholder relations.  This arrangement may be terminated at will by
either party.  Kent was the beneficial owner of approximately 53.25%
of the Company’s outstanding common stock at March 31, 2008.  Paul O.
Koether, Chairman of the Company is also the Chairman of Kent and the beneficial
owner of approximately 56.22% of Kent’s outstanding common
stock.  Bryan P. Healey, Chief Financial Officer and Director of the
Company is also the Chief Financial Officer and Director of Kent as well as the
son-in-law of Paul O. Koether.
 
 NOTE
C - Common Stock
 
 In
October 2000, the Board of Directors approved a stock repurchase program
authorizing the Company to repurchase up to 320,000 shares of its Common Stock
at prices deemed favorable from time to time in the open market or in privately
negotiated transactions subject to market conditions, the Company’s financial
position and other considerations.  This program has no expiration
date.  No shares were repurchased during the quarter ended March 31,
2008; however, 2,000 shares were acquired during the quarter ended March 31,
2007.  At March 31, 2008, there were 133,536 shares remaining
authorized for repurchase under the program.  All shares repurchased
were returned to the status of authorized but unissued shares.
  6
 Table of Contents
  NOTE
D - Basic and Diluted Net Loss Per Share
 
 The
Company reports income (loss) per share under the requirements of Statement of
Financial Accounting Standards No. 128, “Earnings per
Share”.  Basic income (loss) per share includes the weighted
average number of common shares outstanding during the year.  Diluted
income (loss) per share includes the weighted average number of shares
outstanding and dilutive potential common shares, such as warrants and
options.  The Company had 120,000 and 290,000 common stock options
outstanding at March 31, 2008 and 2007, respectively.  Since the
Company had losses in the three months ended March 31, 2008, the stock options
outstanding would have an anti-dilutive effect on net loss per share and as such
are not included in the calculation.
 
 NOTE
E - Stock Options Plans
 
 Kent
International has issued certain common stock options to its employees,
directors and consultants.  At March 31, 2008 and December 31, 2007,
Kent International had 120,000 common stock options outstanding, and none were
issued during the three months ended March 31, 2008.
 
 Until
December 31, 2005, the Company applied Accounting Principles Board Opinion No.
25 and related interpretations in accounting for its common stock
options.  Accordingly, no compensation cost had been recognized for
the common stock options issued.  In December 2004, the FASB issued
SFAS No. 123(R), "Share-Based
Payment," (“SFAS 123(R)”), a revision of SFAS 123, "Accounting for Stock-Based
Compensation.”  SFAS 123(R) requires that the compensation cost
relating to share-based payment transactions be recognized in financial
statements.  The compensation cost is measured based on the fair value
of the equity or liability instruments issued. SFAS 123(R) was effective as of
the beginning of the first interim or annual period beginning after December 15,
2005.  Kent International adopted SFAS 123(R) on January 1,
2006.  The adoption did not have an impact on the Company’s financial
position or results of operations as all stock options granted to date were
fully vested prior to January 1, 2006.
 
 NOTE
F – Net Operating Loss Carryforwards
 
 As of
December 31, 2007, Kent International had approximately $77.6 million of net
operating loss carryforwards (“NOL”) for income tax purposes.  In
addition, Kent International has approximately $1.85 million of research and
development and foreign tax credit carryforwards available to offset future
federal income tax, subject to limitations for alternative minimum
tax.  The NOL’s and tax credit carryforwards expire in various years
from 2008 through 2027.  Kent International’s use of operating loss
carryforwards and tax credit carryforwards is subject to limitations imposed by
the Internal Revenue Code.  Management believes that the deferred tax
assets as of March 31, 2008 do not satisfy the realization criteria set forth in
SFAS No. 109 and has recorded a valuation allowance for the entire net tax
asset.  By recording a valuation allowance for the entire amount of
future tax benefits, the Company has not recognized a deferred tax benefit for
income taxes in its statements of operations.
  7
 Table of Contents
  NOTE
H - New Accounting Pronouncements
 
 In
December 2007, the FASB issued SFAS No. 141 (R), Business Combinations, and
SFAS No. 160, Non-controlling
Interests in Consolidated Financial Statements.  SFAS No. 141
(R) requires an acquirer to measure the identifiable assets acquired, the
liabilities assumed, and any non-controlling interest in the acquiree at their
fair values on the acquisition date, with goodwill being the excess value over
the net identifiable assets acquired.  SFAS No. 160 clarifies that a
non-controlling interest in a subsidiary should be reported as equity in the
consolidated financial statement.  The calculation of earnings per
share will continue to be based on income amounts attributable to the
parent.  SFAS No. 141 (R) and SFAS No. 160 are effective for
financial statements issued for fiscal years beginning after December 15,
2008.  Early adoption is prohibited.  We have not yet
determined the effect on our financial statements, if any, upon adoption of SFAS
No. 141 (R) or SFAS No. 160.
 
