U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]   QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR 15(d)  OF  THE SECURITIES
      EXCHANGE ACT OF 1934

      For the quarterly period ended:  June 30, 2004
                                       -------------

                                       OR

[ ]   TRANSITION  REPORT  PURSUANT  TO SECTION 13  OR 15(d)  OF  THE  SECURITIES
      EXCHANGE ACT OF 1934

                           Commission File No.: 1-7986
                                                ------

                          Kent Financial Services, Inc.
                          -----------------------------
        (Exact name of small business issuer as specified in its charter)

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

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

                                 (908) 234-0078
                                 --------------
                           (Issuer's telephone number)

                                       N/A
                                       ---
              (Former name, former address and former fiscal year,
                          if changed since last report)

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

     State the number of shares  outstanding of each of the issuer's  classes of
common stock: As of July 31, 2004, the issuer had 2,891,226 shares of its common
stock, par value $.10 per share, outstanding.

     Transitional Small Business Disclosure Format (check one).
                                 Yes     No X
                                    ---    ---

<PAGE>

PART I  -  FINANCIAL INFORMATION
------     ---------------------
Item 1. -  Financial Statements
-------    --------------------

                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2004
                                   (UNAUDITED)
                                 ($000 Omitted)
ASSETS
------

Cash and cash equivalents                                           $ 13,557
Securities owned                                                         793
Investment in T. R. Winston                                              441
Property and equipment:
  Land and building                                                    1,447
  Office furniture and equipment                                          85
                                                                    --------
                                                                       1,532
  Accumulated depreciation                                         (     560)
                                                                    --------
  Net property and equipment                                             972
                                                                    --------
Other assets                                                              51
                                                                    --------
    Total assets                                                    $ 15,814
                                                                    ========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Liabilities:

Accounts payable and accrued expenses                               $  1,116
Mortgage payable                                                         652
Put option                                                               334
Accrual for previously discontinued operations                           166
                                                                    --------
    Total liabilities                                                  2,268
                                                                    --------

Contingent liabilities

Minority interest in subsidiary                                        5,662

Stockholders' equity:

Preferred stock without par value, 500,000
  shares authorized; none outstanding                                      -
Common stock, $.10 par value, 4,000,000
  shares authorized; 2,916,855 outstanding                               292
Additional paid-in capital                                            12,620
Deferred compensation                                              (     334)
Accumulated deficit                                                (   4,694)
                                                                    --------
    Total stockholders' equity                                         7,884
                                                                    --------
    Total liabilities and stockholders' equity                      $ 15,814
                                                                    ========

     See accompanying notes to condensed consolidated financial statements.

                                       2


<PAGE>

                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                      ($000 Omitted, except per share data)



                                                     Three Months Ended
                                                           June 30,
                                                   ----------------------
                                                     2004          2003
                                                   --------      --------

Revenues:
  Principal transactions:
    Investing gains (losses)                       ($    25)     $    339
    Trading                                               -            74
  Brokerage commissions and fees                          -         1,399
  Management fee income                                  57            57
  Equity in earnings of T. R. Winston                    29             -
  Pre-acquisition equity in loss of Cortech        (     83)            -
  Interest, dividends and other                          38           138
                                                    -------      --------
                                                         16         2,007
                                                    -------      --------

Expenses:
  General, administrative and other                     179           477
  Brokerage                                               -           826
  Interest                                               14            14
                                                    -------      --------
                                                        193         1,317
                                                    -------      --------

Income (loss) before income taxes                  (    177)          690
Provision for income taxes                                1            21
                                                    -------      --------
Net income (loss)                                  ($   178)     $    669
                                                    =======      ========

Basic and diluted net income (loss)
  per common share                                 ($   .06)     $    .20
                                                    =======      ========

Weighted average number of common
  shares outstanding (in 000's)                       2,958         3,302
                                                    =======      ========








     See accompanying notes to condensed consolidated financial statements.

                                       3

<PAGE>

                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                      ($000 Omitted, except per share data)



                                                       Six Months Ended
                                                            June 30,
                                                     --------------------
                                                       2004        2003
                                                     --------    --------

Revenues:
  Principal transactions:
    Investing gains                                  $    17      $   213
    Trading                                                -           97
  Brokerage commissions and fees                           -        1,777
  Management fee income                                  114          114
  Equity in earnings of T. R. Winston                    138            -
  Pre-acquisition equity in loss of Cortech         (     83)           -
  Interest, dividends and other                          266          206
                                                     -------      -------
                                                         452        2,407
                                                     -------      -------

Expenses:
  General, administrative and other                      399          942
  Brokerage                                                -        1,085
  Interest                                                27           30
                                                     -------      -------
                                                         426        2,057
                                                     -------      -------

Income before income taxes                                26          350
Provision for income taxes                                17           20
                                                     -------      -------
Net income                                           $     9      $   330
                                                     =======      =======

Basic and diluted net income
  per common share                                   $     -      $   .10
                                                     =======      =======

Weighted average number of common
  shares outstanding (in 000's)                        2,971        3,308
                                                     =======      =======








     See accompanying notes to condensed consolidated financial statements.

