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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-QSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 0-13328
For the quarterly period ending May 31, 2004

SENTEX SENSING TECHNOLOGY, INC.(Exact name of registrant as specified in its charter)


New Jersey
    
    22-2333899(State or other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)


1801 East Ninth Street
Cleveland, Ohio
    
    44114(Address of principal executive offices)
    
    (Zip Code)


(216) 687-0289(Registrants telephone number including area code)


Securities registered pursuant to Section 12 (b) of the Act:
None

Securities registered pursuant to Section 12 (g) of the Act:
Common Shares, no par value

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 15(d) of the Securities and
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No

Number of shares of Common Shares (No Par Value) of SENTEX SENSING
TECHNOLOGY, Inc., issued and outstanding as of the latest practicable
date is 101,764,911





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|                                                                                      |  |  |  |  |  |  |  | 
|------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|CONSOLIDATED BALANCE SHEET                                                           
|CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS                             
|CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE SIX MONTHS                              
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)                               
|MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|SIGNATURE                                                                            
|Exhibit 31.1 302 Cert of CEO                                                         
|Exhibit 31.2 302 Cert of CFO                                                         
|Exhibit 32.1 906 Cert                                                                
|Exhibit 32.2 906 Cert                                                                



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SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
NOVEMBER 30, 2003 AND MAY 31, 2004

November 30,
    
    May 31,2003
    
    2004(Audited)
    
    (Unaudited)ASSETSCURRENT ASSETSCash
    
    $
    45,330
    
    
    $
    6,064Accounts receivable  trade, net of allowance fordoubtful accounts of $35,000
    
    
    225,481
    
    
    
    89,112Inventory
    
    
    343,672
    
    
    
    45,085TOTAL CURRENT ASSETS
    
    
    614,483
    
    
    
    140,261FIXED ASSETSComputer equipment
    
    
    4,009
    
    
    
    4,009Less accumulated depreciation
    
    
    2,927
    
    
    
    3,1971,082
    
    
    
    812OTHER ASSETSRestricted stock investment
    
    
    4,800
    
    
    
    4,800Goodwill
    
    
    36,042
    
    
    
    36,042Deposits
    
    
    990
    
    
    
    99041,832
    
    
    
    41,832TOTAL ASSETS
    
    $
    657,397
    
    
    $
    182,905LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESNotes payable:Bank
    
    $
    2,500,000
    
    
    $
    2,500,000Related party
    
    
    3,453,125
    
    
    
    3,577,693Accounts payable ($612,066 & 795,397 to related parties)
    
    
    1,006,180
    
    
    
    1,051,493Accrued liabilities
    
    
    200,536
    
    
    
    186,344Consulting Contracts Payable
    
    
    21,249
    
    
    
    21,249Convertible subordinated notes payable
    
    
    12,423
    
    
    
    12,423TOTAL CURRENT LIABILITIES
    
    
    7,193,513
    
    
    
    7,349,202STOCKHOLDERS EQUITYCommon stock, no par value
    
    
    2,867,579
    
    
    
    2,867,579Authorized - 200,000,000 sharesIssued - 109,460,911 sharesOutstanding - 101,764,911 sharesAccumulated deficit
    
    
    (9,134,227
    )
    
    
    (9,764,408
    )Treasury shares at cost, 7,696,000 shares
    
    
    (269,468
    )
    
    
    (269,468
    )TOTAL STOCKHOLDERS EQUITY
    
    
    (6,536,116
    )
    
    
    (7,166,297
    )TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    657,397
    
    
    $
    182,905


See Notes to Consolidated Financial Statements

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SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS
ENDED MAY 31, 2003 AND MAY 31, 2004 (UNAUDITED)

Three Months Ended
    
    Six Months EndedMay 31,
    
    May 31,
    
    May 31,
    
    May 31,2003
    
    2004
    
    2003
    
    2004REVENUESSales
    
    
    1,027,077
    
    
    
    783,249
    
    
    
    2,056,918
    
    
    
    1,374,344Interest and other income
    
    
    8,138
    
    
    
    23,366
    
    
    
    15,907
    
    
    
    35,633Total Revenues
    
    
    1,035,215
    
    
    
    806,615
    
    
    
    2,072,825
    
    
    
    1,409,977COST OF GOODS SOLD
    
    
    634,292
    
    
    
    545,670
    
    
    
    1,253,743
    
    
    
    1,146,704GROSS PROFIT
    
    
    400,923
    
    
    
    260,945
    
    
    
    819,082
    
    
    
    263,273OPERATING EXPENSESAdministration
    
    
    296,177
    
    
    
    414,672
    
    
    
