Information
Statement Pursuant to Section 14(c) of the Securities Exchange Act of
1934
(Amendment
No.
)
Check
the
appropriate box:
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£
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Preliminary
Information Statement
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£
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Confidential,
for Use of the Commission Only (as permitted by Rule
14c-5(D)(2))
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S
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Definitive
Information Statement
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KENT
FINANCIAL SERVICES, INC.
(Name
of
Registrant as Specified in Its Charter) Payment of Filing Fee (Check the
appropriate box):
|
q
|
Fee
computed on table below per Exchange Act Rules 14c-5(g) and
0-11.
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|
1)
|
Title
of each class of securities to which transaction
applies:
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|
2)
|
Aggregate
number of securities to which transaction
applies:
|
|
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3)
|
Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act 0-11 (set forth the amount on which the filing fee is
calculated and state how it was
determined):
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4)
|
Proposed
maximum aggregate value of
transaction:
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q
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Fee
paid previously with preliminary
materials.
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q
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid
previously. Identify the previous filing by registration statement
number,
or the Form or Schedule and the date of its
filing.
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1)
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Amount
Previously Paid:
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2)
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Form,
Schedule or Registration Statement
No.:
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KENT
FINANCIAL SERVICES, INC.
211
PENNBROOK ROAD
P.O.
BOX 97
FAR
HILLS, NEW JERSEY 07931
(908)
766-7221
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
December
17, 2007
TO
THE STOCKHOLDERS:
NOTICE
IS
HEREBY GIVEN that the Annual Meeting of Stockholders of Kent Financial Services,
Inc. (the “Company”), will be held on Monday, December 17, 2007 at 8:30 a.m.,
local time, at 376 Main Street, Bedminster, New Jersey 07921
for the purpose of
considering and acting upon the following matters:
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1.
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To
elect five directors to serve until the next Annual Meeting or until
their
respective successors are duly elected and
qualified;
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2.
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To
transact such other business as may properly come before the Annual
Meeting or any adjournment(s), postponement(s) or continuation(s)
thereof.
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Only
stockholders of record at the close of business on November 15, 2007, are
entitled to notice of and to vote at the Annual Meeting and at any and all
adjournments, postponements or continuations thereof. A list of
stockholders entitled to vote at the Annual Meeting will be available for
inspection during ordinary business hours by any stockholder for any purposes
germane to the meeting, at the Company’s offices at 211 Pennbrook Road, Far
Hills, New Jersey 07931, for a period of at least ten days prior to the Annual
Meeting and will also be available for inspection at the Annual
Meeting.
All
stockholders are cordially invited to attend the Annual Meeting in
person.
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By
Order of the Board of Directors
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/s/
Paul O. Koether
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Paul
O. Koether
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Chairman
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Date:
November 26, 2007
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY
KENT
FINANCIAL SERVICES, INC.
211
PENNBROOK ROAD
P.O.
BOX 97
FAR
HILLS, NEW JERSEY 07931
(908)
766-7221
INFORMATION
STATEMENT FOR THE ANNUAL MEETING
DECEMBER
17, 2007
General
This
Information Statement is being furnished to the stockholders of Kent Financial
Services, Inc., a Delaware corporation (“Kent Financial” or the “Company”),
pursuant to Regulation 14(c) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), in connection with the forthcoming Annual Meeting of
Stockholders (the “Annual Meeting”) to be held on Monday, December 17, 2007, at
8:30 a.m., at 376 Main Street, Bedminster, New Jersey 07921, and at any and
all
adjournments, postponements or continuations thereof, for the purposes set
forth
herein and in the accompanying Notice of Annual Meeting of Stockholders. The
Company’s telephone number is (908) 766-7221.
This
Information Statement and accompanying Notice of Annual Meeting of Stockholders
are first being mailed on or about November 26, 2007 to all stockholders
entitled to vote at the Annual Meeting.
Record
Date; Voting Securities
Only
stockholders of record at the close of business on November 15, 2007 (the
“Record Date”), are entitled to notice of and to vote at the Annual
Meeting. On the Record Date, 2,792,082 shares of the Company’s common
stock, $0.10 par value per share (the “Common Stock”), were issued and
outstanding. The presence, either in person or by proxy, of the
holders of a majority of the total number of shares of Common Stock outstanding
on the Record Date is necessary to constitute a quorum and to transact such
matters as come before the Annual Meeting.