                                       4

<PAGE>

                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 ($000 Omitted)

                                                            Six Months Ended
                                                                 June 30,
                                                          --------------------
                                                            2004        2003
                                                          --------    --------

Cash flows from operating activities:
  Net income                                              $      9     $    330
  Adjustments to reconcile net income
   to net cash provided by (used in)
   operating activities:
     Depreciation and amortization                              16           19
     Unrealized gains (losses) on
      securities owned                                           9    (     704)
     Equity in earnings of T. R. Winston                 (     138)           -
     Pre-acquisition equity in loss of Cortech                  83            -
  Changes in operating assets and liabilities:
   Change in securities owned                            (     523)       2,368
   Change in accounts payable and
    accrued expenses                                           110          416
   Other, net                                                   82    (     224)
                                                          --------     --------
   Net cash provided by (used in) operating activities   (     352)       2,205
                                                          --------     --------

Cash flows from investing activities:
  Net cash acquired through consolidation of Cortech        10,992            -
  Investment in T. R. Winston                            (      45)           -
  Purchase of equipment                                  (       3)   (       2)
                                                          --------     --------
   Net cash provided by (used in) investing
     activities                                             10,944    (       2)
                                                          --------     --------

Cash flows from financing activities:
  Repurchase of common stock                             (     767)   (      34)
  Principal mortgage payments                            (       5)   (       5)
                                                          --------     --------
   Net cash used in financing activities                 (     772)   (      39)
                                                          --------     --------

Net increase in cash and cash equivalents                    9,820        2,164
Cash and cash equivalents at beginning of period             3,737          328
                                                          --------     --------
Cash and cash equivalents at end of period                $ 13,557     $  2,492
                                                          ========     ========

Supplemental disclosure of cash flow information:
  Cash paid for:
    Interest                                              $     27     $     30
                                                          ========     ========
    Taxes                                                 $     11     $      2
                                                          ========     ========

     See accompanying notes to condensed consolidated financial statements.

                                       5


<PAGE>

                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2004 AND 2003
                                   (Unaudited)

1.   Basis of Presentation
     ---------------------

     The accompanying  unaudited condensed  consolidated financial statements of
Kent Financial  Services,  Inc. and subsidiaries  (the "Company") as of June 30,
2004 and for the three  and six  month  periods  ended  June 30,  2004 and 2003,
reflect  all  material   adjustments   consisting   of  only  normal   recurring
adjustments,  which,  in the opinion of  management,  are  necessary  for a fair
presentation  of  results  for the  interim  periods.  Certain  information  and
footnote disclosures required under accounting  principles generally accepted in
the United  States of America  have been  condensed  or omitted  pursuant to the
rules and  regulations of the Securities and Exchange  Commission,  although the
Company  believes  that the  disclosures  are  adequate to make the  information
presented not misleading. These consolidated financial statements should be read
in conjunction  with the year-end  consolidated  financial  statements and notes
thereto  included  in the  Company's  Annual  Report on Form 10-KSB for the year
ended December 31, 2003 as filed with the Securities and Exchange Commission.

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.  Estimates  that  are  particularly  susceptible  to  change  include
assumptions  used  in  determining  the  fair  value  of  securities  owned  and
non-readily marketable securities.

     Certain  reclassifications  have been made to the  prior  year's  financial
statements to conform to the current year's presentation.

     The results of  operations  for the three and six month  periods ended June
30, 2004 and 2003 are not  necessarily  indicative of the results to be expected
for the entire year or for any other period.

2.   Business
     --------

     Until July 31,  2003,  the  Company  owned T. R.  Winston &  Company,  Inc.
("Winston,  Inc."),  a  licensed  securities  broker-dealer  and a  wholly-owned
subsidiary.  Effective July 31, 2003,  the Company sold 60% of Winston,  Inc. to
two  executives of Winston,  Inc. (the  "Agreement").  Immediately  prior to the
sale,  Winston,  Inc.  paid  cash to Kent  reducing  Winston,  Inc's.  equity to

                                       6

<PAGE>

$500,000 and subsequently  Winston, Inc. was reorganized to form T. R. Winston &
Company,  LLC  ("Winston").  The Company  then  recorded its 40%  investment  in
Winston at $200,000.  Subsequent to the Agreement, the Company has no management
responsibility  for  Winston  but is  entitled  to a 40%  distributive  share of
Winston's  profits  as  defined  by the  Agreement,  and is  accounting  for its
investment in Winston by the equity method. During the first six months of 2004,
$138,000  was recorded as income  related to the  Company's  equity  interest in
Winston.  In August 2004, Kent sold its remaining  interest in Winston (For more
information on this transaction, see Note 10).

