<PAGE>

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

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

                          Commission File No. 2-13328
                  For the fiscal year ending November 30, 2003

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

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

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

                                 (216) 687-9133
                                 --------------
              (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 or 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 [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]

The Company's revenues for the fiscal year ended November 30, 2003 were
$3,457,479.

The aggregate market value of Sentex Sensing Technology, Inc. Common Shares, no
par value, held by non-affiliates, computed by reference to the average of the
closing bid and asked prices as reported on April 26, 2004: $5,088,246.

Number of shares of Common Shares (No Par Value) of SENTEX SENSING TECHNOLOGY,
INC., issued and outstanding as of April 26, 2004 is 101,764,911.

<PAGE>

           TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (Check One)
                                 Yes [ ] No [X]

                      DOCUMENTS INCORPORATED BY REFERENCE

Part IV - Item 13 - Exhibits, Financial Statement Schedules, and Reports on Form
8-K See Page 14

                                 ITEMS OMITTED

None

                                       2
<PAGE>

ITEM 1 BUSINESS

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.

When a company or institution determines its equipment is at the end of a
technology life cycle, it will typically go through a "refresh" process. During
a typical refresh process, a company will replace an average of one third of all
of its user-based technology assets (primarily computers). The typical lifespan
for most of these assets is about three years. Therefore, most major
corporations and institutions are refreshing one third of their IT population
every year. These assets include PC's (CPU's and laptops), Servers, Monitors,
Printers, Networking Equipment (routers, hubs, bridges, and other peripheral
computer equipment), as well as other equipment (Midrange up to Mainframe
Assets).

The asset recovery group of a company, along with its IT departments, typically
work to remove or dispose of the older technology assets while the new assets
are being rolled out. This process often emphasizes rolling out the new
equipment and tends to ignore the action plan for disposing of the old
equipment. This typically results in the complete write off of the old equipment
and a slow and cumbersome removal of the old equipment.

Regency Technologies seeks to fulfill a company's need to systematically and
efficiently dispose of its old equipment. We use traditional sales models as
well as Internet based research to identify prospects that are likely candidates
for our services. We have four full time employees concentrating on sourcing
equipment via asset recovery programs as well as selling equipment to
wholesalers, exporters, importers and maintenance companies. We have one inside
sales person who is responsible for selling equipment to retail accounts and
have one inside sales person who is responsible for the sale of parts only. We
expect our marketing staff to continue to expand and assist in our growth.

The Company hopes to offer a leasing option using the skills of its management
team, which has extensive experience in financial services and leasing of
equipment. The leasing industry generates in excess of $200 billion per year in
new lease revenue and is characterized by attractive growth prospects. It is a
mega-industry with many participants and no truly dominant player.

As of November 30, 2003, the Company employed approximately 24 full-time
employees and used the services of four other persons from CPS. Management
believes its relations with the employees are good. The Company does not
currently rely on any patented technologies or other trade secrets to operate.
It primarily relies on its knowledge of the industry and the computer trading
market. The Company believes that while the financial barriers to entry into
this market are relatively low, and therefore, potentially faces competition
from a variety of sources, that it has a competitive advantage over most of its
competition because its management team has significant years of experience in
leasing, sourcing and trading computer equipment. There can be no assurance,
however, that another company either does not possess or cannot obtain that
knowledge and compete effectively against the Company.

                                       3
<PAGE>

The Company to date has not had to make any substantial investment in research
and development costs. It relies primarily on its ability to find companies that
are disposing of computer equipment and then selling the equipment to those who
are in the market to buy older equipment that is still sufficient for those
buyers' purposes.

While any equipment that cannot be resold, needs to be disposed of within
accordance with environmental laws, the Company does not believe that complying
with those requirements places a significant environmental burden on the
Company.

ITEM 2 PROPERTIES

Regency Technologies occupies approximately 25,000 square feet of
warehouse/office space at 30700 Carter Street, Solon, Ohio 44139 while
Administrative offices consist of approximately 3,500 square feet, which is
shared with CPS at 1801 East Ninth Street, Cleveland, Ohio 44114.

ITEM 3 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.

On December 8, 2003, the State of Ohio amended 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.

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

                                       4
<PAGE>

PART II

ITEM 5 MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

The Company's Common Shares trade on the Over-the-Counter Bulletin Board. The
range of high and low closing bid prices by fiscal quarter was

<TABLE>
<CAPTION>
2003                                          HIGH                     LOW
----                                          ----                     ---
<S>                                           <C>                      <C>
1st Quarter                                    .02                     .00
2nd Quarter                                    .03                     .01
3rd Quarter                                    .04                     .02
4th Quarter                                    .02                     .01

2002

1st Quarter                                    .05                     .02
2nd Quarter                                    .04                     .02
3rd Quarter                                    .03                     .01
4th Quarter                                    .03                     .00
</TABLE>

The bid quotations represent interdealer quotations and do not include retail
markup, markdown or commissions, and may not represent actual transactions. On
April 26, 2004 there were 109,308,746 Common Shares issued, 109,460,911 Common
Shares outstanding and approximately 1,250 holders of record of the outstanding
Common Shares. The Company has not paid a dividend since becoming a public
company in November of 1980. The Company does not plan to pay cash dividends in
the foreseeable future.

                                       5
<PAGE>

ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 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.

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, 2002 and November 30,
2003, 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 2003, the Company sustained losses of approximately $531,000. These
losses have had a substantial adverse effect on the working capital of the
Company.

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 Capital has provided the Company with temporary
working capital loans and, as of November 30, 2003, there was an outstanding
borrowing of $3,453,000 on those loans.

Net Tax Operating Loss Carryforwards

As of November 30, 2003, the Company has approximately $15,000,000 in net tax
operating loss carryforwards 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 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 $15,000,000 net operating losses may be subject
to these limitations and potentially may not be able to provide any economic
benefit to the Company.

                                       6
<PAGE>

RESULTS FROM OPERATIONS

Fiscal 2003 as Compared to Fiscal 2002

Regency Technologies is an asset manager and computer dealer and is fully
integrated with complete demanufacturing and some recycling capability. We have
installed a new Database Management System to allow us to become a parts
supplier as well for the global market. Our marketing is truly global.
Additionally, we expect to exploit new niche opportunities in 2004.

Revenues experienced a substantial increase from approximately $1,982,000 in
fiscal 2002 to almost $3,457,000 in fiscal 2003, an increase of 74%. Gross
margins on sales improved from 19.8% in 2002 to 29.2% in 2003 due primarily to
the increased volume. However, our volume was still not high enough to be
profitable for the full year.

