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U.S. SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

Sento Corporation(Name of small business issuer in its charter)

|Utah                                           |  | 000-06425             |  | 87-0284979                       
|---------------------------------------------- |  | --------------------- |  | ---------------------------------
|(State or other jurisdiction of incorporation) |  | (Commission File No.) |  | (IRS Employer Identification No.)

808 East Utah Valley Drive
American Fork, Utah 84003(Address of principal executive offices, including zip code)

Issuer's
telephone number, including area code: (801) 772-1100

Securities
registered under Section 12(b) of the Exchange Act:

None

Securities
registered under Section 12(g) of the Exchange Act:

Common
Stock, $.25 par value

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

Check
if there is no disclosure of delinquent filers pursuant to Item 405 of Regulation S-B contained herein, and no disclosure will be contained, to the best of the
Issuer'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. o

State
Issuer's revenues for its most recent fiscal year: $23,047,337

The
aggregate market value of the Common Stock held by non-affiliates of the issuer, based upon the closing sale price of the Common Stock reported by the NASDAQ SmallCap
Market on May 31, 2002, was approximately $6,959,383.

The
number of shares of Common Stock outstanding as of May 31, 2002 was 8,395,766

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Issuer's definitive proxy statement relating to its Annual Meeting of Shareholders are incorporated by reference in Part III of this
report.

Transitional
Small Business Disclosure Format (check one): Yes o No ý

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TABLE OF CONTENTS



|PART I              
|--------------------
|Item 1.             
|Item 2.             
|Item 3.             
|Item 4.             
|PART II             
|Item 5.             
|Item 6.             
|                    
|                    
|                    
|                    
|Item 7.             
|Item 8.             
|PART III            
|Item 9.             
|Item 10.            
|Item 11.            
|Item 12.            
|Item 13.            
|SIGNATURES          
|FINANCIAL STATEMENTS

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Statements contained in this Annual Report on Form 10-KSB that are not purely historical are "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements involve various risks and
uncertainties. Forward-looking statements contained in this Report include statements regarding the Company's plans to develop and deliver integrated information technology services, market
opportunities and acceptance, expectations, goals, revenues, financial performance, strategies, mission and intentions for the future. Such forward-looking statements are included under Item 1.
"Business," Item 2. "Properties" and Item 6. "Management's Discussion and Analysis of Financial Condition and Results of Operations." All forward-looking statements included in this Report are
made as of the date hereof, based on information available to the Company as of such date, and the Company assumes no obligation to update any forward-looking statement. It is important to note that
such statements may not prove to be accurate and that the Company's actual results and future events could differ materially from those anticipated in such statements. Among the factors that could
cause actual results to differ materially from the Company's expectations are those described under Item 6. "Management's Discussion and Analysis of Financial Condition and Results of
OperationsRisks Related to Existing and Proposed Sento Operations." All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf
are expressly qualified in their entirety by this section and other factors included elsewhere in this Report.

PART I

Item 1. Business.

Overview

Sento Corporation, Inc. ("Sento" or "Company") designs, implements, and manages high-tech solutions for customer acquisition, customer care,
technical support, and help-desk functions. Using state-of-the-art Portal Services and Customer Contact Solutions Centers, Sento provides domestic and
international support services to Fortune 1000 companies, multinational companies, product manufacturers, and
software publishing companies. Sento's proprietary customer relationship management ("CRM") software and other reporting and management tools, when integrated with multi-channel communications points
such as telephone, internet, chat, email, and self help, provide leading edge solutions that help Sento's clients significantly reduce costs and improve customer satisfaction. By allowing companies to
focus on their core business, Sento helps its clients reduce headcount, eliminate unnecessary capital expenditures, and improve the experience for the customer.

Sento
believes that the principal factors motivating organizations to pursue outsourced customer contact center services are the desire to provide improved customer satisfaction, an
effort to focus internal organizational resources on the organization's core competencies, reduced costs, and a desire for increased efficiency. Many organizations that currently support their
customers in-house, whether in their core business or to facilitate business operations, currently outsource some or all of their customer contact needs. Business analysts believe that
this trend will continue to grow as technology becomes more complex and client resources need to be allocated in the most cost-effective manner possible.

Background

Sento was formed in 1986 as a value-added reseller ("VAR") and was formerly known as Spire Technologies, Inc. In 1996, Sento executed a share exchange with
an existing public company. Sento is incorporated under the laws of the State of Utah. The Company's common stock is traded on the NASDAQ Small Cap Market under the symbol "SNTO". Throughout this
Report, the word "client" refers to entities the Company serves and the word "customer" refers to customers of Sento's clients.

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In
1997 and 1998, Sento undertook a strategic transition to focus its efforts on customer contact solutions. Sento constructed a new generation customer contact facility ("Customer
Contact Solutions Center" or "CCSC"). Subsequently, the Company has constructed an additional CCSC in Utah and two CCSCs in Wyoming, one of which the Company does not expect to utilize and which is
currently for sale or subletting. In addition, through strategic alliances, Sento has developed CCSCs in Scotland, South Africa, and India and plans to open a CCSC in Ireland in the near future.

Sento
sold certain operations, comprising substantially all of its VAR business, in March and June 1999. In November 1999, Sento, Echopass Corporation, a newly-formed
corporation organized by certain existing and former Sento officers, directors and employees ("Echopass"), and a group of financial and strategic investors entered into a series of transactions,
pursuant to which Sento transferred to Echopass substantially all of the technology then owned and utilized by Sento in the operation of its Customer Contact Solutions Centers. Sento sold to Echopass
certain tangible assets, consisting primarily of computer equipment, and other investors contributed technology license rights and approximately $27.6 million in cash. In exchange, Sento
received 4,000,000 shares of Echopass Series A
Preferred Stock, approximately $1.3 million in cash and rights to utilize the Echopass technology in developing its Customer Contact Solutions Centers (the "Echopass Transactions").

Since
the completion of the Echopass Transactions, Echopass has issued additional shares of stock, incurred debt, which may be converted or exchanged for shares of stock, and issued
derivative securities, which can be exercised for shares of stock. These transactions have diluted Sento's ownership interest in Echopass to less than one-half of one percent. The
substantial dilution of Sento's ownership interest in Echopass has virtually eliminated any prospect that Sento will benefit financially from its ownership interest in Echopass. Sento continues to
utilize certain elements of the Echopass technology to operate its Customer Contact Solutions Centers, but has developed proprietary technology or acquired the right to use third-party technology for
much of its Customer Contact Solutions Center operations, and anticipates that it will no longer continue to utilize any Echopass technology after July 2002.

On
May 30, 2001, Sento announced its plans to discontinue the operations of its Training Division to focus on the Company's profitable, higher-growth Customer Contact Solutions
business. The discontinuation of Sento's Training Division operations is in line with the Company's stated objective of reducing operating expenses to concentrate resources and personnel on the
Company's core CCSC business. The Company completed the disposal of its Training Division in August 2001.

Industry Background

The customer contact services industry encompasses a broad spectrum of services and technology used to build long-term relations between clients and
their customers. Sento believes most organizations face a rapidly changing, highly competitive environment in which improved customer contact center services and enhanced customer interactions can be
a significant factor in improving products and services, lowering costs, increasing customer satisfaction, and building competitive advantages.

Many
senior executives and managers recognize the importance of information technology ("IT") in their organizations and the potential benefits of improved customer service. At the same
time, technological changes and the costs and time associated with implementing and utilizing current solutions create tremendous pressure on organizations and their management. As the pace of
advancement accelerates, an organization's ability to evaluate, design, integrate, deploy, and leverage new technology becomes a critical competitive issue. It is also becoming increasingly more
difficult for companies to stay abreast of rapid technological change while maintaining the required operational efficiency of customer contact centers. In addition, heightened reliance on accumulated
customer data to improve product offerings as well as customer satisfaction and loyalty requires functional and

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pertinent information gathered and analyzed in a timely fashion. An organization's ability to implement and utilize customer relationship data gathering in a timely and cost-efficient
manner may very well be the difference between failure and success.

The
challenge of maintaining an organization's focus on core business areas while attempting to monitor and benefit from rapid changes has prompted more and more organizations to seek
outsourced customer contact center solutions. Organizations lacking this experience and know-how are finding it increasingly difficult and expensive to service all their needs
in-house. As a result, "outsourcing" continues to gain favor across the business spectrum.

Business Strategy

Sento's business strategy is to design, develop, implement, and manage integrated customer contact solutions that enable its customers to effectively use
leading-edge technology and diversified workforce management to improve their business operations and reduce their operating expenses while improving their overall customer satisfaction.
Sento's business strategy is based on the following strategic initiatives:

Diversified Workforce Management Sento's solutions incorporate the ability to allow Sento's clients, partners and
competitors serving the same client account to work from the same software platforms while having the data from disparate locations tracked and recorded by a central data source provided by Sento. In
addition, Sento can provide Sento's clients access to offshore labor in India, South Africa, and the U.K with the ability for these labor alternatives to utilize the same software and tracking
capabilities real time whether domestic or offshore. Sento's proprietary customer relationship management software ("Recite") gathers information from every phone call, chat, email and
self-help transaction regardless of the service provider so long as all are connected to Sento's solution platform.

Design, Develop, Implement, and Manage Leading Edge Customer Relationship Management and Contact Center Solutions
Sento develops strategies and implements customer contact solutions that can help its clients significantly drive service costs lower while increasing customer choices and satisfaction. Sento's
business strategy employs a suite of options intended to allow its clients' customers to use a variety of contact points depending upon the customer's desire at the time. In some cases, Sento has
assisted its clients in moving expensive phone interactions to more cost-effective Web solutions while maintaining the same or higher levels of service. In other cases, when the client
desires some level of telephone contact with its customers, Sento provides highly skilled and very personable phone agents to enhance both fee-based and free phone interactions. In most
cases, Sento delivers a solution using a combination of telephone and Web solutions.