     The Company also invests through its wholly-owned  subsidiary,  Asset Value
Fund Limited  Partnership  ("AVF").  AVF principally selects investments using a
value based approach.  At June 30, 2004, AVF owned more than 5% of the following
securities:

                                                                   Percentage
Security                     Description of Business               Ownership
--------                     -----------------------               ----------

Cortech, Inc.                Manages its technology portfolio        50.06%
                             and is seeking an acquisition of
                             an operating business

General Devices, Inc.        Seeks to acquire an operating              37%
                             business

Dewey Electronics Corp       Manufactures electronic and                10%
                             eletromechanical devices for
                             the military

GolfRounds.com, Inc.         Seeks to acquire an operating               5%
                             business

     As of June 30, 2004, AVF owned 50.06% of Cortech, Inc. Accordingly, Cortech
is  consolidated in the financial  statements of AVF and the Company.  (For more
information, see Note 3.)

3.   Acquisition of Cortech, Inc., by AVF
     ------------------------------------

     As of June 30,  2004,  AVF's  ownership  percentage  of Cortech,  Inc.  was
50.06%.  Prior to that  date,  AVF had been  accounting  for its  investment  in
Cortech based upon its fair value as  determined by the  management of AVF. (See
Note 4 of Notes to the Consolidated Financial Statements for more information on
fair value).  This fair value  ordinarily was AVF's  proportionate  ownership of
Cortech's equity.  Since AVF's ownership exceeds 50%, Cortech is consolidated in
the  accompanying  financial  statements.  (See Note 11 for  proforma  financial
information.)




                                       7

<PAGE>

4.   Securities owned and securities sold, not yet purchased
     -------------------------------------------------------

     Securities owned consist of proprietary  trading  positions held for resale
to customers and portfolio positions held for capital appreciation, all of which
are valued at fair value. The fair values of the portfolio  positions  generally
are based on listed market prices. If listed market prices are not indicative of
fair  value or if  liquidating  the  Company's  positions  would  reasonably  be
expected  to impact  market  prices,  fair  value is  determined  based on other
relevant factors. Among the factors considered by management in determining fair
value of the portfolio positions are the financial condition,  asset composition
and operating  results of the issuer,  the long-term  business  potential of the
issuer and other factors  generally  pertinent to the valuation of  investments.
The fair value of these  investments  are subject to a high degree of volatility
and may be susceptible to significant fluctuation in the near term.

     Securities  owned as of June 30, 2004,  consisting  of portfolio  positions
(equity securities) held for capital  appreciation  consist of the following (in
000's):

                                                                 Owned
                                                                 -----
Marketable equity securities:
  Portfolio positions of greater than 5% of
   outstanding common stock:
          Dewey Electronics Corp (140,800 shares)                $  493
          Golf Rounds.com, Inc.(189,600 shares)                     157
          General Devices, Inc.(866,558 shares)                     139
  All other portfolio positions                                       4
                                                                  -----
          Fair value                                              $ 793
                                                                  =====

     Securities  owned which are not valued at listed  market prices at June 30,
2004 amounted to $296,000.

5.   Income taxes
     ------------

     The  components  of income tax expense  for the three and six months  ended
June 30, 2004 and 2003 are as follows ($000 Omitted):

                                    Three Months         Six Months
                                   Ended June 30,       Ended June 30,
                                   --------------       --------------
                                    2004    2003         2004    2003
                                    ----    ----         ----    ----

Federal-Current                     $  -    $  -         $  -    $  -
State-Current                          1      21           17      20
Deferred                               -       -            -       -
                                    ----    ----         ----    ----

Total                               $  1    $ 21         $ 17    $ 20
                                    ====    ====         ====    ====

                                       8

<PAGE>

     Total  income tax expense for the three and six months  ended June 30, 2004
and 2003 is different from the amounts  computed by  multiplying  total earnings
before income taxes by the statutory Federal income tax rate of 34%. The reasons
for these differences and the related tax effects are ($000 Omitted):

                                            Three Months          Six Months
                                           Ended June 30,        Ended June 30,
                                           --------------        --------------
                                            2004    2003          2004    2003
                                            ----    ----          ----    ----


Income tax expense (benefit) computed at
  statutory rates on total earnings
    before income taxes                    ($  60)  $ 235        $   9   $ 119
Increase (decrease) in tax from
  Valuation allowance on net
    operating loss carryforward                60  (  235)      (    9) (  119)
State income tax, net of Federal
    benefit                                     1      21           17      20
                                            -----   -----        -----   -----

      Total                                 $   1   $  21        $  17   $  20
                                            =====   =====        =====   =====

6.   Capital Stock Activity
     ----------------------

     On April 16, 2004 the Board of Directors approved a two for one stock split
in the form of a 100% stock  dividend.  The record  date was April 30,  2004 and
distribution date was May 3, 2004.  Accordingly,  all share information has been
restated.