Operating expenses (SG&A) increased from about $993,000 in fiscal 2002 to
$1,319,000 in fiscal 2003. As a result of the non-recurring startup expenses of
the trading function in fiscal 2002 being eliminated, operating expenses as a
per cent of sales fell from 50.9% in fiscal 2002 to 38.4% in fiscal 2003.

Interest expense at $240,000 maintained essentially the same level in 2003 as
was experienced in 2002.

CURRENT OUTLOOK

Revenues grew significantly from 2002 to 2003 and are expected to do so again in
2004.

The Company is actively pursuing various capital sources in an effort to
recapitalize and restructure the Company so that it may move forward with its
new business model which includes leasing and other financial services. Although
there can be no assurances, the Company believes that it will have its funding
requirements fulfilled in the very near future.

Over the past several months we have been discussing the possibility of
acquiring the business of a company that provides leasing and other financial
and technical services. If this acquisition were successful, it would provide us
with a platform company to build on. There can be no assurance that any such
acquisition will be successful.

Upon completion of either or both of these initiatives we will plan to have a
press release (for each) describing the particulars of each and the impact on
the Company.

         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 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.

A summary of the Company's significant accounting policies is included in the
Note 2 to the financial statements that are included herein.

ITEM 7 FINANCIAL STATEMENTS

See Index to Financial Statements appearing on page F-2

                                       7
<PAGE>

ITEM 8 CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

         None

ITEM 8a.  CONTROLS AND PROCEDURES

The Company's Chief Executive Officer and Principal Accounting Officer, after
evaluating the effectiveness of the Company's disclosure controls and procedures
pursuant to Exchange Act Rule 13a-14 within 90 days of the filing of this annual
report, have concluded that the Company's disclosure controls and procedures
were effective to ensure the timely collection, evaluation and disclosure of
information relating to the Company that would potentially be subject to
disclosure under the Securities Exchange Action of 1934, as amended, and the
rules and regulations promulgated thereunder. There were no significant changes
in the Company's internal controls or in other factors that could significantly
affect the internal controls subsequent to the date the Company carried out its
evaluation.

                                       8
<PAGE>

PART III

ITEM 9 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS:
       COMPLIANCE WITH SECTION 16 (A) OF THE EXCHANGE ACT

The Directors and Executive Officers of the Company are as follows:

<TABLE>
<CAPTION>
Name                      Age       Position
----                      ---       --------
<S>                       <C>       <C>
Robert S. Kendall          65       Chairman, President and Treasurer
James S. O'Leary           66       Director
Julius L. Hess             42       Vice President, Secretary and Director
Ronald M. Lipson           69       Director
William R. Sprow           65       Controller
</TABLE>

ROBERT S. KENDALL has been the Chairman, President and Treasurer of the Company
since March 1, 1996. He is also President and Chairman of CPS Capital, Limited,
an investment company based in Cleveland. Until April 1996, he was also Chairman
of the Board and founder of LDI Corporation, an asset leasing and technology
services company which he, along with two others, founded in 1972. LDI was one
of the largest independent lessors of technology and computer equipment in the
United States. Mr. Kendall is also a general partner in NCP, Ltd., a real estate
partnership actively engaged in investing, acquiring, financing and managing
commercial, industrial and other properties. From 1969 to 1972, Mr. Kendall was
branch manager at Victor Computer, a manufacturer and distributor of computer
systems. From 1963 to 1969, he was a salesman, financial specialist and sales
manager at Burroughs Corporation (now Unisys Corp.). Mr. Kendall graduated from
Case Western Reserve University with a bachelor's degree in psychology in 1960,
and attended graduate school at John Carroll University.

JAMES S. O'LEARY had been employed by Monitek since August 1982 and served as
its Executive Vice President, Secretary and Treasurer since April 1987. The
Company has retained his services and, from December 1996 through November 1998,
he served as Vice President of Finance and Chief Financial Officer. In December
1998, Mr. O'Leary was elected as a Director and was appointed Chief Operating
Officer of the Company. In September 1999, Mr. O'Leary resigned from his
position as Chief Operating Officer but he remained a Director.

JULIUS L. HESS has served as Assistant Vice President and Vice President for CPS
since November 1994 and is responsible for research and analysis. At CPS he
serves as lead analyst in the location and evaluation of investment
opportunities of publicly held companies which are believed to be undervalued,
or closely held companies with potential for appreciation. Prior to joining CPS,
Mr. Hess was Human Resources Manager for a division of GE Capital from 1990 to
1994. From 1989 to 1990, he was Senior Human Resources Representative for B. F.
Goodrich and prior thereto he was Compensation and Labor Relations Manager from
1986 to 1989 at the Mayo Clinic Medical Center. Mr. Hess graduated from Miami
University in Oxford, Ohio, with a bachelor's degree in political science in
1983 and attended graduate school at the University of Minnesota. Mr. Hess is
Mr. Kendall's son-in-law.

                                       9
<PAGE>

RONALD M. LIPSON has been an attorney for more than thirty five years in
Cleveland, Ohio, practicing in various areas including corporate, business, and
real estate law. He was the incorporating attorney for LDI Corporation and
formerly served as legal counsel and a director for LDI Corporation. Mr. Lipson
is also a general partner in G&C Properties, an Ohio real estate partnership
engaged in buying, selling and managing various types of real estate. Mr. Lipson
attended Ohio University and graduated from Adelbert College of Case Western
Reserve University with a bachelor's degree in business administration in 1955.
He also received a Doctor of Jurisprudence degree in 1958 from Case Western
Reserve University School of Law.

WILLIAM R. SPROW is the Chief Financial Officer of the Company, and as such, is
responsible for all financial operations from day to day accounting, financial
reporting, SEC report preparation and submission, and a variety of
administrative responsibilities for all CPS companies, Sentex and Regency. He
additionally handles IT administration issues for our own internal system. Mr.
Sprow also serves as Controller of CPS Holding Company, Ltd., a related company
that is responsible for energy purchasing and subsequent energy management for a
variety of clients ranging from large Fortune 1000 clients to large public
institutions. With over 38 years of related accounting and financial experience,
Mr. Sprow served as Vice President, Finance of Borden Consumer Products, Canada
from 1980 to 1985; as Controller and Operations Manager for Sherwin-Williams
Canada from 1986 to 1993; in key management positions with a number of Northeast
Ohio companies from 1995 to 1999.

There were two meetings of the Company's Board of Directors during the fiscal
year ended November 30, 2003.

The Company's Board of Directors does not currently have a nominating committee,
audit committee or a compensation committee.

ITEM 10 EXECUTIVE COMPENSATION

The following information is set forth with respect to the Company's Chief
Executive Officer. No other executive officer whose total compensation exceeded
$100,000 for the fiscal year ended November 30, 2003.