These
innovative Web solutions are delivered through Sento's proprietary "Services Portal", that allows customers access to highly effective self-help tools. If a particular
issue is not resolved there, customers then proceed seamlessly to live chat, email, and other live Web services. Sento's unique CRM product records and delivers the customers' Web experience (i.e. the
"click stream" and other important information) to the live agent. This information transfer allows the agent to know immediately where the customer has been on the Website and to speed to resolution
whatever need the customer has. By constantly monitoring customer activity and analyzing positive behavior, Sento can effectively report and improve the overall customer experience.

Internal Growth, Partnerships, and Strategic Alliances Sento intends to expand its operations by opening, partnering
or developing strategic alliances with other customer contact facilities in strategic locations throughout the U.S. and foreign countries. The Company's management believes that if Sento successfully
identifies and consummates partnerships with or alliances with additional resources, it will enhance its ability to offer domestic and multinational clients a comprehensive package of integrated
customer contact services. In addition to geographic expansion, Sento will seek to identify and partner

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with or make alliances with companies that provide complementary services and solutions and thereby extend the breadth of its service offerings.

Attract and Retain Highly Skilled Phone and Technology Professionals Sento's success will depend on its ability to
attract, train, motivate, and retain highly skilled professionals. Management believes the Company's approach to ongoing training and industry certifications provides an excellent career path marked
by significant opportunities, from entry-level positions to upper-level engineers. Sento's sales, customer care, helpdesk, and technical support centers offer both entry-level employees and seasoned
professionals the prospect of training to enhance their abilities while serving customers across a broad range of vertical markets. Sento also offers its professionals the opportunity for rapid
advancement and expert personal training, as employees can move from one career step to another while remaining within Sento. Sento employees work with leading-edge technologies in a
flexible, entrepreneurial environment that includes ongoing training and development.

Capitalize on Technology Sento's Customer Contact Solutions Centers, which incorporate diversified work force
management and leading-edge solutions, are designed to enable clients to rapidly deploy and quickly capitalize on trends within their customer base. Sento currently owns and operates two
Customer Contact Centers in Utah and has another in reserve in nearby Wyoming. In addition, Sento utilizes contact center resources in India, Scotland, and South Africa with a location in Ireland
agreed to in June 2002 for activation in August 2002. The Company has adopted an approach to technology that combines traditional and proven call center infrastructure and systems with
newer technologies such as voice over IP (VOIP) and hosted Portal Services. The melding of "cutting edge" technologies and proven systems provided by companies such as Nortel Networks, Cisco Systems,
and AT&T enables Sento to provide high levels of economy and efficiency. Sento's technology policy requires that infrastructure be fully scalable, meet or exceed customer needs, and provide adequate
redundancy.

Sento's
Customer Contact Solutions Centers go beyond a traditional telephone-centric customer support facility, incorporating increased customer contact points through nearly any media
type, with intense focus on Internet interactions (e-mail, Web text chat, Internet calls, Web collaboration, Web callback interactions and co-browsing) as well as voice and fax
communication, most with better efficiency than conventional telephone interactions. The increasing utility of the Internet and rising comfort and confidence of the consumer with the Internet are
changing the manner in which businesses communicate and interact with their customers and Sento believes its Portal Services and Customer Contact Solutions Centers position Sento to take advantage of
these emerging opportunities.

Services

Sento's integrated Portal Services and customer contact solutions are designed to enable its clients to effectively use leading-edge technology to
improve their business processes and operating results. Clients relying upon Sento to provide Portal Services and customer contact solutions have realized significantly reduced costs associated with
product/services support, customer satisfaction, and brand loyalty. Sento achieves these results in several ways:

Portal Services Sento provides to clients a highly robust hosted website on which client specific information is made
available to client customers. This information allows those customers the option of answering questions and resolving problems without ever going to a live person for assistance. In addition, the
Portal directs customers to information related to live contact (voice, chat or email), if so desired by the customer, which allows the customer to make an informed choice as to the best possible live
contact for him or her at the time. For the client, Sento tracks customer behavior while on the Portal and assists the client in serving customer service needs more cost-effectively and
efficiently.

Fee-Based Solutions Sento provides its clients with a variety of fee-based options. By
adopting the fee-based solution Sento's clients are charging customers for annual service contracts, multi-incident

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packets, single incidents, or even single minutes of support assistance. This solution allows Sento's client's customers the added ability to move to the front of the queue at those times when
waiting for a free contact is not acceptable. While currently used in the telephone environment, fee-based services can apply to any type of contact, whether delivered by telephone, chat,
email, self-help, or a combination of these. Fee-based services can be used to route and prioritize interactions, enabling clients to offer multi-tiered service plans (silver,
gold, platinum). A dramatic and pragmatic use of fee-based services highlights the free contact points and helps move customers to self help and chat, which are more effective and
lower-cost alternatives.

Sento
currently bills its clients' customers directly using a credit card or 900-number billing (customers receive an invoice on their telephone bill). In the case of credit
card billing, funds are deposited directly into the clients' merchant accounts. When clients choose to have Sento act as the merchant, the funds can used to offset other charges from Sento.

Customer Contact Solutions Sento offers a broad range of customer contact outsourcing services, consisting
principally of customer acquisition, customer care, helpdesk, technical support, and the development and implementation of Web strategies, to induce customers to the Web. Sento uses advanced systems,
including web enabled databases and reporting systems, Internet, local area networks ("LAN"), multi-user systems, Computer-Telephony Integration ("CTI"), CRM, and Integrated Voice Response
("IVR") technologies, to provide immediate and accurate support, reducing the technology, personnel, and management expenses incurred by Sento's clients.

CTI
combines customer data with voice systems in order to enhance telephony services. For example, automatic number identification ("ANI") allows a caller's history to be retrieved from
the database while the call is routed to the appropriate service representative. In this way, any available contact representative is more fully informed of the customer's contact history and is more
capable of servicing the customer in a fast, professional, and informed manner.

IVR
is an automated telephony system that responds with a voice menu that allows the user to make choices and enter information via the user's telephone keypad or by voice to receive
information and accurately route the call to a service representative. IVR systems are used in Sento's Customer Contact Solutions Centers to enhance the customer experience by assisting in routing the
caller to the appropriate resource as quickly as possible and by limiting the amount of time required by a live agent to complete the interaction.

Most
importantly, Sento's CRM tools allow its clients a view into the activities and behavior of their customers. These robust and rapidly deployable tools are less expensive to deploy
than cumbersome data warehouse systems; they may however, be fully integrated into such systems for deeper analysis. The information gathered and reported using Sento's CRM tools enables Sento's
clients to improve the overall customer experience and to offer products designed to fulfill their customers' needs and desires.



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International Operations.Sento and its clients mutually benefit by distributing some or all customer contacts to offshore
locations. The Company operates in Scotland, South Africa, and India with a location in Ireland agreed to in June 2002 for activation in August 2002. These offshore locations
successfully handle a mix of voice, chat, and email transactions. Other locations are currently under consideration. These international operations provide the Company's clients with more choices and
greater control of their customer relationships. Management believes offshore contact sites also will help Sento to achieve levels of profitability that could be more difficult to realize in a large
domestic urban area.

Significant Clients

Three clients accounted for approximately 60% of the Company's revenues for the year ended March 30, 2002. These three clients accounted for approximately
28%, 19%, and 13%, respectively of revenues for fiscal 2002. The largest of these clients terminated its relationship with Sento in April 2002. The loss of this client has had a significant
adverse impact on Sento's operations, and will likely have a significant adverse impact on Sento's revenues and net income during fiscal 2003 if the business is not replaced. For the year ended
March 31, 2001, two clients accounted for approximately 62% of the Company's revenues. These two clients accounted for approximately 38%, and 24%, respectively of revenues for fiscal 2001.

Consistent
with industry standards, Sento's contracts are generally cancelable by the client on short-term notice. Sento's loss of a significant amount of business with any
of its key clients could have, and the loss of a substantial amount of business with any of its largest existing technical support clients would have, a material adverse effect on Sento's business,
financial condition, and results of operations. In addition, Sento's future revenue growth is dependent upon its ability to attract and retain new clients.

Competition

The contact center industry is highly competitive, global in scope, and comprised of a myriad of 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 will likely be larger and will have greater resources than Sento. Firms not now in direct competition with
Sento may introduce competing products in the future. It is possible for companies to be at various times

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competitors, customers, and collaborators in different markets. Management believes that implementation of the Company's strategy of delivering integrated contact center solutions, powered by the
Web, constitutes a competitive advantage.

As
Sento has completed its transition to the delivery of outsourced Customer Contact Solutions, it has encountered a new range of competitors in the customer contact solutions industry.
The Company faces significant and diverse competition in the customer contact solutions industry from a broad spectrum of international, national, regional and local enterprises. Sento's ability to
compete will be driven by its niche approach, its competencies in leading-edge technologies, its deployment of Web solutions, its strategic and business alliances and its efforts to
aggressively establish a presence in other vertical markets such as health care and the financial sectors.

Given
the extensive market opportunity in the customer contact center space, management believes that the Company's strategy of providing the "best-of-breed"
services, powered by the Web, will provide it with significant competitive positioning to achieve growth and capture market share while reaching profitability objectives. Additionally, banks and other
companies in the financial sector are beginning to recognize the value of outsourced customer contact solutions. Sento expects to direct considerable time and effort to establish a solid presence in
this vertical market.

Patents and Proprietary Technology

The Company does not own any patents nor has it submitted any patent applications relating to its products. Sento 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. Sento is also seeking trade name and trademark
protection for certain of its names and marks. Accordingly, Sento's management does not believe that any particular patent or group of patents, copyrights, trademarks, or trade names is of material
importance to the business of Sento as a whole.

