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:   September 30, 1996

                                       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 October 31, 1996,  the issuer had  1,046,646  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


<TABLE>

                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                     ASSETS

                                   (UNAUDITED)

                                 ($000 Omitted)

<CAPTION>


                                                            September 30,
                                                                1996
                                                            -------------
<S>                                                           <C>
Cash and cash equivalents                                      $ 7,381
U.S. Treasury Securities, at cost,
  which approximates market                                        292
Securities owned                                                 7,382
Net receivable from clearing broker                                400
Property and equipment:
  Land and building                                              1,440
  Leasehold improvements                                           220
  Office furniture and equipment                                   401
                                                               -------
                                                                 2,061
  Accumulated depreciation                                    (    778)
                                                               -------
  Net property and equipment                                     1,283
                                                               -------
Other assets                                                       301
                                                               -------
     Total assets                                              $17,039
                                                               =======


</TABLE>







          See accompanying notes to consolidated financial statements.





                                                         


<PAGE>



<TABLE>


                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                   (UNAUDITED)

                                 ($000 Omitted)


<CAPTION>


                                                              September 30,
                                                                   1996
                                                              -------------
<S>                                                           <C>

Liabilities:
  Securities sold, not purchased                               $   157
  Accounts payable                                                 101  
  Accrued expenses                                               1,974
  Long-term debt                                                   556
  Accrual for discontinued operations                              460
                                                               -------
      Total liabilities                                          3,248
                                                               -------
Stockholders' equity:
  Preferred stock without par value, 500,000
    shares authorized; none issued                                   -
  Common stock, $.10 par value, 4,000,000
    shares authorized; 1,049,793 issued
and outstanding                                                    105
  Additional paid-in capital                                    15,457
  Accumulated deficit                                         (  1,771)
                                                               -------
      Total stockholders' equity                                13,791
                                                               -------
      Total liabilities and stockholders' equity               $17,039
                                                               =======



</TABLE>





          See accompanying notes to consolidated financial statements.




<PAGE>




                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)

                      ($000 Omitted, except per share data)



         
<TABLE>
<CAPTION>
                                                           Three Months Ended
                                                              September 30,
                                                           1996          1995
                                                        ---------     ---------
<S>                                                     <C>           <C>       
Revenues:
  Brokerage commissions and fees                        $   928       $ 1,176
  Net broker-dealer inventory gains                         481         1,252
  Net investing gains                                        44         1,146
  Interest, dividends and other                             251           353
                                                        -------       -------
                                                          1,704         3,927
                                                        -------       -------
Expenses: 
  Brokerage                                                 926         1,629
  General, administrative and other                         639         1,139
  Interest                                                   24           100
                                                        -------       -------
                                                          1,589         2,868
                                                        -------       -------

Earnings before income taxes                                115         1,059
Provision for income taxes                                   53           168
                                                        -------       -------
Net earnings                                            $    62       $   891
                                                        =======       =======

Net earnings per common share                           $   .06       $   .84
                                                        =======       =======


Weighted average number of common
  shares outstanding (in 000's)                           1,050         1,061
                                                        =======       =======





</TABLE>


          See accompanying notes to consolidated financial statements.


                                                           

<PAGE>




                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)

                      ($000 Omitted, except per share data)

<TABLE>
<CAPTION>

                                                           Nine Months Ended
                                                              September 30,
                                                           1996         1995
                                                        ----------   ----------
<S>                                                     <C>           <C>
Revenues:
  Brokerage commissions and fees                        $ 2,843       $ 3,096
  Net broker-dealer inventory gains                       1,745         3,612
  Net investing gains                                     1,096         2,535
  Interest, dividends and other                           1,033           932
                                                        -------       -------
                                                          6,717        10,175
                                                        -------       -------

Expenses:
  Brokerage                                               3,121         4,501
  General, administrative and other                       2,131         3,257
  Interest                                                  171           272
                                                        -------       -------
                                                          5,423         8,030
                                                        -------       -------

Earnings before income taxes                              1,294         2,145
Provision for income taxes                                  339           302
                                                        -------       -------
Net earnings                                            $   955       $ 1,843
                                                        =======       =======

Net earnings per common share                           $   .91       $  1.73
                                                        =======       =======

Weighted average number of common
  shares outstanding (in 000's)                           1,051         1,067
                                                        =======       =======
 



</TABLE>




          See accompanying notes to consolidated financial statements.


