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Kent Financial Services Inc. Reports Operating Results (10-K/A)
Posted by: gurufocus (IP Logged)
Date: July 1, 2011 10:30PM
Kent Financial Services Inc. (KENT) filed Amended Annual Report for the period ended 2010-12-31. Kent Financial Services Inc. has a market cap of $3.3 million; its shares were traded at around $1.2087 with and P/S ratio of 90.1.
Highlight of Business Operations:
Kent International had very limited business operations during 2010 and 2009, and the Company had net losses of $359,041 and $474,618 in 2010 and 2009, respectively. At December 31, 2010, the accumulated deficit was $89,833,067. Kent International initiated its broker-dealer operations at the end of 2009; however, the Company does not expect that its securities broker-dealer or its business development activity will generate any significant revenues for an indefinite period as these efforts are in their early stages. As a result, these activities will produce losses until such time as meaningful revenues are achieved.
The Company had a consolidated net loss of $502,604, ($.18 basic and fully diluted loss per share) in 2010, compared to a consolidated net loss of $530,593 ($.19 basic and fully diluted loss per share) in 2008. The decrease in the net loss was mainly the result of decreased expenses incurred by the Company s subsidiaries (discussed in greater detail below) offset by decreased income from discontinued operations.
Interest income was $10,100 and $18,996 in 2010 and 2009, respectively, a decrease of $8,896. The decrease was primarily caused by dramatically lower yields on invested balances and, to a lesser extent, a decrease in amounts available for investment.
Net unrealized gains on available for sale securities were $39,329, and realized losses were $2,088 for the year ended December 31, 2010 as compared to net unrealized losses on available for sale securities of $16,845, and no realized gains or losses for the year ended December 31, 2009. Since marketable securities are classified as available for sale securities, unrealized losses during the years ended December 31, 2010 and 2009 were recorded as an adjustment to accumulated other comprehensive income in stockholder s equity.
General and administrative expenses decreased to $699,007 for the year ended December 31, 2010 from $836,572 for 2009. Significant decreases included $95,051 for consulting and legal fees paid by Kent International in 2009 for due diligence on a proposed acquisition that was terminated prior to closing. These expenses did not recur in 2010. Other material expense decreases during 2010, occurring in subsidiaries of Kent International, were $6,000 in consulting expenses related to the licensing and operation of Kent Capital, Inc. and $22,952 related to the operation of ChinaUSPals.com.
At December 31, 2010, the Company had cash and cash equivalents of $10,514,981. Cash and cash equivalents consist of cash held in banks and brokerage firms, or U.S. treasury bills with original maturities of three months. Working capital at December 31, 2010 was approximately $10.42 million. Management believes its cash and cash equivalents are sufficient for its business activities for at least the next 12 months and for the costs of seeking an acquisition of or starting an operating business.
Stocks Discussed: KENT,