As
of the
Record Date, management and its affiliates collectively owned greater than
50%
of the Company’s outstanding Common Stock and will vote their shares to elect as
directors the five nominees listed under the caption “Election of
Directors. Since the Common Stock owned by management and its
affiliates constitutes a majority of the Company’s outstanding Common Stock, the
Board of Directors has determined not to solicit proxies. Any
stockholder of record on the Record Date is entitled to attend the meeting
and
vote their shares personally or through such stockholder’s own legally
constituted proxy.
Votes
Required
The
directors nominated for election will be elected by a plurality of the votes
cast, in person or by proxy, at the Annual Meeting. As of the Record
Date, there were 2,792,082 shares outstanding and each share is entitled to
one
vote. Abstentions from voting and broker “non-votes” will have no
effect since they will not represent votes cast at the annual
meeting.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY
The
Company will reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding the Information Statement
and
Notice of Annual Meeting of Stockholders to such beneficial owners.
PROPOSAL
1
ELECTION
OF DIRECTORS
Five
directors are to be elected to hold office until the next annual meeting of
stockholders or until their respective successors are duly elected and
qualified. Management and our majority stockholder will vote FOR the
election of each nominee named below. Each nominee has consented to
serve as a director if elected. It is not expected that any nominee
will be unable to serve, but, in the event that any nominee should be unable
to
serve, management and our majority stockholder will vote for a substitute
candidate selected by the Board of Directors.
Set
forth
below is biographical information for the persons nominated for election to
the
Board of Directors including information furnished by them as to their principle
occupations at present and for the past five years, certain directorships held
by each, their ages as of November 15, 2007 and the year in which each director
became a director of the Company.
Nominees
for Directors
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Position
and Office Presently Held
with
Company
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Paul
O. Koether
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71
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Chairman,
Chief Executive Officer and Director
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1987
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William
Mahomes, Jr.
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61
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Director
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2005
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Casey
K. Tjang
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69
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Director
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1992
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M.
Michael Witte
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81
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Director
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1986
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Bryan
P. Healey
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37
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Chief
Financial Officer and Director
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2007
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Paul
O. Koether
has been Chairman, Director and Chief Executive Officer of
the Company since July 1987 and President of the Company from October 1990
until
November 2005, and until December 31, 2003 when it was dissolved, the general
partner of Shamrock Associates, an investment partnership which was the
principal stockholder of the Company. Mr. Koether was Chairman from
April 1988 to July 2005, President from April 1989 to February 1997 and director
from March 1988 to July 2005 of Pure World, Inc., (“Pure World”) and from
December 1994 until July 2005 a director and from January 1995 to July 2005
Chairman of Pure World’s wholly owned subsidiary, Pure World Botanicals, Inc., a
manufacturer and distributor of natural products. Mr. Koether was
Chairman and a Director of Sun Equities Corporation, (“Sun”) a private company
until Sun was merged into Pure World in December 2004. Mr. Koether
was Chairman from 1990 until August 2003 and a registered representative since
1989 of T. R. Winston & Company, LLC. (“Winston”). Since
September 1998, Mr. Koether has been a director, Chairman and Chief Executive
Officer as well as President from October 2003 until November 2005, of Kent
International Holdings, Inc., a biopharmaceutical company formerly known as
Cortech, Inc. that is seeking to redeploy its assets. From November
2003 to December 2003, Mr. Koether was General Partner of Emerald Partners,
an
investment partnership. Bryan P. Healey, Chief Financial Officer and
Director of the Company is the son-in-law of Paul O. Koether.
William
Mahomes, Jr.
currently is a senior shareholder in Simmons Mahomes P.C.,
a law firm emphasizing commercial real estate transactions, public finance,
business transactions and mediation. From 1997 to May 2001, Mr. Mahomes was
in
the private practice of law emphasizing mediation, real estate and commercial
transactions. From 1994 to March 1997, Mr. Mahomes was a senior shareholder
with
a major Texas law firm. From 1989 to 1994, he was an international partner
in
the Dallas office of a major international law firm. From 1993 to July 2005,
Mr.
Mahomes was a director of Pure World. Mr. Mahomes currently serves on the Board
of Directors of a variety of organizations, including the Center for New
Ventures and Entrepreneurship (Texas A&M University), The Association of
Former Students at Texas A&M University and the Texas Affiliate Board of
Healthcare Service Corporation (HCSC), also known as Blue Cross and Blue Shield
of Texas.