                                                         

<PAGE>

                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)

                                 ($000 Omitted)
<TABLE>
<CAPTION>
                                                           Nine Months Ended
                                                             September 30,
                                                           1996         1995
                                                        ---------    ---------

<S>                                                    <C>           <C>
Cash flows from operating activities:
  Net earnings                                          $   955       $ 1,843
  Adjustments:
    Depreciation and amortization                           111           132
    Unrealized gains on
      marketable securities                            (    686)     (  1,220)
    Change in marketable securities
      and U.S. Treasury securities                     (  1,671)        2,221
    Change in net receivable from
      clearing agent                                        289      (  1,392)
    Change in interest receivable                      (      9)           40
    Change in accounts payable and
      accrued expenses                                 (     94)          623
    Change in accrued income taxes                          163           251
    Other, net                                         (      7)           98
                                                        -------       -------
    Net cash provided by (used in)
      operating activities                             (    949)        2,596
                                                        -------       -------

Cash flows from investing activities:
    Sale (purchase) of equipment, net                        33      (     23)
    Other, net                                               97      (     39)
                                                        -------       -------
       Net cash provided by
         (used in) investing activities                     130      (     62)
                                                        -------       -------

Cash flows from financing activities:
  Purchase of common stock                             (     17)     (     81)
  Payments on debt                                     (     23)     (    166)
  Redemption of debentures                             (     19)     (     18)
                                                        -------       -------
    Net cash used in financing
      activities                                       (     59)     (    265)
                                                        -------       -------
Net increase (decrease) in cash and
  cash equivalents                                     (    878)        2,269
Cash and cash equivalents at
  beginning of period                                     8,259         3,791
                                                        -------       -------                                                      
Cash and cash equivalents at end of
  period                                                $ 7,381       $ 6,060
                                                        =======       =======

</TABLE>

          See accompanying notes to consolidated financial statements.

                                        

<PAGE>




                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 1996 AND 1995

                                   (Unaudited)

1.        Financial  Condition and Operating  Results
          -------------------------------------------
     The  accompanying  unaudited  consolidated  financial  statements  of  Kent
Financial  Services,  Inc. and subsidiaries  (the "Company") as of September 30,
1996 and for the three and nine month periods ended  September 30, 1996 and 1995
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 generally accepted  accounting  principles 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, 1995 as filed with the Securities
and Exchange Commission.

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

     The  results  of  operations  for the three and nine  month  periods  ended
September 30, 1996 and 1995 are not necessarily  indicative of the results to be
expected for the entire year or for any other period.

2.          Business
            --------

     The Company's  business is comprised  principally of the operation of T. R.
Winston  &  Company,  Inc.  ("Winston"),  a  wholly-owned  subsidiary,  and  the
management of Asset Value Fund Limited Partnership,  an investment  partnership.
Winston is a licensed  securities  broker-dealer and is a member of the National
Association of Securities  Dealers,  Inc. and the Securities Investor Protection
Corporation.  All  safekeeping,  cashiering,  and customer  account  maintenance
activities  are  provided  by  an  unrelated   broker-dealer  under  a  clearing
agreement.

     Pursuant to the net  capital  provisions  of Rule 15c3-1 of the  Securities
Exchange Act of 1934, Winston is required to maintain a minimum net capital,  as
defined,  of $100,000.  At  September  30,  1996,  Winston had net  capital,  as
defined, of approximately $656,000, which was $556,000 in excess of the required
minimum.
                                                           

<PAGE>



3.          Securities Owned
            ----------------

     Marketable securities are valued at market value and securities not readily
marketable are valued at fair value as determined by the Board of Directors. The
resulting  difference  between cost and market value (or fair value) is included
in revenue as net investing  gains.  Securities not readily  marketable  include
investment  securities for which market  quotations are not readily available as
determined by the Board of Directors.  The determination of fair value was based
on all  relevant  indications  of  value,  including  but not  limited  to,  the
financial  statements of the companies,  the cost of the securities at the dates
of purchase, and trading volume. Because of inherent uncertainties of valuation,
the estimated  values may differ  significantly  from the values that would have
been used had a ready market for the securities existed and the difference could
be material.