    567,062
    
    
    
    784,179Total expenses
    
    
    296,177
    
    
    
    414,672
    
    
    
    567,062
    
    
    
    784,179PROFIT(LOSS) FROM OPERATIONS
    
    
    104,746
    
    
    
    (153,727
    )
    
    
    252,020
    
    
    
    (520,906
    )OTHER EXPENSEInterest Expense
    
    
    63,861
    
    
    
    54,832
    
    
    
    127,806
    
    
    
    109,275PROFIT(LOSS) BEFORE PROVISION FOR
INCOME TAX EXPENSE
    
    
    40,885
    
    
    
    (208,559
    )
    
    
    124,214
    
    
    
    (630,181
    )PROVISION FOR INCOME TAX EXPENSE
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NET PROFIT(LOSS)
    
    $
    40,885
    
    
    $
    (208,559
    )
    
    $
    124,214
    
    
    $
    (630,181
    )NET PROFIT(LOSS) PER SHARE
(BASIC AND DILUTED)
    
    $
    0.00
    
    
    $
    (0.00
    )
    
    $
    0.00
    
    
    $
    (0.01
    )WEIGHTED NUMBER OF SHARES OUTSTANDING
    
    
    101,764,911
    
    
    
    101,764,911
    
    
    
    101,764,911
    
    
    
    101,764,911


See Notes to Consolidated Financial Statements

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SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE SIX MONTHS
ENDED MAY 31, 2003 AND MAY 31, 2004 (UNAUDITED)

Six Months EndedMay 31,
    
    May 31,2003
    
    2004OPERATING ACTIVITIES:Net profit(loss)
    
    $
    124,214
    
    
    $
    (630,181
    )Depreciation
    
    
    
    
    
    
    270Adjustment to reconcile net (loss) income to net
cash provided by (used in) operating
activities:Change in assets and liabilities:(Increase) decrease in:Accounts receivable
    
    
    (410,154
    )
    
    
    136,369Inventories
    
    
    (189,591
    )
    
    
    298,587Other assets
    
    
    28,054
    
    
    
    Increase (decrease) in:Accounts payable
    
    
    (18,837
    )
    
    
    (226,007
    )Accrued liabilities
    
    
    256,428
    
    
    
    257,128TOTAL ADJUSTMENTS
    
    
    (334,100
    )
    
    
    466,347Net cash used by operating activities
    
    
    (209,886
    )
    
    
    (163,834
    )CASH FLOWS FROM FINANCING ACTIVITIESProceeds on notes and accounts payable  related party
    
    
    153,943
    
    
    
    124,568Payment on note payable  related party
    
    
    
    
    
    
    Net cash provided by financing activities
    
    
    153,943
    
    
    
    124,568NET INCREASE (DECREASE) IN CASH
    
    
    (55,943
    )
    
    
    (39,266
    )CASH  BEGINNING OF PERIOD
    
    
    74,633
    
    
    
    45,330CASH  END OF PERIOD
    
    $
    18,690
    
    
    $
    6,064


See Notes to Consolidated Financial Statements

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SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1) In the opinion of management, the unaudited financial statements contain
all adjustments (consisting of only normal recurring accruals and repayments)
necessary to present fairly the financial position at May 31, 2004 and the
results of operations and cash flows for the six months ended May 31, 2003 and
May 31, 2004.

These interim statements should be read in conjunction with the audited
financial statements and notes thereto included in the Companys Annual Report
on Form 10-KSB for the fiscal year ended November 30, 2003 (Commission File No.
2-13328)

(2) The results of operations for the six months ended May 31, 2003 and May
31, 2004 are not necessarily indicative of the results to be expected for the
full year.

(3) PROFIT(LOSS) PER SHARE

Profit(loss) per share is calculated using the weighted average number of
common shares outstanding. Potentially dilutive securities are insignificant.

(4) PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Sentex Sensing
Technology, Inc. and its wholly-owned subsidiaries (the Company). All
material inter-company accounts and transactions have been eliminated in
consolidation.

(5) RESTRICTED STOCK INVESTMENT

During the Companys third quarter ending August 31, 2003, substantially all of
the business and assets of Metrisa, Inc. were sold to Galvanic Applied
Sciences, Inc. (a Canadian corporation). The purchase price was approximately
$2,500,000 of which approximately $251,000 has been held in escrow for a period
of eighteen months pending the satisfaction of other financial obligations. It
is anticipated that approximately $ .25 to $ .40 per chare will be available to
the current stockholders of Metrisa as a liquidating distribution.

