UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K





MARK
ONE:





x
            Annual
      Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934.


For the
Fiscal year ended December 31, 2008





o
            Transition
      Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of
      1934


For the
transition period from __________ to  _____________.





Commission
file number 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)
              (Zip
      Code)





Registrant’s
telephone number   (908)
766-7222





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
$.002 per share


(Title of
Class)





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. o





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act. o





Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.Yes xNo o





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K  is not contained herein, and will not 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-K or any
amendment to this Form 10-K. x





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  o
              Accelerated
      filer  o
              Non-accelerated
      filer   o
              Smaller
      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
o





As of
February 28, 2009, there were 3,555,488 shares of common stock
outstanding.  The aggregate market value of the common stock held by
non-affiliates of the registrant, based upon the closing sale price on The Pink
Sheets on February 27, 2009, was $2.6 million.













PART I




Item
      1.  -
            BUSINESS





General





Except
for the historical information contained herein, the matters discussed in this
Annual Report on Form 10-K are forward-looking statements that involve risks and
uncertainties.  For a discussion of certain factors which may affect
the outcome projected in such statements, see Item 7 (“Management’s Discussion
and Analysis of Financial Condition and Results of Operations”) of this Annual
Report, as well as factors noted in the balance of this Item 1 (“Description of
Business”).  Actual results may differ materially from those
projected.  These forward-looking statements represent the Company’s
judgment as of the date of the filing of this Annual Report.  The
Company disclaims, however, any intent or obligation to update these
forward-looking statements.





Background





Kent
International Holdings, Inc. (“Kent International” or “Company”), previously
known as Cortech, Inc. (“Cortech”), was a biopharmaceutical company whose
primary focus had been the discovery and development of novel therapeutics for
the treatment of inflammatory disorders.  Cortech was incorporated in
1982 in Colorado and reincorporated in Delaware in
1991.  Specifically, Cortech had directed its research and development
efforts principally toward protease inhibitors and bradykinin
antagonists.  Although these efforts produced certain intellectual
property rights, these rights are currently recorded at nil value as the Company
is not currently marketing them.





In
response to disappointing test results and its loss of collaborative partner
support, Cortech implemented a series of workforce reductions which resulted in
the Company having no compensated employees from 1999 until November 2005, and
effectively discontinued all internal research and development
activities.  In addition, in 1998 Cortech decommissioned its
laboratories and sold all of its remaining scientific, technical and office
equipment.  As a result of these actions, Cortech no longer had the
staff or operative facilities required to conduct internal research and
development activities.





On May
25, 2006, Cortech was reincorporated in Nevada by a merger with its wholly owned
subsidiary, Kent International Holdings, Inc.  The reincorporation
effected a change in Cortech’s legal domicile from Delaware to Nevada and a
change in the name from Cortech, Inc. to Kent International Holdings,
Inc.





Business
Development 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’’).  The
Company may use its available working capital, capital stock, debt or a
combination of these to start a business or to effect a business combination
with a company seeking to establish a public trading market for its securities
while avoiding the time delays, significant expense, loss of voting control and
other burdens including significant professional fees of an initial public
offering.  A 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.





The
Company will not restrict its search to any particular industry; rather, it may
investigate businesses of essentially any kind or nature and participate in any
type of business that may, in management's opinion, meet the business objectives
as described in this report.  The Company emphasizes that the
description in this report of the business objective of seeking an operating
business is extremely general and is not meant to restrict management discretion
to seek and enter into potential business opportunities.





2





The
Company has not identified the particular business in which it will seek to
engage, nor has it conducted any market studies with respect to any business or
industry to evaluate the possible merits or risks of the target business or
industry in which the Company ultimately may operate.  To the extent
the Company enters 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 revenues or earnings, or starts its own
new business, the Company will become subject to numerous risks inherent in the
business and operations of financially unstable and early stage or developing
companies.  In addition, to the extent that the Company effects a
business combination with an entity in an industry characterized by a high level
of risk or starts its own new business in such an industry, the Company 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 the Company will endeavor to evaluate the risks inherent in a
particular industry or target business, the Company cannot assure you that it
will properly ascertain or assess all significant risk factors.





Sources
of target businesses





Kent
International anticipates that target business candidates may be brought to the
Company’s attention from various unaffiliated sources, including securities
broker-dealers, investment bankers, private equity groups, venture capitalists,
bankers and other members of the financial community, who may present solicited
or unsolicited proposals.  The Company’s officers and directors and
their affiliates may also bring to the Company’s attention target business
candidates.  The Company has entered into non-exclusive agreements
with several finders and investment bankers and may engage such firms in the
future for which the Company may pay a finder's fee or other compensation if a
transaction is completed.





Selection
of a target business and structuring of a business combination





The
Company’s management will have significant flexibility in identifying and
selecting a prospective target business. In evaluating a prospective target
business, management may consider, among other factors, the
following:





·
            the
      financial condition and results of operation of the
  target;


·
            the
      growth potential of the target and that of the industry in which the
      target operates;


·
            the
      experience and skill of the target's management and availability of
      additional personnel;


·
            the
      capital requirements of the target;


·
            the
      competitive position of the target;


·
            the
      stage of development of the target's products, processes or
      services;


·
            the
      degree of current or potential market acceptance of the target's products,
      processes or services;


·
            proprietary
      features and the extent and quality of the intellectual property or other
      protection of the target's products, processes or
  services;


·
            the
      regulatory environment of the industry in which the target
      operates;


·
            the
      prospective equity interest in, and opportunity for control of, the
      target; and


·
            the
      costs associated with effecting a business
  combination.





These
criteria are not intended to be exhaustive.  Any evaluation relating
to the merits of a particular business combination will be based, to the extent
relevant, on the above factors as well as other considerations deemed relevant
by the Company’s management in connection with effecting a business combination
consistent with the Company’s business objective.  In connection with
the evaluation of a prospective target business, the Company anticipates that it
will conduct an extensive due diligence review that will encompass, among other
things, meetings with incumbent management and inspection of facilities, as well
as a review of financial or other information that will be made available to
us.





3





Social
Networking Website





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 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.  In July, we reached an agreement with Wizart Studios, LLC,
a New York based web design firm, to redesign and market the site in return for
a 19% equity interest in ChinaUSPals.com, Inc., the site’s holding
company.  As a part of the agreement, Kent International will be
responsible for the costs of marketing the site until revenue is
generated.  The redesigned site was launched on August 6,
2008.  Since then, site membership has grown to over 3,100 members
from the approximately 150 members prior to the redesign.





Item
      1A.  -
            RISK
      FACTORS





Our
business development activities and website produce losses





The
Company has had net losses of $190,937 and $301,361 in 2008 and 2007,
respectively.  At December 31, 2008, the accumulated deficit was
$88,999,408.  The Company does not expect that its business
development activity or social networking website will generate any significant
revenues for an indefinite period as these efforts are in their early
stages.  As a result, these activities will produce losses until such
time as meaningful revenues are achieved.





Our
social networking website might not be viewable in China and will continue to
produce losses for an indefinite period.





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
expenses related to identifying a target business and to complete a business
combination will increase the losses of the Company.





Until
presented with a specific opportunity for a business combination, the Company is
unable to ascertain with any degree of certainty the time and costs required to
select and evaluate a target business and to structure and complete the business
combination.  Any costs incurred in connection with the identification
and evaluation of a prospective target business with which a business
combination is not ultimately completed will result in a loss to the Company and
reduce the amount of capital otherwise available to complete a business
combination and thereafter operate the acquired business.  Kent
International cannot assure you that it will be successful in identifying a
target business and completing a business combination on terms favorable to its
stockholders, if at all.





4





The
tax treatment of a potential business combination is not clear.





The
Company will endeavor to structure a business combination so as to achieve the
most favorable tax treatment to it and to the target business and the
stockholders of both companies.  Kent International cannot assure you,
however, that the Internal Revenue Service or appropriate state tax authorities
will agree with the Company’s tax treatment of the business
combination.





We
have limited ability to evaluate the target business' management; we cannot
anticipate what role, if any, the Company’s management will play in a combined
business and whether our management has the necessary experience to manage the
combined business; we do not know if we will be able to recruit more management
if necessary.