Research and Development

Sento competes in an industry that is characterized by rapid technological change. As the needs of Sento's clients change and evolve and as Internet and Web
technologies proliferate, Sento expects to incur additional expense in the development of improved Portal Services, customer contact solutions tools and offerings and in the integration of Sento's
technology with third party platforms and software. In maintaining its competitive edge in technology, Sento will also be dependent on the research and development efforts of other technology
providers and partners.

Employees

Sento maintains a staff of trained personnel to provide support to its clients. The Company enjoys a technically competent employee base, which it gains from
being geographically situated within proximity of two major universities. Sento enhances employees' proficiency through the Company's sophisticated performance management system. Employees receive
positive performance feedback on a daily basis and are given access to training programs including Microsoft Certified Software Engineer, Novell Certification, and operating systems including Windows,
Unix, and Linux. Sento also maintains a highly proficient performance management team responsible for training and monitoring employees. Sento's rapidly expanding Portal Services business has allowed
the Company to reduce headcount from that of previous years. However, Sento's software engineer and web developer groups continue to be a major focus within the organization.

As
of May 31, 2002, Sento had approximately 220 total employees, of which approximately 177 were full-time employees and approximately 43 were part-time
employees. Competition for qualified personnel in Sento's industry is intense. The future success and growth of Sento will depend in large measure upon its ability to attract and retain qualified
management and technical personnel. There can

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be no assurance that Sento 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. If Sento fails to attract and retain key management and technical personnel, Sento's operations may be adversely impacted. None of Sento's employees is represented by a
labor organization with respect to his or her employment with Sento. Sento has never had a work stoppage, and Sento considers its employee relations agreeable.

Proprietary Marks

Sento utilizes many third-party products represented by registered or common-law trademarks, including the following trademarks:
(1) Microsoft®, Windows® and MCSE®, which are trademarks of Microsoft; (2) CNE®, which is a trademark of Novell Inc; and
(3) Linux, which is a trademark of Linus Torvalds. This Report also contains trademarks of other companies including Nortel, which is a registered trademark of Nortel Networks;
Cisco, which is a registered trademark of Cisco Systems Inc; and AT&T, which is a registered trademark of AT&T Corporation.

Item 2. Description of Property.

Sento's headquarters and initial Customer Contact Solutions Center is located at 808 East Utah Valley Drive, American Fork, Utah. Sento leases approximately
40,000 square feet of space used for its
administrative and customer contact solutions operations. The initial lease period will end in August 2005, with a monthly base rent of $35,070, subject to adjustment during the renewal period.
Sento's Evanston, Wyoming Customer Contact Solutions Center consists of approximately 33,000 square feet of leased space. The Evanston initial lease period will end in June 2005, and the
monthly base rent is $9,625. Sento's second American Fork, Utah facility houses administrative offices and a newly developed Customer Contact Solutions Center. The initial lease for this facility will
end in June 2005 and the monthly base rent is $17,171, subject to a five percent increase beginning July 2002. Sento also has a new Customer Contact Solutions Center located at Green
River, Wyoming. The Green River facility is approximately 14,000 square feet of space with the option to add an additional 10,000 square feet at any point in the future. The lease commenced in
July 2001with an initial term of seven years. The monthly base rent at the Green River facility is $11,920, which includes real estate taxes, insurance against loss, facility and property
maintenance including electrical, plumbing, HVAC, and ordinary wear. The lessor assumes responsibility for janitorial services, snow, and trash removal.

Item 3. Legal Proceedings.

From time to time, the Company is involved in litigation, most of which is incidental to its business. In the Company's opinion, no litigation to which the
Company currently is a party is likely to have a material adverse effect on the Company's results of operations or financial condition.

Item 4. Submission of Matters to a Vote of Security Holders.

No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this Report.

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PART II

Item 5. Market for Registrant's Common Equity and Related Shareholder Matters.

The Company's common stock, par value $.25 (the "Common Stock"), is listed and traded under the symbol "SNTO" on the NASDAQ Small Cap Market maintained by the
National Association of Securities Dealers (the "NASD"). The following table sets forth the range of high and low closing prices for the Common Stock for the periods indicated, as reported by the
NASD. The quotations represent prices in the market between dealers in securities; they do not include retail markup, markdown or commissions, and do not necessarily represent actual transactions.

Quarter Ended

High

LowMarch 30, 2002

$
1.42

$
0.72December 29, 2001

$
1.52

$
1.03September 29, 2001

$
2.17

$
1.27June 30, 2001

$
2.75

$
1.65March 31, 2001

$
3.00

$
1.63December 31, 2000

$
4.06

$
2.38September 30, 2000

$
4.31

$
3.31June 30, 2000

$
6.38

$
3.31


The
Company did not pay or declare dividends on the Common Stock during the fiscal years ended March 30, 2002 and March 31, 2001. The Company currently anticipates that it
will retain all available funds to finance its future growth and business expansion. The Company does not presently intend to pay cash dividends in the foreseeable future.

As
of May 31, 2002, the Company had 8,395,766 shares of Common Stock outstanding, held by 438 shareholders of record, which does not include shareholders whose shares are held in
securities position listings.

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Item 6. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

Using state-of-the-art Portal Services and Customer Contact Solutions Centers, Sento provides domestic and international
support services to Fortune 1000 companies, multinational companies, product manufactures and software publishing companies. By allowing companies to focus on their core business, Sento helps its
clients reduce headcount, eliminate unnecessary capital expenditures, and improve the experience for the customer.

During
the year ended March 30, 2002, the Company disposed of its Training Division. The results of operations of the Training Division have been reflected as a discontinued
operation in the financial statements included in this Report.

Critical Accounting Policies

Sento's significant accounting policies are described in Note 2 to Sento's Consolidated Financial Statements, which were prepared in accordance with
accounting principles generally accepted in the United States. Included within these policies are the Company's "critical accounting policies." Critical accounting policies are those policies that are
most important to the preparation of the Company's consolidated financial statements and require management's subjective and complex judgments due to the need to make estimates about the effect of
matters that are inherently uncertain. The Company's critical accounting policies relate to revenue recognition, credit risk and stock-based compensation. The application of these accounting policies
involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results could differ materially from these estimates.

The
development and selection of these critical accounting policies have been discussed with the Audit Committee. Such policies are reviewed periodically during each year by the Audit
Committee.

Revenue Recognition.Revenue is generally recognized when persuasive evidence of an arrangement exists, delivery of services
has occurred, the fee is fixed or determinable, and collection of the resulting receivable is reasonably assured. Certain of the Company's customer support services are delivered over a period of
time. Revenue associated with these services is deferred until the customer support is completed and Sento has no remaining obligation to provide further support services.

Credit Risk.In the normal course of business, the Company provides unsecured credit terms to its customers. Accordingly, the
Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses. Except for the significant losses incurred during the fourth quarter of fiscal 2001, the
Company's credit losses have generally been within management's expectations. However, there can be no assurance that the Company will experience credit losses that are within management's
expectations. In addition, the Company's revenues and accounts receivable are concentrated in a relatively few number of customers. A significant change in the liquidity or financial position of any
one of these customers or a further deterioration in the economic environment, in general, could have an adverse impact on the collectability of the Company's accounts receivable and the Company's
future operating results.

Stock-Based Compensation.Statement of Financial Accounting Standards No. 123,Accounting for
Stock Based Compensation(SFAS 123) encourages entities to adopt a fair value based method of accounting for stock options or similar equity instruments. However, it also
allows an entity to continue measuring compensation cost for stock based compensation using the intrinsic-value method of accounting prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees(APB 25). The Company has elected to continue to apply the provisions of APB 25 and provide pro forma
disclosures required by SFAS 123 in the footnotes to the consolidated financial statements. Sento also issues equity based incentive compensation to non-employees from time to time.

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Pursuant to Emerging Issues Task Force (EITF) 96-18,Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring or in Conjunction with
Selling Goods or Services, Sento accounts for these arrangements based on the fair value of the equity instrument issued. The fair value of such instruments is revalued each
quarter as the related goods or services are provided. The resulting change in value of the instrument is either charged or credited to income.

Results of Operations

Fiscal 2002 Compared to Fiscal 2001

Revenues.Revenues decreased 12%, or $3,057,000, from $26,104,000 for the fiscal year ended March 31, 2001 to
$23,047,000 for the fiscal year ended March 30, 2002. The decrease was primarily due to pricing pressure and lower call volumes from larger existing clients, which management attributes largely
to the economic recession. Currently, the Company has excess capacity available to service additional call volume. This excess capacity was built in anticipation of higher demand for the Company's
services. However, with the economic recession and terrorist attacks occurring in September 2001, it is difficult to predict the Company's ability to fill this excess capacity with new business
in the near future or at all. The Company began its Customer Contact Solutions operations during the quarter ended March 31, 1998. Revenues for this business segment by quarter for the fifteen
quarters ended March 30, 2002 were as follows:

Three Months Ended

Revenues

Increase (decrease)
from prior quarterSeptember 30, 1998

$
294,468

$
7,014December 31, 1998

$
685,881

$
391,413March 31, 1999

$
1,575,429

$
889,548June 30, 1999

$
2,128,492

$
553,063September 30, 1999

$
2,318,631

$
190,139December 31, 1999

$
4,264,383

$
1,945,752March 31, 2000

$
5,267,371

$
1,002,988June 30, 2000

$
4,856,045

$
(411,326
)September 30, 2000

$
5,394,214

$
538,169December 31, 2000

$
7,760,778

$
2,366,564March 31, 2001

$
8,092,588

$
331,810June 30, 2001

$
6,191,717

$
(1,900,871
)September 29, 2001

$
5,082,742

$
(1,108,975
)December 29, 2001

$
5,363,430

$
280,688March 30, 2002

$
6,409,448

$
1,046,018


The
Company's largest client (accounting for approximately 28% of revenues for the year ended March 30, 2002) terminated its relationship with Sento in April 2002. The loss
of this client has had a significant adverse impact on Sento's operations, and will likely have a significant adverse impact on Sento's revenues and net income in quarters subsequent to
March 30, 2002, if the business is not replaced.