Casey
K. Tjang
has been chairman and chief executive officer of First
Merchant Bankers, Inc., a private merchant bank dealing with Asia-Pacific
businesses since January 2004. From September 2001 to February 2002,
he was president and chief executive officer and from August 2000 to September
2001 was chief financial officer of Knowledgewindow, Inc., an e-learning
provider of Internet training. Since February 2002, Mr. Tjang has
been president and chief executive officer of Princeton Accredited Services,
Inc. and Erudite Internet Systems, Inc. an e-learning custom courseware
developer and provider of an Internet based distance education
system. Since 2005, he has been chairman and chief executive officer
of Princeton Business School, a provider of an online education towards
Entrepreneurial Master of Business Administration degree program.
M.
Michael Witte.
Since August 1980, he has been President of M.M. Witte
& Associates, Inc., a private corporation that is engaged in oil & gas
consulting and investing management. In November 1995, Mr. Witte was elected
Co-chairman of the American Drilling Company, LLC. On August 1, 1996, Mr. Witte
was elected Chief Executive Officer and Director of South Coast Oil Corporation,
a Los Angeles based oil company founded in 1921. He formally resigned this
position in September 2007 after serving 11 years.
Bryan
P. Healey
, a certified public accountant, has been Vice-President,
Secretary and Chief Financial Officer of the Company since May 2006 and a
Director since November 2007. Mr. Healey has also been
Vice-President, Secretary and Chief Financial Officer since May 2006 and a
Director since November 2007 of Kent International Holdings,
Inc. Since July 2006, Mr. Healey has been a registered representative
of T. R. Winston & Company, LLC. From September 1995 to April
2006, Mr. Healey was with Bowman & Company, L.L.P., the largest CPA firm in
Southern New Jersey, in various positions including audit manager from July
2001
to April 2006.
BOARD
MEETINGS AND COMMITTEES
The
Board
of Directors held two meetings during the year ended December 31, 2006 and
otherwise acted by written consent. Each of the Company’s directors
attended all of the meetings of the Board of Directors and of all committees
of
the Board on which he served.
During
the year ended December 31, 2006, the Board had an Audit Committee, which
consisted of Messrs. Tjang, Witte and Mahomes. The Audit Committee,
which reviews the Company’s internal controls, accounting practices and
procedures, and results of operations, held five meetings in 2006.
Meetings
of independent directors are held at regularly scheduled Audit Committee
meetings throughout the year.
Exemptions
for a Controlled Company Election
NASDAQ
has established specific exemptions from its listing standards for controlled
companies, i.e., companies of which more than 50% of the voting power is held
by
an individual, a group or another entity. Kent Financial is a “controlled
company” by virtue of the fact that Mr. Paul O. Koether, Chairman of the Board,
Chief Executive Officer and President of the Company controls a majority
interest in the stock of the Company. Please see “Stock Ownership of
Directors, Executive Officers and Certain Beneficial Owners.”
The
Company has elected to rely upon certain of the exemptions provided in the
rules. Specifically, the Company will rely on exceptions to the
requirements that listed companies (i) select, or recommend for the Board’s
selection, director nominees by a majority of independent directors or a
nominating committee comprised solely of independent directors, and (ii)
determine officer compensation by a majority of independent directors or a
compensation committee comprised solely of independent directors.
Communications
with the Directors
Stockholders
may communicate in writing with any of the Company’s directors by sending such
written communication to Bryan P. Healey, Secretary of the Company, at the
Company’s principal executive offices, 211 Pennbrook Road, P.O. Box 97, Far
Hills, New Jersey, 07931. Copies of written communications received at such
address will be provided to the relevant director or directors unless such
communications are determined by the Company’s outside general counsel to be
inappropriate for submission to the intended recipients. However, any
communication not so delivered will be made available upon request to any
director. Examples of stockholder communications that would be
considered inappropriate for submission include, customer complaints,
solicitations, product promotions, resumes and other forms of job inquiries,
as
well as material that is unduly hostile, threatening, illegal or similarly
unsuitable.
Policy
on Director Attendance at Annual Meetings
Although
all Board members are encouraged to attend the Company’s annual meetings of
stockholders, attendance at the annual meeting is not mandatory.