Although
the Company intends to carefully scrutinize the management of a prospective
target business before effecting a business combination, it cannot assure you
that its assessment of the target's management will prove to be
correct.  In addition, the Company cannot assure you that the target's
future management will have the necessary skills, qualifications or abilities to
manage a public company.  Furthermore, the future role of the
Company’s officers and directors, if any, in the target business cannot
presently be stated with any certainty.  While it is possible that one
or more of the Company’s officers and directors will remain associated in some
capacity following a business combination, it is uncertain whether all of them
will devote their full efforts to the Company’s affairs after a business
combination.  Moreover, the Company cannot assure you that its
officers and directors will have significant experience or knowledge relating to
the operations of the particular target business.





The
Company may seek to recruit additional management personnel to supplement the
incumbent management of the target business.  The Company cannot
assure you, however, that it will be able to recruit additional managers who
have the requisite skills, knowledge or experience necessary to enhance the
incumbent management and successfully operate the target business.





In
our search for an appropriate combination partner, we will have to compete with
other entities with more experience and greater resources; after a successful
business combination we will have to face the competitors of the operating
company we combine with.





The
Company may encounter intense competition from other entities seeking to combine
with a privately held operating company.  Many of these entities,
including financial consulting companies and venture capital firms, have longer
operating histories and have extensive experience in identifying and effecting
business combinations.  Many of these competitors also possess
significantly greater financial, technical and other resources than does the
Company.  Kent International cannot assure you that it will be able to
effectively compete with these entities. Consequently, Kent International may
acquire a company with less favorable prospects then it would otherwise prefer,
thus making its long-term prospects for success less likely.





If the
Company effects a business combination, it will become subject to competition
from the competitors of the acquired business.  In particular,
industries that experience rapid growth frequently attract larger numbers of
competitors, including competitors with greater financial, marketing, technical
and other resources than the Company.  The Company cannot ascertain
the level of competition it will face if it effects a business combination, and
it cannot assure you that it will be able to compete successfully with these
competitors.





The
Pink Sheets are characterized by high volatility which may negatively affect our
stock price.





Our
common stock is quoted on the Pink Sheets under the symbol
“KNTH”.  The Pink Sheets and the price of our common stock are
characterized by high volatility.  The Company cannot guarantee any
market for its shares of common stock, and cannot guarantee that any stable
market for its shares of common stock will develop or be
sustained.  The Company cannot predict the effect, if any, that our
business activities or a business combination might have on the market
price.





5





Employees





The
company does not have any compensated employees.





ITEM
      2.  -
            PROPERTIES





The
Company’s executive offices are located in Far Hills, New Jersey in premises
provided by Kent Financial Services Inc.  The Company pays Kent
Financial Services a monthly management fee of $21,000 for management
services.  No separate payment is made for use of the
premises.





ITEM
      3.  -
            LEGAL
      PROCEEDINGS





None





ITEM4.-
            SUBMISSION OF MATTERS
      TO A VOTE OF SECURITY
HOLDERS





None


PART II





ITEM
      5.  -
            MARKET FOR COMMON
      EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
      SECURITOES





Shareholders
of Record





At
February 29, 2009, the Company had approximately 394 stockholders of
record.





Market
Information





Since
June 8, 2006, the Company’s common stock has been quoted on The Pink Sheets,
under the symbol “KNTH”.  The table below sets forth the high and low
sales price per share of the Common Stock for the periods indicated, as reported
in The Pink Sheets





Calendar
      Quarter Ended:
                      
                      High
                      
                      
                      Low2007
                      March
      31
                      
                      $
                      2.83
                      
                      
                      $
                      2.61June
      30
                      
                      
                      2.90
                      
                      
                      
                      2.80September
      30
                      
                      
                      3.10
                      
                      
                      
                      2.57December
      31
                      
                      
                      2.66
                      
                      
                      
                      2.512008
                      March
      31
                      
                      $
                      2.65
                      
                      
                      $
                      2.13June
      30
                      
                      
                      2.30
                      
                      
                      
                      2.18September
      30
                      
                      
                      2.25
                      
                      
                      
                      1.43December
      31
                      
                      
                      1.65
                      
                      
                      
                      1.35





6





Dividends





The
Company has not paid any cash dividends on its common stock since its inception
and does not anticipate paying any cash dividends in the foreseeable
future.





Purchase
of Equity Securities





Issuer
Purchases of Equity Securities (1)





Period
                        
                        Total
      Number of Shares Purchased
                        
                        
                        Average
      Price Paid per Share
                        
                        
                        Total
      Number of Shares Purchased as Part of Publicly Announced Plans or
      Programs
                        
                        
                        Maximum
      Number of Shares that May Yet Be Purchased Under the Plans or
      ProgramsOctober
      1, 2008 -       October 31,
      2008
                        
                        
                        500
                        
                        
                        $
                        1.64
                        
                        
                        
                        500
                        
                        
                        
                        131,268November
      1, 2008 - November 30, 2008
                        
                        
                        9,700
                        
                        
                        $
                        1.65
                        
                        
                        
                        9,700
                        
                        
                        
                        121,568December
      1, 2008 - December 31, 2008
                        
                        
                        500
                        
                        
                        $
                        1.58
                        
                        
                        
                        500
                        
                        
                        
                        121,068Total
                        
                        
                        10,700
                        
                        
                        $
                        1.65
                        
                        
                        
                        10,700
                        
                        
                        
                        121,068





(1)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.  This program has no expiration date.





Equity
Compensation Plan Information





The
following table sets forth information about the shares of the Company’s common
stock that may be issued upon the exercise of options granted to employees under
the Company’s 1986 Stock Option Plan


Plan
      Category
                                        
                                        (a)
      Number of Securities to be Issued Upon Exercise of Outstanding Options,
      Warrants and Rights
                                        
                                        
                                        (b)
      Weighted-Average Exercise Price of Outstanding Options, Warrants and
      Rights
                                        
                                        
                                        (c)
      Number of Securities Remaining Available for Future Issuance Under Equity
      Compensation Plans Excluding Securities Reflected in Column
      (a)Equity
      Compensation Plans Approved by Security Holders1986
      Stock Option Plan
                                        
                                        
                                        200,000
                                        
                                        
                                        $
                                        3.35
                                        
                                        
                                        
                                        100,000


The
Company’s 1986 Stock Option Plan (“1986 Plan”) authorizes the grant of stock
options to officers and employees of the Company to purchase an aggregate of
300,000 shares of common stock.  The stock options granted under the
plan may be incentive stock options (“ISO”) or nonstatutory stock options
(“NSO”).  The Board of Directors may set the rate at which the options
expire, subject to limitations discussed below.  However, no options
shall be exercisable after the tenth anniversary of the date of grant or, in the
case of ISOs, three months following termination of employment, except in cases
of death or disability, for which the time or exercisability is
extended.  In the event of dissolution, liquidation or other corporate
reorganization, all stock options outstanding under the 1986 Plan would become
exercisable in full.





7





ISOs may
not be granted at an exercise price of less than the fair market value of the
common stock at the date of grant.  If an ISO is granted to an
employee who owns more than 10% of the Company’s total voting stock, such
exercise price shall be at least 110% of fair market value of the common stock,
and the ISO shall not be exercisable until after five years from the date of
grant.  The exercise price of each NSO may not be less than 85% of the
fair market value of the common stock at the date of grant.





The plan
also provides for stock appreciation rights, which may be granted with respect
to any stock option.  No stock appreciation rights have been granted
through December 31, 2008.





On May 8,
2008, the Board awarded a non-qualified stock option to Bryan P. Healey to
purchase 100,000 shares of Kent International’s common stock under the Company’s
1986 Stock Option Plan.  The option has an exercise price of $3.20 and
shall become exercisable at a rate of 20,000 shares on each of the first five
anniversaries of the date of grant, provided that Mr. Healey remain in the
continuous employ of the company.  The option shall expire on May 8,
2018, unless earlier terminated.





ITEM
      6.  -
            SELECTED FINANCIAL
      DATA





Not
Applicable.





ITEM
      7.  -
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





The
following discussion and analysis should be read in conjunction with the
Company’s Financial Statements and Notes thereto included elsewhere in this Form
10-K.  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 projected and
include, but are not limited to, the risks discussed below, the risks discussed
in the section of this Form 10-K entitled “Description of Business” and risks
discussed elsewhere in this Form 10-K.  The Company expressly
disclaims any obligation or undertaking to update these statements in the
future.