11

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Cost of Sales.Cost of sales from continuing operations decreased 10%, or $2,352,000, from $22,682,000 for the fiscal year
ended March 31, 2001 to $20,330,000 for the year ended March 30, 2002. This decrease in cost of sales was principally attributable to decreased customer support call volume and a shift
from traditional call center support to Portal Services support, which has a lower cost. Gross profit as a percentage of revenues decreased by 1% from 13% of revenues during the year ended
March 31, 2001 to 12% of revenues for the year ended March 30, 2002. This decrease in gross margin percentage would likely have been greater had it not been for the following:
(i) the increasing revenues from Sento's Services Portal business that has a higher gross margin than the traditional call center business, (ii) management's decision during the quarter
ended December 29, 2001 not to increase staffing for additional holiday business from a major client, which would have resulted in the incurrence of
significant training costs involved in bringing on new call center agents and the lack of time to recover those training costs before the immediate subsequent layoffs required after the holiday
season, and (iii) management's continued focus on keeping labor and other variable costs in line with the amount of revenue produced. Had it not been for management's efforts to control
variable costs and Sento's implementation of the Services Portal, the significant level of fixed costs would likely have further reduced gross margins given the decrease in revenue.

The
Company anticipates low call volumes during the quarter ending June 29, 2002 with increasing call volumes during the remaining three quarters of fiscal 2003. However, actual
call volumes will be subject to a number of factors beyond Sento's control, including the extent and speed of the economic recovery. An increase in call volumes, if achieved, would result in higher
absorption of overhead and fixed costs, which would likely result in improved gross margin percentages.

Selling, General and Administrative Expenses.Selling, general and administrative expenses decreased 15%, or $348,000, from
$2,287,000 for the year ended March 31, 2001 to $1,939,000 for year the ended March 30, 2002. Selling, general, and administrative expenses were higher in fiscal 2001 as the result of
$400,000 bad debt expense arising from sales to two dot.com companies who were unable to meet their financial obligations to the Company.

Equity Loss on Investment in Echopass Corporation.The Company has historically accounted for its investment in Echopass
Corporation under the equity method of accounting. Therefore, the Company has historically recorded its pro-rata share of Echopass' losses. As of June 30, 2000, the investment in
Echopass had been written down to zero. On November 2, 2001, Echopass entered into a new financing arrangement that substantially diluted Sento's ownership to less than one-half of
one percent of Echopass. As a result, Sento no longer accounts for its investment in Echopass under the equity method of accounting. Furthermore, the substantial dilution of Sento's ownership interest
in Echopass has significantly reduced the prospect that Sento will realize any financial benefit from its ownership interest in Echopass.

Interest Income.Interest income decreased 22%, or $30,000, from $138,000 during the year ended March 31, 2001 to
$108,000 for the year ended March 30, 2002. The decrease in interest income was due primarily to the decrease in the Company's cash and short-term investments as well as a decline
in interest rates.

Interest Expense.Interest expense increased 55% or $139,000 from $254,000 during the year ended March 31, 2001 to
$393,000 for the year ended March 30, 2002, due primarily to the increase in long-term debt and capital leases used to finance equipment.

Liquidity and Capital Resources

Cash and short-term investment balances decreased 45%, or $1,600,000, from $3,576,000 at March 31, 2001 to $1,976,000 at March 30, 2002.
Working capital decreased 58%, or $2,289,000 to $1,638,000 at March 30, 2002 from $3,927,000 at March 31, 2001. Although the Company generated

12

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$1,336,000 of cash flow from operations, $2,458,000 was used during the year ended March 30, 2002 for capital expenditures. The Company was able to borrow $887,000 to finance a portion of the
capital expenditures; however these borrowings were more than offset by principal payments on long-term debt and capital leases totaling $989,000. In addition, the Company's convertible
subordinated debentures become due in February 2003 and therefore, are now classified as a current liability, causing a substantial decrease in working capital as of March 30, 2002 when
compared to the prior year.

The
Company has contractual obligations, including debt agreements and leases that will require the use of substantial amounts of cash over time. The following table sets forth the
Company's contractual obligations as of March 30, 2002:

Contractual Obligations:

|                                                |  | Payments Due by Period
|----------------------------------------------- |  | ----------------------
|
|Long Term Debt (principal only) (1)             |  | $                     
|Convertible Debentures (2) (including interest) |  |                       
|Capital Leases                                  |  |                       
|Operating Leases                                |  |                       
|Unconditional Purchase Obligations              |  |                       
|                                                |  |                       
|Total Contractual Cash Obligations              |  | $                     
|                                                |  |                       

---

In
addition to the above contractual obligations, the Company is contingently liable for an equipment lease that was assumed by Echopass. The total amount due under this lease for the
year ending March 29, 2003 is $182,000. The total amount due thereafter under this lease is $119,000. Management believes that the Company will be able to meet all of its current obligations.

The
Company has an unused $3 million revolving line of credit. Effective April 15, 2002 this credit line was renewed through the execution of a loan modification agreement.
This credit line is limited to eligible receivable balances and by the net balance of the Company's term loans outstanding with the bank (as of March 30, 2002, the Company had $1,306,000 of
outstanding term loans with the bank). In addition, the credit line calls for the Company to maintain certain financial covenants. Pursuant to these covenants, if the Company is unsuccessful in its
efforts to refinance or replace its current debentures with other long-term financing prior to July 31, 2002 or is unable to obtain a waiver related to its covenants, the Company would not be
able to draw additional amounts on its line of credit, and any outstanding balance on either the line of credit or term loans would become callable and due upon demand, at the option of the bank.

On
September 13, 2000, the Board of Directors approved the repurchase of up to $1,000,000 of Common Stock. The repurchase program was conditioned upon the Company's having cash
balances of at least $3,500,000 plus an unused bank line of credit of $3,000,000 immediately prior to any buyback of shares. As of March 30, 2002, the Company had repurchased a total of 289,695
shares of Common Stock at a total cost of $702,000 under this buyback program. As of October 16, 2001, the Board of
Directors unanimously called for the cessation of the repurchase program, as it was determined the Company's resources would be better used for selling and marketing efforts.

13

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Historically
the Company's primary sources of liquidity have been cash received from sales of assets and cash provided through private sales of equity and debt, as well as borrowings
under a bank line of credit. During the two years ended March 30, 2002, liquidity and cash were also provided by positive cash flow from operations. In addition, the Company has financed some
of the equipment utilized in its business through long-term leasing and loan arrangements. However, leasing and other financing companies have become much more conservative in providing
financing because of the economic recession, making it more difficult for the Company to obtain equipment financing. The growth of the Company has consumed substantial amounts of cash, and the Company
will be required to obtain additional financing to fund future growth. In the event the Company is not able to find additional sources of funding and enter into financing transactions on reasonable
terms, its ability to pursue its planned business growth strategy may be limited. There can be no assurance that the Company will be able to obtain necessary capital funding on terms favorable to the
Company, if at all.

Risks Related to Existing and Proposed Sento Operations

In addition to other information in this Report, the following are important factors that should be considered carefully in evaluating the Company and its
business.

Volatile Economic Conditions Have Affected and Will Likely Continue to Affect Sento's Operations and Financial
Results.Volatile economic conditions have adversely affected Sento's operations and financial results. The slowing economy has resulted in increased pricing
pressures and lower call volumes from existing clients, and may have limited Sento's ability to attract new clients. These factors have contributed to a decline in Sento's revenues and net income and
have resulted in Sento's excess capacity to service call volumes. A substantial percentage of Sento's expenses is attributable to labor costs associated with staffing Customer Contact Solutions
Centers, which Sento may not be able to reduce on short notice in order to compensate for unexpected shortfalls in call volumes. Sento cannot forecast future fluctuations in economic conditions, and
its operations and financial results may be materially and adversely affected by continued economic volatility.

Dependence on Key Clients.Three clients accounted for approximately 60% of the Company's revenues for the year ended
March 30, 2002. These three clients accounted for approximately 28%, 19%, and 13%, respectively of revenues for fiscal 2002. The largest of these clients terminated its relationship with Sento
in April 2002. The loss of this client has had a significant adverse impact on Sento's operations and will likely have a significant adverse impact on Sento's revenues and net income during
fiscal 2003, if the business is not replaced. For the year ended March 31, 2001, two clients accounted for approximately 62% of the Company's revenues. These two clients accounted for
approximately 38%, and 24%, respectively of revenues for fiscal 2001.

Consistent
with industry standards, Sento's contracts are generally cancelable by the client on short-term notice. Sento's loss of a significant amount of business with any
of its key clients could have, and the loss of a substantial amount of business with any of its largest existing technical support clients would have, a material adverse effect on Sento's business,
financial condition, and results of operations. In addition, Sento's future revenue growth is dependent upon its ability to attract and retain new clients.

Credit Risk.In the normal course of business, the Company provides unsecured credit terms to its customers. Accordingly, the
Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses. Except for the significant losses incurred during the fourth quarter of fiscal 2001, the
Company's credit losses have generally been within management's expectations. However, there can be no assurance that the Company will experience credit losses that are within management's
expectations. In addition, the Company's revenues and accounts receivable are concentrated in a relatively few number of customers. A significant change in the liquidity or financial position of any
one of these customers or a further deterioration in the economic environment, in

14

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general, could have an adverse impact on the collectability of the Company's accounts receivable and the Company's future operating results.

Risks of Growth Strategy.Sento's business strategy is premised, in part, upon expansion of its operations by opening
customer contact facilities, or partnering or developing strategic alliances with other customer contact providers in strategic locations throughout the U.S. and foreign countries. Substantial risks
accompany Sento's growth plans. For example, Sento's growth plans are dependent upon its ability to attract and retain new clients. Sento's failure to attract and retain new clients will not only
prevent the implementation of its business strategy, but may leave Sento with excess personnel and physical facilities, which would have a negative impact on Sento's results of operations and
financial condition.