<TABLE>
<CAPTION>

                                       ANNUAL COMPENSATION
                                       -------------------                     OTHER ANNUAL
                                      YEAR          SALARIES        BONUS      COMPENSATION
                                      ----          --------        -----      ------------
<S>                                   <C>           <C>             <C>        <C>
Robert S. Kendall                     2003            -0-            -0-            -0-
  (Chief Executive Officer)           2002            -0-            -0-            -0-
                                      2001            -0-            -0-            -0-
</TABLE>

1.       Represents compensation paid to CPS for management services rendered.
         (See Item 12). Amounts assigned to Mr. Kendall represent the allocation
         provided the Company by CPS at the Company's request, and may not
         actually represent any sum actually paid to him by CPS. Since May 31,
         1997, the Company has not made any payments to CPS for management
         services but has accrued for such fees through June 30, 2000,

                                       10
<PAGE>

Long-Term Compensation:

No long-term compensation was paid during the fiscal years ended November 30,
2003, 2002, or 2001 to any executive officer of the Company by way of restricted
stock awards, options or stock appreciation rights, or other long-term incentive
plans.

Stock Options:

The Company adopted the Plan at a special meeting of its shareholders held on
November 14, 1996. Under the Plan, the Company may grant different types of
options covering up to 7,000,000 Common Shares to its existing and future
directors, officers and employees. As of November 30, 2003, there were no
Company stock options held by the directors or executive officers of the
Company.

Compensation Pursuant to Plans:

The Company has no plans pursuant to which cash or non-cash equivalents were
paid during the fiscal years ended November 30, 2003, 2002, or 2001.

ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
        RELATED STOCKHOLDERS MATTERS

                      EQUITY COMPENSATION PLAN INFORMATION

<TABLE>
<CAPTION>
                                                                                                Number of securities
                                                                                              remaining available for
                                                                                               future issuance under
                                          Number of securities to       Weighted average        equity compensation
                                          be issued upon exercise      exercise price of          plans (excluding
                                          of outstanding options,     outstanding options,    securities reflected in
                                            warrants and rights       warrants and rights           column (a))
             Plan category                          (a)                       (b)                      (c)
<S>                                       <C>                         <C>                     <C>
Equity compensation plans approved by                         0                       0                    7.000.000
security holders

Equity compensation plans not approved                       NA                      NA                           NA
by security holders

Total                                                         0                       0                    7,000,000
</TABLE>

The following table sets forth certain information regarding the beneficial
ownership of the Common Shares as of February 2, 2004 by: (a) the Company's
Directors; (b) each other person who is known by the Company to own beneficially
more than 5% of the outstanding Common Shares; and (c) the Company's executive
officers and Directors as a group. Except as otherwise described in the notes
below, the following beneficial owners have sole voting power and sole
investment power with respect to all Common Shares set forth opposite their
names.

                                       11
<PAGE>

<TABLE>
<CAPTION>
NAME AND ADDRESS                          AMOUNT AND NATURE
OF BENEFICIAL OWNER (1)                   OF BENEFICIAL OWNER            PERCENTAGE
-----------------------                   -------------------            ----------
<S>                                       <C>                            <C>
Robert S. Kendall (2)                          48,029,814                   47.2%

James S. O'Leary                                       --                     --

Julius L. Hess                                         --                     --

Ronald M. Lipson                                  687,500                      *
3 Laurel Hill Lane
Pepper Pike, Ohio 44124

CPS Capital, Limited (3)                       48,029,814                   47.2%
1801 East Ninth Street
Cleveland, Ohio 44114

All Directors and Officers                     48,717,314                   47.9%
(as a group persons)
</TABLE>

1.       The name and address of each individual is listed in the table, except
         where otherwise indicated, is c/o Sentex Sensing Technology, Inc., 1801
         East Ninth Street, Cleveland, Ohio 44114.

2.       The Common Shares set forth herein with respect to Mr. Kendall are all
         held of record by CPS Capital, Limited or are beneficially owned by CPS
         Capital, Limited. Mr. Kendall and his wife own 100% of the outstanding
         membership interests in CPS.

3.       CPS is the record holder of 48,029,814 Common Shares and has sole
         voting and dispositive power with respect to such shares.

*        Represents less than 1% of the outstanding Common Shares.

SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS

As required under the securities laws of the United States, the Company's
directors, its executive (and certain other) officers, and any persons holding
ten percent or more of the Common Shares must report on their ownership of the
Common Shares and any changes in that ownership to the Securities and Exchange
Commission and to the National Association of Securities Dealers, Inc.'s
Automated Quotation System. Specific due dates for those reports have been
established.

                                       12
<PAGE>

ITEM 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

CPS Management Agreement:

After CPS acquired effective control of the Company, CPS entered into a
Management Agreement with the Company, which was effective on March 1, 1996.
(the "Original Management Agreement"). In connection with the execution of the
Merger Agreement, CPS and the Company entered into an Amended and Restated
Management Agreement (the "Amended and Restated Management Agreement"). Pursuant
to the Original Management Agreement, CPS agreed to cause its personnel to
perform the functions that would normally be performed by officers of the
Company. Presently, such personnel consist mainly of Mr. Kendall, the Chairman
of CPS and William R. Sprow the Controller of CPS. In order to permit Mr.
Kendall and Mr. Sprow to function as officers and for them to be properly
insured as officers of the Company, Mr. Kendall has been elected as the
President and Treasurer of the Company and Mr. Sprow has been elected Chief
Financial Officer of the Company.

Under the terms of the Original Management Agreement, CPS received an annual fee
of $193,800, which was payable monthly. Under the terms of the Amended and
Restated Management Agreement, the annual fee was increased to $393,800 to
account for the increase in tasks and responsibilities relating to the operation
of Monitek. Due to the present financial condition of the Company, CPS has not
received payment under the Amended and Restated Management Services Agreement
since May 1997, but the Company has accrued such expense. On May 15, 1998, CPS
and the Company entered into the Second Amended and Restated Management Services
Agreement, pursuant to which CPS agreed to accept 5,025,745 Common Shares in
lieu of accrue management fees equaling $196,900, representing fees for the
second half of fiscal 1997. All the shares acquired by CPS were acquired for
investment purposes.

In December 1997, CPS and the Company agreed to a reduced management fee of
$250,000 for fiscal 1998 and in December 1998, the parties agreed to reduce the
fee to $300,000 for fiscal 1999 and subsequent years. CPS and the Company have
agreed that the balance due as of November 30, 2000, which totals $442,000. The
Company and CPS are considering reinstituting management fees for Fiscal Year
2004.