Audit
Committee Financial Expert
The
Board
of Directors of the Company have determined Casey K. Tjang is an audit committee
financial expert as that term is defined under SEC rules and that Mr. Tjang
is
independent, as the term is used in Item 7 (d) (3) (iv) of Schedule 14A under
the Exchange Act.
Compensation
of Directors
Directors
who are not employees of the Company receive a monthly fee of $1,000 plus $200
for each day of attendance at board and committee meetings. During
2006, the Company paid directors' fees in the aggregate amount of
$42,400. The table below includes information about compensation paid
to our non-employee directors:
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Name
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Fees
Earned or
Paid
in
Cash
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Total
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William
Mahomes, Jr.
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$
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14,400
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$
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14,400
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|
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Casey
K. Tjang
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14,400
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14,400
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M.
Michael Witte
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13,600
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13,600
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$
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42,400
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$
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42,400
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Code
of Ethics
The
Company has adopted a Code of Ethics. Stockholders may write to Bryan
P. Healey, the Secretary of the Company, at the Company’s principal executive
office: 211 Pennbrook Road, P.O. Box 97, Far Hills, New Jersey, 07931, to
request a copy of the Code of Ethics, we will provide it to any person without
charge upon such request.
BENEFICIAL
OWNERSHIP
Security
Ownership of Officers, Directors, Nominees and Certain
Stockholders
The
following table sets forth the beneficial ownership of Common Stock of the
Company as of November 15, 2007, by each person who was known by the Company
to
beneficially own more than 5% of the Common Stock, by each current director
and
nominee, each executive officer, and by all current directors and executive
officers as a group:
Name
and Address of Beneficial Owner
|
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Number
of Shares
of
Common Stock
Beneficially
Owned
(1)
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Approximate
Percent
of
Class
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Paul
O. Koether
211
Pennbrook Road
Far
Hills, NJ 07931
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1,540,689
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(2)
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55.18
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%
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William
Mahomes, Jr.
900
Jackson Street
Suite
540
Dallas,
TX 75202
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-
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*
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Casey
K. Tjang
510
Tallwood Lane
Greenbrook,
NJ 08812
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-
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*
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M.
Michael Witte
1120
Granville Avenue
Suite
102
Los
Angeles, CA 90049
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2,000
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*
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Marital
Trust u/w/o Natalie I. Koether
211
Pennbrook Road
Far
Hills, NJ 07931
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451,434
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16.12
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%
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Bryan
P. Healey
211
Pennbrook Road
Far
Hills, NJ 07931
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22,744
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(3)
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*
|
|
|
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|
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|
|
|
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All
Directors and Officers as a group (5 persons)
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1,565,433
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56.07
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%
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____________________
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*
Represents less than 1%
|
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(1)
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The
beneficial owner has both sole voting and sole investment powers
with
respect to these shares except as set forth in other footnotes
below.
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(2)
|
Includes
53,106 shares held in Mr. Koether’s IRA. Also includes 451,434 shares
beneficially owned by the Marital Trust u/w/o Natalie I. Koether.
As
trustee, Mr. Koether may be deemed to own these shares
beneficially.
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|
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(3)
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Includes
700 shares held in Mr. Healey’s IRA. Also includes 22,044
shares beneficially owned by Mr. Healey’s
spouse.
|
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act as amended and the regulations and rules promulgated
thereunder require the Company’s officers, directors and persons who own more
than ten percent of a registered class of the Company’s equity securities to (i)
file reports of ownership and changes in ownership on Forms 3, 4 and 5 with
the
Securities and Exchange Commission and (ii) furnish copies of these filings
to
the Company.
Based
solely on the Company’s review of the copies of such forms (and amendments) it
has received and representations from certain reporting persons that they were
not required to file Forms 5 for specified fiscal years, we believe that all
officers, directors and persons who own more than ten percent of a registered
class of the Company’s equity securities complied with all filing requirements
applicable to them with respect to transactions during fiscal 2006.
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
Summary Compensation Table may be found under Item 10.
Executive
Compensation
in Form 10-KSB for the year ended December 31, 2006 mailed
together with this Information Statement.