Organization





The
Company, previously known as Cortech, Inc., was a biopharmaceutical company
whose primary focus had been the discovery and development of novel therapeutics
for the treatment of inflammatory disorders.  Specifically, Cortech
had directed its research and development efforts principally toward protease
inhibitors and bradykinin antagonists.  Although these efforts
produced certain intellectual property rights, these rights are currently
recorded at nil value as the Company is not currently marketing
them.





In
response to disappointing test results and its loss of collaborative partner
support, Cortech implemented a series of workforce reductions which resulted in
the Company having no compensated employees from 1999 until November 2005, and
effectively discontinued all internal research and development
activities.  In addition, in 1998 Cortech decommissioned its
laboratories and sold all of its remaining scientific, technical and office
equipment.  As a result of these actions, Cortech no longer had the
staff or operative facilities required to conduct internal research and
development activities.





8





On May
25, 2006, Cortech was reincorporated in Nevada by a merger with its wholly owned
subsidiary, Kent International Holdings, Inc.  The reincorporation
effected a change in Cortech’s legal domicile from Delaware to Nevada and a
change in the name from Cortech, Inc. to Kent International Holdings,
Inc.





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.





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 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.  In July, we reached an agreement with Wizart Studios, LLC,
a New York based web design firm, to redesign and market the site in return for
a 19% equity interest in ChinaUSPals.com, Inc., the site’s holding
company.  As a part of the agreement, Kent International will be
responsible for the costs of marketing the site until revenue is
generated.  The redesigned site was launched on August 6,
2008.  Since then, site membership has grown to over 3,100 members
from the approximately 150 members prior to the redesign.





While we
are encouraged by the membership and traffic growth since the redesign, we
cannot be certain that the growth rate will continue or that existing members
will continue using the site.  We also 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.





9





Results
of Operations





Kent
International had a net loss of $190,937, or $0.05 basic and fully diluted loss
per share, for the year ended December 31, 2008 compared to a net loss of
$301,361, or $0.08 basic and fully diluted income per share, for the year ended
December 31, 2007.  The decrease in the net loss was a result of a
decrease in personnel expenses offset by decreased interest revenue and
increased consulting and due diligence expenses related to a proposed
acquisition that was terminated prior to closing.





Revenues





Revenues
were $265,579 and $532,843 for the years ended December 31, 2008 and 2007,
respectively.  Interest income decreased to $264,329 in 2008 from
$517,843 in 2007 due to dramatically lower yields on invested balances. The
Company recorded $1,250 and $15,000 in other income for 2008 and 2007,
respectively, in connection with a patent licensing agreement with the
University of Colorado.  These patents are recorded on the Company’s
books at a zero carrying value and the Company does not anticipate significant
earnings in the future in connection with the agreement.





Expenses





General
and administrative expenses were $456,006 in 2008 compared to $795,306 in
2007.  The decrease can be primarily attributed to a reduction of
$333,099 in personnel related expenses as a result of the resignation of our
former President in August of 2007.  Other significant reductions in
expenses included directors’ fees which decreased $19,500, and rental expense
which decreased $16,200.  These decreases were partially offset by
$58,227 in consulting and due diligence expenses related to a proposed
acquisition that was terminated prior to closing.





The
Company recorded a charge of $37,764 in June 2007 to write off certain website
development costs related to our social networking website,
ChinaUSPals.com.  These costs were associated with a beta version of
the website that the Company is no longer utilizing.





Liquidity
and Capital Resources





At
December 31, 2008, the Company had cash and cash equivalents of
$290,880.  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 $10.090
million at December 31, 2008.  Working capital at December 31, 2008
was approximately $10.356 million.  Management believes its cash and
cash equivalents are sufficient for its business activities for the at least the
next 12 months and for the costs of seeking an acquisition of an operating
business.





Net cash
of $159,939 was used in operations during 2008, a decrease of $121,970 or 43%
over the $281,909 used in operations during 2007.  This decrease
resulted primarily from the decrease in expenses as previously described in the
Expenses section of the Management’s Discussion and Analysis.





Net cash
of $443,243 and $290,072 was provided by investing activities in 2008 and 2007,
respectively, primarily by the amount that the sales and maturities exceeded the
purchases of short-term investments.





The
Company used $20,764 for financing activities for the year ended December 31,
2008 to repurchase 12,468 shares of common stock compared to $5,343 used to
repurchase 2,000 shares during 2007.





10





Factors
Which May Affect Future Results





Future
earnings of the Company are dependent on interest rates earned on the Company’s
invested balances and expenses incurred. The Company expects to incur
significant expenses in connection with its objective of redeploying its assets
into an operating business.





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 53.44%
of the Company’s outstanding common stock at February 28, 2009.  Paul
O. Koether, Chairman of the Company is also the Chairman of Kent and the
beneficial owner of approximately 59.11% of Kent’s outstanding common
stock.  Bryan P. Healey, Chief Financial Officer of the Company is
also the Chief Financial Officer of Kent and the son-in-law of Paul O.
Koether.





Off-Balance
Sheet Arrangements





The
Company has no off-balance sheet arrangements.





Contractual
Commitments





The
Company has no contractual commitments.





Other
Matters





As of
December 31, 2008, Kent International had approximately $63.4 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 NOLs and tax credit carryforwards expire in various years
from 2009 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 December 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.





11





ITEM
      8.  -
            FINANCIAL STATEMENTS
      AND SUPPLEMENTARY DATA





The
financial statements filed with this item are listed below:





Report of
Independent Registered Public Accounting Firm





Financial
Statements:





Consolidated
Balance Sheet as of December 31, 2008





Consolidated
Statements of Operations for the Years ended December 31, 2008 and
2007





Consolidated
Statements of Cash Flows for the Years ended December 31, 2008 and
2007





Consolidated
Statements of Stockholders’ Equity for the Years ended December
31, 2008 and 2007





Notes to
Consolidated Financial Statements





12





Report
of Independent Registered Public Accounting Firm





To the
Stockholders’ and Board of Directors of Kent International Holdings,
Inc.





We have
audited the accompanying consolidated balance sheets of Kent International
Holdings, Inc. as of December 31, 2008 and 2007 and the related consolidated
statements of operations, stockholders’ equity, and cash flows for the years
ended December 31, 2008 and 2007.  These consolidated financial
statements are the responsibility of the Company’s management.  Our
responsibility is to express an opinion on these financial statements based on
our audit.





We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a reasonable basis
for our opinion.





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Kent International Holdings,
Inc. and subsidiaries as of December 31, 2008 and 2007, and the results of their
operations and their cash flows for the years ended December 31, 2008 and 2007
in conformity with accounting principles generally accepted in the United States
of America.








/s/
Paritz & Company, P.A.





March 11,
2009


Hackensack,
New Jersey





13





KENT
INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY


CONSOLIDATED
BALANCE SHEETS


As of
December 31, 2008 and 2007





December
      31,ASSETS
                
                2008
                
                
                2007Current
      Assets:Cash
      and cash equivalents
                
                $
                290,880
                
                
                $
                28,340Short-term
      investments
                
                
                10,090,292
                
                
                
                10,549,906Prepaid
      expenses and other current assets
                
                
                4,769
                
                
                
                8,012Total
      current assets
                
                
                10,385,941
                
                
                
                10,586,258Property
      and equipment, net of accumulated depreciation of $7,391 and
      $1,474
                
                
                
                
                
                
                5,917Other
      assets
                
                
                5,500
                
                
                
                5,500Total
      assets
                
                $
                10,391,441
                
                
                $
                10,597,675LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilities:Accounts
      payable and accrued expenses
                
                $
                30,087
                
                
                $
                30,478Stockholders'
      equity:Preferred
      stock, $.002 par value; 2,000,000 shares authorized; none
      outstandingCommon
      stock, $.002 par value; 10,000,000 shares authorized; 3,555,488 and
      3,567,956 shares issued and outstanding
                
                
                7,111
                
                
                
                7,136Additional
      paid-in capital
                
                
                99,353,651
                
                
                
                99,368,532Accumulated
      deficit
                
                
                (88,999,408
                )
                
                
                (88,808,471
                )Total
      stockholders' equity
                
                
                10,361,354
                
                
                
                10,567,197Total
      liabilities and stockholders' equity
                
                $
                10,391,441
                
                
                $
                10,597,675





See
accompanying notes to consolidated financial statements.