 ITEM
      2.
              Management’sDiscussion and Analysis of Financial Condition and
      Results of Operations
 
 The
following discussion and analysis should be read in conjunction with the
Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31,
2007 as well as the Company’s financial statements and notes thereto included
elsewhere in this Quarterly Report on Form 10-Q.  Statements in this
report relating to future plans, projections, events or conditions are
forward-looking statements.  Such statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
described.  The Company expressly disclaims any obligation or
undertaking to update these statements in the future.
 
 Business
Activities
 
 Our
current business plan is to serve as a vehicle for the acquisition of or merger
or consolidation with another company (a ‘‘target business’’).  We
intend to use our available working capital, capital stock, debt or a
combination of these to effect a business combination with a target business
which we believe has significant growth potential.  The business
combination may be with a financially stable, mature company or a company that
is in its early stages of development or growth, which could include companies
seeking to obtain capital and to improve their financial
stability.  We will not restrict our search to any particular
industry.  Rather, we may investigate businesses of essentially any
kind or nature and participate in any type of business that may, in our
management’s opinion, meet our business objectives as described in this
report.  We emphasize that the description in this report of our
business objectives is extremely general and is not meant to restrict the
discretion of our management to search for and enter into potential business
opportunities.  We have not chosen the particular business in which we
will engage and have not conducted any market studies with respect to any
business or industry for you to evaluate the possible merits or risks of the
target business or the particular industry in which we may ultimately
operate.  To the extent we enter into a business combination with a
financially unstable company or an entity in its early stage of development or
growth, including entities without established records of sales or earnings, we
will become subject to numerous risks inherent in the business and operations of
financially unstable and early stage or potential emerging growth
companies.  In addition, to the extent that we effect a business
combination with an entity in an industry characterized by a high level of risk,
we will become subject to the currently unascertainable risks of that
industry.  An extremely high level of risk frequently characterizes
certain industries that experience rapid growth.  In addition,
although we will endeavor to evaluate the risks inherent in a particular
industry or target business, we cannot assure you that we will properly
ascertain or assess all significant risk factors.
  8
 Table of Contents
  Additionally,
Kent International has developed a niche social networking website, www.chinauspals.com,
designed to promote cultural exchange between the citizens of the United States
and those of the People’s Republic of China.  Membership to the site
is free, thus, any potential revenues will be derived from advertisements placed
on the site by third parties.  The site provides users with access to
other users’ personal profiles and enables the user to send private messages to
other registered users of similar interests in order to develop lasting
friendships or simply attain a pen pal.  Chinauspals.com also features
user generated discussion forums and blogs as well as user submitted videos and
pictures.  Traffic growth has been disappointing thus
far.
 
 We face
the risk that our website will not be viewable in China or will be deliberately
blocked by the government of the People’s Republic of China.  Internet
usage and content are heavily regulated in China and compliance with these laws
and regulations may cause us to change or limit our business practices in a
manner adverse to our business.
 
 The
Company does not expect that these activities will generate any significant
revenues for an indefinite period as these efforts are in their early
stages.  As a result, these programs may produce significant losses
until such time as meaningful revenues are achieved.
 
 Results
of Operations
 
 Kent
International had a net loss of $30,000, or $.01 basic and fully diluted loss
per share, for the quarter ended March 31, 2008 compared to a net loss of
$66,000, or $0.02 basic and fully diluted income per share, for the same period
of 2007.  The decrease in the net loss was a result of a decrease in
personnel expenses offset by decreased interest revenue on short-term
investments and cash on deposit.
 
 Revenues
 
 Interest
income decreased to $84,000 for the three months ended March 31, 2008, from
$134,000 for the three months ended March 31, 2008.  A lower yield on
short-term investments and cash equivalents was the reason for the
decrease.
 
 Expenses
 
 General
and administrative expenses were $114,000 in the three months ended March 31,
2008 compared to $200,000 in the three months ended March 31, 2007, a decrease
of $86,000.  This decrease can be primarily attributed to a reduction
of $63,000 in personnel expenses as a result of the resignation of our former
President in August of 2007.  Other reductions in expenses included
legal fees which decreased $13,000 and rental expense which decreased
$5,000.
  9
 Table of Contents
  Liquidity
and Capital Resources
 
 At March
31, 2008, the Company had cash and cash equivalents of approximately
$33,000.  Cash and cash equivalents consist of cash held in banks and
brokerage firms.  The Company had short-term investments, consisting
of U.S. Treasury Bills with original maturities of six months, of approximately
$10.5 million at March 31, 2008.  Working capital at March 31, 2008
was approximately $10.525 million.  Management believes its cash, cash
equivalents and short-term investments are sufficient for its operations for at
least the next twelve months and for the costs of seeking an acquisition of or
starting an operating business.
 
 Net cash
of $93,000 was used in operations for the three months ended March 31, 2008, a
decrease of $111,000 from the $204,000 used in operations for the three months
ended March 31, 2007.  Net cash used in operations for the periods was
the result of the net losses for the periods coupled with the changes in
operating assets and liabilities.  The decrease in net cash used in
operations was largely the result a decrease in expenses.
 
 Net cash
of $98,000 was provided by investing activities during the three months ended
March 31, 2008 by the sales of short-term investments.  Net cash of
$230,000 was provided by investing activities during the three months ended
March 31, 2007 resulting from $244,000 from the sales of short-term investments
offset by $14,000 expended for website design.
 
