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As filed with the Securities and Exchange Commission on August 16, 1999
Registration No. 33-_______________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
----------------------
SENTO CORPORATION
(Exact name of registrant as specified in its charter)
UTAH 7373
(State or other jurisdiction of (Primary standard industrial
incorporation or organization) classification code number)
87-0284979
(I.R.S. employer
identification number)
----------------------
808 EAST UTAH VALLEY DRIVE
AMERICAN FORK, UT 84003
(801) 492-2000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
GARY FILLER
CHIEF FINANCIAL OFFICER
SENTO CORPORATION
808 EAST UTAH VALLEY DRIVE
AMERICAN FORK, UT 84003
(801) 492-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------------
COPIES TO:
BRIAN G. LLOYD, ESQ.
ERIC D. BAWDEN, ESQ.
PARR WADDOUPS BROWN GEE & LOVELESS
185 SOUTH STATE STREET, SUITE 1300
SALT LAKE CITY, UTAH 84111
(801) 532-7840
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the Registration Statement becomes effective
----------------------
If any of the securities being registered on this Form are being
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box: [X]
CALCULATION OF REGISTRATION FEE
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<CAPTION>
PROPOSED PROPOSED MAXIMUM
AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED REGISTERED PRICE PER SHARE(1) PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, $0.25 par value 3,310,932 $2.375 $7,863,464 $2,186
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and based upon the average of the high and low
prices for the shares of Common Stock on August 11, 1999, as reported by
the National Quotation Bureau.
----------------------
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Securities and Exchange
Commission, acting pursuant to said Section 8(a), may determine.
<PAGE>
SECONDARY PUBLIC OFFERING
PROSPECTUS
Sento Corporation
808 East Utah Valley Drive
American Fork, UT 84003
SENTO CORPORATION
3,310,932 SHARES OF COMMON STOCK
Sento Corporation's common stock is listed on the NASDAQ SmallCap
Market under the symbol "SNTO".
These shares of common stock are being sold by the selling shareholders
identified in this prospectus. Sento will not receive any of the proceeds from
the sale of these shares by the selling shareholders.
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THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
PURCHASE SHARES ONLY IF YOU CAN AFFORD A COMPLETE LOSS. SEE "RISK FACTORS" ON
PAGE 5 OF THIS PROSPECTUS.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS ____, 1999
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
<PAGE>
TABLE OF CONTENTS
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PAGE
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Prospectus Summary ........................................................ 3
Risk Factors .............................................................. 5
Business .................................................................. 8
Use of Proceeds ........................................................... 13
Selling Shareholders ...................................................... 13
Plan of Distribution ...................................................... 16
Legal Matters ............................................................. 16
Experts ................................................................... 16
Available Information ..................................................... 16
Incorporation of Certain Information by Reference ......................... 17
Indemnification ........................................................... 17
</TABLE>
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PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION CONTAINED ELSEWHERE IN
THIS PROSPECTUS. IT IS NOT COMPLETE AND MAY NOT CONTAIN ALL OF THE
INFORMATION THAT IS IMPORTANT TO YOU. TO UNDERSTAND THIS OFFERING FULLY, YOU
SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY, INCLUDING THE RISK FACTORS AND
FINANCIAL STATEMENTS.
THE COMPANY
SENTO: Sento Corporation, a Utah corporation ("Sento"). Unless
otherwise indicated, references in this report to "Sento"
or the "Company" include Sento and its subsidiaries.
SENTO'S BUSINESS: Sento provides a wide range of outsourcing solutions for
organizations of all sizes using Windows NT, UNIX, and
Internet/Intranet-based client-server computing
environments. These services include:
- IT technical services, including outsourced technical
support and help-desk functions;
- IT consulting, including computer-telephony interface
("CTI") consulting; and
- IT training, including assessing and training in-house
IT staff both on-site and through distance learning,
including computer-based training ("CBT").
SENTO'S HISTORY: Sento was formed in 1986 as Spire Technologies, Inc. to
market high-end third party hardware and software products
as a value added reseller ("VAR"). In 1997 and 1998, the
Company undertook a strategic transition to focus its
efforts on IT training, consulting and technical support.
In 1998 it constructed a state-of-the-art call center
facility which is now operational and which it anticipates
to be fully staffed (300 personnel) during the 2000 fiscal
year. The Company sold certain operations, comprising its
VAR business, in March and June 1999.
THE OFFERING
Common Stock, par value $0.25, of the Company (the
"Common Stock") offered by the selling shareholders .. 3,310,932 shares
Common Stock outstanding prior to and after this
offering.............................................. 7,936,409 shares (1)
Use of proceeds....................................... All proceeds of the
offering will be
received by the selling
shareholders identified
in this prospectus.
- --------------------
(1) Excludes 2,738,029 shares of Common Stock issuable upon the exercise of
outstanding stock options and warrants granted by the Company.
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SELLING SHAREHOLDERS
All of the shares offered in this prospectus are to be sold by the
selling shareholders identified in this prospectus. Most of the selling
shareholders acquired their shares in connection with private placements of
(1) 446,048 shares of Common Stock and warrants to purchase 223,024 shares of
Common Stock that the Company completed on June 18, 1996, (2) 720,000 shares
of Common Stock and warrants to purchase 240,000 shares of Common Stock that
the Company completed on August 27, 1997 and (3) 1,200,000 shares of Common
Stock and warrants to purchase 600,000 shares of Common Stock that the
Company completed on June 29, 1999. The remaining selling shareholders
acquired shares of Common Stock in connection with various other
transactions, including business acquisitions and consulting and financing
arrangements. Of the 3,310,932 shares of Common Stock offered by the Company,
2,272,362 shares were acquired through private placement transactions and
1,038,570 shares were acquired in other transactions.
PROPRIETARY MARKS
The Company utilizes many third-party products represented by
registered or common law trademarks, including the following trademarks: (1)
DEC-Registered Trademark-, VMS-Registered Trademark- and Open VMS-TM-,
VAX-Registered Trademark- and Alpha-TM- which are trademarks of Digital
Equipment Corporation ("Digital"); (2) Microsoft-Registered Trademark-,
MS-DOS-Registered Trademark-, DOS-TM-, Windows-Registered Trademark-, Windows
NT-Registered Trademark- and Windows 95-TM- which are trademarks of Microsoft
Corporation ("Microsoft"), (3) OS/2-TM- which is a trademark of International
Business Machines Corporation ("IBM") and (4) Intel-Registered Trademark-
which is a registered mark of Intel Corporation ("Intel"). This Prospectus
also contains trademarks of other companies.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus, including
information "incorporated by reference," discuss future expectations, contain
projections of results of operation or financial condition or state other
"forward-looking" information. Those statements are subject to known and
unknown risks, uncertainties and other factors that could cause the actual
results to differ materially from those contemplated by the statements. The
forward-looking information is based on various factors and was derived using
numerous assumptions. Some of these factors are included in the discussion of
"Risk Factors" on the following pages.
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RISK FACTORS
The shares offered hereunder involve a high degree of risk, and are
suitable only for persons who can afford to bear such risk, including the
loss of their entire investment in the shares. In evaluating the Company and
its business, prospective investors should carefully consider the following
factors in addition to the other information set forth or referred to herein
before purchasing any of the shares.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1999, the Company had working capital of $170,720 and a
cash balance of $579,536. The Company's liquidity position had deteriorated
substantially during the year ended March 31, 1999, primarily because the
Company used $3,362,744 of cash for employee training and operating
activities during the year ended March 31, 1999 and $2,717,848 of cash for
the purchase of furniture and equipment.
The Company's primary sources of liquidity have been cash received
from sales of assets and cash provided through private sales of equity, as
well as borrowing under a bank line of credit. In addition, the Company has
financed some of its equipment utilized in its business through long-term
leasing arrangements. The Company's expansion and continuing operating losses
will require the Company to find additional sources of funding. In the event
the Company is not able to find such alternate sources of funding, its
ability to pursue its planned business strategy will be limited, and it may
be forced to reduce its operations. There can be no assurance that the
Company will be able to obtain necessary capital to fund its operations and
purchase needed equipment to expand its operations on terms favorable to the
Company, if at all.
DEPENDENCE ON CUSTOMERS
No customer accounted for more than 10% of revenues for the fiscal
year ended March 31, 1999. However, two customers accounted for approximately
83% of technical support revenues, and it is anticipated that less than five
customers will account for more than 80% of the technical support revenues in
the next fiscal year and perhaps longer. In addition, the Company anticipates
that technical support revenues will become the majority of its revenues,
and, therefore, it is anticipated that a small number of customers will
account for the majority of the Company's revenues. Consistent with industry
standards, the Company's contracts are generally cancelable by the customer
on short-term notice. The Company's loss of a significant amount of business
with any of its key customers could have, and the loss of a substantial
amount of business with either of its existing technical support customers
would have, a material adverse effect on the Company's business, financial
condition and results of operations.