14





KENT
INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY


CONSOLIDATED
STATEMENTS OF OPERATIONS





Year
      Ended December 31,2008
                
                
                2007Revenues:Interest
                
                $
                264,329
                
                
                $
                517,843Other
      income
                
                
                1,250
                
                
                
                15,000Total
      revenues
                
                
                265,579
                
                
                
                532,843Expenses:General
      and administrative
                
                
                456,006
                
                
                
                795,306Write
      off capitalized software costs
                
                
                
                
                
                
                37,764Total
      expenses
                
                
                456,006
                
                
                
                833,070Loss
      before income taxes
                
                
                (190,427
                )
                
                
                (300,227
                )Provision
      for income taxes
                
                
                510
                
                
                
                1,134Net
      loss
                
                $
                (190,937
                )
                
                $
                (301,361
                )Basic
      and diluted net loss per common share
                
                $
                (0.05
                )
                
                $
                (0.08
                )Basic
      and diluted weighted average number of commonCommon
      shares outstanding
                
                
                3,564,867
                
                
                
                3,568,361





See
accompanying notes to consolidated financial statements.





15





KENT
INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY


CONSOLIDATED
STATEMENTS OF CASH FLOWS





Year
      Ended December 31,2008
                
                
                2007Cash
      flows from operating activities:Net
      loss
                
                $
                (190,937
                )
                
                $
                (301,361
                )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
                
                
                5,917
                
                
                
                4,108Stock-based
      compensation expense
                
                
                5,858Write
      off capitalized software costs
                
                
                
                
                
                
                37,764Changes
      in operating assets and liabilities:Interest
      receivable on short-term investments
                
                
                16,371
                
                
                
                8,029Change
      in prepaid expenses and other current assets
                
                
                3,243
                
                
                
                13,113Change
      in accounts payable and accrued expenses
                
                
                (391
                )
                
                
                (43,562
                )Net
      cash used in operating activities
                
                
                (159,939
                )
                
                
                (281,909
                )Cash
      flows from investing activities:Purchase
      of short-term investments
                
                
                (20,574,584
                )
                
                
                (21,156,714
                )Sales
      and maturities of short-term investments
                
                
                21,017,827
                
                
                
                21,461,052Acquisition
      of property and equipment
                
                
                
                
                
                
                (14,266
                )Net
      cash provided by investing activities
                
                
                443,243
                
                
                
                290,072Cash
      flows from financing activities:Repurchase
      of common stock
                
                
                (20,764
                )
                
                
                (5,343
                )Net
      cash used in financing activities
                
                
                (20,764
                )
                
                
                (5,343
                )Net
      increase in cash and cash equivalents
                
                
                262,540
                
                
                
                2,820Cash
      and cash equivalents at beginning of period
                
                
                28,340
                
                
                
                25,520Cash
      and cash equivalents at end of period
                
                $
                290,880
                
                
                $
                28,340Supplemental
      disclosure of cash flow information:Cash
      paid for:Taxes
                
                $
                510
                
                
                $
                1,134





See
accompanying notes to consolidated financial statements.





16





KENT
INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY





AdditionalCommon
      Stock
                
                
                Paid
      in
                
                
                AccumulatedShares
                
                
                Amount
                
                
                Capital
                
                
                Deficit
                
                
                TotalBalance
      December 31, 2006
                
                
                3,569,956
                
                
                $
                7,140
                
                
                $
                99,373,871
                
                
                $
                (88,507,110
                )
                
                $
                10,873,901Repurchase
      of common stock
                
                
                (2,000
                )
                
                
                (4
                )
                
                
                (5,339
                )
                
                
                
                
                
                
                (5,343
                )Net
      loss
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (301,361
                )
                
                
                (301,361
                )Balance
      December 31, 2007
                
                
                3,567,956
                
                
                
                7,136
                
                
                
                99,368,532
                
                
                
                (88,808,471
                )
                
                
                10,567,197Repurchase
      of common stock
                
                
                (12,468
                )
                
                
                (25
                )
                
                
                (20,739
                )
                
                
                
                
                
                
                (20,764
                )Stock-based
      compensation
                
                
                
                
                
                
                
                
                
                
                5,858
                
                
                
                
                
                
                
                5,858Net
      loss
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (190,937
                )
                
                
                (190,937
                )Balance
      December 31, 2008
                
                
                3,555,488
                
                
                $
                7,111
                
                
                $
                99,353,651
                
                
                $
                (88,999,408
                )
                
                $
                10,361,354




See
accompanying notes to consolidated financial statements.





17





KENT
INTERNATIONAL HOLDINGS, INC. AND SUDSIDIARY


Notes
to Consolidated Financial Statements


For the
Years Ended December 31, 2008 and 2007





NOTE
1 – Organization





The
Company, previously known as Cortech, Inc., was a biopharmaceutical company
whose primary focus had been the discovery and development of novel therapeutics
for the treatment of inflammatory disorders.  Specifically, Cortech
had directed its research and development efforts principally toward protease
inhibitors and bradykinin antagonists.  These efforts produced certain
intellectual property rights.





In
response to disappointing test results and its loss of collaborative partner
support, Cortech implemented a series of workforce reductions which resulted in
the Company having no compensated employees from 1999 until November 2005, and
effectively discontinued all internal research and development
activities.  In addition, in 1998 Cortech decommissioned its
laboratories and sold all of its remaining scientific, technical and office
equipment.  As a result of these actions, Cortech no longer had the
staff or operative facilities required to conduct internal research and
development activities.





On May
25, 2006, Cortech was reincorporated in Nevada by a merger with its wholly owned
subsidiary, Kent International Holdings, Inc.  The reincorporation
effected a change in Cortech’s legal domicile from Delaware to Nevada and a
change in the name from Cortech, Inc. to Kent International Holdings,
Inc.





Nature
of Business and Associated Risk





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.





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 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.  In July, we reached an agreement with Wizart Studios, LLC,
a New York based web design firm, to redesign and market the site in return for
a 19% equity interest in ChinaUSPals.com, Inc., the site’s holding
company.  As a part of the agreement, Kent International will be
responsible for the costs of marketing the site until revenue is
generated.  The redesigned site was launched on August 6,
2008.  Since then, site membership has grown to over 3,100 members
from the approximately 150 members prior to the redesign.





18





While we
are encouraged by the membership and traffic growth since the redesign, we
cannot be certain that the growth rate will continue or that existing members
will continue using the site.  We also 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.





NOTE
2 - Significant Accounting Policies





Use
of Estimates





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 revenue and expenses during
the reporting period.  Actual results could differ from those
estimates.





Cash
and Cash Equivalents





Cash and
cash equivalents consist of cash in banks and brokerage firms.





Short-term
Investments





Short-term
investments consist of U.S. Treasury Bills with original maturities of six
months and are valued at cost plus accrued interest, which approximates fair
value.





Basic
and Diluted Net Loss Per Share





Basic
loss per common share is computed by dividing the net loss by the
weighted-average number of common shares outstanding.  Diluted loss
per share is computed by dividing the net loss by the sum of the
weighted-average number of common shares outstanding plus the dilutive effect of
shares issuable through the exercise of stock options.





We have
excluded 100,000 and 120,000 Common Stock options from the calculation of
diluted loss per share for the years ended December 31, 2008 and 2007,
respectively, which, if included, would have an antidilutive
effect.








19





Income
Taxes





The
Company recognizes deferred tax assets and liabilities related to the expected
future tax consequences of events that have been recognized in the Company’s
financial statements and tax returns.  However, if it is more likely
than not that some portion or all of the net deferred tax assets will not be
realized, a valuation allowance is established and the tax benefit is not
recognized in the statements of operations.





Stock
Based Compensation Expense





The
Company follows 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.





New
Accounting Pronouncements





FASB
issued SFAS No. 157 ("SFAS 157") “Fair Value Measurements” on
September 15, 2006.  SFAS 157 enhances existing guidance for measuring
assets and liabilities using fair value. Previously, guidance for applying fair
value was incorporated in several accounting pronouncements.  The new
statement provides a single definition of fair value, together with a framework
for measuring it, and requires additional disclosure about the use of fair value
to measure assets and liabilities.  While the statement does not add
any new fair value measurements, it does change current practice.  One
such change is a requirement to adjust the value of nonvested stock for the
effect of the restriction even if the restriction lapses within one
year.  SFAS 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years.  The adoption of SFAS 157 is not expected to have a
material impact on the financial statements of the Company.