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

     In March 2001,  the Board of Directors  approved a plan to repurchase up to
300,000 shares of the Company's  common stock at prices deemed  favorable in the
open  market  or  in  privately   negotiated   transactions  subject  to  market
conditions,  the Company's  financial position and other  considerations  ("2001
Plan").  As of June  30,  2004,  all  shares  under  the  2001  Plan  have  been
repurchased,  canceled  and  returned to the status of  authorized  but unissued
shares.

     In January 2004, the Board of Directors approved a plan to repurchase up to
500,000 shares of the Company's  common stock at prices deemed  favorable in the
open  market  or  in  privately   negotiated   transactions  subject  to  market
conditions,  the Company's  financial position and other  considerations  ("2004
Plan").  In April  2004,  the Board of  Directors  reduced  the number of shares
available for repurchase  under the 2004 Plan to 200,000 shares.  As of June 30,
2004,  177,519  shares under the 2004 Plan have been  repurchased,  canceled and
returned to the status of authorized but unissued shares.


                                       9

<PAGE>

     In August 2004, the Board of Directors  approved a plan to repurchase up to
an  additional  200,000  shares of the  Company's  common stock at prices deemed
favorable in the open market or in privately negotiated  transactions subject to
market conditions, the Company's financial position and other considerations.

7.   Put Option Liability
     --------------------

     In connection with the Agreement  relating to the sale of Winston  $334,000
has been accrued as of June 30, 2004. The $334,000 is recorded as a deduction in
stockholders'  equity  in  the  accompanying  financial  statements.  (For  more
information on the Agreement, see Note 2.)

8.   Related Party Transactions
     --------------------------

     A  management  fee of  $19,000  per month has been paid to the  Company  by
affiliates  for  management  services  performed by the Company on behalf of the
affiliates.  These services include corporate  governance,  financial management
and accounting  services.  As of July 1, 2004, due to Cortech's inclusion in the
consolidated  financials of AVF,  $15,000 of this monthly fee will be eliminated
in consolidation.

     Since August 1, 2003 the Company reimburses Winston for the cost of certain
services  provided by Winston which include  approximately  $3,000 per month for
accounting  services which is expensed,  and $7,500 per month in accordance with
the  Agreement  which is  recorded as  additional  investment  in Winston.  Kent
receives approximately $5,300 per month from Winston for office space rental.

9.   Investment Company Act of 1940
     ------------------------------

     As a result of the  Company's  sale of 60% of its holdings of Winston,  the
Company  believes  that a large  portion of its  remaining  assets may have been
classified as "investment  securities" as such term is defined in the Investment
Company Act of 1940,  as amended  (the "1940 Act").  If the Company,  therefore,
were deemed to be an investment company under the 1940 Act, it would be required
to register as an investment company with the Securities and Exchange Commission
and would become subject to the regulatory  duties and  restrictions of the 1940
Act, including, but not limited to, restrictions on:

         o  operating methods;
         o  management structure;
         o  capital structure and debt issuance;
         o  issuance of dividends; and
         o  transactions with affiliates

     These  restrictions  would require the Company to significantly  change the
manner in which it conducts its operations  and require it to incur  significant
expenses  for which it has not  provided.  This would  have a  material  adverse
effect on the Company's results of operations.


                                       10

<PAGE>

     Furthermore,  if the Company were deemed to be an  unregistered  investment
company,  it would be  subject to  substantial  restrictions  on its  ability to
conduct its present  business  activities  unless it became  registered with the
Securities  and  Exchange  Commission.  These  restrictions  would  also  have a
material adverse effect on the Company's results of operations.

     The Company intends to engage primarily in a business other than that of an
investment  company and,  unless an exclusion  from the definition of investment
company under the 1940 Act is available to it, the Company intends on taking all
action  necessary to prevent it from being deemed an investment  company  within
the time  permitted by the 1940 Act. This may include  reducing the value of the
"investment  securities"  that the Company  holds as a  percentage  of its total
assets and any other  actions  that the Company  deems to be  appropriate.  This
reduction  could  be  achieved  in a  number  of  ways,  including  through  the
disposition of "investment  securities"  and the  acquisition of  non-investment
security assets.  If the Company is required to sell "investment  securities" it
may be forced to sell them sooner than it otherwise would and these dispositions
may be made  under  unfavorable  market  conditions  resulting  in losses to the
Company.