Working Capital Assistance:

During fiscal 1997 through fiscal 2001, CPS and Mr. Kendall provided the Company
assistance in connection with funding its working capital needs in the form of
loans and security for bank loans. From May 1997 through November 2002, CPS
provided the Company a series of temporary capital loans at a prime interest
rate plus 100 basis points. The outstanding balance of such loans total
$3,453,125, including accrued interest, as of November 30, 2003. From time to
time, Mr. Kendall has also provided security to banks by permitting the banks to
obtain a security interest in Mr. Kendall's personal assets and/or providing
guarantees so the Company could obtain financing from the Bank. Except for the
interest to be received on the loans provided by CPS, neither Mr. Kendall nor
CPS has received nor will receive any remuneration in connection with providing
such working capital assistance to the Company unless the notes are converted
into Common Shares at some future date. The Company believes the interest
payable to CPS is and was on terms no less favorable than could be obtained
pursuant to an arms-length transaction.

                                       13
<PAGE>

ITEM 13 EXHIBIT LISTS AND REPORTS ON FORM 8-K

(A) EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                EXHIBIT DESCRIPTION
-------                               -------------------
<S>                   <C>
  3.1                 Certificate of Incorporation, as amended (3)

  3.2                 First Amended and Restated Bylaws of the Company (6)

  3.3                 Certificate of Incorporation of Sentex Acquisition Corp. (4)

  3.5                 Certificate of Merger (Sentex Systems, Inc. into Sentex) (4)

  3.6                 Certificate of Incorporation of Sentex Systems, Inc. (5)

  4.1                 Specimen Certificate of Common Shares (3)

 10.2                 Consulting Agreement with Ms. Joanne Bianco, dated March 1,
                      1996 (2)

 10.3                 Sentex 1996 Long-Term Incentive Stock Option Plan (1)

 21.1                 List of Subsidiaries (6)

 27.1*                Financial Data Schedule

 31.1                 302 Certification of Chief Executive Officer
 31.2                 302 Certification of Chief Financial Officer

 32.1                 Certification Pursuant To 18 U.S.C. Section 1350, As Adopted
                      Pursuant To Section 906 Of The Sarbanes-Oxley Act of 2002

 32.2                 Certification Pursuant To 18 U.S.C. Section 1350, As Adopted
                      Pursuant To Section 906 Of The Sarbanes-Oxley Act of 200
</TABLE>

                                       14
<PAGE>

                  1.       Incorporated by reference to Annex A of the Joint
                           Proxy Statement/Prospectus which is a part of
                           Amendment No. 1 to the Registration Statement on Form
                           S-4, filed on October 4, 1996, File No. 333-12993
                           (the "Registration Statement").

                  2.       Incorporated by reference to exhibits of the
                           Registration Statement bearing the same exhibit
                           numbers.

                  3.       Incorporated by reference to exhibits bearing same
                           exhibit numbers, filed with the Company's
                           Registration Statement on Form S-1, File No. 2-86860.

                  4.       Incorporated by reference to exhibits bearing the
                           same exhibit numbers, file with the Company's Form
                           10-KSB for the fiscal year ended November 30, 1992.

                  5.       Incorporated by reference to exhibits bearing the
                           same exhibit numbers, filed with the Company's Form
                           10-KSB for the fiscal year ended November 30, 1984.

                  6.       Incorporated by reference to exhibits bearing the
                           same exhibit numbers, filed with the Company's Form
                           10-KSB for the fiscal year ended November 30, 1996.

(B) REPORTS ON FORM 8-K

None

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Aggregate audit fees billed for professional services rendered by Hausser &
Taylor LLC for auditing the registrant's annual financial statements included in
the Registrant's 10-KSB and review of its internal financial statements included
in the registrant's 10-QSB's were $40,734 in 2003 and $52,168 in 2002.

Hausser & Taylor LLC did not charge the Company any audit-related, tax or other
fees for these years.

Hausser & Taylor LLC (the "Firm") has a continuing relationship with American
Express Tax and Business Services, Inc. ("TBS") from which it leases auditing
staff who are full time, permanent employees of TBS and through which its
shareholders provide non-audit services. As a result of this arrangement, the
Firm has no full time employees and, therefore, none of the audit services
performed were provided by permanent full time employees of the Firm. The Firm
manages and supervises the audit and audit staff, and is exclusively
responsible for the opinion rendered in connection with its examination.

SIGNATURE

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

Date:  April 26, 2004                         SENTEX SENSING TECHNOLOGY, INC.

                                              By: /s/ Robert S. Kendall
                                                  ------------------------------
                                                  Robert S. Kendall,
                                                  Chief Executive Officer

                                       15
<PAGE>

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following person on behalf of the Registrant and in
the capacities and on the dates indicated:

<TABLE>
<S>                              <C>                                        <C>
/s/ Robert S. Kendall
----------------------
Robert S. Kendall                Chairman, President and Treasurer          April 26, 2004

/s/ Julius L. Hess
----------------------
Julius L. Hess                   Vice President, Secretary and Director     April 26, 2004

/s/ Ronald M. Lipson
----------------------
Ronald M. Lipson                 Director                                   April 26, 2004

/s/ James S. O'Leary
----------------------
James S. O'Leary                 Director                                   April 26, 2004

/s/ William R. Sprow
----------------------
William R. Sprow                 Chief Financial Officer                    April 26, 2004

/s/ William R. Sprow
----------------------
William R. Sprow                 Controller                                 April 26, 2004
</TABLE>

                                       16
<PAGE>











                         SENTEX SENSING TECHNOLOGY, INC.
                                AND SUBSIDIARIES

                          CONSOLIDATED FINANCIAL REPORT



<PAGE>




                SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES

                                    CONTENTS



--------------------------------------------------------------------------------

                                                                     Page
                                                                     ----

AUDITORS' REPORT ON THE FINANCIAL STATEMENTS                          F-3

FINANCIAL STATEMENTS
    Consolidated balance sheet                                        F-4
    Consolidated statements of operations                             F-5
    Consolidated statements of stockholders' equity (deficit)         F-6
    Consolidated statements of cash flows                             F-7
    Notes to consolidated financial statements                     F-8 - F-17




                                      F-2
<PAGE>



                          Independent Auditors' Report
                          ----------------------------


To the Board of Directors and Stockholders
Sentex Sensing Technology, Inc.
Cleveland, Ohio


         We have audited the accompanying consolidated balance sheet of Sentex
Sensing Technology, Inc. and subsidiaries as of November 30, 2003, and the
related consolidated statements of operations, stockholders' equity (deficit)
and cash flows for each of the two years in the period ended November 30, 2003.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Sentex
Sensing Technology, Inc. and subsidiaries as of November 30, 2003, and the
consolidated results of their operations and their cash flows for each of the
two years in the period ended November 30, 2003, in conformity with accounting
principles generally accepted in the United States of America.