In
December 2007, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standard (“SFAS”) No. 141 (R), Business Combinations, and
SFAS No. 160, Noncontrolling
Interests in Consolidated Financial Statements.  SFAS No. 141
(R) requires an acquirer to measure the identifiable assets acquired, the
liabilities assumed, and any noncontrolling 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
noncontrolling interest in a subsidiary should be reported as equity in the
consolidated financial statements.  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 consolidated
financial statements, if any, upon adoption of SFAS No. 141 (R) or SFAS No.
160.  SFAS 141 (R) will significantly affect the accounting for future
business combinations and we will determine the accounting as new combinations
are determined.




20





NOTE
3 – Property, Plant & Equipment





Net
property, plant and equipment as December 31, 2008 and 2007 consisted of
(numbers in thousands):





2008
                          
                          
                          2007Office
      Furniture and Equipment
                          
                          $
                          7,391
                          
                          
                          $
                          7,391Less:
      Accumulated Depreciation
                          
                          
                          (7,391
                          )
                          
                          
                          (1,474
                          )$
                          -
                          
                          
                          $
                          5,917





Website
Development Costs





The
Company recorded a charge of approximately $37,764 in June 2007 to write off
certain website development costs related to our social networking website,
ChinaUSPals.com.  These costs were associated with a beta version of
the website that the Company is no longer utilizing.





NOTE
4 - Income Taxes





As of
December 31, 2008, the Company had approximately $63.4 million of net operating
loss carryforwards (“NOL”) for income tax purposes and 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 NOLs and tax credit carryforwards expire
in various years from 2009 through 2027.





Income
tax expense for the years ended December 31, 2008 and 2007 consisted entirely of
New Jersey State income taxes.  The income tax expense for the years
ended December 31, 2008 and 2007 is different from the amount computed by
multiplying total earnings before income taxes by the statutory Federal income
tax rate of 35%.  The reasons for this difference and the related tax
effect are as follows:





2008
                                      
                                      
                                      2007Loss
      before income taxes
                                      
                                      $
                                      (190,937
                                      )
                                      
                                      $
                                      (301,361
                                      )Stock-based
      compensation expense
                                      
                                      
                                      5,858(185,079
                                      )
                                      
                                      
                                      (301,361
                                      )Statutory
      federal income tax rate
                                      
                                      
                                      35
                                      %
                                      
                                      
                                      35
                                      %Expected
      income tax benefit
                                      
                                      
                                      (64,778
                                      )
                                      
                                      
                                      (105,476
                                      )Increase
      in valuation allowance
                                      
                                      
                                      64,778
                                      
                                      
                                      
                                      105,476State
      income tax expense
                                      
                                      
                                      510
                                      
                                      
                                      
                                      1,134Provision
      for income tax
                                      
                                      $
                                      510
                                      
                                      
                                      $
                                      1,134





Deferred
income taxes reflect the net effects of (a) temporary differences between the
carrying amounts of assets and liabilities for financial statement purposes and
the amounts used for income tax purposes, and (b) operating loss and tax credit
carryforwards.





21





The tax
effect of significant items comprising the Company’s net deferred tax asset as
of December 31, 2008 and 2007 is as follows:





2008
                                      
                                      
                                      2007Net
      operating loss carryforwards
                                      
                                      $
                                      63,368,181
                                      
                                      
                                      $
                                      77,603,669Stock-based
      compensation expense
                                      
                                      
                                      (5,858
                                      )63,362,323
                                      
                                      
                                      
                                      77,603,669Statutory
      federal income tax rate
                                      
                                      
                                      35
                                      %
                                      
                                      
                                      35
                                      %Expected
      income tax benefit
                                      
                                      
                                      22,176,813
                                      
                                      
                                      
                                      27,161,284Research
      and development and other credits
                                      
                                      
                                      1,848,114
                                      
                                      
                                      
                                      2,233,97224,024,927
                                      
                                      
                                      
                                      29,395,256Valuation
      Allowance
                                      
                                      
                                      (24,024,927
                                      )
                                      
                                      
                                      (29,395,256
                                      )Net
      deferred tax asset
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -





Management
believes the deferred tax assets as of December 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.





The Tax
Reform Act of 1986 contained provisions that may limit the NOL and credit
carryforwards available to be used in any given year upon the occurrence of
certain events, including significant changes in ownership of a company of
greater than 50% within a three-year period which results in an annual
limitation on the Company’s ability to utilize its NOLs and tax credit
carryforwards from tax periods prior to the ownership change.





NOTE
6 - Stockholders’ Equity





Preferred
Stock





The
Company is authorized to issue 2,000,000 shares of $.002 par value preferred
stock, which may be issued with various terms in one or more series, as the
Board of Directors may determine. No preferred stock has been issued as of
December 31, 2008.





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.  During the years ended December 31, 2008 and 2007, the Company
acquired 12,468 and 2,000 shares, respectively at a cost of $20,764 and $5,343,
respectively.  As of December 31, 2008, 121,068 shares remaining
authorized for repurchase under the program.  All shares repurchased
were returned to the status of authorized but unissued shares.





Stock
Option Plans





Kent
International has issued certain common stock options to its employees,
directors and consultants.  At December 31, 2008, Kent International
had 200,000 common stock options outstanding.





The
Company’s 1986 Stock Option Plan (“1986 Plan”) authorizes the grant of stock
options to officers and employees of the Company to purchase an aggregate of
300,000 shares of common stock.  On May 8, 2008, the Board awarded a
non-qualified stock option to Bryan P. Healey to purchase 100,000 shares of Kent
International’s common stock under the 1986 Plan.  The option has an
exercise price of $3.20 and shall become exercisable at a rate of 20,000 shares
on each of the first five anniversaries of the date of grant, provided that Mr.
Healey remain in the continuous employ of the company.  The option
shall expire on May 8, 2018, unless earlier terminated.





22





The stock
options granted under the plan may be incentive stock options (“ISO”) or
nonstatutory stock options (“NSO”).  The Board of Directors may set
the rate at which the options expire, subject to limitations discussed
below.  However, no options shall be exercisable after the tenth
anniversary of the date of grant or, in the case of ISOs, three months following
termination of employment, except in cases of death or disability, for which the
time or exercisability is extended.  In the event of dissolution,
liquidation or other corporate reorganization, all stock options outstanding
under the 1986 Plan would become exercisable in full.





ISOs may
not be granted at an exercise price of less than the fair market value of the
common stock at the date of grant.  If an ISO is granted to an
employee who owns more than 10% of the Company’s total voting stock, such
exercise price shall be at least 110% of fair market value of the common stock,
and the ISO shall not be exercisable until after five years from the date of
grant.  The exercise price of each NSO may not be less than 85% of the
fair market value of the common stock at the date of grant.





The plan
also provides for stock appreciation rights, which may be granted with respect
to any stock option.  No stock appreciation rights have been granted
through December 31, 2008.





A summary
of the status of the Company’s 1986 Plan as of December 31, 2008 and 2007 and
changes during the years ended on those dates is presented below:





2008
                  
                  
                  2007Weighted-
                  
                  
                  
                  
                  
                  
                  
                  
                  Weighted-Average
                  
                  
                  Range
      of
                  
                  
                  
                  
                  
                  Average
                  
                  
                  Range
      ofExercise
                  
                  
                  Exercise
                  
                  
                  
                  
                  
                  Exercise
                  
                  
                  ExerciseShares
                  
                  
                  Price
                  
                  
                  Price
                  
                  
                  Shares
                  
                  
                  Price
                  
                  
                  PriceOptions
      outstanding at the beginning of the year
                  
                  
                  120,000
                  
                  
                  $
                  3.50
                  
                  
                  $
                  3.50
                  
                  
                  
                  290,850
                  
                  
                  $
                  3.52
                  
                  
                  $
                  3.50
      - $7.34Awarded
                  
                  
                  100,000
                  
                  
                  $
                  3.20
                  
                  
                  $
                  3.20Expired
                  
                  
                  (20,000
                  )
                  
                  $
                  3.50
                  
                  
                  $
                  3.50
                  
                  
                  
                  (170,850
                  )
                  
                  $
                  3.54
                  
                  
                  $
                  3.50
      - $7.34Options
      outstanding at the end of the year
                  
                  
                  200,000
                  
                  
                  $
                  3.35
                  
                  
                  $
                  3.20-$3.50
                  
                  
                  
                  120,000
                  
                  
                  $
                  3.50
                  
                  
                  $
                  3.50Options
      exercisable at the end of the year
                  
                  
                  100,000
                  
                  
                  $
                  3.50
                  
                  
                  $
                  3.50
                  
                  
                  
                  120,000
                  
                  
                  $
                  3.50
                  
                  
                  $
                  3.50
 During
the year ended December 31, 2007, 300 common stock options with an exercise
price of $7.34 awarded to certain directors and consultants outside of the 1986
plan expired.