Sento's
growth plans are also subject to fluctuations in technology and industry standards, changes in customer requirements and preferences and general economic conditions, among other
factors. Many of these factors are beyond Sento's control. If Sento is incorrect in its assessment of the feasibility of its growth plans, or if circumstances change in a way that Sento did not
foresee or anticipate, Sento may not be able to grow as planned or its growth strategy may have an adverse effect on its business operations and financial condition.

Reliance on a Software Company for Chat and Email applications.Sento contracts with a software company to provide chat and
email tools used with Sento's CRM software, reporting and management services. If this software company fails in its business efforts, Sento may be required to identify and retain one or more
alternate third-party providers of such services and could experience service delays, interruptions or cancellations.

Changing Needs of the Customer Contact Service Market.The customer contact service industry is characterized by rapid
technological change, changes in customer requirements and preferences, and the emergence of new industry standards and practices that could render Sento's existing and proposed products, services,
technology and systems obsolete. To remain competitive, Sento must continually improve the performance, features, and reliability of its products and services, including its existing customer contact
service applications, and develop new products and services that address the increasingly sophisticated and varied needs of its prospective customers. If Sento cannot adapt or respond in a
cost-effective and timely manner to changing industry standards, market conditions, or customer requirements, its business and operating results would suffer and could negatively impact
Sento's business and/or financial condition.

Sento's
success may also 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.

Competition.The market for customer contact services is highly fragmented and very competitive. The customer contact
services industry, however, has begun to experience a degree of consolidation, and the existence of major customer contact center companies 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 Sento. Over the past several years,
a number of existing companies have enjoyed increasing success and rapid internal growth. Several of these companies have been active in acquiring smaller regional customer contact services companies
and are becoming major competitors with a measurable share of this rapidly expanding market.

15

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Also,
many major companies provide their own in-house customer care support and customer training. However, such companies are within the potential customer base for customer
contact service providers and have the capability of outsourcing those services to Sento.

Sento
cannot provide any assurance that better and more efficient services will not be provided by new or existing customer contact service providers in competition with Sento. The
services provided by such competitors may be more effective or less expensive than those provided by Sento. There can be no assurance that Sento will improve, refine or enhance the services it
provides.

Competition in Customer Contact Services Market.The customer contact services market is new and intensely competitive. There
are no substantial barriers to entry, and established or new entities may
enter this market in the near future. Furthermore, established enterprise software companies, including IBM, Hewlett-Packard Company, Microsoft Corporation, and similar companies, may leverage their
existing relationships and capabilities to offer customer service applications. Any delays in the general market acceptance of the customer contact service applications and Sento's proposed products
and services would likely harm Sento's competitive position. Delays would allow Sento's competitors additional time to improve their service or product offerings, and also provide time for new
competitors to develop e-business customer service applications and solicit prospective clients within Sento's target markets. Increased competition could result in pricing pressures,
reduced operating margins and loss of market share.

Risk of Emergency Interruption of Customer Contact Solutions Center Operations.Sento's business depends to a large extent on
computer and telecommunications equipment and software systems (both equipment and systems maintained by Sento and equipment and systems maintained by third parties). Sento cannot provide any
assurance that natural disaster, human error, equipment malfunction or inadequacy, or other events would not result in a prolonged interruption in Sento's ability to provide support services to its
clients. The temporary or permanent loss of computer or telephone equipment or systems, through casualty, operating malfunction or otherwise, could have a material adverse effect on Sento. Property
and business interruption insurance may not be adequate to compensate Sento for all losses that it may incur.

Attracting, Training, and Retaining Quality Management and Employees.Sento's success will depend, in large part, on its
ability to attract, retain and train highly qualified technical, managerial and marketing personnel with the required expertise. Sento has not entered into employment agreements that require the
services of any of its key managerial or technical personnel to remain with Sento for any specified period of time. Competition for such personnel is intense. There can be no assurance that Sento will
be able to attract and maintain the 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.
Specifically, the loss of any 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 Sento.

In
addition, Sento's total employee count has fluctuated from approximately 585 as of March 31, 2000 to approximately 953 as of December 31, 2000, and has decreased to
approximately 220 as of May 31, 2002. The support required for one of the Company's largest clients is seasonal. There is, therefore, a necessity for very rapid increases in employees and
subsequent decreases in the number of employees as the requirements for support change. The Company cannot provide any assurance that its current management team can successfully manage Sento's
rapidly evolving business, and any failure to do so could have a material adverse effect upon Sento's operating results.

Liquidity and Capital Resources.At March 30, 2002, Sento had working capital of $1,638,000 (representing a decline of
58% from March 31, 2001) and a cash and short term investment balance of $1,976,000 (representing a decline of 45% from March 31, 2001). Future growth, particularly growth in

16

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excess of planned growth, will depend on the Company's ability to obtain financing. The historic growth rate of Sento's Customer Contact Solutions operations has consumed substantial amounts of cash
and will continue to require significant capital investment. The Company may be required to pursue additional funding opportunities to fund future growth should it accelerate in excess of historical
and planned future growth. In the event the Company is not able to find such alternate sources of funding, its ability to pursue its planned business strategy may be limited. There can be no assurance
that the Company will be able to obtain necessary capital funding on terms favorable to the Company, if at all.

Further,
the Company's existing line of credit and term loans are subject to certain restrictive covenants, including minimum liquidity and debt service positions. Pursuant to these
covenants, if the Company is unsuccessful in its efforts to refinance or replace its current debentures with other long-term financing prior to July 31, 2002 or is unable to obtain a waiver
related to its covenants, the Company would not be able to draw additional amounts on its line of credit, and any outstanding balance on either the line of credit or term loans would become callable
and due upon demand, at the option of the bank.

Dependence on Industry Trend to Outsource Services.Sento's business depends in large part on the trend within the IT
industry to outsource certain services. Sento 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 Sento.

Potential Significant Fluctuations in Quarterly Results.The value of individual transactions can constitute a substantial
percentage of Sento's quarterly revenue, and particular transactions may generate a substantial portion of the operating profits for a quarter. Because Sento'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 can cause significant variations in operating results from quarter to quarter.
In addition, Sento may expend significant resources pursuing potential sales that will not be consummated. Sento 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, Sento's quarterly revenues from its Customer Contact Solutions Center operations are potentially volatile. Such revenues are principally a function of the number of
support requests received by Sento, and the time spent on such requests. Consequently, Sento's profitability may be adversely affected if Sento receives fewer support requests than anticipated or the
time spent in resolving inquiries is greater than anticipated.

For
the reasons identified above, management believes that period-to-period comparisons of Sento's results of operations may not be meaningful and that no one
should rely upon them as an indication of future performance. Furthermore, Sento cannot provide any assurance that it will be able to achieve or sustain profitability on a quarterly basis.

Possible Volatility of Stock Price.The trading price of the Common Stock has fluctuated widely in response to variations in
quarterly operating results, announcements by Sento or its competitors, industry trends, general economic conditions or other events or factors. Such fluctuations, as well as fluctuations in the
trading volume of the Common Stock, may continue in the future. Regardless of the general outlook for Sento'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.

Anti-Takeover Considerations.Sento'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. Sento's
Articles of Incorporation grant to the Board of Directors the authority, without further action by

17

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Sento's shareholders, to fix the rights and preferences of, 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.

Item 7. Financial Statements.

The financial statement information required by Item 7 is included on pages F-1 to F-19.

Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None

18

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PART III        Items 9, 10, 11 and 12

These items are incorporated by reference to the Company's definitive proxy statement relating to the Company's 2002 Annual Meeting of Shareholders.

Item 13. Exhibits and Reports on Form 8-K.



|Number |  | Description                                                                                                              |  | Incorporated
by Reference |  | Filed
Herewith
|------ |  | ------------------------------------------------------------------------------------------------------------------------ |  | ------------------------- |  | --------------
|3.1    |  | Articles of Incorporation, as amended                                                                                    |  | (1)                       |  |               
|3.2    |  | Bylaws                                                                                                                   |  | (2)                       |  |               
|10.1   |  | Sento Corporation 1999 Omnibus Stock Incentive Plan                                                                      |  | (3)                       |  |               
|10.2   |  | Sento Corporation 1996 Employee Stock Purchase Plan (Amended and Restated)                                               |  | (3)                       |  |               
|10.3   |  | Form of Warrant                                                                                                          |  | (3)                       |  |               
|10.4   |  | Silicon Valley Bank Amended and Restated Loan and Security Agreement, dated as of April 28, 2000.                        |  | (3)                       |  |               
|10.5   |  | Form of 7% Convertible Subordinated Debentures                                                                           |  | (3)                       |  |               
|10.6   |  | Lease Agreement, dated January 1, 2000, between the Company and K.E.B. Enterprises LP                                    |  | (3)                       |  |               
|10.7   |  | Lease Agreement, dated May 24, 2000, between the Company and Abinadi, Inc.                                               |  | (3)                       |  |               
|10.8   |  | Business Lease with Wyoming Financial Properties Inc.                                                                    |  | (4)                       |  |               
|10.9   |  | Loan agreement between Sento Corporation and Wyoming Industrial Development Corporation dated January 12, 2000.          |  | (5)                       |  |               
|10.10  |  | Modification of promissory note with a blended rate (USDA Loan Identification No. 59-021-087028497) dated April 9, 2001. |  | (5)                       |  |               
|10.11  |  | U.S. Small Business Administration Note (SBA loan No. GP-452368 40 08-CAS) dated June 4, 2001                            |  | (5)                       |  |               
|10.12  |  | Modification of Promissory Note with a Blended Rate (SBA loan No. GP-452368 40 08-CAS) dated March 28, 2002              |  |                           |  | (6)           
|10.13  |  | Equipment Lease with NTFC Capital Corporation                                                                            |  |                           |  | (6)           
|21     |  | Subsidiaries of the Registrant                                                                                           |  |                           |  | (6)           
|23     |  | Consent of Ernst & Young LLP                                                                                             |  |                           |  | (6)           