COMPETITION
The market for providing IT services is highly fragmented and very
competitive. The IT services industry is comparatively young with many small
regional service companies supplying some training and consulting, or systems
integration services coupled with hardware and software sales. There are many
small IT training companies specializing in various vertical market niches.
The IT services industry, however, has begun to experience a degree
of consolidation and the entry of major IT companies, which has resulted in
an additional level of competition from service providers that have greater
name recognition, larger installed customer bases, and significantly greater
financial, technical and marketing resources than the Company. Over the past
five years, a number of existing companies have enjoyed increasing success
and rapid internal growth. Several of these companies have been active in
acquiring the smaller regional training and consulting companies and are
becoming major competitors with a measurable share of this rapidly expanding
market. In addition, major sole source IT services companies such as Anderson
Consulting, Computer Sciences Corp. ("CSC"), Electronic Data Systems ("EDS"),
and IBM are providing full "turnkey" solutions to their large customers.
Also, major computer hardware and software companies provide their
own technical support, consulting, and customer training. Therefore, such
companies are not within the potential customer base for IT service providers
and have the capability of providing services that compete with those
provided by the Company.
The Company cannot provide any assurance that better and more
efficient services will not be provided by new or existing IT service
providers in competition with the Company. The services provided by such
competitors may be more effective or less expensive than those provided by
the Company. Although the Company continues to improve, refine and enhance
the services it provides, there can be no assurance that the Company will be
able to do so.
CHANGING MARKET
The market for IT services is characterized by rapid technological
advances, new product introductions and enhancements, and changes in customer
requirements. The Company's future success will depend in large part on its
ability to service new products, platforms and rapidly changing technology.
These factors will require the Company to
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provide adequately trained personnel to address the increasingly
sophisticated, complex and evolving needs of its customers.
The complex nature of support services has resulted in the demand
for technical support services to expand beyond the telephone and now
includes e-mail, faxes and the Internet. Services include resolution of
problems relating to the configuration and set-up, installation and
interoperability of different products, and the level of support requests
ranges from simple error messages to complex network configurations. These
services cover a broad set of technologies, including operating environments,
applications, databases, communication and network products, systems tools,
development environments and Internet/intranet products. There can be no
assurance that the Company will be able to provide such services profitably.
The failure by the Company to adapt to the changing IT service industry would
have an adverse impact on the Company's result of operations and financial
condition.
Sento's success will depend in part on its ability to develop
solutions that keep pace with the continuing changes in information
technology, evolving industry standards and changing client requirements.
There can be no assurance that Sento will be successful in adequately
addressing these developments on a timely basis or that, if these
developments are addressed, Sento will be successful in the marketplace. In
addition, there can be no assurance that products or technologies developed
by others will not render Sento's services non-competitive or obsolete.
Sento's failure to address these developments could have a material adverse
effect on its business and financial condition.
ATTRACTING, TRAINING AND RETAINING QUALITY EMPLOYEES
The IT services market suffers from a significant labor shortage.
The success of the Company depends, in large part, on its ability to attract,
retain and train highly-qualified scientific, technical, managerial and
marketing personnel with IT expertise. The Company has not entered into
employment agreements that require the services of any of its key technical
personnel to remain with the Company for any specified period of time.
Competition for such personnel is intense. There can be no assurance that the
Company will be able to attract and maintain all personnel necessary for the
development and operation of its business nor that it will be able to train
its current employees on new developments in technology. The loss of the
services of key personnel or an inability to attract, retain, train and
motivate qualified personnel could have a material adverse effect on the
business, financial condition and results of operations of the Company.
DEPENDENCE ON INDUSTRY TREND TO OUTSOURCE SERVICES
The Company's business depends in large part on the trend within the
IT industry to outsource certain services. The Company cannot provide any
assurance that this trend will continue or that, if the trend continues, it
will continue at the same rate of growth. The failure of this trend to
continue could have a material adverse effect on the business, financial
condition and results of operations of the Company.
NEW MANAGEMENT
The Company has recently effected significant changes in its
management team and key employees. In particular, Arthur F. Coombs, III
became Chief Executive Officer in April 1999, Gary B. Filler joined the
Company in March 1999 in a consulting role as Executive Vice President and
Chief Financial Officer, and Keith Barr joined in April 1998 as Chief
Information Officer. A majority of the Company's Board of Directors have been
elected since July 1998. The Company's headcount has grown from 162 at June
12, 1998 to 273 at July 31, 1999. The Company cannot provide any assurance
that its new management team and other new personnel can successfully manage
the Company's rapidly evolving business, and any failure to do so would have
a material adverse effect upon the Company's operating results.
POTENTIAL SIGNIFICANT FLUCTUATIONS IN QUARTERLY RESULTS
The value of individual transactions can constitute a substantial
percentage of the Company's quarterly revenue, and particular transactions
may generate a substantial portion of the operating profits for a quarter.
Because the Company's staffing and other operating expenses are based on
anticipated revenue levels, and a high percentage of its expenses are fixed,
delays in the receipt of orders or payments can cause significant variations
in operating results from quarter to quarter. In addition, the Company may
expend significant resources pursuing potential sales that will not be
consummated. The Company also may choose to reduce prices or to increase
spending in response to competition or to pursue new market opportunities,
which may adversely affect its operating results.
In particular, the Company's revenues from call center operations
are potentially volatile. Such revenues are a function of the number of
support requests received by the Company and the time spent on such requests.
Consequently, the Company's profitability may be adversely affected if the
Company receives fewer support requests than anticipated or the time spent in
resolving inquiries is greater than anticipated.
For all of the reasons identified above, management believes that
period-to-period comparisons of the Company's results of operations may not
be meaningful and that no one should rely upon them as an indication of
future
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performance. Furthermore, the Company cannot provide any assurance that it
will be able to achieve and sustain profitability on a quarterly basis.
POSSIBLE VOLATILITY OF STOCK PRICE; FAILURE TO MEET LISTING REQUIREMENTS
The trading price of the Common Stock has fluctuated widely in
response to variations in quarterly operating results, announcements by the
Company or its competitors, industry trends, general economic conditions or
other events or factors. Such fluctuations may continue in the future.
Regardless of the general outlook for the Company's business, the
announcement of quarterly operating results below analyst and investor
expectations could have a material and adverse effect on the market price of
the Common Stock. In addition, the Company's deteriorated financial condition
recently resulted in the Company's failure to meet certain listing standards
required for continued listing of the Common Stock on the Nasdaq Stock
Market. The Company is now in compliance with the listing requirements but
cannot provide any assurance that it will be able to maintain such listing in
the future.
RISK OF EMERGENCY INTERRUPTION OF CALL CENTER OPERATIONS
The Company's business depends to a large extent on its computer and
telecommunications equipment and software systems. The Company cannot provide
any assurance that natural disaster, human error, equipment malfunction or
inadequacy, or other event would not result in a prolonged interruption in
the Company's ability to provide support services to its clients. The
temporary or permanent loss of the Company's computer or telephone equipment
or systems, through casualty, operating malfunction or otherwise, could have
a material adverse effect on the Company. The Company's property and business
interruption insurance may not be adequate to compensate the Company for all
losses that it may incur.
COLLECTION OF ACCOUNTS
The Company's business of providing IT services involves certain
account collection risks. These remedies may be time-consuming and the
Company cannot provide any assurance that it would be successful in its
efforts or that it would be able to recover its costs of collection. With
respect to software sales, a customer who has ordered and received software
from the Company may fail to pay on time for the software, thus creating a
collection problem for the Company. In the event a purchaser of services or
software defaults in its payment obligation, the Company's sole remedy would
be the pursuit of legal remedies.
SHARES ELIGIBLE FOR FUTURE SALE
Sales of substantial amounts of the Common Stock of the Company or
the perception that such sales could occur, could have a negative impact on
the prevailing market prices for the Common Stock. As of August 11, 1999, the
Company had 7,936,409 shares of Common Stock outstanding, of which at least
83,233 were eligible as of such date under applicable securities laws for
immediate sale in the public market without restriction, except for any
shares purchased by any "affiliate" of the Company (as that term is defined
under the rules and regulations of the Securities Act) which will be subject
to the resale limitations of Rule 144 under the Securities Act ("Rule 144").
In addition, approximately 4,104,379 outstanding shares were, as of August
11, 1999, "restricted securities," as that term is defined under Rule 144,
and may be eligible for sale, subject to certain restrictions, in the open
market pursuant to Rule 144.