         The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2A to the
financial statements, the Company has in the past and continues to sustain
substantial net and operating losses. In addition, the Company has used
substantial amounts of working capital in its operations which has reduced the
Company's liquidity to a very low level. At November 30, 2003, current
liabilities exceed current assets by $6,579,030. Additionally, at November 30,
2003, the Company's stock is no longer listed on the NASDAQ Small Cap Market
tier of the NASDAQ stock market which might limit the Company's ability to raise
equity capital. These and other matters raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustments relating to the recoverability and classification of
recorded assets or the amounts and classification of liabilities that might be
necessary in the event the Company cannot continue in existence.



                                                            Hausser + Taylor LLC

Cleveland, Ohio
April 26, 2004


                                      F-3
<PAGE>



                SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                November 30, 2003
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
           ASSETS
           ------

<S>                                                               <C>             <C>                     <C>
CURRENT ASSETS
   Cash                                                                            $   45,330
   Accounts receivable - trade, net of allowance for
     doubtful accounts of $35,000                                                     225,481
   Inventory                                                                          343,672
                                                                                  -----------
           Total current assets                                                                            $   614,483

EQUIPMENT
   Computer equipment                                                                   4,009
   Less accumulated depreciation                                                        2,927                    1,082
                                                                                  -----------

OTHER ASSETS
   Restricted stock investment                                                          4,800
   Goodwill                                                                            36,042
   Deposits                                                                               990                   41,832
                                                                                  -----------              -----------

                                                                                                           $   657,397
                                                                                                           ===========

           LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
           ----------------------------------------------

CURRENT LIABILITIES
   Notes payable:
     Bank                                                        $2,500,000
     Related party                                                3,453,125        $5,953,125
                                                                 ----------
   Trade and other accounts payable ($612,066 to
     related parties)                                                               1,006,180
   Accrued liabilities                                                                200,536
   Consulting contracts payable                                                        21,249
   Convertible subordinated notes payable                                              12,423
                                                                                  -----------
           Total current liabilities                                                                       $ 7,193,513

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT)
   Common stock, no par value
     Authorized - 200,000,000 shares
     Issued - 109,460,911 shares
     Outstanding - 101,764,911 shares                                               2,867,579
   Retained earnings (deficit)                                                     (9,134,227)
   Treasury shares at cost, 7,696,000 shares                                         (269,468)
                                                                                  -----------
           Total stockholders' equity (deficit)                                                             (6,536,116)
                                                                                                           -----------

                                                                                                           $   657,397
                                                                                                           ===========
</TABLE>

    The accompanying notes are an integral part of these financial statements.


                                      F-4
<PAGE>


                SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                     Years Ended November 30, 2003 and 2002
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                        2003                2002
                                                        ----                ----
<S>                                                <C>                 <C>
REVENUES
  Sales                                            $   3,432,553       $   1,950,575
  Interest and other income                               24,926              31,380
                                                   -------------       -------------
           Total revenues                              3,457,479           1,981,955

COST AND EXPENSES
  Cost of sales                                        2,428,754           1,564,890
  Selling, general and administrative                  1,319,304             992,664
                                                   -------------       -------------
           Total costs and expenses                    3,748,058           2,557,554
                                                   -------------       -------------

LOSS FROM OPERATIONS                                    (290,579)           (575,599)

OTHER EXPENSE
  Interest                                               240,491             236,237
  Loss on restricted stock investment                        -               155,200
                                                   -------------       -------------
                                                         240,491             391,437
                                                   -------------       -------------

NET LOSS                                           $    (531,070)      $    (967,036)
                                                   =============       =============


NET LOSS PER SHARE (BASIC AND DILUTED)             $       (0.01)      $       (0.01)
                                                   =============       =============

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING        101,764,911         101,764,911
                                                   =============       =============
</TABLE>


    The accompanying notes are an integral part of these financial statements.


                                      F-5
<PAGE>



                SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES

            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

                     Years Ended November 30, 2003 and 2002
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                                                                     Total
                                       Common Stock              Retained              Treasury Stock            Stockholders'
                                ---------------------------      Earnings        ---------------------------        Equity
                                   Shares          Amount        (Deficit)         Shares          Amount          (Deficit)
                                -----------     -----------     -----------      -----------     -----------      -----------

<S>                             <C>             <C>             <C>              <C>             <C>              <C>
Balance - December 1, 2001      109,460,911     $ 2,867,579     $(7,636,121)       7,696,000     $  (269,468)     $(5,038,010)

Comprehensive loss
  Net loss                                -               -        (967,036)               -               -         (967,036)
                                -----------     -----------     -----------      -----------     -----------      -----------

Balance - November 30, 2002     109,460,911       2,867,579      (8,603,157)       7,696,000        (269,468)      (6,005,046)

Comprehensive loss
  Net loss                                -               -        (531,070)               -               -         (531,070)
                                -----------     -----------     -----------      -----------     -----------      -----------

Balance - November 30, 2003     109,460,911     $ 2,867,579     $(9,134,227)       7,696,000     $  (269,468)     $(6,536,116)
                                ===========     ===========     ===========      ===========     ===========      ===========
</TABLE>


    The accompanying notes are an integral part of these financial statements.


                                      F-6
<PAGE>


                SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     Years Ended November 30, 2003 and 2002
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                 2003           2002
                                                                 ----           ----
<S>                                                           <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                   $(531,070)     $(967,036)
   Adjustments to reconcile net loss to net cash
      used by operating activities:
        Depreciation and amortization                             1,083          1,443
        Loss on restricted stock investment                           -        155,200
        Noncash interest expense                                141,180        138,125
        Changes in assets and liabilities:
           Accounts receivable                                  (10,529)      (178,223)
           Inventory                                           (292,880)       (50,792)
           Other assets                                            (990)             -
           Accounts payable                                     271,447         54,374
           Accrued liabilities                                    9,129         29,557
                                                              ---------      ---------
             Total adjustments                                  118,440        149,684
                                                              ---------      ---------
               Net cash used by operating activities           (412,630)      (817,352)

CASH FLOWS FROM INVESTING ACTIVITIES
   Proceeds on note receivable                                  274,902        106,414

CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds on notes and accounts payable - related party       308,425        796,271
   Payments on note payable - related party                    (200,000)             -
   Payments on consulting contracts                                   -        (10,700)
                                                              ---------      ---------
               Net cash provided by financing activities        108,425        785,571
                                                              ---------      ---------

NET (DECREASE) INCREASE IN CASH                                 (29,303)        74,633

CASH - BEGINNING OF YEAR                                         74,633              -
                                                              ---------      ---------

CASH - END OF YEAR                                            $  45,330      $  74,633
                                                              =========      =========

Supplemental disclosure of cash flow information:
   Cash paid during the year for:
      Interest                                                $ 101,444      $ 101,127
</TABLE>

See notes to the consolidated financial statements for certain noncash
investing and financing activities.




