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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
 FORM 10-QSB QUARTERLY 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 February 28, 2005 SENTEX SENSING TECHNOLOGY, INC.  New Jersey
    
    22-2333899(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)1801 East Ninth StreetCleveland, 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 Exchange Act:
None Securities registered pursuant to Section 12 (g) of the Exchange 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 þ No o 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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TABLE OF CONTENTS  SIGNATUREEX-31.1 CEO CERTIFICATIONEX-31.2 CFO CERTIFICATIONEX-32.1 906 CEO CERTIFICATIONEX-32.2 906 CFO CERTIFICATION    Table of Contents  SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
NOVEMBER 30, 2004 AND FEBRUARY 28, 2005 November 30,
    
    
    February2004
    
    
    2005(Audited)
    
    
    (Unaudited)ASSETSCURRENT ASSETSCash
    
    $
    12,872
    
    
    $
    11,574Accounts
receivable - trade, net of allowance for
doubtful accounts of $55,000
    
    
    98,206
    
    
    
    184,481Inventory
    
    
    103,550
    
    
    
    95,459TOTAL CURRENT ASSETS
    
    
    214,628
    
    
    
    291,514FIXED ASSETSComputer equipment
    
    
    4,009
    
    
    
    4,009Less accumulated depreciation
    
    
    4,009
    
    
    
    4,009
    
    
    
    OTHER ASSETSGoodwill
    
    
    36,042
    
    
    
    36,042Deposits
    
    
    990
    
    
    
    99037,032
    
    
    
    37,032TOTAL ASSETS
    
    $
    251,660
    
    
    $
    328,546LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESNotes payable:Related party
    
    $
    6,203,340
    
    
    $
    6,241,847Trade and other accounts payable ($913,174 and
$967,507 to related parties)
    
    
    1,171,122
    
    
    
    1,267,405Accrued liabilities
    
    
    160,476
    
    
    
    185,834Consulting contracts payable
    
    
    21,249
    
    
    
    21,249Convertible subordinated notes payable
    
    
    12,423
    
    
    
    12,423TOTAL CURRENT LIABILITIES
    
    
    7,568,610
    
    
    
    7,728,758STOCKHOLDERS EQUITYCommon stock, no par value
Authorized - 200,000,000 shares
Issued - 109,460,911 shares
Outstanding - 101,764,911 shares
    
    
    2,867,579
    
    
    
    2,867,579Accumulated deficit
    
    
    (9,915,061
    )
    
    
    (9,998,323
    )Treasury shares at cost, 7,696,000 shares
    
    
    (269,468
    )
    
    
    (269,468
    )TOTAL STOCKHOLDERS EQUITY
    
    
    (7,316,950
    )
    
    
    (7,400,212
    )TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    251,660
    
    
    $
    328,546
 See Notes to Consolidated Financial Statements 2




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SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
ENDED FEBRUARY 29, 2004 AND FEBRUARY 28, 2005 (UNAUDITED) Three Months EndedFeb 29,
    
    
    Feb 28,2004
    
    
    2005REVENUESSales
    
    $
    591,095
    
    
    $
    752,146Interest and other income
    
    
    12,267
    
    
    
    5,228Total Revenues
    
    
    603,362
    
    
    
    757,374COST OF GOODS SOLD
    
    
    601,034
    
    
    
    353,285GROSS PROFIT
    
    
    2,328
    
    
    
    404,089OPERATING EXPENSESAdministration
    
    
    369,507
    
    
    
    408,517Total expenses
    
    
    369,507
    
    
    
    408,517PROFIT(LOSS) FROM OPERATIONS
    
    
    (367,179
    )
    
    
    (4,428
    )OTHER EXPENSEInterest Expense
    
    
    54,443
    
    
    
    78,834PROFIT(LOSS) BEFORE PROVISION FOR
INCOME TAX EXPENSE
    
    
    (421,622
    )
    
    
    (83,262
    )PROVISION FOR INCOME TAX EXPENSE
    
    
    
    
    
    
    NET PROFIT(LOSS)
    
    
    (421,622
    )
    
    
    (83,262
    )NET PROFIT(LOSS) PER SHARE (BASIC AND
DILUTED)
    
    $
    (0.00
    )
    
    $
    (0.00
    )WEIGHTED NUMBER OF SHARES OUTSTANDING
    
    
    101,764,911
    
    
    
    101,764,911
 See Notes to Consolidated Financial Statements 3




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SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE THREE MONTHS
ENDED FEBRUARY 29, 2004 AND FEBRUARY 28, 2005 (UNAUDITED) Three Months EndedFeb 29,
    
    
    Feb 28,2004
    
    
    2005OPERATING ACTIVITIES:Net loss
    
    $
    (421,622
    )
    
    $
    (83,262
    )Adjustment to reconcile net loss to net
cash used by operating activities:Depreciation and amortization
    
    
    
    
    
    
    Noncash interest expense
    
    
    41,079
    
    
    
    78,834Accounts receivable
    
    
    88,712
    
    
    
    (86,275
    )Inventories
    
    
    262,321
    
    
    
    8,091Other assets
    
    
    
    
    
    
    Accounts payable
    
    
    (133,764
    )
    
    
    96,283Accrued liabilities
    
    
    30,290
    
    
    
    (53,476
    )Total Adjustments
    
    
    288,638
    
    
    
    43,457Net cash used by operating activities
    
    
    (132,984
    )
    
    
    (39,805
    )CASH FLOWS FROM FINANCING ACTIVITIESProceeds on
notes and accounts payable - related party
    
    
    107,392
    
    
    
    38,507Payments on
note payable - related party
    
    
    (14,500
    )
    
    
    Net cash provided by financing activities
    
    
    92,892
    
    
    