ANTI-TAKEOVER CONSIDERATIONS
The Company's Articles of Incorporation and bylaws, the Utah Revised
Business Corporation Act and the Utah Control Shares Acquisition Act each
contain certain provisions that may have the effect of inhibiting a
non-negotiated merger or other business combination. The Company's Articles
of Incorporation grant to the Board of Directors the authority, without
further action by the Company's shareholders, to fix the rights and
preferences, and issue shares of preferred stock. These provisions may deter
hostile takeovers or delay or prevent changes in control of Sento or changes
in Sento's management, including transactions in which shareholders might
otherwise receive a premium for their shares over the then-current market
prices. In addition, these provisions may limit the ability of shareholders
to approve transactions that they may deem to be in their best interests.
DIVIDENDS
Dividends are payable on the Common Stock when, as and if declared
by the Company's Board of Directors. No dividend has been declared or paid on
the Common Stock to date. At present the Company intends to retain any future
earnings for use in its business and therefore does not anticipate paying any
dividends on the Common Stock in the foreseeable future.
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BUSINESS
The Company provides IT services to organizations of all sizes that
use or develop applications for Windows NT, UNIX and Internet/Intranet-based
client-server computing environments. Such services consist primarily of the
following:
- providing outsourced technical support and help-desk functions;
- consulting in CTI technology; and
- assessing and training in-house IT staff both on-site and
through distance learning, including CBT methods.
The Company was formed in 1986 as Spire Technologies, Inc. and
marketed high-end third party hardware and software products as a value added
reseller ("VAR"). In 1996, the Company completed a share exchange with an
existing public company. In November 1996, the Common Stock was registered on
the Nasdaq Stock Market (Small Cap Market) (Symbol: SNTO). In 1998, the
Company changed its name to Sento Corporation.
In 1997 and 1998, the Company undertook a strategic transition to
focus its efforts on IT training, consulting and technical support. In 1998,
the Company constructed a call center facility which is now operational and
is anticipated to be fully staffed (300 personnel) during the 2000 fiscal
year. The Company sold certain operations, comprising its VAR business, in
March and June 1999. See "-- BACKGROUND."
BACKGROUND
Historically, Sento's operations consisted almost entirely of a VAR
business oriented to purchases of high-end third-party hardware and software
products. The Company generated revenues almost exclusively from sales and
distribution of third party hardware and software products. In 1997, the
Company began a strategic transition using its technical core competencies to
offer IT outsourcing services such as helpdesk, systems and network
consulting and IT training ("outsourcing" refers to the transfer of IT
product and service responsibility from internal personnel to external
providers). Management believes these new service offerings will contribute
greater operating margins than distributing third-party products. The Company
divested its VAR business in March and June 1999. The Company has also
refocused its training activities from classroom style to corporate custom
and distance learning/CBT.
The Company's marketing efforts focus on middle market companies
ranging from $50 million to $500 million in annual revenues as well as
divisions/departments of Fortune 500 companies. Sento sells and delivers its
services through two IT service offices located in American Fork, Utah, and
Sydney, Australia. Sento's call center is located in the American Fork, Utah
facility.
During the year ended March 31, 1998, Sento expanded its service
offerings and geographic range through the acquisitions of Australian
Software Innovations Pty. Ltd. ("ASI") in Sydney, Australia (now known as
Sento Australia Pty. Ltd.), and Astron Incorporated in Orem, Utah.
THE INDUSTRY
The IT industry encompasses a broad spectrum of technology and
services used in the processing, distribution and management of information.
This spectrum includes:
- a user's desktop information system, consisting principally of
computer hardware, software and associated training;
- back office services, including existing and future IT systems
infrastructure; and
- organizational management of IT systems (including Internet
and Intranet) and requirements.
Sento believes most organizations face a rapidly changing, highly
competitive environment where improved utilization of IT products and
services can be a significant factor in improving products and services,
lowering costs, increasing customer satisfaction and building competitive
advantages. Many top executives and managers recognize the importance of
information technology in their organizations and the potential benefits of
improved IT utilization. At the same time, the rapid technological change and
migration required to achieve those benefits create tremendous pressure on
organizations and their management. As the pace of technological change
accelerates, the organization's ability to evaluate, integrate, deploy and
leverage IT systems is becoming a critical competitive issue. In particular,
internal IT departments are frequently challenged to use limited time and
resources (both financial and human) to stay abreast of rapid technological
change while maintaining the operations of existing IT systems without
incurring significant technological or operational risks.
The challenge of maintaining an organization's focus on core
business areas while attempting to monitor and benefit from rapid IT
development has prompted many organizations to seek professional IT training,
consulting and technical services from external providers. Growing product
complexity, shorter product life cycles and an increasing
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number of products and multi-vendor computer and network configurations have
increased the demand for technical support services. At the same time,
software publishers, hardware manufacturers, online service providers and
other organizations are finding it increasingly difficult and expensive to
service all their needs in-house. Technical support is especially challenging
to undertake as a non-core function because of the need for ongoing capital
investment in specialized equipment, the technical workforce management
challenge and the inherent need for scale. As a result, "outsourcing," or the
transfer of IT product and service responsibility from internal personnel to
external providers, is rapidly gaining favor among many organizations.
The Company believes that the principal factors motivating
organizations to pursue outsourced IT services are the desire to provide
improved customer service, an effort to focus internal organizational
resources on the organization's core competencies, the necessity of enhancing
IT effectiveness and the benefit of supplementing internal IT resources.
Sento believes most organizations that use information technology, whether in
their core business or to facilitate non-IT business operations, are
currently outsourcing or will, in the future, outsource some or all of their
IT needs.
BUSINESS STRATEGY
Sento's business strategy is to develop and provide integrated IT
solutions that enable its customers to effectively use leading-edge
technology to improve their business operations and results. The Company
believes it can pursue its business strategy by implementing the following
strategic initiatives:
DEVELOP AND MARKET LEADING-EDGE IT SOLUTIONS. The Company's services
and products are split into two strategic business segments: comprehensive
product support and helpdesk services available through the Company's
E-Customer Contact Center and customized and general system and applications
training available through Sento Training. The Company's products and
services help businesses provide and improve Internet and telephone-based
customer service. Sento Training provides students with high-quality IT
training that has been designed to incorporate leading-edge delivery systems,
measurement tools and training practices.
INTERNAL GROWTH AND ACQUISITIONS. Sento intends to expand its
operations by opening or acquiring additional call centers and training
offices in strategic locations in the U.S. and foreign countries. Management
believes that if the Company successfully identifies and consummates
acquisitions of additional offices, it will enhance its ability to offer its
multinational clients a comprehensive package of integrated IT services. In
addition to geographic expansion, the Company will seek to identify and
acquire companies that provide complementary consulting and training
services, and, as a result, extend the breadth of its service offerings.
ATTRACT AND RETAIN HIGHLY SKILLED IT PROFESSIONALS. The Company's
success depends on its ability to attract, train, motivate and retain highly
skilled IT professionals. Management believes the Company's three-pronged
service approach (technical support, consulting and training) provides an
excellent career path filled with significant opportunities across the
spectrum of IT experience, from entry level positions through highly-skilled
IT consultants. Sento's helpdesk and technical support centers will offer
both entry level employees and seasoned professionals the prospect of
training to enhance their abilities while serving customers in a broad range
of IT areas. The Company also offers its professionals the prospect for rapid
advancement and expert personal training, as employees can move from one
career step to another while remaining within the Company. Sento provides its
employees the chance to work with leading-edge technologies, in a
stimulating, flexible, entrepreneurial environment with ongoing technical
training.
CAPITALIZE ON TECHNOLOGY. The Company has completed its construction
of a state-of-the-art technical support center in American Fork, Utah. The
Company has integrated technology into the support center from divergent
companies on the cutting-edge of the IT and computing industry. The support
center goes beyond a traditional telephone call center by using leading-edge
technology to establish an E-Customer Contact Center. A customer interaction
can be answered through nearly any media type, including voice and fax
communication and all electronic customer interactions over the Internet
(e-mail, Web text chat, Web call-throughs, Web collaboration and Web
call-back interactions) with the same speed and efficiency as traditional
telephone calls. The advent of the Internet and the proliferation of
electronic customer interactions are changing the manner in which businesses
communicate with their customers and the Company's E-Customer Contact Center
positions the Company to meet these emerging opportunities.
SERVICES
The Company's integrated IT solutions are designed to enable its
customers to effectively use leading-edge technology to improve their
business processes and operating results. Sento delivers IT services in two
strategic categories: technical support and training services.
IT TECHNICAL SUPPORT. Sento offers a broad range of IT outsourcing
services consisting principally of call center, helpdesk and product support
services. Sento uses advanced systems, including client-server-based database
and reporting systems, Internet, local area networks ("LAN"), multi-user
systems and Computer-Telephony Integration ("CTI") and Integrated Voice
Response ("IVR") technologies, to provide timely technical support to its
customers, enabling those customers to focus increased attention on their
core business operations. CTI combines data with voice
9
<PAGE>
systems in order to enhance telephone services. For example, automatic number
identification ("ANI") allows a caller's records to be retrieved from the
database while the call is routed to the appropriate party. IVR is an
automated telephone answering system that responds with a voice menu and
allows the user to make choices and enter information via the user's
telephone keypad. IVR systems are used in call centers as a replacement for
human switchboard operators. IVR systems may also integrate database access
and fax responses.