     The detail of securities owned is as follows (in 000's):
<TABLE>
          <S>                                               <C>
          Marketable, at market value                       $3,755
          Not readily marketable, at fair value              3,627
                                                            ------
            Securities owned                                $7,382
                                                            ======
</TABLE>

     4. Income Taxes
        ------------
     The tax deficiency  previously reported,  including interest,  of more than
$20,000,000  proposed by the Internal Revenue Service for the years 1988 through
1991 has  been  settled  for a total  payment  of  approximately  $330,000  (the
"Settlement").  As a consequence of the Settlement, the Company will be required
to pay alternative  minimum tax ("AMT") and interest of  approximately  $335,000
for the year 1995 and will be subject to AMT in 1996. The  deficiency,  interest
and  AMT  have  been  included  in  the  accompanying   consolidated   financial
statements.


<PAGE>


     At  September  30,  1996,  the Company had the  following  tax  attributes,
adjusted for the Settlement:

<TABLE>


                                           Amount
                                          in 000's          Expiration Years
                                          --------          ----------------
<S>                                        <C>               <C>
Net operating loss
  carryforward                             $5,300            Various years
                                                             through 2009
AMT credit
  carryforward                             $  956            Indefinite

General business credit
  carryforward                             $  989            Various years
                                                             through 2000

</TABLE>


5.        Net Earnings Per Common Share
          -----------------------------

     Net earnings per common  share is based on the weighted  average  number of
shares  outstanding  adjusted for the assumed conversion of shares issuable upon
exercise of stock options where appropriate. 

<PAGE>



Item 2.    Management's Discussion and Analysis or Plan of Operation
           ---------------------------------------------------------


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

     Kent Financial  Services,  Inc. (the "Company") had  consolidated  cash and
cash equivalents  (U.S.  Treasury bills with an original maturity of ninety days
or less) of $7.4 million,  U.S. Treasury securities with an original maturity of
over  ninety  days of $.3  million,  and  securities  owned of $7.4  million  at
September 30, 1996. See Note 3 of Notes to Consolidated Financial Statements for
additional  information on the valuation of securities  owned.  Net cash used in
operations for the nine months ended  September 30, 1996 was  approximately  $.9
million,  compared to net cash  provided by  operations  of $2.6 million for the
nine months  ended  September  30,  1995.  Cash flow from  operations  decreased
principally  from the results of operations  and the net changes in the balances
of marketable  securities and U.S. Treasury  securities,  and the net receivable
from the Company's clearing broker-dealer. Net cash used in financing activities
of $.3 million  for the nine months  ended  September  30, 1995 was  principally
comprised of a $146,000 payment reducing the mortgage loan collateralized by the
Company's  headquarters  facility pursuant to a mortgage refinancing in February
1994. The Company also repurchased common stock in open market transactions. The
Company believes that its liquidity is sufficient for future operations.


Material Changes in Results of Operations
-----------------------------------------

     The  Company had net income of  $62,000,  or $.06 per share,  for the three
months ended  September  30, 1996 compared to net income of $891,000 or $.84 per
share,  for the comparable  quarter in 1995. For the nine months ended September
30, 1996, net income was $955,000,  or $.91 per share, compared to net income of
$1,843,000, or $1.73 per share, for the comparable period in the prior year.

     Total  brokerage  income  (consisting  of brokerage  commissions,  fees and
inventory gains) for the three months ended September 30, 1996 was $1.4 million,
a decrease of  approximately  $1.0 million,  or 41.7%,  from $2.4 million in the
comparable 1995 quarter.  Total  brokerage  income was $4.6 million for the nine
months ended  September  30, 1996, a decrease of $2.1 million or 31.3% from $6.7
million for the nine month period ended September 30, 1995.  Brokerage  expenses
(including  all fixed and variable  expenses)  decreased by $700,000,  or 43.8%,
from $1.6 million in the quarter  ended  September 30, 1995, to $900,000 for the
three months ended  September 30, 1996. For the nine months ended  September 30,
1996,  brokerage  expenses  were $3.1  million  compared to $4.5 million for the
comparable  period in the prior year, a decrease of $1.4  million or 31.1%.  Net
brokerage  income of $500,000 for the quarter ended September 30, 1996 decreased
from $800,000 from the same period in 1995, a decrease of $300,000 or 37.5%. For
the nine month period ended  September 30, 1996,  net brokerage  income was $1.5
million,  compared to $2.2 million for the nine months ended September 30, 1995,
a decrease of $700,000, or 31.8%.