    The accompanying notes are an integral part of these financial statements.


                                      F-7
<PAGE>


                SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  ORGANIZATION, BACKGROUND, INDUSTRY SEGMENT AND DISCONTINUED OPERATIONS

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

         On July 2, 2001, the Company acquired Regency Technologies, Ltd. from
         Regency Steel, LLC. In connection with the acquisition, the Company
         issued 1,250,000 common shares held in treasury in exchange for 100% of
         Regency Technologies, Ltd. The Company's only significant operations in
         the years ended November 30, 2003 and 2002 consisted of Regency
         Technologies, Ltd.'s operations. The Company specializes in the buying,
         selling, and trading of information technology equipment (primarily
         computer equipment). The primary focus of the Company's business
         revolves around acquiring unneeded, older computer equipment and
         reselling that equipment to certain consumers on a global basis. The
         Company's business is confined to one industry segment and two
         geographical reporting segments. The Company's assets are all located
         within the United States.

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         A.       Going Concern - The accompanying financial statements have
                  been prepared in conformity with accounting principles
                  generally accepted in the United States of America, which
                  contemplate continuation of the Company as a going concern.
                  However, the Company has in the past and continues to sustain
                  substantial net and operating losses. In addition, the Company
                  has used substantial amounts of working capital in its
                  operations which has reduced the Company's liquidity to a very
                  low level. At November 30, 2003, current liabilities exceed
                  current assets by $6,579,030. Additionally, at November 30,
                  2003, the Company has limited operations and its stock is no
                  longer listed on the NASDAQ Small Cap Market tier of the
                  NASDAQ stock market which might limit the Company's ability to
                  raise equity capital. These and other matters raise
                  substantial doubt about the Company's ability to continue as a
                  going concern. The financial statements do not include any
                  adjustments relating to the recoverability and classification
                  of recorded assets or the amounts and classification of
                  liabilities that might be necessary in the event the Company
                  cannot continue in existence. The Company's ability to
                  continue in existence is primarily dependent upon its planned
                  ability to arrange adequate financing and to attain profitable
                  operating activities to sustain required cash flows.

         B.       Receivable and Credit Policies - Accounts receivable are
                  uncollateralized customer obligations due with various trade
                  terms from the invoice date and are stated at the amount
                  billed to the customer. Payments of accounts receivable are
                  applied to the specific invoices identified on the customer's
                  remittance advice. The carrying amount of accounts receivable
                  is reported net of the allowance for doubtful accounts
                  reserve, which reflects management's best estimate of the
                  amount that will not be collected. Management individually
                  reviews all accounts receivable balances and any customer
                  account balances with invoices dated over 120 days past due
                  are considered delinquent. These delinquent invoice amounts
                  plus any other invoices deemed not to be collected are
                  reserved for in the allowance for doubtful accounts reserve.
                  Specific accounts are charged directly to the reserve when
                  management obtains evidence of a customer's insolvency or
                  otherwise determines that the account is uncollectible.




                                      F-8
<PAGE>


                SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         B.       Receivable and Credit Policies (Continued)

                  The Company has provided $35,000 for possible doubtful
                  accounts receivable at November 30, 2003. The allowance for
                  doubtful accounts amounted to $5,000 at November 30, 2002.

         C.       Inventory - Inventory consists of used computer equipment held
                  for resale and a variety of electronic component parts.
                  Inventories are valued at the lower of cost (first-in,
                  first-out) or market.

         D.       Equipment - Depreciation and amortization are computed using
                  the straight-line method over the estimated useful lives of
                  the respective assets. When assets are retired or otherwise
                  disposed of, the cost and related accumulated depreciation or
                  amortization are removed from the accounts and any resulting
                  gain or loss is recognized in income or loss for the period.
                  The cost of maintenance and repairs is included in the
                  consolidated statements of operations as incurred; significant
                  renewals and betterments are capitalized.

         E.       Revenue Recognition - The Company records revenue as customers
                  are billed for consulting services or delivery of hardware
                  products.

         F.       Concentration of Credit and Risk Factors - Financial
                  instruments which potentially subject the Company to
                  concentrations of credit risk include cash and equivalents and
                  accounts and notes receivable. The Company places its cash and
                  cash equivalents with high credit quality financial
                  institutions. The amount on deposit in any one institution
                  that exceeds federally insured limits is subject to credit
                  risk. Also see Notes 2.B., 2.I., 4, and 14.

         G.       Use of Estimates - The preparation of financial statements in
                  conformity with accounting principles generally accepted in
                  the United States of America 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.

         H.       Income Taxes - The Company utilizes Statement of Financial
                  Accounting Standards ("SFAS") No. 109, "Accounting for Income
                  Taxes," which requires an asset and liability approach to
                  financial accounting and reporting for income taxes. The
                  difference between the financial statement and tax basis of
                  assets and liabilities is determined annually. Deferred income
                  tax assets and liabilities are computed for those temporary
                  differences that have future tax consequences using the
                  current enacted tax laws and rates that apply to the periods
                  in which they are expected to affect taxable income. Valuation
                  allowances are established, if necessary, to reduce the
                  deferred tax asset to the amount that will, more likely than
                  not, be realized. Income tax expense is the current tax
                  payable or refundable for the period plus or minus the net
                  change in the deferred tax assets and liabilities.

         I.       Fair Value of Certain Financial Instruments - The fair values
                  of cash, accounts receivable, accounts payable, and other
                  short-term obligations approximate their carrying values
                  because of the short maturity of these financial instruments.




                                      F-9
<PAGE>

                SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         J.       Loss Per Share - Loss per share is calculated using the
                  weighted average number of shares outstanding. Potentially
                  dilutive securities are insignificant.

         K.       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 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.

         L.       Certain amounts in the financial statements for the year ended
                  November 30, 2002 have been reclassified to conform with
                  current year presentation.



                                      F-10
<PAGE>

                SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 3.  ACQUISITION OF REGENCY TECHNOLOGIES, LTD.