Stock
Option and Stock Appreciation Rights; Grants and Exercises
In
2005,
stockholders holding approximately 54.69% of the outstanding common stock of
the
Company approved the Kent Financial Services, Inc. 2005 Stock Option Plan (“2005
Stock Option Plan”), by written consent. The Board of Directors also
approved the 2005 Stock Option Plan. Under the 2005 Stock Option
Plan, a total of 400,000 shares of Common Stock were available for issuance
to
key employees, including officers of the Company or any of its
subsidiaries. In November 2005, 300,000 Common Stock options were
issued to Dr. Qun Yi Zheng, the Company’s former President. 33,000 of
these options were immediately exercisable with an additional 33,000 becoming
exercisable on the first eight anniversaries of the grant date. On
August 31, 2007, the effective date of Dr. Zheng’s resignation, the 66,000
common stock options that had become exercisable were forfeited as were the
234,000 options that were still unexercisable. At November 15, 2007,
the Company had no common stock options outstanding.
Long-Term
Incentive Plan Awards Table and Defined Benefit or Actuarial Plan
Table
The
Company does not maintain any long-term incentive plans or defined benefit
or
actuarial plans.
Employment
Agreements
Employment
agreements
may
be found under Item 10.
Executive Compensation
in Form 10-KSB for the
year ended December 31, 2006 mailed together with this Information
Statement.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS Management Fee
The
Company receives a monthly management fee of $21,000 from Kent International
Holdings, Inc. (“Kent International”) for management services. These
services include, among other things, preparation of periodic and other filings
with the Securities and Exchange Commission, evaluating merger and acquisition
proposals, providing internal accounting services and shareholder
relations. This arrangement may be terminated at will by either
party. The monthly management fee revenue and offsetting expense is
eliminated during consolidation. The Company is the beneficial owner
of approximately 53.25% of Kent International’s outstanding Common Stock at
November 15, 2007. Paul O. Koether, Chairman of the Company is also
the Chairman of Kent International and the beneficial owner of approximately
55.18% of the Company’s outstanding common stock. Bryan P. Healey,
Chief Financial Officer and Director of the Company is also the Chief Financial
Officer and Director of Kent International and the son-in-law of Paul O.
Koether.
The
Company and its consolidated subsidiaries reimburse an affiliate, Bedminster
Management Corp., for the allocated direct cost of group health insurance and
office supplies. These reimbursements were approximately $78,000 and $55,000
in
the years ended December 31, 2006 and 2005, respectively. Bedminster
Management Corp. facilitates the allocation of certain central administrative
costs on a cost reimbursement basis and is owned equally by Kent, Kent
International and T.R. Winston & Company, LLC.
AUDIT
COMMITTEE REPORT
The
Company established an Audit Committee in accordance with Section 3(a)(58)
of
the Exchange Act. The Audit Committee consists of three directors, Mr. Tjang,
Mr. Witte and Mr. Mahomes, each of whom is independent as that term is defined
in Rule 4200 (a)(14) of the National Association of Securities Dealers’
Marketplace Rules. A brief description of the responsibilities of the
Audit Committee is set forth above under the caption “Board Meetings and
Committees.” The Audit Committee has adopted a charter, a copy of
which is attached hereto in Appendix A.
The
Audit
Committee has reviewed and discussed the Company’s audited financial statements
for fiscal 2006 with the management of the Company. The Audit
Committee has discussed with Paritz & Company, P.A.. (“Paritz”), the
Company’s independent registered public accounting firm for the year ended
December 31, 2006, the matters required to be discussed by Statement on Auditing
Standards No. 61 (as modified and supplemented). The Company also has
received the written disclosure and letter from Paritz required by Independence
Standards Board Standard No. 1 (as modified and supplemented), and has discussed
with Paritz its independence.
Based
on
the review and discussions referred to above, the Audit Committee recommended
to
the Board of Directors that the Company’s audited financial statements be
included in the Company’s Annual Report on Form 10-KSB for the year ended
December 31, 2006 for filing with the Securities and Exchange
Commission.
The
Audit
Committee
Casey,
K.
Tjang, Chairman
M.
Michael Witte
William
Mahomes, Jr.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Amper,
Politziner & Mattia, P.C. (“APM”) served as Kent Financial’s independent
registered public accounting firm for the fiscal years ended December 31, 2005
and 2004. On November 2, 2006, the Company dismissed APM as the
Company’s independent registered public accounting firm and engaged Paritz &
Company, P.A. (“Paritz”) as its new independent registered public accounting
firm. As described below, the change in independent public accounting
firms was not the result of any disagreement with
APM. Representatives of Paritz are not expected to be present at the
meeting.