HELPDESK. Helpdesk services are provided by vendor-certified
professionals acting on behalf of a customer to provide end users and
IT staffs with a knowledgeable resource to address questions and
problems involving applications, integrated desktop, network support or
customized areas of need. Helpdesk personnel provide flexible services
of a moderately technical nature that can be easily scaled to meet a
customer's changing technical support requirements. Utilizing Sento
personnel, customers can develop a program that meets their
requirements, then implement the program rapidly as a complete helpdesk
solution or as a supplement to the customer's on-site facility. In
addition, Sento can dispatch trained engineers to customer or end-user
locations when necessary to provide on-site solutions.
PRODUCT SUPPORT. Product support services are targeted towards original
equipment manufacturers ("OEMs"), software publishers, hardware system
manufacturers and other organizations requiring high quality technical
services. These services, which are more technical in nature than
helpdesk or call center services, are designed to provide customers
with immediate and efficient access to "best-of-class" product support.
Sento delivers comprehensive first-level support (support related to
product installation, features and configuration) to end users and
manufacturers, combining hardware and network support with application
support for proprietary and off-the-shelf programs.
IT TRAINING. Sento provides instructor-led training in seminar,
customized corporate and multimedia settings. Sento's objective is to provide
high-quality IT training designed to incorporate leading delivery systems,
measurement tools and training practices. Sento currently offers training and
related certification services to IT professionals, including Microsoft
Certified Systems Engineer ("MCSE"), Certified NetWare Engineer ("CNE"),
Certified Winframe Administrator ("CWA"), Internet and networking
technologies. Sento instructors combine their presentation skills with
technical information and years of practical, real-world experience and
examples. Instructors are certified in their area of instruction, with many
having multiple certifications (such as MCSE, MCP, CNE, and/or CWA) to their
credit.
In addition, Sento offers training for QuickBooks customers. These
courses provide tips, configurations, tweaks and solutions required to
address obstacles faced by business and accounting professionals. Students
are provided instruction in the use of solutions to maximize their
productivity. Sento provides its training and applications through various
settings including seminar, customized corporate and multimedia including
video and computer based training via Internet and CD-ROM.
INTERNATIONAL OPERATIONS. In July 1997, the Company acquired
substantially all of the assets of ASI, including the OpenAviator suite of
UNIX-based management and performance monitoring utilities. Shortly
thereafter, Sento sold the OpenAviator product suite to BMC Software, Inc.
("BMC") and agreed to provide related product support services during a
transition period which expired on December 31, 1998. Sento contributed the
remainder of the ASI assets to Sento Australia, Pty. Ltd., a wholly-owned
subsidiary of the Company ("Sento Australia"), which acts as a sales agent
for BMC's Patrol product line. These software sales are complemented by
professional consultancy and integration, performance tuning education, and
customized configuration and development services.
ACQUISITIONS AND DIVESTITURES
As a result of Sento's transition to offering IT outsourcing
services rather than pursuing its historical VAR business, Sento has sold its
VAR business and related assets in a series of divestiture transactions
completed during the period between December 31, 1998 and June 30, 1999.
These transactions consisted principally of:
- the sale of Sento's remaining VAR business and related assets
to an unrelated party in June 1999 in exchange for an initial
cash payment of $50,000 and contingent payments based on
revenues generated from the divested business and assets,
which contingent payments will not exceed $350,000;
- the sale of all of the stock of Sento UK Limited (acquired in
October 1997 for 31,750 shares of Common Stock) in exchange
for the return of 43,750 shares of Common Stock issued to the
principal and certain employees of Sento UK Limited and an
agreement to pay Sento a royalty equal to two percent of net
revenues generated by Sento UK Limited during the five-year
period commencing April 1, 1999;
- the sale of all of the assets of Sento's east coast division
(acquired in July 1997 from CDG Technologies, Inc. for 60,000
shares of Common Stock) in exchange for the payment of cash in
an amount equal to $135,000 (paid over a three-year period)
and a royalty based upon net revenues of
10
<PAGE>
the divested operations over the three-year period, provided that
the entire purchase price will be reduced to $100,000 if paid in
full prior to January 1, 2001;
- the sale of 67% of the stock of Dewpoint Distributed
Solutions, Inc. ("Dewpoint") (representing Sento's entire
ownership of the stock of Dewpoint) in exchange for cash in
the amount of $5,000 and the delivery of promissory notes in
the original principal amount of $333,336, secured by a pledge
of all of the Dewpoint shares transferred by Sento and bearing
interest at the rate of six percent (6%) per annum; and
- the sale of all of the assets of Sento's west coast division
(acquired in October 1997 from PC Business Solutions, Inc. for
250,000 shares of Common Stock) in exchange for a promissory
note in the original principal amount of $250,000, secured by
a pledge of 100,000 shares of Common Stock and bearing
interest at the rate of seven and one-half percent (7.5%) per
annum.
In October 1998, the Company acquired equipment and intellectual
property from Functional Software, Pty., Ltd. ("Functional Software") in
exchange for $450,000 in cash and approximately 130,000 shares of Common
Stock. Functional Software is the developer of COSMOS, a system management
framework technology for UNIX and Windows NT computer systems. Subsequent to
the acquisition, the Company determined that the level of revenues reasonably
anticipated to be generated from the operation of the Functional Software
assets would be substantially lower than anticipated at the time of the
acquisition. The Company also determined that the anticipated expenses of the
acquired business would be higher than anticipated at the time of
acquisition. The Company has, as of March 31, 1999, entered into an agreement
with the successor-in-interest to Functional Software, whereby the Company
sold all of the equipment and intellectual property acquired from Functional
Software in exchange for the return to the Company of 100,000 shares of
Common Stock.
In August 1998, Sento Training Corporation, a Utah corporation which
is a wholly-owned subsidiary of the Company ("Sento Training"), acquired the
marketing rights to certain IT training courses from Educational Systems,
Inc. ("ESI") for $100,000 cash and an agreement to pay future royalties of
not less than $500,000 and not more than $1,400,000 (in cash and shares of
Common Stock) over a 33-month period. Effective April 1, 1999, the Company
began withholding royalty payments, based upon the Company's working capital
position and disagreements with the principals of ESI regarding certain
representations and obligations contained in the acquisition agreement. In
July 1999, the Company, Sento Training and ESI entered into a Settlement and
Release Agreement pursuant to which the Company agreed to issue to ESI
169,097 shares of Common Stock in full satisfaction of the obligations of the
Company and Sento Training to ESI. In addition, the parties released and
discharged any claims they had against each other, whether arising under the
original acquisition agreement or otherwise.
COMPETITION
The IT industry is highly competitive, global in scope and comprised
of myriad enterprises and individuals. Methods of competition within the
industry include, but are not limited to, marketing, product performance,
price, product differentiation, service, technology and compliance with
industry standards. The Company anticipates that present and potential
competition in the various markets it serves will come from enterprises and
individuals of various types, many of which are larger and have greater
resources than those of the Company. Firms not now in direct competition with
the Company may introduce competing products in the future. It is possible
for companies to be at various times competitors, customers and collaborators
in different markets. Management believes that its efforts to implement the
Company's strategy of delivering integrated IT solutions, if successfully
implemented, may constitute a competitive advantage.
As the Company has completed its transition to the delivery of
outsourced IT services, it has encountered a new range of competitors within
each of the technical support and training industry segments. Each of the two
industry segments exhibits unique characteristics and is rapidly growing and
highly competitive. In the IT technical support industry Sento also faces
significant and diverse competition from a broad spectrum of international,
national, regional and local enterprises. In the IT training industry, among
other competitors, Sento faces competition from large hardware and software
vendors, as well as many independent international, national, regional and
local training companies.
Sento's competitors include major sole source IT services companies
such as Anderson Consulting, Computer Sciences Corp., Electronic Data
Systems, and IBM which provide full "turnkey" solutions to their large
customers, as well as the following national and worldwide services
companies, among others, who compete in one or more of the three market
segments in which Sento competes:
11
<PAGE>
<TABLE>
<CAPTION>
COMPANY STOCK SYMBOL FY END TTM REV ($MIL) MARKET SEGMENT*
- ------- ------------ ------ -------------- ---------------
<S> <C> <C> <C> <C>
Keane Consulting KEA Dec 1,076 T, TS
Aris Corporation ARSC Dec 115 T
Sykes International SYKE Dec 469 TS
CBT CBTSY Dec 162 T
Learning Tree Int'l LTRE Sep 187 T
A Consulting Team TACX Dec 49 T
Computer Learning CLCX Jan 145 T
National Tech Team TEAM Dec 117 TS
Teletech Holdings TTEC Dec 369 TS
Stream DNY Dec 200 TS
*T--Training, TS--Technical Support
</TABLE>
Sento's ability to compete in its market segments will be driven by
its niche approach, state-of-the-art call center technology, its core
competencies in leading-edge technologies, and by servicing higher-end IT
segments such as networks, TCP/IP, CTI, and systems rather than simpler
products like desktop applications and games.