     Currently, the Company believes that its 50.06% ownership in Cortech is its
primary  business,  and that it will not be deemed to be an  investment  company
under the 1940 Act.

10.  Subsequent Events
     -----------------

     In August  2004,  the Company  sold its  remaining  interest in Winston for
proceeds of $520,000. The Company will record a gain of approximately $79,000 in
connection with the sale. A copy of the agreement is filed as an exhibit to this
Form 10-QSB (the "Winston Sale Agreement"). Additionally, in accordance with the
Winston Sale Agreement,  the Put Option  Liability (see Note 7) established when
the  Company  sold  40%  of  Winston  in  2003  will  be  reversed  directly  to
stockholders equity.

     In August 2004, the Company sold its building in Bedminster, New Jersey for
$1,950,000,  recording a pre-tax  gain on sale of  approximately  $840,000.  The
Company is currently negotiating to lease office space in the same building.

11.  Proforma Financial Information
     ------------------------------

     Proforma  results of operations  are provided to reflect the  operations of
the Company had the  acquisition of Cortech and the disposition of Winston taken
place on January 1, 2003. This proforma financial information is not intended to
reflect  results of  operations  which would have  actually  resulted  had these
transactions been effected on January 1, 2003. Moreover, this proforma financial
data is not  intended to be  indicative  of results of  operations  which may be
attained in the future.


                                       11

<PAGE>

                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES
                  PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2004

                                                           Proforma
                                                         Adjustments
                                                         Related to
                                             Kent          Winston
                                          Historical     Disposition    Proforma
                                          ----------     -----------    --------

Assets:
Cash and cash equivalents                  $ 13,557       $    520 (a) $ 14,077
Marketable securities, net                      793              -          793
Property and equipment, net                     972              -          972
Investment in T. R. Winston                     441      (     441)(b)        -
Other                                            51              -           51
                                           --------       --------     --------
    Total assets                           $ 15,814       $     79     $ 15,893
                                           ========       ========     ========

Liabilities:
Minority interest in Cortech               $  5,662       $      -     $  5,662
Accrued expenses                              1,116              -        1,116
Discontinued Operations                         166              -          166
Mortgage payable                                652              -          652
Put option                                      334      (     334)(c)        -
                                           --------       --------     --------
    Total liabilities                         7,930      (     334)       7,596
                                           --------       --------     --------

Stockholders' equity:
Common stock                                    292              -          292
Paid in capital                              12,620              -       12,620
Retained earnings                         (   4,694)            79 (d)(   4,615)
Deferred compensation                     (     334)           334 (c)        -
                                           --------       --------     --------
    Total stockholders' equity                7,884            413        8,297
                                           --------       --------     --------
    Total liabilities and stockholders'
     equity                                $ 15,814       $     79     $ 15,893
                                           ========       ========     ========

(a)  Cash proceeds from the sale
(b)  Reverse investment in Winston at June 30, 2004
(c)  Reverse put option liability
(d)  Record gain on sale






                                       12

<PAGE>

                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES
            PROFORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2004

                                             Proforma      Proforma
                                            Adjustments   Adjustments
                                             Related to    Related to
                                     Kent     Cortech       Winston
                                  Historical Acquisition  Disposition  Proforma
                                  ---------- -----------  -----------  --------

Revenues:
Investing gains (losses)        ($    71)    $    88  (a)  $     -      $    17
Management fee income                114           -             -          114
Equity in T. R. Winston              138           -      (    138)(c)        -
Gain on sale of T. R. Winston          -           -           217 (d)      217
Equity in Cortech                      -    (     83) (b)        -     (     83)
Interest, dividends and other        266           -             -          266
                                 -------     -------       -------      -------
    Total revenues                   447           5            79          531
                                 -------     -------       -------      -------

Expenses:
General, administrative and other    426           -             -          426
                                 -------     -------       -------      -------

Income before income taxes            21           5            79          105
Provision for income taxes      (     17)          -             -     (     17)
                                 -------     -------       -------      -------
Net income                       $     4     $     5       $    79      $    88
                                 =======     =======       =======      =======

Basic and diluted net income per
  common share                   $     -                                $   .03
                                 =======                                =======

Weighed average number of common
   shares outstanding (in $000's)  2,971                                  2,971
                                 =======                                =======

(a) Reverse unrealized losses recorded in 2004 on Cortech marketable securities
(b) Record equity in the losses of Cortech
(c) Reverse investment in Winston at December 31, 2003
(d) Record gain on sale of Winston based the Investment in Winston at January 1,
    2004.