23





For all
options outstanding and exercisable at December 31, 2008, the exercise price
ranges are:





Options
      Outstanding
                      
                      
                      Options
      ExercisableRange
      of Exercise Prices
                      
                      
                      Number
      Outstanding at December 31, 2008
                      
                      
                      Weighted
      Average Remaining Life (in Years)
                      
                      
                      Weighted
      Average Exercise Price
                      
                      
                      Number
      Outstanding at December 31, 2008
                      
                      
                      Weighted
      Average Remaining Life (in Years)
                      
                      
                      Weighted
      Average Exercise Price$3.20-$3.50
                      
                      
                      
                      200,000
                      
                      
                      
                      5.45
                      
                      
                      $
                      3.35
                      
                      
                      
                      100,000
                      
                      
                      
                      1.54
                      
                      
                      $
                      3.50


NOTE
7 - Stock Based Compensation





The
Company recorded stock based compensation expense during 2008 for the options
granted to an employee in May 2008.  The options granted have an
exercise price greater than the market price of the Company’s stock on the grant
date.  For purposes of calculating the compensation cost consistent
with SFAS No. 123(R), "Share-Based Payment," the
fair value of the option grant was estimated on the grant date using the
Black-Scholes option-pricing model with the following assumptions used: no
dividend yield; expected volatility of 25.31 percent; risk free interest rate of
3.125 percent; and weighted average expected life of 6.5 years.  The
Company recognized approximately $5,858 in stock based compensation expense for
the year ended December 31, 2008.  As of December 31, 2008 there was
$38,077 of total unrecognized compensation cost related to non-vested awards
granted under this plan, which is expected to be recognized on a straight line
basis over the vesting term.





NOTE
8 - 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 53.44%
of the Company’s outstanding common stock at December 31, 2008.  Paul
O. Koether, Chairman of the Company is also the Chairman of Kent and the
beneficial owner of approximately 59.11% of Kent’s outstanding common
stock.  Bryan P. Healey, Chief Financial Officer of the Company is
also the Chief Financial Officer of Kent and the son-in-law of Paul O.
Koether.





Item
      9. -
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE





None.





Item 9A.
      -
            CONTROLS AND
      PROCEDURES





Evaluation
of Disclosure 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 regarding a lack of adequate segregation of
duties.  Accordingly, based on their evaluation of our disclosure
controls and procedures as of December 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.





24





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 December 31, 2008 that has materially affected or is
reasonably likely to materially affect the Company’s internal control over
financial reporting.





Management’s
Report on Internal Control over Financial Reporting





Management
of the Company is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rule 13a-15(f) under the
Securities Exchange Act of 1934.  We have assessed the effectiveness
of those internal controls as of December 31, 2008, using the Committee of
Sponsoring Organizations of the Treadway Commission (“COSO”) Internal Control – Intergrated
Framework as a basis for our assessment.





Because
of inherent limitations, internal control over financial reporting may not
prevent or detect misstatements.  Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies and procedures may deteriorate.  All internal
control systems, no matter how well designed, have inherent
limitations.  Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation.





A
material weakness in internal controls is a deficiency in internal control, or
combination of control deficiencies, that adversely affects the Company’s
ability to initiate, authorize, record, process, or report external financial
data reliably in accordance with accounting principles generally accepted in the
United States of America such that there is more than a remote likelihood that a
material misstatement of the Company’s annual or interim financial statements
that is more than inconsequential will not be prevented or
detected.  In the course of making our assessment of the effectiveness
of internal controls over financial reporting, we identified a material weakness
in our internal control over financial reporting.  This material
weakness 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.





As we are
not aware of any instance in which the company failed to identify or resolve a
disclosure matter or failed to perform a timely and effective review, we
determined that the addition of personnel to our bookkeeping and accounting
operations is not an efficient use of our resources at this time.





Because
of the above condition, the Company’s internal controls over financial reporting
were not effective as of December 31, 2008.





This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by the
Company’s registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
management’s report in this annual report.





Item
      9B  -
            OTHER
      INFORMATION





None.





25





PART III





ITEM
      10.  -
            DIRECTORS, EXECUTIVE
      OFFICERS, AND CORPORATE
GOVERNANCE





James L.
Bicksler resigned as Director of the Company effective September 30,
2008.  Mr. Bicksler had served as a Director of the Company since
1998.





The Board
of Directors will serve until the next Annual Meeting or until their successors
have been duly elected and qualified.  The Company's officers are
elected by and serve at the leave of the Board.  The directors and
executive officers of the Company at February 28, 2009 were as
follows:





Name
                  Age
                  Position HeldPaul
      O. Koether
                  72
                  Chairman,
      Chief Executive Officer and DirectorDiarmuid
      F. Boran
                  49
                  DirectorRocco
      Mastrodomenico
                  35
                  DirectorBryan
      P. Healey
                  38
                  Chief
      Financial Officer and
Director





Paul O. Koether,has been
Chairman and Chief Executive Officer since September 1998, as well as President
from October 2003 until November 2005 and August 2007 through the present, of
the Company.  Mr. Koether was Chairman from April 1988 to July 2005,
President from April 1989 to February 1997 and director from March 1988 to July
2005 of Pure World, Inc., (“Pure World”) and from December 1994 until July 2005
a director and from January 1995 to July 2005 Chairman of Pure World’s wholly
owned subsidiary, Pure World Botanicals, Inc., a manufacturer and distributor of
natural products.  Mr. Koether was Chairman and a Director of Sun
Equities Corporation, (“Sun”) a private company until Sun was merged into Pure
World in December 2004.  Mr. Koether was Chairman from 1990 until
August 2003 and a registered representative since 1989 of T. R. Winston &
Company, LLC. (“Winston”).  Since 1987, Mr. Koether has been Chairman,
Director and Chief Executive Officer of Kent Financial Services, Inc. (“Kent
Financial”) as well as President of Kent Financial from October 1990 until
November 2005 and August 2007 through present, and until December 31, 2003 when
it was dissolved, the general partner of Shamrock Associates, an investment
partnership which was the principal stockholder of Kent
Financial.  From November 2003 to December 2003, Mr. Koether was
General Partner of Emerald Partners, an investment partnership.  Bryan
P. Healey, Chief Financial Officer and Director of the Company is the son-in-law
of Paul O. Koether.





Diarmuid F. Boran,has been a
Director of the Company since May 2003.  Mr. Boran currently serves as
Chief Operating Officer of Brandmeyer Enterprises.  He has been
employed by the company since May 2008.  From November 2006 through
May 2008 he was employed by Enturia, Inc., most recently as Vice President,
Corporate Development.  From March 2005 through May 2006 he was the
Entrepreneur in Residence for the Kansas Technology Enterprise Corporation
(KTEC).  He worked as an independent consultant from January 2003 to
February 2005 and from April 2001 to October 2001.  From October 2001
to December 2002, Mr. Boran was employed by EMD Pharmaceuticals, Inc., an
affiliate of Merck KGaA, Darmstadt, Germany, most recently as Leader, Oncology
Licensing and Business Development.  From May 2000 to September 2000
Mr. Boran served as Senior Vice President, Business Development for DJ Pharma,
Inc. which was then acquired by Biovail Pharmaceuticals, Inc.  Mr.
Boran served as Senior Vice President, Business Development for Biovail until
April 2001.