 There
were no cash flows from financing activities reported during the three months
ended March 31, 2008.  The Company used $6,000 for financing
activities for the three months ended March 31, 2007 to repurchase 2,000 shares
of common stock.
 
 Factors
That May Affect Future Results
 
 Future
earnings of the Company are dependent on interest rates earned on the Company’s
invested balances and expenses incurred.  Kent International expects
to incur significant expenses in connection with its objective of redeploying
its assets into an operating business and with the operation of the
website.
 
 Other
Disclosures – Related Party Transactions
 
 A monthly
management fee of $21,000 is paid to Kent Financial Services, Inc. (“Kent”), a
Nevada corporation, for management services.  These services include,
among other things, periodic and other filings with the Securities and Exchange
Commission, evaluating merger and acquisition proposals, internal accounting and
shareholder relations.  This arrangement may be terminated at will by
either party.  Kent was the beneficial owner of approximately 53.25%
of the Company’s outstanding common stock at March 31, 2008.  Paul O.
Koether, Chairman of the Company is also the Chairman of Kent and the beneficial
owner of approximately 56.22% of Kent’s outstanding common
stock.  Bryan P. Healey, Chief Financial Officer and Director of the
Company is also the Chief Financial Officer and Director of Kent as well as the
son-in-law of Paul O. Koether.
 
 Contractual
Obligations
 
 The
Company has no material contractual obligations.
  10
 Table of Contents
  Off-Balance
Sheet Arrangements
 
 The
Company has no off-balance sheet arrangements.
 
 ITEM
      3.
              Quantitative and Qualitative Disclosure About Market
    Risk.
 
 Not
Applicable.
 
 ITEM
      4.
              Controls and Procedures
 
 As of the
end of the period covered by this report, the Company carried out, under the
supervision and with the participation of the Company’s management, including
its Chief Executive Officer and Chief Financial Officer, an evaluation of the
effectiveness of the design and operation of the Company’s disclosure controls
and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934) in ensuring that information required to be disclosed by
the Company in its reports is recorded, processed, summarized and reported
within the required time periods.  In carrying out that evaluation,
management identified a material weakness (as defined in Public Company
Accounting Oversight Board Standard No. 2) in our internal control over
financial reporting.
 
 The
material weakness identified by Management consisted of inadequate staffing and
supervision within the bookkeeping and accounting operations of our
company.  The relatively small number of employees who have
bookkeeping and accounting functions prevents us from segregating duties within
our internal control system.  The inadequate segregation of duties is
a weakness because it could lead to the untimely identification and resolution
of accounting and disclosure matters or could lead to a failure to perform
timely and effective reviews.  However, as there has been no instance
in which the company failed to identify or resolve a disclosure matter or failed
to perform a timely and effective review, management determined that the
addition of personnel to our bookkeeping and accounting operations is not an
efficient use of our resources at this time.
 
 Accordingly,
based on their evaluation of our disclosure controls and procedures as of March
31, 2008, the Company’s Chief Executive Officer and its Chief Financial Officer
have concluded that, as of that date, the Company’s controls and procedures were
not effective for the purposes described above.
 
 There was
no change in the Company’s internal control over financial reporting (as defined
in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934)
during the quarter ended March 31, 2008 that has materially affected or is
reasonably likely to materially affect the Company’s internal control over
financial reporting.
  11
 Table of Contents
  PART
      II.
              OTHER INFORMATION
 ITEM
      1.
              Legal
      Proceedings
 
 None.
 
 ITEM
      2.
              Unregistered Sale ofEquity Securities and Use of
      Proceeds
 
 None.
 
 ITEM
      3.
              Defaults UponSeniorSecurities
 
 None.
 
 ITEM
      4.
              Submission of Matters
      to a Voteof Security
  Holders
 
 None.
 
 ITEM
      5.
              Other Information
 
 None.
 
 
 ITEM
      6.
              Exhibits
 
 3.1
              Articles
      of Incorporation of Kent International Holdings, Inc. (1)
 
 3.2
              Bylaws
      of Kent International Holdings, Inc. (1)
 
 3.3
              Certificate
      of Designation for Series A Junior Participating Preferred Stock. (2)
 
 31.1
              Certification
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002*
 
 31.2
              Certification
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002*
 
 32
              Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002*
 
 
 (1)
              Filed
      as an exhibit to the Company’s Definitive Information Statement on Form
      DEF 14C filed April 21, 2006, film number 06771307, and incorporated
      herein by reference.
 
 (2)
              Filed
      as an exhibit to the Company’s annual report on Form 10-K for the year
      ended December 31, 1995, and incorporated herein by
    reference.
 
 *
              Filed
      Herewith
  12
 Table of Contents
  SIGNATURES
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
   KENT
      INTERNATIONAL HOLDINGS, INC.Date:
      May 8, 2008
              By:
              /s/ Bryan P. HealeyBryan
      P. HealeyChief
      Financial Officer and Secretary(Principal
      Accounting and Financial Officer)