---

19

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20

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SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on June 26, 2002.

| |  | SENTO CORPORATION
| |  | -----------------
| |  | By:              

In
accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on
June 26, 2002.

|Signature                             |  | Capacity in Which Signed                                                                                     
|------------------------------------- |  | -------------------------------------------------------------------------------------------------------------
|                                      |  |                                                                                                              
|/s/GARY B. FILLERGary B. Filler       |  | Chairman of the Board of Directors                                                                           
|/s/PATRICK F. O'NEALPatrick F. O'Neal |  | President, Chief Executive Officer and Director (Principal executive officer)                                
|/s/DENNIS L. HERRICKDennis L. Herrick |  | Director                                                                                                     
|/s/KIETH E. SORENSONKieth E. Sorenson |  | Director                                                                                                     
|/s/KIM A. COOPERKim A. Cooper         |  | Director                                                                                                     
|/s/LYNDON L. RICKSLyndon L. Ricks     |  | Director                                                                                                     
|/s/ERIC OLAFSONEric Olafson           |  | Director                                                                                                     
|/s/STANLEY J. CUTLERStanley J. Cutler |  | Senior Vice President of Finance and Secretary (Principal financial officer and Principal accounting officer)

21

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Report of Independent Auditors

The Board of Directors and Shareholders
Sento Corporation and Subsidiaries

We
have audited the accompanying consolidated balance sheets of Sento Corporation and subsidiaries as of March 30, 2002 and March 31, 2001, and the related consolidated
statements of operations, stockholders' equity and comprehensive income (loss) and cash flows for the years then ended. 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. 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 Sento Corporation and subsidiaries at
March 30, 2002 and March 31, 2001, and the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting principles generally
accepted in the United States.



April 22,
2002

F-1

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Sento Corporation and Subsidiaries        Consolidated Balance Sheets

|                                           |                                                                                                                            | March 30
2002 |            | March 31
2001 |  
|------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------- | ------------- | ---------- | ------------- | -
|Assets                                     |                                                                                                                            |               |            |               |  
|Current assets:                            |                                                                                                                            |               |            |               |  
|                                           | Cash and cash equivalents                                                                                                  |               | $          | 1,047,731     |  
|                                           | Short-term investments                                                                                                     |               |            | 928,522       |  
|                                           | Accounts receivable, less allowance for doubtful accounts of $120,000 in 2002 and $80,000 in 2001                          |               |            | 3,514,487     |  
|                                           | Prepaid expenses                                                                                                           |               |            | 634,700       |  
|                                           | Other current assets                                                                                                       |               |            | 156,052       |  
|                                           |                                                                                                                            |               |            |               |  
|Total current assets                       |                                                                                                                            |               | 6,281,492  |               |  
|Property and equipment, net                |                                                                                                                            |               | 5,226,257  |               |  
|Other assets                               |                                                                                                                            |               | 124,293    |               |  
|                                           |                                                                                                                            |               |            |               |  
|Total assets                               |                                                                                                                            | $             | 11,632,042 |               | $
|                                           |                                                                                                                            |               |            |               |  
|Liabilities and stockholders' equity       |                                                                                                                            |               |            |               |  
|Current liabilities:                       |                                                                                                                            |               |            |               |  
|                                           | Accounts payable                                                                                                           |               | $          | 1,230,108     |  
|                                           | Accrued salaries and payroll taxes                                                                                         |               |            | 464,219       |  
|                                           | Accrued liabilities                                                                                                        |               |            | 383,073       |  
|                                           | Accrued loss from disposal of business segment                                                                             |               |            |              |  
|                                           | Current portion of long-term debt and capital leases                                                                       |               |            | 1,117,838     |  
|                                           | Customer deposits                                                                                                          |               |            | 250,668       |  
|                                           | Convertible debt                                                                                                           |               |            | 1,197,442     |  
|                                           |                                                                                                                            |               |            |               |  
|Total current liabilities                  |                                                                                                                            |               | 4,643,348  |               |  
|                                           | Long-term debt and capital leases, excluding current portion                                                               |               |            | 1,504,839     |  
|                                           | Convertible debt                                                                                                           |               |            |              |  
|                                           |                                                                                                                            |               |            |               |  
|Total long-term liabilities                |                                                                                                                            |               | 1,504,839  |               |  
|Commitments                                |                                                                                                                            |               |            |               |  
|Stockholders' equity:                      |                                                                                                                            |               |            |               |  
|                                           | Common stock, $.25 par value, 50,000,000 shares authorized; issued and outstanding 8,372,773 in 2002 and 8,524,285 in 2001 |               |            | 2,093,195     |  
|                                           | Additional paid-in capital                                                                                                 |               |            | 10,322,732    |  
|                                           | Deferred compensation                                                                                                      |               |            |              |  
|                                           | Accumulated other comprehensive loss                                                                                       |               |            | (28,772       | )
|                                           | Accumulated deficit                                                                                                        |               |            | (6,903,300    | )
|                                           |                                                                                                                            |               |            |               |  
|Total stockholders' equity                 |                                                                                                                            |               | 5,483,855  |               |  
|                                           |                                                                                                                            |               |            |               |  
|Total liabilities and stockholders' equity |                                                                                                                            | $             | 11,632,042 |               | $
|                                           |                                                                                                                            |               |            |               |  

See accompanying notes.

F-2

---



Sento Corporation and Subsidiaries        Consolidated Statements of Operations

|                                                  |                                                    | Year Ended |           
|------------------------------------------------- | -------------------------------------------------- | ---------- | ----------
|
|Revenue                                           |                                                    | $          | 23,047,337
|Cost of sales                                     |                                                    |            | 20,329,561
|                                                  |                                                    |            |           
|                                                  | Gross profit                                       |            |           
|Selling, general, and administrative expenses     |                                                    |            | 1,938,999 
|                                                  |                                                    |            |           
|                                                  | Income from operations                             |            |           
|Equity loss on investment in Echopass Corporation |                                                    |            |          
|Interest income                                   |                                                    |            | 107,931   
|Interest expense                                  |                                                    |            | (392,882  
|Other expense, net                                |                                                    |            | (35,856   
|                                                  |                                                    |            |           
|                                                  | Income from continuing operations                  |            |           
|                                                  | Loss from discontinued operations                  |            |           
|                                                  | Gain (loss) on disposal of discontinued operations |            |           
|                                                  |                                                    |            |           
|                                                  | Net income (loss)                                  |            | $         
|                                                  |                                                    |            |           
|Net income (loss) per share  basic               |                                                    |            |           
|                                                  | Continuing operations                              |            | $         
|                                                  | Discontinued operations                            |            |           
|                                                  |                                                    |            |           
|Net income (loss)                                 |                                                    | $          | 0.07      
|                                                  |                                                    |            |           
|Net income (loss) per share  diluted             |                                                    |            |           
|                                                  | Continuing operations                              |            | $         
|                                                  | Discontinued operations                            |            |           
|                                                  |                                                    |            |           
|Net income (loss)                                 |                                                    | $          | 0.07      
|                                                  |                                                    |            |           

See accompanying notes.

F-3

---



Sento Corporation and Subsidiaries        Consolidated Statement of Stockholders' Equity and Comprehensive Income (Loss)

|                                            |                                 | Common Stock |   |   |           |   |   |            |   |   |          |   |  
|------------------------------------------- | ------------------------------- | ------------ | - | - | --------- | - | - | ---------- | - | - | -------- | - | -
|
|Balances at March 31, 2000                  |                                 | 8,313,398    |   | $ | 2,078,351 |   | $ | 10,395,230 |   | $ | (136,052 | ) | $
|Purchase and cancellation of common stock   |                                 | (111,495     | ) |   | (27,874   | ) |   | (257,168   | ) |   |         |   |  
|Revaluation of warrants issued for services |                                 |             |   |   |          |   |   | (75,146    | ) |   | 75,146   |   |  
|Amortization of deferred compensation       |                                 |             |   |   |          |   |   |           |   |   | 29,741   |   |  
|Exercise of stock options                   |                                 | 245,148      |   |   | 61,287    |   |   | 437,476    |   |   |         |   |  
|Employee stock purchases                    |                                 | 77,234       |   |   | 19,308    |   |   | 181,664    |   |   |         |   |  
|Net comprehensive loss                      |                                 |             |   |   |          |   |   |           |   |   |         |   |  
|                                            |                                 |              |   |   |           |   |   |            |   |   |          |   |  
|Balances at March 31, 2001                  |                                 | 8,524,285    |   |   | 2,131,072 |   |   | 10,682,056 |   |   | (31,165  | ) |  
|Purchase and cancellation of common stock   |                                 | (178,200     | ) |   | (44,550   | ) |   | (372,749   | ) |   |         |   |  
|Revaluation of warrants issued for services |                                 |             |   |   |          |   |   | (11,938    | ) |   |         |   |  
|Amortization of deferred compensation       |                                 |             |   |   |          |   |   |           |   |   | 31,165   |   |  
|Exercise of stock options                   |                                 | 4,791        |   |   | 1,198     |   |   | 7,188      |   |   |         |   |  
|Employee stock purchases                    |                                 | 21,897       |   |   | 5,475     |   |   | 18,175     |   |   |         |   |  
|Comprehensive income:                       |                                 |              |   |   |           |   |   |            |   |   |          |   |  
|                                            | Net income                      |              |  |   |           |  |   |            |  |   |          |  |  
|                                            | Unrealized losses on securities |              |  |   |           |  |   |            |  |   |          |  |  
|                                            |                                 |              |   |   |           |   |   |            |   |   |          |   |  
|Net comprehensive income                    |                                 |             |   |   |          |   |   |           |   |   |         |   |  
|                                            |                                 |              |   |   |           |   |   |            |   |   |          |   |  
|Balances at March 30, 2002                  |                                 | 8,372,773    |   | $ | 2,093,195 |   | $ | 10,322,732 |   | $ |         |   | $
|                                            |                                 |              |   |   |           |   |   |            |   |   |          |   |  

See accompanying notes.