Rocco Mastrodomenico, Director
of the Company since November 2005, is a Certified Public
Accountant.  Mr. Mastrodomenico is President of Imperial Consulting
Services, LLC since July 2005.  Mr. Mastrodomenico was a Supervisor
with Sobel & Company, LLC, a certified public accounting and consulting firm
from October 2002 until June 2005.  From May 1999 until September
2002, Mr. Mastrodomenico was involved with several different companies within
the financial services industry, including Financial Analyst with T.R. Winston
and Controller of Pure World Botanicals, Inc.  From September 1996 to
April 1999, Mr. Mastrodomenico was with Deloitte & Touche, LLP.





26





Bryan P. Healey,a certified
public accountant, has been Vice-President, Secretary and Chief Financial
Officer of the Company since May 2006 and a Director since November
2007.  Mr. Healey has also been Vice-President, Secretary and Chief
Financial Officer since May 2006 and a Director since November 2007 of Kent
Financial Services, Inc.  Since July 2006, Mr. Healey has been a
registered representative of T. R. Winston & Company, LLC.  From
September 1995 to April 2006, Mr. Healey was with Bowman & Company, L.L.P.,
the largest CPA firm in Southern New Jersey, in various positions including
audit manager from July 2001 to April 2006.





Audit
Committee





The Board
has an Audit Committee, which consists of Mr. Boran and Mr. Mastrodomenico, each
of whom has been determined by the Board to be independent.





Audit
Committee Financial Expert





The Board
of Directors of the Company has determined that Rocco Mastrodomenico is an audit
committee financial expert as that term is defined under SEC rules.





Nominating
Committee; Compensation Committee





The Board
of Directors has neither a nominating committee nor a compensation
committee.  The Board believes that its numbers are sufficiently small
that nominations and determinations of compensation can be addressed by the
entirety of the Board.





Code
of Ethics





The
Company has adopted a Code of Ethics that applies to its principal executive
officer and principal financial officer.  Stockholders may write to
Bryan P. Healey, the Secretary of the Company, at the Company’s principal
executive office: 211 Pennbrook Road, P.O. Box 97, Far Hills, New Jersey 07931,
to request a copy of the Code of Ethics, and the Company will provide it to any
person without charge upon such request.





ITEM
      11.  -
            EXECUTIVE
      COMPENSATION





Summary
Compensation Table





The table
shown below includes information concerning the annual compensation for services
in all capacities to the Company for the fiscal years ended December 31, 2008
and 2007, for those persons who were, at December 31, 2008 and 2007, the chief
executive officer, the principal financial officer and the most highly paid
executive officer other than the chief executive officer and principal financial
officer (the "Named Officers").  The Company did not compensate any
officers over $100,000 other than the Named Officers.





27




Name
      and Principal Position
                                  
                                  Year
                                  
                                  Salary
      (1)
                                  
                                  Bonus
                                  
                                  Option
      Awards
                                  
                                  
                                  All
      Other Compensation
                                  
                                  
                                  TotalPaul
      O. Koether
                                  
                                  2008Chief
      Executive Officer and
                                  
                                  2007Chairman
      of the Board
                                  
                                  2006Qun
      Yi ZhengPresident
                                  
                                  2007
                                  
                                  $
                                  133,333
                                  
                                  
                                  
                                  
                                  
                                  
                                  $
                                  163,854
                                  (2)
                                  
                                  $
                                  297,1872006
                                  
                                  
                                  200,000
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  33,495
                                  
                                  
                                  
                                  233,495Bryan
      P. Healey
                                  
                                  2008
                                  
                                  
                                  
                                  
                                  
                                  
                                  $
                                  5,858
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  5,858Chief
      Financial Officer,
                                  
                                  2007Principal
      Financial and
                                  
                                  2006Accounting
      Officer





(1)
            Mr.
      Koether and Mr. Healey were elected to their current positions on
      September 20, 1998 and May 15, 2006, respectively, and receive no cash
      compensation or fees for their services.  Mr. Healey was awarded
      100,000 common stock options on May 8, 2008 (see note 7 of the notes to
      consolidated financial statements “Stock-based Compensation” for more
      details)


(2)
            Amount
      includes $13,518 and $13,519 paid by Kent International in 2007 and 2006,
      respectively, for Dr. Zheng’s country club membership, $1,846 paid in 2007
      and 2006 for Dr. Zheng’s life insurance premium and $18,490 paid in 2007
      and 2006 to lease an automobile used for business purposes.  All
      Other Compensation also includes $130,000 paid in accordance with the
      separation agreement with Dr. Zheng dated August 24, 2007.  Dr.
      Zheng resigned effective August 31,
2007.





Outstanding
Equity Awards at Fiscal Year End





On May 8,
2008, the Board awarded a non-qualified stock option to Bryan P. Healey to
purchase 100,000 shares of Kent International’s common stock under the 1986
Plan.  The option has an exercise price of $3.20 and shall become
exercisable at a rate of 20,000 shares on each of the first five anniversaries
of the date of grant, provided that Mr. Healey remain in the continuous employ
of the company.  The option shall expire on May 8, 2018, unless
earlier terminated.





No stock
options were awarded to the Named Executive Officers in 2007.  No
stock appreciation rights were granted to the Named Executive Officers in 2008
or 2007.





The table
below contains information concerning the fiscal year-end value of unexercised
options held by the Named Executive Officers as of December 31,
2008.  No options were exercised by any Named Executive Officer in
2008 or 2007.




Name
                
                Number
      of Securities Underlying Unexercised Options (#)
    Exercisable
                
                
                Number
      of Securities Underlying Unexercised Options (#)
    Unexercisable
                
                
                Equity
      Incentive Plan Awards: Number of Securities Underlying Unexercised
      Unearned Options (#)
                
                
                Option
      Exercise Price
                
                Option
      Expiration DatePaul
      O. Koether
                
                
                100,000
                
                
                
                -
                
                
                
                -
                
                
                $
                3.50
                
                07/16/10Bryan
      P. Healey
                
                
                -
                
                
                
                100,000
                
                
                
                -
                
                
                $
                3.20
                
                05/08/18





28





Long-Term
Incentive Plan Awards Table and Defined Benefit or Actuarial Plan
Table





The
Company does not maintain any long-term incentive plans or defined benefit or
actuarial plans.





Equity
Compensation Plan Information





The
following table shows information with respect to each equity compensation plan
under which the Company’s Common Stock is authorized for issuance as of the end
of fiscal year 2008.





Plan
      Category
                                                  
                                                  (a)
      Number of Securities to be Issued Upon Exercise of Outstanding Options,
      Warrants and Rights
                                                  
                                                  
                                                  (b)
      Weighted-Average Exercise Price of Outstanding Options, Warrants and
      Rights
                                                  
                                                  
                                                  (c)
      Number of Securities Remaining Available for Future Issuance Under Equity
      Compensation Plans Excluding Securities Reflected in Column
      (a)Equity
      Compensation Plans Approved by Security Holders1986
      Stock Option Plan
                                                  
                                                  
                                                  200,000
                                                  
                                                  
                                                  $
                                                  3.35
                                                  
                                                  
                                                  
                                                  100,000


Director
Compensation Table





Directors
who are not employees of the Company receive a monthly fee of $500 plus $1,000
for each day of attendance at board and committee meetings and $500 for each day
of attendance telephonically at board and committee meetings.  During
2008, the Company paid directors fees in the aggregate amount of approximately
$22,000.  The table below includes information about compensation paid
to our non-employee directors during 2008.