Given the extensive market opportunity in the networking, Internet,
and CTI systems operating environments, management believes that Sento's
strategy of providing the "best of breed" services in the technically high
end market niche will provide it with competitive positioning to achieve high
growth and capture market share while reaching profitability objectives.
SIGNIFICANT CUSTOMERS
No customer accounted for more than 10% of the Company's revenues
for the fiscal year ended March 31, 1999. However, two customers accounted
for approximately 83% of technical support revenues, and it is anticipated
that less than five customers will account for more than 80% of the technical
support revenues in the next fiscal year and perhaps longer. In addition, it
is anticipated that technical support revenues will become the majority of
the Company's revenues, and, therefore, it is anticipated that a small number
of customers will account for the majority of the Company's revenues.
Consistent with industry standards, the Company's contracts are generally
cancelable by the customer on short-term notice. The loss of, or the failure
to retain a significant amount of business with any key customer could have a
material adverse effect on the business, financial condition and results of
operations of the Company.
PATENTS AND PROPRIETARY TECHNOLOGY
The Company does not own any patents nor does it have any patent
applications relating to its products. The Company has a limited number of
copyrights and has obtained licenses to create derivative works relative to
copyrights owned by third parties. The ownership of such derivative works
vests in the licensor. The Company is also seeking tradename and trademark
protection for certain of its names and marks. Accordingly, Company
management does not believe that any particular patent or group of patents,
copyrights, trademarks, or tradenames is of material importance to the
business of the Company as a whole.
RESEARCH AND DEVELOPMENT
The Company competes in an industry which is characterized by rapid
technological change. Historically, the Company has not incurred significant
expenses for research and development.
EMPLOYEES
As of July 31, 1999, the Company had approximately 273 total
employees, of which approximately 251 were full-time employees and 22 were
part-time employees. Competition for qualified personnel in the IT industry
is intense. The future success and growth of the Company will depend in large
measure upon its ability to attract and retain qualified management and
technical personnel. There can be no assurance that the Company will be able
to attract and maintain all personnel necessary for the development and
operation of its business nor that it will be able to train its current
employees on new developments in technology. Failure of the Company to
attract and retain key management and technical personnel and qualified
personnel required to continue the Company's operations could have a material
adverse impact on the Company. None of the Company's employees is represented
by a labor organization with respect to their employment with the Company.
The Company has never had a work stoppage, and the Company considers its
employee relations satisfactory.
12
<PAGE>
PROPRIETARY MARKS
The Company utilizes many third-party products represented by
registered or common law trademarks, including the following trademarks: (1)
DEC-Registered Trademark-, VMS-Registered Trademark-, OpenVMS-TM-,
VAX-Registered Trademark- and Alpha-TM- which are trademarks of Digital; (2)
Microsoft-Registered Trademark-, MS-DOS-Registered Trademark-, DOS-TM-,
Windows-Registered Trademark-, Windows NT-Registered Trademark- and Windows
95-TM- which are trademarks of Microsoft; (3) OS/2-TM- which is a trademark
of IBM and (iv) Intel-Registered Trademark- which is a registered trademark
of Intel. This Prospectus also contains trademarks of other companies.
USE OF PROCEEDS
All proceeds from any sale of the shares offered in this prospectus,
less commissions and other customary fees and expenses, will be paid directly
to the Selling Shareholders selling the shares. The Company will not receive
any proceeds from the sale of any of the shares offered in this prospectus.
SELLING SHAREHOLDERS
The following table sets forth, as of the date of this prospectus,
the name of each shareholder selling shares of the Common Stock of the
Company as part of this offering (each a "Selling Shareholder"), certain
beneficial ownership information with respect to the Selling Shareholders,
and the number of shares that may be sold from time to time by each Selling
Shareholder pursuant to this prospectus. There can be no assurance that any
of the shares offered hereby will be sold. The percentages set forth below
have been computed based on the number of outstanding shares of Common Stock
as of August 11, 1999, which was 7,936,409 shares of Common Stock. Except as
otherwise indicated, the Company believes the persons named in the table have
sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them, subject to community property laws,
where applicable.
<TABLE>
<CAPTION>
Beneficial Ownership Shares Beneficially Owned Upon
Prior to Offering Completion of Offering (1)
--------------------------- ------------------------------
Number of
Number of Shares Being Number of
Beneficial Owner Shares Percent(2) Offered(1) Shares Percent(2)
- --------------------------------------------- ------------ ---------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Kathryn Allred 7,150 * 6,216 934 *
Royal and Beth Allred Family Rev. Trust 2,715 * 2,715 0 *
American Energy Management 14,100 * 14,100 0 *
Ancor Sales Co. Profit Sharing Plan 37,500(6) * 37,500 0 *
Janae Arnold 77,618 * 77,618 0 *
Lodene F. Dallmore IRA 10,000 * 10,000 0 *
Banyan Investment Co. 75,000 * 15,000 60,000 *
Bay Area Micro-Cap Fund I.P. 210,000(7) * 210,000 0 *
William R. Bell 12,000 * 12,000 0 *
Kenneth R. Bench 1,000 * 1,000 0 *
Benson Family Trust 12,000 * 12,000 0 *
Glenn G. Bingham 6,000 * 6,000 0 *
Brian W. Braithwaite(3) 397,167 5.0% 397,167 0 *
Robert C. Broadbent 9,000 * 9,000 0 *
Robert N. Broadbent and
Marie Sue Broadbent Family Trust 6,000 * 6,000 0 *
Irwin Bronstein 6,000 * 6,000 0 *
Joseph J. Bunker 25,000 * 25,000 0 *
Keith Cannon 45,000(8) * 45,000 0 *
Gary E. and Judy K. Cansler 12,000 * 12,000 0 *
Walter A. Carozza 23,436(9) * 23,436 0 *
John G. and Marilyn G. Chatterton 6,221 * 6,221 0 *
Kevin W. Clark 6,000 * 6,000 0 *
Gene P. Clasen 12,000 * 12,000 0 *
Sherry and Gene Clasen 24,000 * 24,000 0 *
Wayne T. Clasen 24,000 * 24,000 0 *
Lester L. Colbert, Jr. 45,000(10) * 45,000 0 *
Arthur F. Coombs, Jr. 30,000(11) * 30,000 0 *
Stanley J. Cutler(4) 34,000(12) * 30,000 4,000 *
Steven A. Dawes 19,500 * 19,500 0 *
Max C. Tanner KEOGH 17,000 * 17,000 0 *
Delta Financial Resoruces, Inc. 203,505(13) * 157,000 46,505 *
Michelle Drolet 17,000 * 17,000 0 *
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Beneficial Ownership Shares Beneficially Owned Upon
Prior to Offering Completion of Offering (1)
--------------------------- ------------------------------
Number of
Number of Shares Being Number of
Beneficial Owner Shares Percent(2) Offered(1) Shares Percent(2)
- --------------------------------------------- ------------ ---------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Neal J. Ethridge 12,000 * 12,000 0 *
Walfred J. and Vida L. Fassler 1,250 * 1,250 0 *
Gerald Smith Family Partnership 2,000 * 2,000 0 *
Barton T. Gleave 24,000 * 24,000 0 *
Kelly J. Gleave 30,000(14) * 30,000 0 *
Rodney S. Gleave and
Kelley W. Gleave Family Trust 29,000 * 29,000 0 *
Jeff Gray 60,000(15) * 60,000 0 *
Kristine A. Gornichec 6,000 * 6,000 0 *
Gary B. Filler(5) 47,000(16) * 30,000 17,000 *
Wayne M. Hamersly 3,000 * 3,000 0 *
John Hartunain 18,000 * 18,000 0 *
Hoya Investments 3,000 * 3,000 0 *
Nizar Huddani 24,000 * 24,000 0 *
Leila Huddani 24,000 * 24,000 0 *
Stephen L. Hunsaker 1,000 * 1,000 0 *
Kenichi and Amy Inouye 3,000 * 3,000 0 *
Guy Ivins 3,000(17) * 3,000 0 *
Bruce F. Jastremski 6,000 * 6,000 0 *
Mark H. and Linda A. Krysl 3,000 * 3,000 0 *
Robert H. and Mary Jane Latvala 6,000 * 6,000 0 *
Clair A. Lewis IRA 4,500 * 4,500 0 *
M3 Partners LLC 46,875(18) * 46,875 0 *
Maniar Investments 30,000(19) * 30,000 0 *
Mart Warehousing & Storage Inc. 17,000 * 17,000 0 *
Daniel and Vida L. Mcleod 30,000(20) * 30,000 0 *
Michael T. Michelas 10,000 * 10,000 0 *
Donald D. and Mary N. Montgomery 6,000 * 6,000 0 *
Clark M. Mower 35,000(21) * 30,000 5,000 *
Alexander I. Paluch 23,436(22) * 23,436 0 *
Perigrine Properties 150,000(23) * 150,000 0 *
Mark Peterson 90,000(24) * 90,000 0 *
Rogers Family Trust 45,000(25) * 45,000 0 *
James C. Ruane 12,000 * 12,000 0 *
Andrew E. Shapiro 5,000 * 5,000 0 *
Shoughro Family Trust 12,000 * 12,000 0 *
Heidi M. Smith 104,285 * 104,285 0 *
Jerry Spilsbury 150,000(26) * 150,000 0 *
Lincoln F. Stock 6,000 * 6,000 0 *
Dale Stonedahl 7,860 * 7,860 0 *
Mont E. Tanner 6,000 * 6,000 0 *
Clemons F. Walker 487,000(27) 6.1% 437,000 50,000 *
Ronald J. Walker 6,000 * 6,000 0 *
Wasatch Family Dental Care P.C. Pension Trust 4,000 * 4,000 0 *
William F. Warnick 9,000 * 9,000 0 *
Kerry and Garth Weaver 3,000 * 3,000 0 *
Whisper Investment Company 30,000(28) * 30,000 0 *
John J. Witkowski 26,000(29) * 26,000 0 *
Bert Zaccaria(30) 45,000(31) * 45,000 0 *
ZD Air, Inc.(30) 45,000(32) * 45,000 0 *
Genesys Telecommunications Laboratories 243,753(33) * 243,753 0 *
Silicon Valley Bank 60,000(34) * 60,000 0 *
John Whitney 12,500(35) * 12,500 0 *
--------- --------- -------
3,494,371 3,310,932 183,439
</TABLE>
- ---------------------------
* Represents less than one percent of the outstanding shares of Common
Stock.