F-4

---



Sento Corporation and Subsidiaries        Consolidated Statements of Cash Flows

|                                                     |                                                                                          | Year Ended                                         |                                  
|---------------------------------------------------- | ---------------------------------------------------------------------------------------- | -------------------------------------------------- | ---------------------------------
|
|Cash flows from operating activities:                |                                                                                          |                                                    |                                  
|                                                     | Net income (loss)                                                                        |                                                    | $                                
|                                                     | Adjustments to reconcile net income (loss) to net cash provided by operating activities: |                                                    |                                  
|                                                     |                                                                                          | (Gain) loss on disposal of discontinued operations |                                  
|                                                     |                                                                                          | Depreciation and amortization                      |                                  
|                                                     |                                                                                          | Amortization of deferred compensation              |                                  
|                                                     |                                                                                          | Provision for losses on accounts receivable        |                                  
|                                                     |                                                                                          | Equity loss on investment in Echopass Corporation  |                                  
|                                                     |                                                                                          | Net loss on disposal of assets                     |                                  
|                                                     |                                                                                          | Revaluation of warrants issued for services        |                                  
|                                                     |                                                                                          | Accretion on debenture for warrant                 |                                  
|                                                     |                                                                                          | Changes in operating assets and liabilities:       |                                  
|                                                     |                                                                                          |                                                    | Accounts receivable              
|                                                     |                                                                                          |                                                    | Prepaid expenses and other assets
|                                                     |                                                                                          |                                                    | Accounts payable                 
|                                                     |                                                                                          |                                                    | Accrued liabilities              
|                                                     |                                                                                          |                                                    | Customer deposits                
|                                                     |                                                                                          |                                                    |                                  
|                                                     |                                                                                          |                                                    |                                  
|Cash flows from investing activities:                |                                                                                          |                                                    |                                  
|                                                     | Capital expenditures                                                                     |                                                    |                                  
|                                                     | Proceeds from sale of assets                                                             |                                                    |                                  
|                                                     | Principal payments received on note receivable                                           |                                                    |                                  
|                                                     | Purchase of short term investments                                                       |                                                    |                                  
|                                                     |                                                                                          |                                                    |                                  
|                                                     |                                                                                          |                                                    |                                  
|Cash flows from financing activities:                |                                                                                          |                                                    |                                  
|                                                     | Proceeds from issuance of long-term debt and line of credit                              |                                                    |                                  
|                                                     | Principal payments on long-term debt and credit line                                     |                                                    |                                  
|                                                     | Principal payments on capital leases                                                     |                                                    |                                  
|                                                     | Proceeds from exercise of stock options                                                  |                                                    |                                  
|                                                     | Proceeds from employee stock purchase plan                                               |                                                    |                                  
|                                                     | Repurchase of common stock                                                               |                                                    |                                  
|                                                     |                                                                                          |                                                    |                                  
|                                                     |                                                                                          |                                                    |                                  
|Net (decrease) increase in cash and cash equivalents |                                                                                          |                                                    | (2,528,009                       
|Cash and cash equivalents at beginning of period     |                                                                                          |                                                    | 3,575,740                        
|                                                     |                                                                                          |                                                    |                                  
|Cash and cash equivalents at end of period           |                                                                                          | $                                                  | 1,047,731                        
|                                                     |                                                                                          |                                                    |                                  

See accompanying notes.

F-5

---



Sento Corporation and Subsidiaries        Supplement to Consolidated Statements of Cash Flows

|                                                                        |                                                                                                  | Year Ended
|----------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | ----------
|
|Supplemental disclosures of cash flow information                       |                                                                                                  |           
|Cash paid for:                                                          |                                                                                                  |           
|                                                                        | Interest                                                                                         |           
|Supplemental disclosures of noncash investing and financing activities: |                                                                                                  |           
|                                                                        | Assets acquired under capital lease                                                              |           
|                                                                        | Capitalized cost of software developed for internal use                                          |           
|                                                                        | Note received on sale of equipment                                                               |           
|                                                                        | Net loss on disposal of equipment charged against accrued loss from disposal of business segment |           
|                                                                        | Cancellation of treasury shares                                                                  |           

See accompanying notes.

F-6

---

Sento Corporation and Subsidiaries

Notes to Consolidated Financial Statements

March 30, 2002

1.    Description of Business

Using state-of-the-art Portal Services and Customer Contact Solutions Centers, Sento provides domestic and international
support services to Fortune 1000 companies, multinational companies, product manufactures and software publishing companies. By allowing companies to focus on their core business, Sento helps its
clients reduce headcount, eliminate unnecessary capital expenditures, and improve the experience for the customer. Sento conducts its principal business through its wholly-owned subsidiary Sento
Technical Services Corporation.

In
May 2001, the Company's management and Board of Directors reached a decision to discontinue the Company's Training Division segment. The results of operations for the Training
Division have been reflected as a discontinued operation in the accompanying financial statements (see Note 5).

2.    Significant Accounting Policies

Principles of Consolidation

The accompanying financial statements include the consolidated financial statements of Sento and its wholly-owned subsidiaries (collectively, the Company). All
significant intercompany balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers all highly-liquid investments with original maturities of three months or less to be cash equivalents.

Short-term investments

The Company classifies all of its short-term investments as available-for-sale securities. Such short-term
investments consist of mutual funds and corporate bonds which are stated at market value, with unrealized gains and losses on such securities reflected as other comprehensive income (loss) in
shareholders' equity. Realized gains and losses on short-term investments are included in earnings and are derived using the specific identification method for determining the cost of
securities. It is the Company's intent to maintain a liquid portfolio to take advantage of investment opportunities; therefore, all securities are considered to be
available-for-sale and are classified as current assets.

Revenue Recognition

Revenue is generally recognized when persuasive evidence of an arrangement exists, delivery of services has occurred, the fee is fixed or determinable, and
collection of the resulting receivable is reasonably assured.

Property and Equipment

Property and equipment are stated at cost. Depreciation of fixed assets is computed on the straight-line method over the estimated useful lives of
individual classes of assets. Leasehold improvements are depreciated over the shorter of the remaining lease term or the useful life of the improvements. The estimated useful lives of equipment and
furniture are three to ten years. Major

F-7

---

replacements, which extend the useful lives of equipment, are capitalized and depreciated over the remaining useful lives. Normal maintenance and repair items are expensed as incurred.

Research and Development

Research and development costs are expensed as incurred. In accordance with Statement of Position 98-1,Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use, the Company capitalized approximately $41,000 in fiscal 2002 associated with major enhancements to its
technology.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and deferred tax liabilities are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and deferred tax
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and deferred tax liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Net Income (Loss) Per Common Share

Basic income (loss) per share is computed in accordance with Financial Accounting Standards Board Standards No. 128,Earnings Per
Share. Basic net income (loss) per share is computed as net income or loss divided by the weighted average number of common shares outstanding for the period. Diluted net
income (loss) per share reflects the potential dilution that could occur from common shares issueable through stock options, warrants, and other convertible securities, if dilutive.

F-8

---

Net Income (Loss) Per Common Share (continued)

The following table sets forth the calculation of basic and diluted net income (loss) per share:

|                                                                       |                         | Year Ended |          
|---------------------------------------------------------------------- | ----------------------- | ---------- | ---------
|
|Net income (loss)                                                      |                         | $          | 560,756  
|                                                                       |                         |            |          
|Denominator for basic net income per share  weighted average shares   |                         |            | 8,394,020
|Dilutive common stock options and warrants                             |                         |            | 43,053   
|                                                                       |                         |            |          
|Denominator for diluted net income per share  weighted average shares |                         |            | 8,437,073
|                                                                       |                         |            |          
|Basic net income (loss) per share:                                     |                         |            |          
|                                                                       | Continuing operations   |            | $        
|                                                                       | Discontinued operations |            |          
|                                                                       |                         |            |          
|Net income (loss)                                                      |                         | $          | 0.07     
|                                                                       |                         |            |          
|Diluted net income (loss) per share:                                   |                         |            |          
|                                                                       | Continuing operations   |            | $        
|                                                                       | Discontinued operations |            |          
|                                                                       |                         |            |          
|Net income (loss)                                                      |                         | $          | 0.07     
|                                                                       |                         |            |          

Stock-Based Compensation

The Company has adopted the footnote disclosure provisions of Statement of Financial Accounting Standards No. 123,Accounting for
Stock Based-Compensation(SFAS 123). SFAS 123 encourages entities to adopt a fair value based method of accounting for stock options or similar equity
instruments. However, it also allows an entity to continue measuring compensation cost for stock-based
compensation using the intrinsic-value method of accounting prescribed by Accounting Principles Board Opinion No. 25,Accounting for Stock Issued to
Employees(APB 25). The Company has elected to continue to apply the provisions of APB 25 and provide pro forma footnote disclosures required by SFAS 123.

Comprehensive Income (loss)

Comprehensive income is comprised of net income and other comprehensive income (loss). Other comprehensive income (loss) includes certain changes in equity of the
Company that are excluded from net income. Other comprehensive loss in fiscal 2002 included unrealized losses on securities available for sale. There were no items of other comprehensive income (loss)
in fiscal 2001.

Concentration of Credit Risk

In the normal course of business, the Company provides unsecured credit terms to its customers. Accordingly, the Company performs ongoing credit evaluations of
its customers and maintains allowances for possible losses. Three customers accounted for 60% of revenues for the year ended

F-9

---

March 30, 2002. These three customers accounted for 28%, 19% and 13%, respectively of fiscal 2002 revenue. For the year ended March 31, 2001, two customers accounted for 62% of
revenues. These two customers accounted for 38% and 24%, respectively of fiscal 2001 revenues.