                                       13

<PAGE>

                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES
            PROFORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      FOR THE YEAR ENDED DECEMBER 31, 2003


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

                                                Proforma       Proforma
                                               Adjustments   Adjustments
                                                Related to   Related to
                                      Kent       Cortech       Winston
                                   Historical  Acquisition   Disposition     Proforma
                                   ---------   -----------   -----------     --------


Revenues:
Investing gains                     $   663     $   112  (a)  $     -         $   775
Trading                                 122           -      (    122) (c)          -
Brokerage commissions and fees        1,869           -      (  1,869) (c)          -
Management fee income                   228           -             -             228
Equity in T. R. Winston                  20           -      (     20) (d)          -
Gain on sale of T. R. Winston             -           -           145  (e)        145
Equity in Cortech                         -    (    165) (b)        -        (    165)
Interest, dividends and other           285           -      (    162) (c)        123
                                    -------     -------       -------         -------
    Total revenues                    3,187    (     53)     (  2,028)          1,106
                                    -------     -------       -------         -------

Expenses:
General, administrative and other     1,577           -      (    825) (c)        752
Brokerage                             1,164           -      (  1,164) (c)          -
Interest                                 55           -             -              55
                                    -------     -------       -------         -------
    Total expenses                    2,796           -      (  1,989)            807
                                    -------     -------       -------         -------

Income (loss) before income taxes       391    (     53)     (     39)            299
Provision for income taxes         (     34)          -            22  (c)   (     12)
                                    -------     -------       -------         -------
Net income (loss)                   $   357    ($    53)     ($    17)        $   287
                                    =======     =======       =======         =======

Basic and diluted net income per
 common share                       $   .11                                   $   .09
                                    =======                                   =======

Weighted average number of common
  Shares outstanding (in $000's)      3,292                                     3,292
                                    =======                                   =======

</TABLE>



(a) Reverse unrealized losses recorded in 2003 on Cortech marketable securities
(b) Record equity in the losses of Cortech in 2003
(c) Reverse operations of Winston in 2003  prior to  selling  40% of  Winston in
    July 2003
(d) Reverse equity in Winston recorded after selling 40% of Winston in July 2003
(e) Record gain on sale of  Winston based on Investment in Winston at January 1,
    2003.





                                       14

<PAGE>

Item 2.      Management's  Discussion   and  Analysis  of   Financial  Condition
-------      -------------------------------------------------------------------
             and Results of Operations
             -------------------------

Acquisition of Cortech, Inc. by Asset Value Fund Limited Partnership (AVF)
--------------------------------------------------------------------------

     As of June 30, 2004, AVF's ownership percentage of Cortech,  Inc. increased
to 50.06%.  Prior to that date,  AVF had been  accounting  for its investment in
Cortech based upon its fair value as  determined by the  management of AVF. (See
Note 4 of notes to the Consolidated Financial Statements for more information on
fair value).  This fair value  ordinarily was AVF's  proportionate  ownership of
Cortech's  equity.  Since AVF's  ownership now exceeds 50%, as of June 30, 2004,
Cortech is part of the consolidated  results of AVF and accordingly  included in
the consolidated results of AVF and the Company.

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

     Kent Financial Services, Inc. (the "Company") had cash and cash equivalents
(U.S.  Treasury  bills  with  original  maturities  of  ninety  days or less) of
approximately  $13.6 million and securities owned of  approximately  $800,000 at
June 30, 2004. Substantially all securities are owned by AVF. Securities carried
at fair value of $296,000  were valued based on  management's  estimates.  These
securities  are subject to a high degree of volatility and may be susceptible to
significant  fluctuation in the near term. The remainder of the securities owned
are valued at quoted market prices.

     Net cash used by  operations  was $352,000 in the six months ended June 30,
2004  compared  to net  cash  provided  in  operations  of $2.2  million  in the
comparable period of 2003.  Changes in securities owned,  principally due to the
reclassification  of the  Company's  investment  in  Cortech  to a  consolidated
subsidiary is the primary reason for the change in cash provided by operations.

     Net cash  provided by investing  activities  was $10.9  million for the six
months ended June 30, 2004 compared to net cash used in investing  activities of
$2,000 in the six months  ended June 30,  2003.  Net cash of  approximately  $11
million was acquired through the consolidation of Cortech in 2004.