                                 

<PAGE>



     The Company  completed a private  placement of six million shares of common
stock of a public company in the third quarter 1996 which accounted for $360,000
in brokerage commissions.  The overall decrease in total brokerage income, total
brokerage  expense and net brokerage  income was  attributable to the closing of
the New York office of T. R. Winston & Company,  Inc.  ("Winston")  on March 31,
1996. The Company expects total brokerage  income to decline in the future as it
continues to de-emphasize its retail brokerage business.

     Net  investing  gains were  $44,000 and $1.1 million for the three and nine
months ended September 30, 1996, respectively, compared to $1.1 million and $2.5
million,  respectively  for the comparable  periods in 1995. For the nine months
ended September 30, 1996, realized gains accounted for $410,000 of net investing
gains while unrealized gains were $686,000.  The decrease in net investing gains
from the three and nine month period ended  September 30, 1995 to the comparable
periods in 1996 reflected general market conditions and variations in investment
portfolio composition.  See Note 3 of Notes to Consolidated Financial Statements
for additional information on the valuation of securities owned.

     Interest,  dividend and other income was  $251,000 and  $1,033,000  for the
three and nine  months  ended  September  30,  1996,  respectively,  compared to
$353,000 and $932,000 for the  comparable  periods in the prior year.  Interest,
dividend and other income increased in the nine month period ended September 30,
1996 compared to the same period of the prior year due  principally  to the sale
of  Winston's  Pacific  Stock  Exchange  seat.  This  sale  generated  a gain of
approximately $100,000.

     General and administrative  expenses were $600,000 and $1.1 million for the
quarters ended September 30, 1996 and 1995, respectively, a decrease of $500,000
or 45.5%. For the nine month periods ended September 30, 1996 and 1995,  general
and administrative  expenses were $2.1 million and $3.3 million respectively,  a
decrease of $1.2 million or 36.4%. The decreases for each of the periods in 1996
compared  to the  same  periods  in 1995  was the  direct  result  of  decreased
administrative  costs related to the closing of Winston's  New York office.  The
principal  reduction in operating  expense was due to a lower  headcount,  which
reduced personnel expense.

     The  provision  for income  taxes of $53,000 and $339,000 for the three and
nine months  ended  September  30,  1996 is composed of a provision  for federal
alternative  minimum tax  ("AMT") and state  income  taxes.  The tax  deficiency
previously  reported,  including interest,  of more than $20,000,000 proposed by
the  Internal  Revenue  Service for the years 1988 through 1991 has been settled
for  a  total  payment  of  approximately  $330,000  (the  "Settlement").  As  a
consequence  of the  Settlement,  the  Company  will be  required to pay AMT and
interest of approximately  $335,000 for the year 1995 and will be subject to AMT
in 1996. The deficiency, interest and AMT have been included in the accompanying
consolidated financial statements.
      

<PAGE>



PART II - OTHER INFORMATION

Item 4.        Submission of Matters to a Vote of Security Holders
               ---------------------------------------------------
     The Company held its Annual  Meeting of  Stockholders  on November 4, 1996.
Management's  nominees,  Messrs.  Paul O. Koether,  Mathew E. Hoffman,  Casey K.
Tjang and M. Michael Witte were elected to the Board of Directors.

        The following is a tabulation for all nominees:

<TABLE>
<CAPTION>
                                            For                Withheld
                                          -------              --------

            <S>                           <C>                    <C>
            Paul O. Koether               819,579                7,993
            Mathew E. Hoffman             819,440                8,132
            Casey K. Tjang                819,634                7,938
            M. Michael Witte              819,588                7,984


</TABLE>

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

        (a)      Exhibits

            27.  Financial Data Schedule for the nine months ended
                 September 30, 1996.


        (b)      Reports on Form 8-K

     No reports on Form 8-K were filed  during the quarter for which this report
     is being filed.


<PAGE>








                                   SIGNATURES

     In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                             KENT FINANCIAL SERVICES, INC.



Dated:  November 12, 1996                By: /s/ Mark Koscinski
                                             ---------------------------------
                                             Mark Koscinski
                                             Vice President and
                                             Principal Accounting Officer