(6) LEGAL PROCEEDINGS

State of Ohio, Department of Administrative Services v. IQ Solutions,
LLC, et al.; Case No. 03-CVH05-6054; Franklin County Common Pleas Court,
Ohio.

On May 30, 2002, the State of Ohio, Department of Administrative
Services filed a complaint against IQ Solutions, LLC (IQ Solutions)
and CPS Holding Company, Ltd. (CPS Holdings), both of which are owned
and controlled by Robert S. Kendall, the Chairman and Chief Executive
Officer of the Company. The complaint alleges that IQ Solutions failed
to act properly as a third party administrator to procure natural gas
supplies for various state agencies and failed to pay approximately $5.8
million dollars that were forwarded to IQ Solutions by the various state
agencies for payment to the suppliers of the natural gas based on claim
for breach of contract, conversion and unjust enrichment. As part of
its investigation, the State of Ohio conducted an audit of IQ Solutions
and CPS Holdings in which it identified approximately $255,000 had been
advanced from the defendants bank account to the Company. The amount
of these loans are recorded on the audited financial statements of the
Company as related party notes payable, and effectively are repayable at
the discretion of Mr. Kendall.

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On December 8, 2003, the State of Ohio ammended its complaint to add,
among others, Mr. Kendall, Mr. Hess, and 15 business entities,
comprising CPS Capital, Ltd. (the controlling shareholder of the
Company) the Company, all of the Companys subsidiaries and all other
companies with which Mr. Kendall has ever been associated. These
entities have been added on the theory that they are the alter egos of
one another, and the State of Ohio asserts these entities are jointly
and severally liable for the entire $5.8 million dollars in damages,
plus prejudgment interest, post-judgment interest, punitive damages, its
costs and attorney fees. The Company believes that other than with
respect to the $255,000 it received from the initial defendants (which
is documented as a related party note payable), the Company and its
subsidiaries have no liability with respect to the damages that are
being sought.

On April 6, 2004, the Court granted the plaintiffs and defendants
joint motion to stay the litigation pending the outcome of a declaratory
action filed by one of the insurers of these defendants relating to the
insurers indemnity obligations. No assurance, however, can be given
with respect to the timing or ultimate resolution of this matter.

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SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

On July 2, 2001, the Company purchased Regency Technologies, LLC from
Regency Steel, LLC and other members.

Regency Technologies specializes in the buying, selling, and trading of
information technology equipment (primarily computer equipment). The
primary focus of our business revolves around acquiring unneeded, older
computer equipment and reselling that equipment to certain consumers on
a global basis.

FINANCIAL CONDITION

Working Capital and Liquidity

During the last several fiscal years, the Company has incurred losses and
significant working capital deficits. In addition, the Companys certified
public accountants, Hausser + Taylor LLC, have included in their auditors
report, which covers the Companys financial statements for the years ended
November 30, 2002 and November 30, 2003, a statement that the Companys
recurring losses and significant working capital deficits raised substantial
doubt about the Companys ability to continue as a going concern.

To address the Companys working capital needs, the Company, In July 1998,
established a bank line of credit of $2,000,000, and in August 2001, in
connection with a refinancing, an additional $500,000 was provided, all of
which is secured by the personal guarantee of Robert S. Kendall, the Chairman
of the Company. From time to time, CPS has provided the Company with temporary
working capital loans and as of May 31, 2004, there was an outstanding
borrowing of $3,577,693 on those loans.

Net Operating Losses

The Company has approximately $15,630,000 in net tax operating loss
carryforwards as of May 31, 2004, which will expire at various dates through
the year 2023 that are mainly attributable to losses incurred by Monitek.
Federal tax law imposes restrictions on the use of net operating loss
carry-forwards in the event of a change in ownership, such as a merger. Due to
the merger with Monitek, approximately $6,265,000 of the $15,630,000 net
operating losses may be subject to these limitations and potentially may not be
able to provide any economic benefit to the Company.

RESULTS OF OPERATIONS

Six Months ended May 31, 2004 Compared to Six Months Ended May 31, 2003.

The results of the second quarter 2004 improved slightly over the first
quarter, but still reflect the effect of delays in equipment programs which
will come on stream in subsequent quarters and thereby grow our revenue and
margins substantially. The majority of this pick up will not be felt until the
third quarter of this year.

Insofar as our acquisition and capital raising programs are concerned, these
are continuing on as planned. Our hope is that we will soon conclude a
transaction and have a press release.