         In July 2001, the stockholders of Sentex Sensing Technology, Inc. and
         the members of Regency Technologies, Ltd. (an Ohio limited liability
         company) approved a merger whereby Regency Technologies, Ltd. became a
         wholly-owned subsidiary of Sentex Sensing Technology, Inc., through the
         issuance of 1,250,000 shares of Sentex common stock in exchange for
         100% of the member interest in Regency Technologies, Ltd.

         In the transaction, accounted for as a purchase, the Company issued
         1,250,000 common shares, previously held in treasury at a cost of $.035
         per share, for an aggregate purchase price of $31,250, approximating a
         fair market value of $.025 per share. The resulting goodwill of $36,042
         is the excess of the purchase price over the net deficit (assets of
         $18,854 and liabilities of $23,646) of Regency Technologies, Ltd. The
         operations of Regency Technologies, Ltd. are included in the Company's
         financial statement from the acquisition date.

         The Company accounts for goodwill under SFAS No. 142, "Goodwill and
         Other Intangible Assets." Under this standard, goodwill is no longer
         amortized over its useful life; rather, it is subject to a periodic
         impairment test based upon its fair value. During the year ending
         November 30, 2003, the Company determined that there was no impairment
         in that goodwill.

NOTE 4.  NOTE RECEIVABLE

         Note receivable, in the original amount of $425,655 and having a
         balance of $-0- at November 30, 2003 and $274,902 at November 30, 2002,
         consisted of a single promissory note dated July 1, 2000, due from
         Metrisa, Inc. ("Metrisa") (see Note 5). Amounts due under the note bear
         interest payable monthly at the prime rate. The note was payable in
         forty-eight monthly installments of $8,868 beginning July 1, 2001. The
         note has been fully paid as of November 30, 2003.

NOTE 5.  RESTRICTED STOCK INVESTMENT

         At November 30, 2003, the Company owns 160,000 shares of Metrisa, Inc.
         common stock which represents approximately 11% (not including the
         effect of dilutive securities) of the outstanding common stock of
         Metrisa. The unregistered stock was received in a private transaction
         as partial consideration for the sale of the net assets and operations
         of Monitek. The stock is subject to "Rule 144" covering the purchase,
         resale, and holding periods of "restricted securities." Metrisa is no
         longer subject to Section 15(d) reporting requirements of the
         Securities Exchange Act of 1934, and its common stock is not quoted on
         a securities exchange registered with the SEC or in the
         over-the-counter market. There currently does not exist an active
         trading market for Metrisa's securities and there are believed to be
         less than 350 holders of Metrisa's outstanding common stock.

         The Company does not consider the stock to be "trading securities," as
         defined under SFAS No. 115, "Accounting for Certain Investments in Debt
         and Equity Securities." Due to limited or non-existent trading
         activity, assessing current value is difficult. Management determined
         that its investment in Metrisa has experienced an "other than temporary
         decline in value" and recorded an impairment loss of $155,200 for the
         year ended November 30, 2002.




                                      F-11
<PAGE>

                SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 5.  RESTRICTED STOCK INVESTMENT (CONTINUED)

         During the Company's fourth quarter ending November 30, 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 share will be available
         to the current stockholders of Metrisa as a liquidating distribution.

         Metrisa was incorporated in Delaware and was a product development,
         manufacturing, and contract test services company which specialized in
         manufacturing instruments and providing contract test services for
         measuring the properties of a wide variety of materials, liquids, and
         gases.

NOTE 6.  ACCRUED LIABILITIES

         Accrued liabilities consist of the following at November 30, 2003:


<TABLE>
<S>                                                            <C>
                  Pension                                      $ 100,000
                  Customer deposits                               34,584
                  Other                                           65,952
                                                               ---------

                                                               $ 200,536
                                                               =========
</TABLE>
                SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 7.  NOTES PAYABLE - BANK AND OTHER BORROWING ARRANGEMENTS

         The Company has available a $2,500,000 demand line of credit secured by
         the Company's assets and the assets and guarantee of the Company's
         Chairman of the Board. Interest is charged at LIBOR plus 200 basis
         points (3.24% as of November 30, 2003) and is payable monthly. Amounts
         outstanding under the line amounted to $2,500,000 at November 30, 2003.

         During the years ended November 30, 2003 and 2002, the Company's
         principal stockholder (CPS Capital, Ltd.) and the Company's Chairman
         provided the Company assistance in connection with funding its working
         capital needs in the form of loans and security for bank loans. As of
         November 30, 2003, the Company had notes payable of $3,453,125
         including accrued interest of approximately $766,000 (bearing interest
         at 1% over the prime rate) to its principal stockholder in connection
         with such unsecured loans.

         Interest expense for the years ended November 30, 2003 and 2002
         amounted to $240,491 and $236,237, respectively. Interest expense
         includes $141,180 and $138,125 for the years ended November 30, 2003
         and 2002, respectively, of interest that has been added to the
         principal balance of the notes described in the preceding paragraph.




                                      F-12
<PAGE>
                SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 8.  CONVERTIBLE SUBORDINATED NOTES PAYABLE

         Convertible subordinated notes payable of $12,423 are subordinated to
         all present and future obligations of the Company and have a stated
         interest rate of 5.05% per annum. The notes can be converted at the
         holders' or Company's option into that number of shares by dividing the
         face amount of the note by $.075. The conversion terms contain standard
         anti-dilutive provisions to adjust the conversion price. The notes
         matured December 1, 2000.

NOTE 9.  COMMITMENTS AND CONTINGENCIES

         The Company leases office and warehouse space under a non-cancelable
         operating lease which expires February 29, 2008. The following is a
         schedule, by year, of future minimum lease payments as of November 30,
         2003:

<TABLE>
<S>                                                            <C>
                        2004                                   $ 67,284
                        2005                                     76,896
                        2006                                     79,863
                        2007                                     88,764
                        2008                                     22,191
                                                               --------

                                                               $334,998
                                                               ========
</TABLE>

         Rent expense for the year ended November 30, 2003 was $77,408.

NOTE 10. STOCK INCENTIVE PLAN

         The Company has a long-term incentive plan ("Incentive Plan") to
         provide current and future directors, officers and employees incentives
         to stimulate their active interest in the development and financial
         success of the Company. The Incentive Plan provides for the granting of
         "incentive stock options," under Section 422 of the Internal Revenue
         Code of 1986, as amended, or other stock options, stock appreciation
         rights, restricted, or nonrestricted stock awards to purchase not more
         than 7,000,000 shares (which shares have been reserved by the Company)
         of common stock as determined by the Company's Incentive Plan Committee
         (the "Committee"). The option prices per share of common stock, which
         are the subject of incentive stock options and other stock options
         under the Incentive Plan, shall not be less than 100% of the fair
         market value of the Company's shares of common stock on the date such
         option is granted. The Committee shall determine when each option is to
         expire but no option shall be exercisable for a period of more than 10
         years from the date upon which the option is granted. Generally,
         options granted under the Incentive Plan vest or terminate upon the
         employee leaving the Company and are subject to automatic acceleration
         of any vesting requirements given certain changes in control of the
         Company. No options were outstanding to purchase the Company's stock
         during the years ended November 30, 2003 and 2002.