    38,507NET INCREASE (DECREASE) IN CASH
    
    
    (40,092
    )
    
    
    (1,298
    )CASH - BEGINNING OF PERIOD
    
    
    45,330
    
    
    
    12,872CASH - END OF PERIOD
    
    $
    5,238
    
    
    $
    11,574Supplemental disclosure of cash flow information:Cash paid during the quarter for:Interest
    
    $
    13,364
    
    
    $
    
 See Notes to Consolidated Financial Statements 4




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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 February 28, 2005 and the results of operations and cash flows for the three
months ended February 29, 2004 and February 28, 2005. 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, 2004 (Commission File No. 2-13328). (2) The results of operations for the three months ended February 29, 2004 and February 28, 2005
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) 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. During October 2004, the Company was dismissed without prejudice from the above-caption and
previously disclosed matter. 5




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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 from operations. 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, 2003 and November 30, 2004, a statement that the Companys recurring
losses from operations raised substantial doubt about the Companys ability to continue as
a going concern. For fiscal years 2003 and 2004, the Company sustained losses of
approximately $531,000 and $781,000, respectively. These losses have had a substantial
adverse effect on the working capital of the Company. In June of 2004, the Company
restructured its $2,500,000 in bank financing. This
financing has subsequently been taken over by CPS, which now holds much of the working
capital debt that has been used in the business during 2004. As of February 28, 2005,
there was an outstanding balance of $6,242,000 on the loans from CPS. We believe these
loans have been secured under terms no less favorable than we could have obtained pursuant
to an arms-length transaction. In addition to the CPS loans, from time to time, Mr. Julius L. Hess, the Companys Vice
President, Secretary and a Director, has provided the Company with cash investments to
help fund certain specified transactions. From December 1, 2004 through February 28,
2005, Mr. Hess has invested a total of $147,770 to fund such transactions. In agreement
for providing such funds, which amounts may not otherwise have been available to the
Company, Mr. Hess typically receives remuneration in the amount of up to fifty percent of
the gross profit from such transactions. Upon settlement of the transactions during the
period from December 14, 2004 through February 28, 2005, Mr. Hess will have received total
proceeds of $177,987. We believe these investments have been secured under terms no less
favorable than we could have obtained pursuant to an arms-length transaction. As of
February 28, 2005, there was an outstanding balance of $146,270 on these loans. In addition to the above-noted investments, Mr. Hess has, from time to time, provided
loans to the Company to cover certain working capital expenses such as payroll. Mr. Hess
does not receive any remuneration for these loans, other than the return of principal.
These loans are typically paid back within a short period of time. From December 1, 2004
through February 28, 2005, Mr. Hess provided $65,000 in loans of this kind to the Company.
As of February 28, 2005, there was an outstanding balance of $50,000 on these loans. Net Tax Operating Loss Carryforwards 6




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SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued) As of February 28, 2005 the Company has approximately $15,864,000 in net tax operating loss
carryforwards which will expire at various dates through the year 2024 that are mainly attributable
to losses incurred by Monitek. Federal tax law imposes restrictions on the use of net operating
loss carryforwards in the event of a change in ownership, such as a merger. Due to the merger with
Monitek, approximately $6,265,000 of the $15,864,000 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 Three Months ended February 29, 2004 compared to Three Months Ended February 28, 2005. First quarter 2005 results were significantly improved of the first quarter 2004. Sales increased
by $154,000 or 25.5%. Gross profit went from near zero to $404,000 which resulted in a 53.7%
margin on sales. This favorable performance was largely due to first quarter sales being generated
from asset recovery products that typically produce larger than normal margins. Operating expenses of $408,000 were in line with the increased sales. Interest expense is higher for 2005 primarily due to the increases in the prime rate. Losses for the first quarter amounted to $83,000. CURRENT OUTLOOK Volume is now accelerating
at a rapid pace and the second quarter revenue should be up
substantially from the second quarter of 2004. The Company continues to actively pursue various capital sources and strategic partners in an
effort to recapitalize and restructure the Company so that it may move forward with its new and
expanded business model. Although there can be no assurances, the
Company believes that it will
have its funding requirements fulfilled in the very near future. This is the key to the
substantial growth that can be achieved within our platform. CHANGES IN ACCOUNTING STANDARDS New Accounting Standards  In December 2004, the Financial Accounting Standards Board (FASB)
issued SFAS No. 123, Share Based Payment. SFAS No. 123R, which amends SFAS No. 123, Accounting
or Stock Based Compensation, and SFAS No. 95, Statement of Cash Flows. SFAS 123R requires
all companies to measure compensation cost for all share-based payments at fair value, and will be
effective for public companies for interim and annual periods beginning after June 15, 2005. This new standard
may be adopted in one of two ways  the modified prospective transition method of the modified
retrospective transition method. The Company currently has no stock-based compensation plans. In December 2003, the FASB issued Interpretation No. 46 (revised December 2003) (FIN 46),
Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletin
No. 51. FIN 46R 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 46R 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 March 15, 2004. The Company currently has no
contractual relationship or other business relationship with a variable interest entity. 7




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SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued) The adoption of the new standards did not, or is not expected to, materially affect the Companys
financial position and results of operations 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. 8




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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: April 15, 2005
    
    SENTEX SENSING TECHNOLOGY, INC.By:
    
    /s/ Robert S. KendallRobert S. Kendall, Chief Executive Officer/s/ Julius L. HessJulius L. Hess, Secretary and Director/s/ William R. SprowWilliam R. Sprow, Chief Financial Officer/s/ William R. SprowWilliam R. Sprow, Controller
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EXHIBITS AND REPORTS ON FORM 8-Ka)
    
    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 2002b)
    
    No reports on Form 8-K were filed with the Commission during the small business issuers first quarter.
 10