The
reports of APM on the consolidated financial statements for the Company’s two
most recent fiscal years ended December 31, 2005 and December 31, 2004, did
not
contain an adverse opinion or disclaimer of opinion and were not qualified
or
modified as to uncertainty, audit scope, or accounting principles. In
connection with its audits for the years ended December 31, 2005 and December
31, 2004 and in the subsequent interim period through November 2, 2006 there
were (1) no disagreements with APM on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure,
which
disagreements, if not resolved to the satisfaction of APM, would have caused
them to make reference thereto in connection with its reports on the financial
statements for such years or (2) reportable events. APM furnished the
Company with a letter addressed to the Securities and Exchange Commission
stating that it agreed with the above statements.
On
November 2, 2006, the Board of Directors engaged Paritz as the Company’s
independent registered public accounting firm for the fiscal year ending
December 31, 2006, and to perform procedures related to the financial statements
to be included in the Company’s quarterly report on Form 10-QSB, beginning with,
and including, the quarter ending March 31, 2007. The Company had not
consulted with Paritz during its two most recent fiscal years ended December
31,
2005 and December 31, 2004, or during any subsequent interim period prior to
its
appointment as the Company’s auditor regarding (i) the application of accounting
principles to a specified transaction, either completed or proposed or the
type
of audit opinion that might be rendered on the Company’s consolidated financial
statements, and neither a written report was provided to the Company nor oral
advice was provided that Paritz concluded was an important factor considered
by
the Company in reaching a decision as to the accounting, auditing or financial
reporting issue; or (ii) any matter that was either the subject of disagreement
(as defined in Item 304(a)(1)(iv) of Regulation S-K and the related
instructions) or a reportable event (within the meaning of Item 304(a)(1)(v)
of
Regulation S-K).
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
Amounts
paid to APM and Paritz may be found under Item 14.
Principal Accountant Fees
and Services
in Form 10-KSB for the year ended December 31, 2006 mailed
together with this Information Statement.
STOCKHOLDERS’
PROPOSALS AND NOMINATIONS
Any
stockholder who desires to present proposals to the 2007 annual meeting and
to
have such proposals set forth in the Company’s information statement mailed in
conjunction with such annual meeting must submit such proposals to the Company’s
not later than August 5, 2008. All stockholder proposals must comply with Rule
14a-8 promulgated by the Securities and Exchange Commission. While the Board
of
Directors will consider stockholder proposals, the Company reserves the right
to
omit from the Company’s information statement stockholder proposals that it is
not required to include under the Exchange Act, including Rule
14a-8.
In
addition, the Company’s policy on stockholder nominations for director
candidates requires that to be considered for next year’s slate of directors any
stockholder nominations for director must be received by Bryan P. Healey, the
Secretary of the Company, at the Company’s principal executive office: 211
Pennbrook Road, Far Hills, New Jersey 07931, no later than August 5,
2008.
Stockholders
may write to Bryan P. Healey, the Secretary of the Company, at the Company’s
principal executive office: : 211 Pennbrook Road, P.O. Box 97, Far Hills, New
Jersey 07931, to deliver the stockholder proposals and stockholder nominations
discussed above.
ADDITIONAL
INFORMATION
A
copy of
the Company’s Annual Report on Form 10-KSB for the fiscal year ended December
31, 2006 accompanies this Information Statement.
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By
Order of the Board of Directors
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/s/
Paul O. Koether
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Paul
O. Koether
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Chairman
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Dated:
November 26, 2007
APPENDIX
A
KENT
FINANCIAL SERVICES, INC., AUDIT COMMITTEE CHARTER
INTRODUCTION
This
Audit Committee Charter (“Charter”) has been adopted by the Board of Directors
(the “Board”) of Kent Financial Services, Inc. (the “Company”). The Audit
Committee of the Board (the “Committee”) shall review and reassess this Charter
annually and recommend any proposed changes to the Board for
approval.
The
Committee assists the Board in fulfilling its responsibility for oversight
of
the quality and integrity of the accounting, auditing, internal control and
financial reporting practices of the Company. It may also have such other duties
as may from time to time be assigned to it by the Board.