(1) Assumes the sale by each Selling Shareholders of all of the shares
offered hereunder by such Selling Shareholder. There can be no
assurance that any of the shares offered hereby will be sold.
14
<PAGE>
(2) The percentages set forth have been computed without taking into
account any treasury shares held by Sento and, with respect to those
persons holding warrants to purchase Common Stock exercisable within
60 days of August 11, 1999, the number of shares of Common Stock that
would be issuable at the end of such period assuming the exercise
thereof.
(3) Brian W. Braithwaite served on the Company's Board of Directors and
as Corporate Secretary from August of 1986 until October of 1997.
(4) Stanley J. Cutler currently serves as Corporate Secretary.
(5) Gary B. Filler currently serves on the Company's Board of Directors
and as Chief Financial Officer. (6) Includes shares subject to a
presently exercisable warrant to purchase 7,500 shares of the
Company's Common Stock.
(7) Includes shares subject to a presently exercisable warrant to
purchase 70,000 shares of the Company's Common Stock.
(8) Includes shares subject to a presently exercisable warrant to
purchase 15,000 shares of the Company's Common Stock.
(9) Includes shares subject to a presently exercisable warrant to
purchase 7,812 shares of the Company's Common Stock.
(10) Includes shares subject to a presently exercisable warrant to
purchase 15,000 shares of the Company's Common Stock.
(11) Includes shares subject to a presently exercisable warrant to
purchase 10,000 shares of the Company's Common Stock.
(12) Includes shares subject to a presently exercisable warrant to
purchase 10,000 shares of the Company's Common Stock.
(13) Includes shares subject to a presently exercisable warrant to
purchase 50,000 shares of the Company's Common Stock.
(14) Includes shares subject to a presently exercisable warrant to
purchase 10,000 shares of the Company's Common Stock.
(15) Includes shares subject to a presently exercisable warrant to
purchase 20,000 shares of the Company's Common Stock.
(16) Includes 32,000 shares and shares subject to a presently exercisable
warrant to purchase 10,000 shares in the name of G.T. Investments, of
which Mr. Filler is the sole shareholder.
(17) Includes 1,000 shares owned jointly by Guy and Norma Ivins.
(18) Includes shares subject to a presently exercisable warrant to
purchase 15,625 shares of the Company's Common Stock.
(19) Includes shares subject to a presently exercisable warrant to
purchase 10,000 shares of the Company's Common Stock.
(20) Includes shares subject to a presently exercisable warrant to
purchase 10,000 shares of the Company's Common Stock.
(21) Includes shares subject to a presently exercisable warrant to
purchase 10,000 shares of the Company's Common Stock.
(22) Includes shares subject to a presently exercisable warrant to
purchase 7,812 shares of the Company's Common Stock.
(23) Includes shares subject to a presently exercisable warrant to
purchase 50,000 shares of the Company's Common Stock.
(24) Includes shares subject to a presently exercisable warrant to
purchase 30,000 shares of the Company's Common Stock.
(25) Includes shares subject to a presently exercisable warrant to
purchase 15,000 shares of the Company's Common Stock.
(26) Includes shares subject to a presently exercisable warrant to
purchase 50,000 shares of the Company's Common Stock.
(27) Includes 280,900 shares of Common Stock held in the name of the
Walker Family Trust, presently exercisable warrants to purchase
50,000 shares of Common Stock held by Mr. Walker and presently
exercisable warrants to purchase 50,000 shares of Common Stock held
in the name of the Walker Family Trust.
(28) Includes shares subject to a presently exercisable warrant to
purchase 10,000 shares of the Company's Common Stock.
(29) Includes shares subject to a presently exercisable warrant to
purchase 5,000 shares of the Company's Common Stock and 11,000 shares
owned jointly by John J. and Carolyn A. Witkowski.
(30) Bert Zaccaria is the President and a shareholder of ZD Air, Inc.
(31) Includes shares subject to a presently exercisable warrant to
purchase 15,000 shares of the Company's Common Stock.
(32) Includes shares subject to a presently exercisable warrant to
purchase 15,000 shares of the Company's Common Stock.
(33) Includes shares subject to a presently exercisable warrant to
purchase 81,251 shares of the Company's Common Stock.
15
<PAGE>
(34) Includes shares subject to a presently exercisable warrant to
purchase 60,000 shares of the Company's Common Stock.
(35) Includes shares subject to a presently exercisable warrant to
purchase 12,500 shares of the Company's Common Stock.
PRIVATE PLACEMENT -- The Selling Shareholders acquired a significant
portion of the shares offered hereby in connection with private placements of
(1) 446,048 shares of Common Stock and warrants to purchase 223,024 shares of
Common Stock that the Company completed on June 18, 1996 (the "1996 Private
Placement"), (2) 720,000 shares of Common Stock and warrants to purchase
240,000 shares of Common Stock that the Company completed on August 27, 1997
(the "1997 Private Placement") and (3) 1,200,000 shares of Common Stock and
warrants to purchase 600,000 shares of Common Stock that the Company
completed on June 29, 1999 (the "1999 Private Placement" and together with
the 1996 Private Placement and the 1997 Private Placement, collectively, the
"Private Placements"). The Company conducted the Private Placements pursuant
to the terms set forth in (1) a Private Placement Memorandum of Sento dated
April 24, 1996, (2) a Private Placement Memorandum of Sento dated May 30,
1997 and (3) a Private Placement Memorandum of Sento dated May 5, 1999,
respectively.
The 1996 Private Placement consisted of the offer and sale to
certain Selling Shareholders (the "1996 Selling Shareholders") of 200,000
units (the "1996 Units") comprised of two shares each, together with one
warrant each for the purchase of one share of Common Stock, exercisable until
April 30, 1998, at an exercise price of $3.50 per share. The 1996 Units were
offered on a "best efforts" basis on behalf of Sento by officers of Sento at
an offering price per Unit of $7.00. The Company accepted subscriptions from
the 1996 Selling Shareholders for all of the 1996 Units offered in the 1996
Private Placement.
The 1997 Private Placement consisted of the offer and sale to
certain Selling Shareholders (the "1997 Selling Shareholders") of 240,000
units (the "1997 Units") comprised of three shares each, together with one
warrant each for the purchase of one share of Common Stock, exercisable until
May 31, 1999, at an exercise price of $5.50 per share. The 1997 Units were
offered on a "best efforts" basis on behalf of Sento by certain independent
brokers at an offering price per 1997 Unit of $12.50. The Company accepted
subscriptions from the 1997 Selling Shareholders for all of the 1997 Units
offered in the 1997 Private Placement.