                                      F-13
<PAGE>
                SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 10. STOCK INCENTIVE PLAN (CONTINUED)

         Stock appreciation rights may be awarded by the Committee at the time
         or subsequent to the time of the granting of options. Stock
         appreciation rights awarded shall provide that the option holder shall
         have the right to receive an amount equal to 100% of the excess, if
         any, of the fair market value of the shares of common stock covered by
         the option over the option price. Such amount shall be payable, as
         determined by the Committee, in one or more of the following manners:
         (a) cash; (b) fully-paid shares of common stock having a fair market
         value equal to such amount; or (c) a combination of cash and shares of
         common stock. As of November 30, 2003, the Company has not granted any
         appreciation rights under the Incentive Plan.

NOTE 11. PROFIT-SHARING PLAN

         The Company has a profit-sharing plan and a 401(k) retirement plan for
         the benefit of eligible employees. Contributions under the plans are
         determined at the discretion of the Board of Directors and are credited
         to employees based upon a percentage of eligible salaries. The Company
         elected to suspend all contributions for the years ended November 30,
         2003 and 2002.

NOTE 12. INCOME TAXES

         As referred to in Note 1, the Company utilizes SFAS 109, "Accounting
         for Income Taxes." A reconciliation between the Company's effective
         income tax rate and the statutory federal income tax rate is as follows
         for the years ended November 30:

<TABLE>
<CAPTION>
                                                                   2003              2002
                                                                   ----              ----
<S>                                                               <C>               <C>
               Expected federal income tax benefit at
                 the statutory rate                               (34.0)%           (34.0)%

               Increase in taxes resulting from:
                 Effect of operating loss for which no tax
                   carrybacks are available                        34.0              34.0
                                                                 ------            ------

                                                                      - %               - %
                                                                 ======            ======
</TABLE>




         The tax effects of significant temporary differences that give rise to
         significant portions of the deferred tax assets and deferred tax
         liabilities are presented below for the years ended November 30:

<TABLE>
<CAPTION>
                                                           2003                2002
                                                           ----                ----
<S>                                                     <C>                 <C>
               Deferred tax assets:
                 Net operating loss carryforward        $2,969,600          $2,821,000
                 Other                                      42,500              52,800
                                                        ----------          ----------
                   Total gross deferred tax assets       3,012,100           2,873,800
                 Less valuation allowance                3,012,100           2,873,800
                                                        ----------          ----------

                   Net deferred tax assets              $       -           $       -
                                                        ==========          ==========
</TABLE>




                                      F-14
<PAGE>
                SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12. INCOME TAXES (CONTINUED)

         The deferred tax assets do not include deferred tax assets related to
         purchased net operating loss carryforwards that are subject to usage
         limitations (see below).

         The Company established a valuation allowance against tax benefits that
         are potentially available to the Company but have not yet been
         recognized. This valuation allowance relates to the amount of net
         operating loss carryforwards in excess of existing net taxable
         temporary differences and to certain deductible temporary differences
         that may not reverse during periods in which the Company may generate
         net taxable income. During the years ended November 30, 2003 and 2002,
         the Company recorded increases of $138,300 and $328,900, respectively,
         in the valuation allowance primarily as a result of the net operating
         loss generated during the year.

         At November 30, 2003, the Company had approximately $15,000,000 of net
         operating loss carryforwards available to offset future federal taxable
         income. The federal non-limited net operating loss carryforwards expire
         at various dates from 2011 through 2023. Federal tax law imposes
         restrictions on the utilization of net operating loss carryforwards in
         the event of a change in ownership. The Company's net operating loss
         includes approximately $6,265,000 of loss carryforwards that may be
         subject to limitations as a result of these provisions.

NOTE 13. RELATED PARTY TRANSACTIONS

         The Company has a management agreement with an affiliate and
         significant stockholder, CPS Capital, Ltd., to perform management and
         executive services. Based on limited operations, the Company and CPS
         agreed to reduce the management fee until the Company expands its
         operations. As of November 30, 2003, the balance due for unpaid
         management fees was $441,671.

         Two of the Company's officers have made temporary cash advances to the
         Company in the amount of $170,395 which is included in trade and other
         accounts payable.

         The Company also leases its office and warehouse space from a real
         estate partnership that is related through common ownership of one of
         the Company's officers and significant stockholders.

NOTE 14. SIGNIFICANT REVENUES

         For the year ended November 30, 2003, six customers accounted for
         approximately 44% of net sales revenue. For the year ended November 30,
         2002, two customers accounted for approximately 62% of net sales
         revenue. A significant portion of trade accounts receivable was
         attributable to such customers.




                                      F-15
<PAGE>
                SENTEX SENSING TECHNOLOGY, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 15. SEGMENT AND GEOGRAPHIC INFORMATION

         The Company's business is confined to one industry segment as described
         in Note 1 and two geographical reporting segments. Sales for the years
         ended November 30, 2003 and 2002 and identifiable assets classified by
         the major geographic areas in which the Company operated are as
         follows:

<TABLE>
<CAPTION>
                                                            Year Ended November 30,
                                                         ------------------------------

                                                            2003                2002
                                                            ----                ----
<S>                                                      <C>                 <C>
               Sales to unaffiliated customers:
                 United States
                   Domestic                              $2,536,904          $1,950,575
                   Export sales                             895,649                   -
                                                         ----------          ----------

               Net sales                                 $3,432,553          $1,950,575
                                                         ==========          ==========

               Identifiable assets:
                 United States                           $  657,397          $  658,286
                                                         ==========          ==========
</TABLE>



         The Company does not track, or report, operating income by geographical
         location due to the bulk acquisition and nature of its inventory (see
         Notes 1 and 2.C.).

NOTE 16. LEGAL CONTINGENCIES

         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 that was 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 is recorded on the audited financial statements of the
         Company as related party notes payable and, effectively, is repayable
         at the discretion of Mr. Kendall.

         On December 8, 2003, the State of Ohio amended 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 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,
         the Company and its subsidiaries have no liability with respect to the
         damages that are being sought.




                                      F-16
<PAGE>



NOTE 16. LEGAL CONTINGENCIES (CONTINUED)

         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.







                                      F-17