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SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)

CHANGES IN ACCOUNTING STANDARDS



| |  | New Accounting Standards  In December 2002, the Financial Accounting
Standards Board
(FASB) issued SFAS No. 148, Accounting for Stock-Based, Compensation -
Transition and Disclosure, that, among other provisions, amends SFAS No.
123, Accounting for Stock-Based Compensation, to provide alternative
methods of transition to the fair value method of accounting for stock-based
employee compensation. SFAS No. 148 also amends the disclosure New
Accounting Standards  In December 2002, the Financial Accounting Standards
Board (FASB provisions of SFAS No. 123 and APB Opinion No. 28, Interim
Financial Reporting. The Statement does not amend SFAS No. 123 to require
companies to account for employee stock options using the fair value method.
The Statement is effective for fiscal years beginning after December 15,
2002.                                                                                    
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. This statement amends and
clarifies financial reporting for derivative instruments, including certain
derivative instruments embedded in other contracts and for hedging activities
under SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities. This statement is effective for contracts entered into or
modified after June 30, 2003, and for hedging relationships designated after
June 30, 2003.                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. This
statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. SFAS No. 150 was originally to be effective for financial
instruments entered into or modified after May 31, 2003, and otherwise was to
be effective at the beginning of the first interim period beginning after
June 15, 2003. In November 2003, FASB issued FASB Staff Position 150-3 which
delays or defers indefinitely the effective date of certain provisions of
SFAS No. 150.                                                                                                                                                                                                                                         
|
| |  | In January 2003, the FASB issued Interpretation No. 46 (FIN 46),
Consolidation of Variable Interest Entities, an interpretation of
Accounting Research Bulletin No. 51. FIN 46 requires certain variable
interest entities, or VIEs, to be consolidated by the primary beneficiary of
the entity if the equity investors in the entity do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 is effective for
all VIEs created or acquired after January 31, 2003. For VIEs created or
acquired prior to February 1, 2003, the provisions of FIN 46 must be applied
for the first interim or annual period beginning after June 15, 2003. The
Company currently has no contractual relationship or other business
relationship with a variable interest entity.
|
| |  | The adoption of the new standards did not, or is not expected to, materially
affect the Companys financial position and results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|

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SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)

CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOUR OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995.

Certain statements in the Managements Discussion and Analysis of
Financial Condition and Results of Operations and the Financial
Statements included in this Annual Report on Form 10-KSB, in the
Companys press releases and in oral statements made by or with the
approval of an authorized executive officer of the Company constitute
forward-looking statements as that term is defined under the Private
Securities Litigation Reform Act of 1995. These may include statements
projecting, forecasting or estimating Company performance and industry
trends. The achievement of the projections, forecasts or estimates is
subject to certain risks and uncertainties. Actual results and events
may differ materially from those projected, forecasted or estimated.
The applicable risks and uncertainties include general economic and
industry conditions that affect all business, as well as matters that
are specific to the Company and the markets it serves.

Specific risks to the Company include an inability of the Company to
finance its working capital needs. In light of this and other
uncertainties, the inclusion of a forward-looking statement herein
should not be regarded as a representation by the Company that the
Companys plans and objectives will be achieved.

SUBSEQUENT EVENTS

Insofar as the statements made in our last 10-QSB regarding the acquisition and
capital raising programs are concerned, we are continuing to move forward
though nothing is completed as we go to press.

We have in the month of June, however, paid off the $2,500,000 bank debt
completely. This means that all of the debt on the books is now to related
parties and can be converted to equity, subordinated or otherwise enhanced to
help strengthen the company.

Our first two quarters have been absolutely awful and we have been unable to
move forward with the fulfillment of completed contracts. The third quarter,
however, has finally opened up and this will be a blockbuster quarter, thereby
virtually assuring that 2004 will surpass 2003 as originally predicted. The
economy seems to have truly turned around and we are now experiencing the new
business we had anticipated earlier in the year.

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SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized:

Date: July 7, 2004
    
    SENTEX SENSING TECHNOLOGY, INC.By: /s/ Robert S. Kendall
Robert S. Kendall, Chief Executive Officer/s/ Julius L. Hess
Julius L. Hess, Secretary and Director/s/ William R. Sprow
William R. Sprow, Chief Financial Officer/s/ William R. Sprow
William R. Sprow, Controller


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EXHIBITS AND REPORTS ON FORM 8-K

a)
    
    Exhibit 31.1
    
    302 Certification of Chief Executive OfficerExhibit 31.2
    
    302 Certification of Chief Financial OfficerExhibit 32.1
    
    Certification Pursuant To 18 U. S. C. Section 1350, As
Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act of 2002Exhibit 32.2
    
    Certification Pursuant To 18 U. S. C. Section 1350, As
Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act of 2002


b)
    
    No reports on Form 8-K were filed with the Commission during the
Registrants second quarter.


11