The 1999 Private Placement consisted of the offer and sale to
certain Selling Shareholders (the "1999 Selling Shareholders" and together
with the 1996 Selling Shareholders and the 1997 Selling Shareholders,
collectively, the "Private Placement Selling Shareholders") of 600,000 units
(the "1999 Units" and together with the 1996 Units and the 1997 Units,
collectively, the "Units") comprised of two shares each, together with one
warrant each for the purchase of one share of Common Stock, exercisable until
May 31, 2002, at an exercise price of $2.50 per warrant. The 1999 Units were
offered on a "best efforts--all or none" basis on behalf of Sento by officers
of the Company at an offering price per 1999 Unit of $3.20. The Company
accepted subscriptions from the 1999 Selling Shareholders for all of the 1999
Units offered in the 1999 Private Placement.
In connection with the purchase of Units by Private Placement
Selling Shareholders, the Company executed registration rights agreements
entitling such Selling Shareholders to certain incidental, or "piggyback,"
registration rights with respect to the shares acquired thereunder. The
Company also has executed registration rights agreements entitling other
Selling Shareholders to "piggyback" registration rights with respect to
certain shares of Common Stock acquired in connection with various other
transactions, including business acquisitions and consulting and financing
arrangements.
PLAN OF DISTRIBUTION
The shares offered in this Prospectus will not be offered or sold
through any underwriting syndicate, nor has the Company retained any
underwriter, broker or dealer to facilitate the offer or sale of the shares.
Sento will not pay any underwriting commissions or discounts in connection
with this offering. Those Selling Shareholders electing to offer or sell
shares will do so in transactions on the NASDAQ Small Cap Market, in
negotiated transactions or in a combination of the two methods of sale, at
prices relating to the prevailing market prices or at negotiated prices. The
Selling Shareholders may sell the shares to or through broker-dealers. Such
broker-dealers may receive compensation in the form of discounts or
commissions from the Selling Shareholders and/or the purchasers of the shares
for whom such broker-dealers may act as agents or to whom they may sell as
principal, or both. The compensation as to a particular broker-dealer may be
in excess of customary commissions. The Company will not receive any proceeds
from the sale of any of the shares.
In order to comply with the securities laws of certain states, if
applicable, the shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale
in the applicable state or an exemption from the registration or
qualification requirement is available.
16
<PAGE>
LEGAL MATTERS
The validity of the shares being offered in this prospectus and
certain other legal matters pertaining to Sento are being passed upon for
Sento by Parr Waddoups Brown Gee & Loveless, Salt Lake City, Utah.
EXPERTS
The financial statements of Sento as of March 31, 1999 and 1998, and
for the years then ended have been incorporated by reference herein and in
the registration statement in reliance upon the report of KPMG LLP,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), a registration statement Form S-3 (the "Registration
Statement") with respect to the shares of Common Stock offered by this
Prospectus. This Prospectus, filed as a part of the Registration Statement,
does not contain all the information set forth in the Registration Statement
and the exhibits and schedules thereto, certain portions of which have been
omitted as permitted by the rules and regulations of the Commission. For
further information regarding the Company and the shares offered hereby,
reference is made to the Registration Statement and any amendments, exhibits
and schedules thereto, which may be inspected with charge and copied at
prescribed rates at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 (the
public may obtain information on the operation of the Public Reference Room
by calling the Commission at 1-800-SEC-0330). Such information may also be
available at the Internet site maintained by the Commission at
http://www.sec.gov. Statements contained in this Prospectus as to the
contents of any contract or other document referred to herein are not
necessarily complete, and, in each instance, reference is made to the copy of
such contract or document filed as an exhibit to the Registration Statement,
each such statement being qualified in its entirety by such reference.
The Company is subject to the informational and reporting
requirements of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"). As long as the Company is subject to such periodic reporting
and information requirements, it will file with the Commission all Commission
reports, proxy statements and other information required thereby, which may
be inspected at the Public Reference Room and at the Commission's regional
offices located at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511 and 7 World Trade Center, Suite 1300, New York,
New York 10048. Copies of such materials may also be obtained by mail upon
written request from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 upon payment of prescribed fees.
In addition, electronically filed documents, including reports, proxy
statements and other information filed by the Company, can be obtained from
the Commission's Internet site at http://www.sec.gov.
In addition, the Company intends to furnish its shareholders with
annual reports which include financial statements that have been audited with
a report thereon by its independent accountants and quarterly reports
containing unaudited summary financial information for the first three
quarters of each fiscal year.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act (File No. 0-06425) are incorporated herein by
reference as of their respective dates:
(a) Annual Report on Form 10-KSB for the fiscal year ended March 31,
1999.
(b) Quarterly Report on Form 10-QSB for the quarter ended June 30, 1999.
(c) Description of the Company's Common Stock contained in a Registration
Statement on Form 10 dated July 24, 1972, as modified and amended by
the Company's Current Report on Form 8-K filed on October 20, 1997.
All reports and other documents filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering of the Common
Stock shall be deemed to be incorporated by reference herein. Any statement
contained in a document incorporated or deemed to be incorporated by
reference shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which is also incorporated or
17
<PAGE>
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a
Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the information incorporated by reference in this
Prospectus, other than exhibits to such information (unless such exhibits are
specifically incorporated by reference into the information that this
Prospectus incorporates). Requests for such copies should be directed to Gary
Filler, Chief Financial Officer, Sento Corporation, 808 East Utah Valley
Drive, American Fork, Utah 84003, telephone (801) 492-2000.
INDEMNIFICATION
The Company's Bylaws provide that it will indemnify all of its
directors and officers as permitted by the Utah Revised Business Corporation
Act, as amended. Under the Act, Sento may indemnify any person acting in his
or her capacity as a director or officer of Sento who is made a party to any
suit or proceeding if the person acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to Sento's best interests.
The Company may indemnify the person in the case of a criminal proceeding if
he or she had no reasonable cause to believe his or her conduct was unlawful.
The Company may not indemnify any director or officer, however, where the
claim or liability arose out of that person's own negligence or willful
misconduct, or if that person is ultimately adjudged in the proceeding to be
liable to the Company or liable on the basis that he or she derived an
improper personal benefit.
In addition, under the Registration Rights Agreements between Sento
and the Selling Shareholders who purchased shares under the Private
Placements, Sento has agreed to indemnify such Selling Shareholders, and such
Selling Shareholders have agreed to indemnify Sento and its officers,
directors and controlling persons, for some specific liabilities that might
arise under the Securities Act in connection with the registration statement
of which this prospectus is a part.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to the Company's directors, officers and
controlling persons pursuant to the foregoing provisions or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act,
and is, therefore, unenforceable. If a claim for indemnification against such
liabilities is asserted by a director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its legal counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by the Company is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue. Sento does not consider its payment of expenses incurred or paid by
any of its directors, officers or controlling persons in the successful
defense of any action, suit or proceeding to be against public policy and,
therefore, it does not anticipate submitting, on its own initiative, such
issue to the judgment of a court.
18
<PAGE>
3,310,932 SHARES
COMMON STOCK
---------------
PROSPECTUS
---------------
_____________, 1999
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses of the offering,
sale and distribution of the shares being registered pursuant to this
registration statement (the "Registration Statement"), other than
underwriting discounts and commissions. All of the expenses listed below will
be borne by the Company. All of the amounts shown are estimates, except the
SEC registration fees.
<TABLE>
<CAPTION>
Amount
--------
<S> <C>
SEC registration fees ........................... $ 2,186
Accounting fees and expenses .................... 5,000
Legal fees and expenses ......................... 15,000
Blue sky fees and expenses ...................... 1,000
Miscellaneous expenses .......................... 1,814
--------
Total ........................................... $ 25,000
--------
--------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is a Utah corporation. Reference is made to Sections
16-10a-902 through 16-10a-907 of the Utah Revised Business Corporation Act,
as amended (the "Act"). Section 16-10a-902 of the Act provides that a
corporation may indemnify any individual who was, is, or is threatened to be
made a named defendant or respondent (a "Party") in any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative and whether formal or informal (a
"Proceeding"), because he is or was a director of the corporation or, while a
director of the corporation, is or was serving at its request as a director,
officer, partner, trustee, employee, fiduciary or agent of another
corporation or other person or of an employee benefit plan (an "Indemnifiable
Director"), against any obligation incurred with respect to a Proceeding,
including any judgment, settlement, penalty, fine or reasonable expenses
(including attorneys' fees), incurred in the Proceeding if his conduct was in
good faith, he reasonably believed that his conduct was in, or not opposed
to, the best interests of the corporation, and, in the case of any criminal
Proceeding, he had no reasonable cause to believe his conduct was unlawful;
provided however, that, (i) indemnification in connection with a Proceeding
by or in the right of the corporation is limited to payment of reasonable
expenses (including attorneys' fees) incurred in connection with the
Proceeding and (ii) the corporation may not indemnify an Indemnifiable
Director in connection with a Proceeding by or in the right of the
corporation in which the Indemnifiable Director was adjudged liable to the
corporation, or in connection with any other Proceeding charging that the
Indemnifiable Director derived an improper personal benefit, whether or not
involving action in his official capacity, in which Proceeding he was
adjudged liable on the basis that he derived an improper personal benefit.