     Net cash used in  financing  activities  of $772,000 and $39,000 in the six
month periods ended June 30, 2004 and 2003,  respectively,  was comprised of the
repurchase of Company common stock, which was subsequently retired, and payments
on the mortgage loan collateralized by the Company's headquarters building.

                                       15

<PAGE>

     The Company believes that its liquidity is sufficient for future operations
for the next twelve months.

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

     The Company recorded a net loss of $178,000, or $.06 basic and diluted loss
per share,  for the three months ended June 30, 2004 compared to net earnings of
$669,000  or $.20  basic and  diluted  earnings  per share,  for the  comparable
quarter in 2003.  For the six months  ended  June 30,  2004,  the net income was
$9,000 or $.00 basic and diluted  earnings per share,  compared to net income of
$330,000 or $.10 basic and diluted income per share,  for the comparable  period
in 2003.  Per share earnings have been adjusted to reflect a 100% stock dividend
which was effected in April 2004.

     Net investing  losses were $25,000 and net investing gains were $17,000 for
the three and six months  ended June 30,  2004,  respectively,  compared  to net
investing  gains of $339,000 and $213,000  for the  comparable  periods in 2003.
These net investing gains and losses are the result of changes in the fair value
of portfolio positions.

     Total  brokerage  income  (consisting  of brokerage  commissions,  fees and
trading gains) for the three and six months ended June 30, 2003 was  $1,473,000,
and 1,874,000 respectively. Brokerage expenses (including all fixed and variable
expenses)  for the three and six months  ended June 30,  2003 was  $826,000  and
$1,085,000.  There was no brokerage  income or expenses  recorded in 2004 due to
the sale of Winston  effective  July 2003.  The  Company is  accounting  for its
investment  in  Winston  by the equity  method  and has  recorded  equity in its
investment in Winston of $29,000 and $138,000 for the three and six months ended
June 30, 2004, respectively.

     Management  fees of $19,000 per month is paid to the Company by  affiliates
for management  services  performed by the Company on behalf of the  affiliates.
These services include corporate governance, financial management and accounting
services.

     Equity in the losses of Cortech of  $83,000  were  recorded  for the period
prior to the  acquisition  of Cortech  and its  consolidation  in the  financial
statements of the Company.

     Interest, dividends and other income was $38,000 and $266,000 for the three
and six months  ended June 30,  2004,  respectively,  compared to  $138,000  and
$206,000  for the three and six months ended June 30,  2003,  respectively.  The
decrease in the quarter  ended June 30, 2004,  was due to an  investment-banking
fee  received by Winston in 2003.  The increase in the six months ended June 30,
2004 was due to a fee for services received from a non-affiliated company in the
first quarter of 2004,  offset by lower interest  income earned on the Company's
cash balances.


                                       16

<PAGE>

     General and  administrative  expenses  were  $179,000  and $477,000 for the
quarters ended June 30, 2004 and 2003, respectively, a decrease of $298,000. For
the six month periods ended June 30, 2004 and 2003,  general and  administrative
expenses were $399,000 and $942,000 respectively,  a decrease of $543,000. These
decreases are due  principally  due to the reduction of expenses due to the sale
of Winston in July 2003.

Subsequent Events
-----------------

     In August 2004,  the Company sold its remaining 40% interest in Winston for
proceeds of $520,000. The Company will record a gain of approximately $79,000. A
copy of the  agreement is filed as an exhibit to this Form 10-QSB (the  "Winston
Sale Agreement").  Additionally,  in accordance with the Winston Sale Agreement,
the Put Option  Liability  established  when the Company  sold 40% of Winston in
2003 will be reversed directly to stockholders equity.

     In August 2004, the Company sold its building in Bedminster, New Jersey for
$1,950,000,  recording a pre-tax  gain on sale of  approximately  $840,000.  The
Company is currently negotiating to lease office space in the same building.

Item 3. - 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).  Based upon and as of the date of
that  evaluation,  the  Chief  Executive  Officer  and Chief  Financial  Officer
concluded  that the  design  and  operation  of these  disclosure  controls  and
procedures  are effective.  There were no  significant  changes in the Company's
internal  controls 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
June 30,  2004  that  have  materially  affected  or are  reasonably  likely  to
materially  affect the  company's  internal  controls over  financial  reporting
evaluation.


