Name
                  
                  Fees
      Earned or Paid in Cash
                  
                  
                  TotalDiarmuid
      F. Boran
                  
                  $
                  8,000
                  
                  
                  $
                  8,000James
      L. Bicksler
                  
                  
                  6,000
                  
                  
                  
                  6,000Rocco
      Mastrodomenico
                  
                  
                  8,000
                  
                  
                  
                  8,000$
                  22,000
                  
                  
                  $
                  22,000








ITEM
      12.  -
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS





The
following table sets forth the beneficial ownership of Common Stock of the
Company as of February 28, 2009, by each person who was known by the Company to
beneficially own more than 5% of the Common Stock, by each current director and
nominee, each Named Executive Officer, and by all current directors and Named
Executive Officers as a group:





29




Name
      and Address ofBeneficial
      Owner
                                                      
                                                      Number
      of Sharesof Common
      StockBeneficially
      Owned(1)
                                                      
                                                      
                                                      ApproximatePercentof
    ClassKent
      Financial Services, Inc.
                                                      
                                                      
                                                      1,900,000
                                                      
                                                      
                                                      
                                                      53.44
                                                      %211
      Pennbrook RoadPO
      Box 97Far
      Hills, NJ 07931Paul
      O. Koether (1)
                                                      
                                                      
                                                      2,108,440
                                                      (2)
      (3)
                                                      
                                                      
                                                      57.68
                                                      %211
      Pennbrook RoadPO
      Box 97Far
      Hills, NJ 07931Dirmuid
      Boran
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -c/o
      211 Pennbrook RoadPO
      Box 97Far
      Hills, NJ 07931Rocco
      Mastrodomenico
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -790
      Speedwell AvenueMorris
      Plains, NJ 07950Bryan
      P. Healey (1)
      (4)
                                                      
                                                      
                                                      1,914,420
                                                      (2)
      (4)
                                                      
                                                      
                                                      53.84
                                                      %211
      Pennbrook RoadPO
      Box 97Far
      Hills, NJ 07931Biotechnology
      Value Fund
                                                      
                                                      
                                                      725,606
                                                      (5)
                                                      
                                                      
                                                      20.41
                                                      %227
      West Monroe StreetSuite
      4800Chicago,
      IL 60606All
      directors and officers as a group (4 persons)
                                                      
                                                      
                                                      2,122,860
                                                      
                                                      
                                                      
                                                      58.07
                                                      %





(1)   This
table is based upon information supplied by the Company’s officers, directors
and principal stockholders and Form 4’s filed with the Securities Exchange
Commission (the “SEC”).  Unless otherwise indicated in the footnotes
to this table and subject to community property laws where applicable, the
Company believes that each of the stockholders named in this table has sole
voting and investment power with respect to the shares indicated as beneficially
owned.  Applicable percentages are based on 3,555,488 shares
outstanding on February 28, 2009, adjusted as required by rules promulgated by
the SEC.  Included in such number of shares beneficially owned are
shares subject to options currently exercisable or becoming exercisable within
60 days: Paul O. Koether (100,000); and all directors and executive officers as
a group (100,000).





(2)   Includes
1,900,000 shares held by Kent Financial Services, Inc. (“Kent”), a Nevada
Corporation.  Mr. Koether is the Chairman and Chief Executive Officer
of Kent and Mr. Healey is the Secretary and Chief Financial Officer of
Kent.  Mr. Koether and Mr. Healey disclaim beneficial ownership of
those shares.





30





(3)   Includes
44,730 shares held in Mr. Koether’s IRA.   Also includes 63,710
shares beneficially owned by the Marital Trust u/w/o Natalie
Koether.  As trustee, Mr. Koether may be deemed to own these shares
beneficially.





(4)   Includes
6,420 shares held in Mr. Healey’s IRA.  Also includes 8,000 shares
beneficially owned by Mr. Healey’s spouse.





(5)   According
to Form 4 filed on December 10, 2001 on behalf of Biotechnology Value Fund L.P.,
Biotechnology Value Fund II L.P., BVF Partners L.P., BVF, Inc., and BVF
Investments L.L.C. (collectively “Biotechnology Value Fund”).





Section
16(a) Beneficial Ownership Reporting Compliance





Section
16(a) of the Securities Exchange Act as amended and the regulations and rules
promulgated thereunder require the Company's officers, directors and persons who
own more than ten percent of a registered class of the Company's equity
securities (“Principal Owners”) , (i) file reports of ownership and changes in
ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission and
the National Association of Securities Dealers and (ii) furnish copies of these
filings to the Company.





Based
solely on the Company's review of the copies of such forms (and amendments) it
has received and representations from certain reporting persons that they were
not required to file Forms 5 for specified fiscal years, the Company believes
that all its officers, directors and Principal Owners complied with all filing
requirements applicable to them with respect to transactions during fiscal
2008.





ITEM
      13.  -
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
      INDEPENDENCE





Certain
Relationships and Related 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 53.44%
of the Company’s outstanding common stock at December 31, 2008.  Paul
O. Koether, Chairman of the Company is also the Chairman of Kent and the
beneficial owner of approximately 59.11% of Kent’s outstanding common
stock.  Bryan P. Healey, Chief Financial Officer of the Company is
also the Chief Financial Officer of Kent and the son-in-law of Paul O.
Koether.





Director
Independence





The
following members of the Board of Directors are “independent” as that term is
defined in the Rules of the NASDAQ Stock Market: Diarmuid Boran and Rocco
Mastrodomenico.





Item
      14.  -
            PRINCIPAL ACCOUNTANT
      FEES AND SERVICES





The
Company’s Principal Accountant for 2008 and 2007 was Paritz and Company, P.A.
(“Paritz”).





Year
ended December 31, 2008





Audit
Fees:  The aggregate fees, including expenses, expected to be billed
by Paritz in connection with the audit of the Company’s consolidated financial
statements and for the review of the Company’s financial information included in
the Company’s Annual Report on Form 10-K for the fiscal year ending December 31,
2008 are $13,000.  The aggregate fees, including expenses, billed by
Paritz in connection with the review of the Company’s financial information
included in the Company’s quarterly reports on Form 10-Q filed during the fiscal
year ending December 31, 2008 were $4,500.





31





Audit
Related Fees: No audit related fees were billed to the Company by Paritz in
2008.





Tax Fees:
The aggregate fees, including expenses, billed by Paritz in connection with the
preparation of income tax returns for the Company during fiscal year ended
December 31, 2008 were $2,000.





All Other
Fees: Paritz billed the Company $1,250 during 2008 for due diligence services
related to a proposed acquisition that was terminated prior to
closing.





Year
ended December 31, 2007





Audit
Fees:  The aggregate fees, including expenses, billed by Paritz in
connection with the audit of the Company’s consolidated financial statements and
for the review of the Company’s financial information included in the Company’s
Annual Report on Form 10-KSB for the fiscal year ending December 31, 2007 were
$13,000.  The aggregate fees, including expenses, billed by Paritz in
connection with the review of the Company’s financial information included in
the Company’s quarterly reports on Form 10-QSB filed during the fiscal year
ending December 31, 2007 were $4,500.





Audit
Related Fees: No audit related fees were billed to the Company by Paritz in
2007.





Tax Fees:
The aggregate fees, including expenses, billed by Paritz in connection with the
preparation of income tax returns for the Company during fiscal year ended
December 31, 2007 were $2,000.





All Other
Fees: No other fees were billed to the Company by Paritz during
2007.





Audit
Committee Pre-Approval Policies and Procedures





The Audit
Committee pre-approved all non-audit work performed by the Company’s principal
accountant, specifically, the preparation of income tax returns for the
Company.





ITEM
      15.  -
            EXHIBITS





The following exhibits are
filed as part of this report:





ExhibitNumber
                Description of Document3.1
                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)10.39
                Amended
      and Restated 1986 Incentive Stock Option Plan of the Company.(3)**21
                Subsidiary31.1
                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***





32


__________________________





(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.




(3)
            Filed
      as an exhibit to the Company’s Registration Statement of Form S-1, filed
      October 13, 1992, file number 33-53244, or amendments thereto and
      incorporated herein by reference.







**
            Compensatory
      Plan.


***
            Filed
      herewith.





33





SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) 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.March
      20, 2009
                                    
                                    By:
                                    /s/
      Paul O. KoetherPaul
      O. KoetherChairman
      and Chief Executive
Officer





Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.





Signature
                            
                            Capacity
                            
                            Date/s/ Paul O. Koether
                            
                            Chairman
      and Chief
                            
                            March
      20, 2009Paul
      O. Koether
                            
                            Executive
      Officer(Principal
      Executive Officer)/s/ Bryan P. Healey
                            
                            Chief
      Financial Officer,
                            
                            March
      20, 2009Bryan
      P. Healey
                            
                            Treasurer,
      Secretary and Director (Principal Financial And Accounting
      Officer)/s/ Diarmuid Boran
                            
                            Director
                            
                            March
      20, 2009Diarmuid
      Boran/s/ Rocco Mastrodomenico
                            
                            Director
                            
                            March
      20, 2009Rocco
      Mastrodomenico






34