Section 16-10a-903 of the Act provides that, unless limited by its
articles of incorporation, a corporation shall indemnify an Indemnifiable
Director who was successful, on the merits or otherwise, in the defense of
any Proceeding, or in the defense of any claim, issue or matter in the
Proceeding, to which he was a Party because he is or was an Indemnifiable
Director of the corporation, against reasonable expenses (including
attorneys' fees) incurred by him in connection with the Proceeding or claim
with respect to which he has been successful.
In addition to the indemnification provisions discussed above,
Section 16-10a-905 of the Act provides that, unless otherwise limited by a
corporation's articles of incorporation, an Indemnifiable Director may apply
for indemnification to the court conducting the Proceeding or to another
court of competent jurisdiction. Section 16-10a-904 of the Act provides that
a corporation may pay for or reimburse the reasonable expenses (including
attorneys' fees) incurred by an Indemnifiable Director who is a Party to a
Proceeding in advance of the final disposition of the Proceeding upon the
satisfaction of certain conditions.
Article 9 of the Company's Bylaws provides that the Company shall
indemnify all directors and officers of the Company as permitted by the Act.
Under such provisions, any director or officer, who in his capacity as such,
is made a party to any suit or proceeding, shall be indemnified if such
director or officer acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Company and, in
the case of a criminal
II-1
<PAGE>
proceeding, he or she had no reasonable cause to believe his or her conduct
was unlawful; provided, however, that no indemnification may be given a
director or officer where the claim or liability arose out of that person's
own negligence or willful misconduct, or if such person is ultimately
adjudged in the proceeding to be liable to the Company or liable on the basis
that he or she derived an improper personal benefit. The Bylaws further
provide that such indemnification is not exclusive of any other rights to
which such individuals may be entitled under the Company's Articles, the
Bylaws, any agreement, vote of stockholders or otherwise.
In addition, pursuant to the Registration Rights Agreements executed
by the Company and the Selling Shareholders who purchased Shares under the
Private Placement, the Company has agreed to indemnify such Selling
Shareholders, and such Selling Shareholders have agreed to indemnify the
Company and its officers, directors and controlling persons, for certain
liabilities which might arise under the Securities Act in connection with the
Registration Statement.
Indemnification may be granted pursuant to any other agreement,
bylaw, or vote of shareholders or directors. The Company currently maintains
no policy of director's and officer's insurance for the benefit of the
officers and directors of the Company. The foregoing description is
necessarily general and does not describe all details regarding the
indemnification of officers, directors or controlling persons of the Company.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act,
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-2
<PAGE>
ITEM 16. EXHIBITS
(a) EXHIBITS TO THE REGISTRATION STATEMENT.
The following exhibits required by Item 601 of Regulation S-K
have been included herewith or have been filed previously with the
commission as indicated below.
<TABLE>
<CAPTION>
Regulation
S-K Exhibit Incorporated
No. Description By Reference Filed Herewith
----------- ----------- ------------ --------------
<S> <C> <C> <C>
4.1 Articles of Incorporation, as amended. (1)
4.2 Bylaws of the Company. (2)
4.3 Specimen Certificate. (3)
5 Legal Opinion of Parr Waddoups Brown Gee & Loveless, counsel X
to the Company, as to the legality of the securities offered.
23.1 Consent of Parr Waddoups Brown Gee & Loveless X
(included in their legal opinion filed as Exhibit 5
to this Registration Statement).
23.2 Consent of KPMG, independent public accountants. X
24 Power of Attorney (included on page II-5 of this X
Registration Statement).
</TABLE>
(b) FINANCIAL STATEMENT SCHEDULES. -- NOT APPLICABLE.
- -------------------
(1) Incorporated by reference to Annual Report on Form 10-KSB for the fiscal
year ended March 31, 1999, filed with the Commission on June 29, 1999.
(2) Incorporated by reference to Annual Report on Form 10-KSB for the fiscal
year ended April 30, 1996, filed with the Commission on July 29, 1996, as
amended by Form 10-KSB/A filed with the Commission on August 1, 1996 filed
with the Securities and Exchange Commission on September 27, 1996.
(3) Incorporated by reference to Registration Statement on Form S-1 filed with
the Commission on September 27, 1996, as amended by Amendment No. 1 to Form
S-1 Registration Statement on Form S-1/A filed with the Commission on
November 6, 1996.
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the
financial statements or notes thereto.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer, or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The Company hereby undertakes:
(1) To file, during any period in which the Company offers or sells
securities, a post-effective amendment to this registration statement
to include any additional or changed material information on the plan
of distribution.
II-3
<PAGE>
(2) For the purpose of determining liability under the Securities Act, to
treat each post-effective amendment as a new registration statement of
the securities offered, and the offering of the securities at that time
to be the initial bona fide offering thereof.
(3) To file a post-effective amendment to remove from registration any of
the securities being registered that remain unsold at the termination
of the offering.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Company has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
American Fork, State of Utah, on August 13, 1999.
SENTO CORPORATION
By: /s/ Arthur F. Coombs, III
------------------------------------
Arthur F. Coombs, III
President and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons
in the capacities and as of the dates indicated. Each person whose signature
to this Registration Statement appears below hereby constitutes and appoints
Arthur F. Coombs, III and Gary B. Filler, and each of them, as his true and
lawful attorney-in-fact and agent, with full power of substitution, to sign
on his behalf individually and in the capacity stated below and to perform
any acts necessary to be done in order to file all amendments and
post-effective amendments to this Registration Statement, and any and all
instruments or documents filed as part of or in connection with this
Registration Statement or the amendments thereto and each of the undersigned
does hereby ratify and confirm all that said attorney-in-fact and agent, or
his substitutes, shall do or cause to be done by virtue hereof.
Signature Title Date
--------- ----- ----
/s/ Kieth E. Sorenson Chairman of the Board August 13, 1999
- -----------------------------
Kieth E. Sorenson
/s/ Arthur F. Coombs, III President, Chief Executive August 13, 1999
- ----------------------------- Officer and Director
Arthur F. Coombs, III (principal executive officer)
/s/ Gary B. Filler Chief Financial Officer and August 13, 1999
- ----------------------------- Director (principal financial
Gary B. Filler and accounting officer)
II-5
<PAGE>
EXHIBIT 5
[Letterhead of Parr Waddoups Brown Gee & Loveless]
August 16, 1999
The Board of Directors of
Sento Corporation
808 East Utah Valley Drive
American Fork, Utah 84003
Re: Sento Corporation
Registration Statement on Form S-3
Gentlemen:
As counsel to Sento Corporation, a Utah corporation (the "COMPANY"),
in connection with the sale by certain shareholders of the Company (the
"SELLING SHAREHOLDERS") of up to 3,310,932 shares of the Company's Common
Stock (the "Shares") pursuant to a Registration Statement on Form S-3 (the
"REGISTRATION STATEMENT"), we have examined the originals or certified,
conformed or reproduction copies of all such records, agreements, instruments
and documents as we have deemed necessary as the basis for the opinion
expressed herein. In all such examinations, we have assumed the genuineness
of all signatures on original or certified copies and the conformity to
original or certified copies of all copies submitted to us as conformed or
reproduction copies. As to various questions of fact relevant to the opinion
hereinafter expressed, we have relied upon certificates of public officials
and statements or certificates of officers or representatives of the Company
and others.
Based upon and subject to the foregoing, we are of the opinion that
the Shares to be sold by the Selling Shareholders are legally issued, fully
paid and nonassessable.
We hereby consent to the reference to our firm under "Legal Matters"
in the prospectus which constitutes a part of the Registration Statement and
the filing of the opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ PARR WADDOUPS BROWN GEE & LOVELESS
<PAGE>
EXHIBIT 23.2
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Directors and Stockholders
Sento Corporation:
We consent to incorporation by reference in the Registration Statement on
Form S-3 of Sento Corporation of our report dated May 21, 1999, except as to
the first paragraph of note 6, which is as of June 8, 1999, and the second
paragraph of note 16, which is as of June 9, 1999, relating to the
consolidated balance sheets of Sento Corporation and subsidiaries as of March
31, 1999 and 1998 (as restated), and the related consolidated statements of
operations, stockholders' equity and comprehensive loss, and cash flows for
the years then ended, as such report appears in the Annual Report on Form
10-K of Sento Corporation and to the reference to our firm under the heading
"Experts" in the prospectus.
/s/ KPMG LLP
Salt Lake City, Utah
August 16, 1999