The
membership of the Committee shall consist of at least three directors, who
are
each free of any relationship that, in the opinion of the Board, may interfere
with such member’s individual exercise of independent judgment. Each Committee
member shall also meet the independence and financial literacy requirements
for
serving on audit committees, and at least one member shall have accounting
or
related financial management expertise, all as set forth in the applicable
rules
of Nasdaq.
The
Committee shall maintain free and open communication with the independent
auditors, and Company management. In discharging its oversight role, the
Committee is empowered to investigate any matter relating to the Company’s
accounting, auditing, internal control or financial reporting practices brought
to its attention, with full access to all Company books, records, facilities
and
personnel. The Committee at Company expense may retain outside counsel, auditors
or other advisors as the Committee may deem appropriate.
One
member of the Committee shall be appointed as chair. The chair shall be
responsible for leadership of the Committee, including scheduling and presiding
over meetings, preparing agendas, and making regular reports to the Board.
The
chair will also maintain regular liaison with the CEO, CFO and the lead
independent audit partner.
The
Committee shall meet at least four times a year, or more frequently as the
Committee considers necessary. At least once each year the Committee shall
have
separate private meetings with the independent auditors and
management.
Responsibilities
Although
the Committee may wish to consider other duties from time to time, the general
recurring activities of the Committee in carrying out its oversight role are
described below. The Committee shall be responsible for:
a. Recommending
to the Board the independent auditors to be retained (or nominated for
stockholder approval) to audit the financial statements of the Company. Such
auditors are ultimately accountable to the Board and the Committee, as
representatives of the stockholders.
b. Evaluating,
together with the Board and management, the performance of the independent
auditors and, where appropriate, replacing such auditors.
c. Obtaining
annually from the independent auditors a formal written statement describing
all
relationships between the auditors and the Company, consistent with Independence
Standards Board Standard Number 1. The Committee shall actively engage in a
dialogue with the independent auditors with respect to any relationships that
may impact the objectivity or independence of the auditors and shall take,
or
recommend that the Board take, appropriate actions to oversee and satisfy itself
as to the auditors’ independence.
d. Reviewing
the audited financial statements and discussing them with management and the
independent auditors. These discussions shall include the matters required
to be
discussed under Statement of Auditing Standards No. 61 and consideration of
the
quality of the Company’s accounting principles as applied in its financial
reporting, including a review of particularly sensitive accounting estimates,
pricing of securities held by the Company, reserves and accruals, judgmental
areas, audit adjustments (whether or not recorded), and other such inquiries
as
the Committee or the independent auditors shall deem appropriate. Based on
such
review, the Committee shall make its recommendation to the Board as to the
inclusion of the Company’s audited financial statements in the Company’s Annual
Report on Form 10-KSB and any Annual Report to Shareholders.
e. Issuing
annually a report to be included in the Company’s proxy statement as required by
the rules of the Securities and Exchange Commission.
f. Overseeing
the relationship with the independent auditors, including discussing with the
auditors the nature and rigor of the audit process, receiving and reviewing
audit reports, and providing the auditors full access to the Committee (and
the
Board) to report on any and all appropriate matters.
g. Discussing
with a representative of management and the independent auditors: (1) the
interim financial information contained in the Company’s Quarterly Reports on
Form 10-QSB prior to their filing, (2) earnings announcements prior to release
(if practicable), and (3) the results of the review of any such information
by
the independent auditors. (These discussions may be held with the Committee
as a
whole or with the Committee chair, either in person or by
telephone.)
h. Discussing
with management, and the independent auditors the quality and adequacy of and
compliance with the Company’s internal controls.
i. Discussing
with management and/or Company counsel any legal matters (including the status
of pending litigation) that may have a material impact on the Company’s
financial statements, and any material reports or inquiries from regulatory
or
governmental agencies.
j. Reviewing
management “conflict of interest” transactions.
The
Committee’s job is one of oversight. Management is responsible for the
preparation of the Company’s financial statements and the independent auditors
are responsible for auditing those financial statements. The Committee and
the
Board recognize that management and the independent auditors have more resources
and time, and more detailed knowledge and information regarding the Company’s
accounting, auditing, internal control and financial reporting practices than
the Committee does. Accordingly the Committee’s oversight role does not provide
any expert or special assurance as to the financial statements and other
financial information provided by the Company to its stockholders and
others.
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