                                       17

<PAGE>

PART II  -  OTHER INFORMATION
-------     -----------------

Item 2.  -  Changes in Securities
-------     ---------------------

            SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES (1)
                       (COMMON STOCK-2004 REPURCHASE PLAN)

                                                   (c) Total
                                                   Number of      (d) Maximum
                                                     Shares         Number of
                                                  Purchased as   Shares that May
                (a) Total                            Part of         Yet Be
                 Number of          (b)             Publicly     Purchased Under
                   Shares      Average Price     Announced Plans   the Plans or
  Period         Purchased     Paid per Share     or Programs      Programs (2)

April 1, 2004 -
April 30, 2004        3,688          $ 2.33             3,688        67,780

May 1, 2004 -           884          $ 2.21               884        66,896
May 31, 2004

June 1, 2004 -       44,415          $ 2.26            44,415        22,481
June 30, 2004

Total                48,987          $ 2.27            48,987        22,481



(1)  All  share  information  adjusted  for a  100%  stock  dividend  which  was
     effective April 30, 2004.
(2)  In January 2004, the Board of Directors approved a plan to repurchase up to
     500,000 shares of the Company's  common stock.  In April 2004 the number of
     shares was reduced to 200,000. This plan has no expiration date.
(3)  In August 2004, the Board of Directors  approved a plan to repurchase up to
     200,000 shares of the Company's common stock.
















                                       18


<PAGE>

Item 6.  -  Exhibits and Reports on Form 8-K
-------     --------------------------------

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


            10.5      Agreement  to  sell  the  Company's  Investment  in  T. R.
                      Winston & Company, LLC

            31.1      Certification  pursuant  to  Section  302 of the Sarbanes-
                      Oxley Act of 2002

            31.2      Certification  pursuant  to  Section  302 of the Sarbanes-
                      Oxley Act of 2002

            32        Certification  pursuant  to  Section  906 of the Sarbanes-
                      Oxley Act of 2002

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

            On April 20, 2004 the Company filed a Form 8-K reporting that it had
            issued a press release announcing that the Company was splitting its
            stock two for one and had reduced the previously authorized buy back
            of Common Shares to 200,000 post split shares.

            On May 12, 2004 the Company  filed a  Form 8-K reporting that it had
            issued a press  release announcing  results for the first quarter of
            2004.
















                                       19

<PAGE>

                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                            KENT FINANCIAL SERVICES, INC.



Dated: August 16, 2004                      By: /s/ Sue Ann Merrill
                                                -------------------------------
                                                Sue Ann Merrill
                                                Chief Financial Officer
                                                  and Secretary































                                       20

<PAGE>

                                                                    EXHIBIT 31.1
                      CERTIFICATION PURSUANT TO SECTION 302
                        OF THE SARBANES-OXLEY ACT OF 2002

I,   Paul O. Koether, certify that:

1.   I have  reviewed  this  quarterly  report on Form 10-QSB of Kent  Financial
     Services, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b)   designed such internal  control over  financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          our  supervision,   to  provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     c)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     d)   disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's  auditors and the audit committee of registrant's board of
     directors (or persons performing the equivalent functions):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.

August 16, 2004                                   /s/ PAUL O. KOETHER
                                                  ------------------------------
                                                  Paul O. Koether
                                                  Chairman and President

<PAGE>

                                                                    EXHIBIT 31.2
                      CERTIFICATION PURSUANT TO SECTION 302
                        OF THE SARBANES-OXLEY ACT OF 2002

I,   Sue Ann Merrill, certify that:

1.   I have  reviewed  this  quarterly  report on Form 10-QSB of Kent  Financial
     Services, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b)   designed such internal  control over  financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          our  supervision,   to  provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     c)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     d)   disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's  auditors and the audit committee of registrant's board of
     directors (or persons performing the equivalent functions):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.

August 16, 2004                                 /s/ SUE ANN MERRILL
                                               ---------------------------------
                                               Sue Ann Merrill
                                               Chief Financial Officer
                                                 and Secretary

<PAGE>
                                                                      Exhibit 32

     CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


Pursuant to Section 906 of the Public  Company  Accounting  Reform and  Investor
Protection  Act of 2002 (18 U.S.C.  1350,  as  adopted),  Paul O.  Koether,  the
Chairman and President of Kent Financial  Services,  Inc., (the "Company"),  and
Sue Ann Merrill,  the Chief Financial  Officer and Secretary of the Company each
hereby certifies that, to the best of their knowledge:

     1.   The  Company's  Quarterly  Report on Form 10-QSB for the period  ended
          June 30, 2004, to which this  Certification  is attached as Exhibit 32
          (the  "Periodic  Report"),  fully  complies with the  requirements  of
          Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934,
          as amended;

     and

     2.   The information  contained in the Periodic Report fairly presents,  in
          all  material  respects,   the  financial  condition  and  results  of
          operations of the Company.


Dated:   August 16, 2004


/s/ Paul O. Koether
--------------------------------------
Paul O. Koether
Chairman and President



/s/ Sue Ann Merrill
--------------------------------------
Sue Ann Merrill
Chief Financial Officer and Secretary