Use of Estimates

Management of the Company has made a number of estimates and assumptions relating to the reporting of assets, liabilities, revenues, and expenses and the
disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with generally accepted accounting principles. Actual results could differ from those
estimates.

Reclassifications

Certain items in the 2001 consolidated financial statements have been reclassified to conform with the 2002 presentation.

Financial Instruments

The carrying value of accounts receivable, accounts payable, accrued expenses, and debt approximate their estimated fair value. The Company derives the fair value
of its short-term investments based on quoted market prices.

Advertising

Advertising costs are expensed as incurred. Advertising costs amounted to $101,096 and $635,722 in fiscal 2002 and 2001, respectively.

3.    Short-term investments:

Short-term investments consisted of the following as of March 30, 2002:

Cost

Unrealized
losses

Fair
ValueMutual funds

$
817,483

$
5,581

$
811,902Corporate bonds


139,811


23,191


116,620Total short-term investments

$
957,294

$
28,772

$
928,522


Subsequent
to the year ended March 30, 3002, the corporate bonds listed above were sold. The actual loss realized on the bonds at the time of sale was $8,806.

4.    Echopass Corporation

Pursuant to a shareholder vote at a special shareholder meeting in December 1999, the Company consummated the sale of certain technology to Echopass
Corporation ("Echopass") in exchange for 4,000,000 shares of Echopass' Series A Preferred Stock in March 2000. Sento recorded its investment in Echopass at the historical carrying value
of the underlying technology that was transferred to Echopass. At that time Sento recorded its pro-rata share of Echopass losses under the equity method of

F-10

---

accounting. As of June 30, 2000, the investment in Echopass had been written down to a zero balance as the result of recording Sento's pro-rata share of Echopass losses.

On
November 2, 2001, EchoPass entered into a new financing arrangement with some of its investors that substantially diluted Sento's ownership to less than one-half of
one percent of Echopass. As a result, Sento no longer accounts for its investment in Echopass under the equity method of accounting. Furthermore, the substantial dilution of Sento's ownership interest
in Echopass has virtually eliminated any prospect that Sento will benefit financially from its ownership interest in Echopass.

5.    Discontinued Operations

On May 23, 2001, the Company reached a decision to discontinue the operations of its Training Division, which had historically been presented as a separate
business segment. Pursuant to generally accepted accounting principles, a charge of $577,119 was retroactively reflected in the Company's 2001 consolidated financial statements for the estimated costs
of discontinuing this segment. Upon the completion of the disposal in fiscal 2002, the excess of the estimated and accrued costs above the actual costs of discontinuing this segment ($102,786) was
recorded as a gain on disposal of discontinued operations. Revenues, operating costs and expenses, other income and expenses, and income taxes of this segment have been reclassified to discontinued
operations for the year ended March 31, 2001. Revenues related to this segment and included in discontinued operations as of March 31, 2001 were $3,147,037. The loss from this operation
during the year ended March 31, 2001 was $268,015.

6.    Property and Equipment

Property and equipment consisted of the following as of March 30, 2002 and March 31, 2001:

2002

2001Leasehold improvements

$
1,586,478

$
887,883Furniture, fixtures, equipment and software


7,031,496


5,010,4418,617,974


5,898,324Less accumulated depreciation


(3,391,717
)

(2,010,542
)$
5,226,257

$
3,887,782


7.    Notes Payable to Bank and Long-Term Debt

On April 15, 2002, the Company renegotiated the terms of its revolving line-of-credit agreement with a bank. The Company can draw
up to $3,000,000 under the agreement, subject to eligible receivable balances and reduced by the net balances of term loans outstanding with the bank (as of March 30, 2002, term loans
outstanding with the bank totaled $1,306,454, of which $694,020 is classified as a current liability). Amounts drawn accrue interest at prime plus 1.25%. The Company had no balances outstanding
against the credit line as of March 30, 2002.

The
availability of the line of credit is subject to certain restrictive covenants, including minimum liquidity and debt service positions. Pursuant to these covenants, if the Company is
unsuccessful in its efforts to refinance or replace its current debentures with other long-term financing prior to July 31,

F-11

---

2002 or is unable to obtain a waiver related to its covenants, the Company would not be able to draw additional amounts on its line of credit, and any outstanding balance on either the line of credit
or term loans would become callable and due upon demand, at the option of the bank.

The
Company also issued a warrant to the bank, in connection with obtaining the original line of credit in 1999, to purchase 60,000 shares of Common Stock at $1.60 per share. The stock
purchase warrant is
currently exercisable and expires March 2, 2004. Substantially all of the assets of the Company serve as collateral for the above line-of-credit and loans.

Long-term
debt, including capital lease obligations, consist of the following as of March 30, 2002 and March 31, 2001:

|                                                                                                                                 |                      | 2002 |            | 2001      |  
|-------------------------------------------------------------------------------------------------------------------------------- | -------------------- | ---- | ---------- | --------- | -
|10.4% note payable in monthly installments totaling $3,217, including interest, secured by equipment                             |                      | $    | 30,689     |           | $
|7.5% note payable in monthly installments totaling $601, including interest, secured by equipment                                |                      |      | 901        |           |  
|8.5% note payable in monthly installments totaling $26,088, including interest, secured by furniture and equipment               |                      |      | 741,024    |           |  
|10.9% note payable in monthly installments totaling $2,787, including interest, secured by furniture and equipment               |                      |      | 50,731     |           |  
|6.7% note payable in monthly installments totaling $1,973 starting in May 2002, including interest, secured by equipment         |                      |      | 87,400     |           |  
|9.4% note payable in monthly installments totaling $13,764, including interest, secured by furniture and equipment               |                      |      | 310,907    |           |  
|9.5% note payable in monthly installments totaling $11,742, including interest, secured by furniture and equipment               |                      |      | 284,258    |           |  
|Variable-rate (prime plus 1.25%-1.5%) notes payable in monthly installments totaling $31,359, secured by furniture and equipment |                      |      | 629,869    |           |  
|                                                                                                                                 |                      |      |            |           |  
|Total installment notes payable                                                                                                  |                      |      | 2,135,779  |           |  
|Present value of net minimum capital lease payments                                                                              |                      |      | 486,898    |           |  
|                                                                                                                                 |                      |      |            |           |  
|                                                                                                                                 | Total long-term debt |      |            | 2,622,677 |  
|Less current portion                                                                                                             |                      |      | (1,117,838 | )         |  
|                                                                                                                                 |                      |      |            |           |  
|Long-term debt, excluding current portion                                                                                        |                      | $    | 1,504,839  |           | $
|                                                                                                                                 |                      |      |            |           |  

F-12

---

Capitalized
leases are for equipment. Future minimum capital lease payments, excluding taxes, insurance and other costs as of March 30, 2002 were:

Fiscal Year2003

$
184,2872004


167,3962005


157,4722006


69,391Total minimum capital lease payments


578,546Less amounts representing interest


(91,648
)Present value of net minimum capital lease payments

$
486,898


Aggregate
maturities of installment notes payable are as follows in each respective fiscal year: 2003, $975,763; 2004, $864,618; 2005, $265,275; 2006, $22,340 and 2007, $7,783. The
Company's debt covenants require, among other things, the maintenance of a minimum net worth, debt to net worth ratio and net income.

8.    Convertible Bonds and Debentures

In February 2000, the Company issued $1,300,000 of 7% convertible subordinated debentures in $1,000 units consisting of one $990 debenture and warrants to
purchase 100 shares of common stock for $6.25 per share. Pursuant to the original terms of the debenture, in January 2001, the exercise price of the warrants decreased to $5.00 per share and in
February 2001, the interest rate on the debentures
increased to 8%. Each debenture is convertible at the option of the holder for 198 shares of common stock at a conversion price of $5.00 per share. Debentures that have not been converted or earlier
redeemed are due and payable in February 2003. The Company granted certain rights to register the shares of common stock that are issuable upon the conversion of the debentures. The Company
also issued warrants to the placement agent for 35,000 shares of common stock at a purchase price of $5.00 per share. Of the total proceeds, $226,609 have been allocated to value the warrants
(including the placement agent warrants) and offering costs of $84,878 have been reflected as a discount against the book value of the debentures and are being amortized to interest expense over the
life of the debentures.

9.    Income Taxes

As of March 30, 2002 and March 31, 2001, the Company had federal and state net operating loss carryforwards of approximately $4,570,000 and
$4,255,000 respectively. The net operating loss and credit carryforwards will expire at various dates beginning in 2019 through 2022, if not utilized.

F-13

---

Income
tax expense (benefit) consists of:

Current

Deferred

TotalYear ended March 30, 2002:Federal

$


$


$
State








$


$


$
Year ended March 31, 2001:Federal

$


$


$
State








$


$


$



Actual
income tax expense differs from the "expected" tax expense (computed by applying the U.S. federal corporate income tax rate of 34% to income before income taxes) as follows:

Year EndedMarch 30
2002

March 31
2001Computed "expected" tax (benefit) expense

$
190,657

$
(8,435
)Increase (decrease) in income taxes resulting from:State income taxes, net of federal tax benefit


22,717


(992
)Non-consolidated losses (income)





50,930Return to accrual adjustments


(64,933
)

(213,915
)Change in valuation allowance


(161,000
)

147,000Nondeductible meals and entertainment and other


12,559


25,412Income tax (benefit) expense

$


$



F-14

---

Significant
components of the Company's deferred tax assets and liabilities for federal and state income taxes as of March 30, 2002 and March 31, 2000 are as follows:

|                          |                                   | 2002 |            | 2001      |  
|------------------------- | --------------------------------- | ---- | ---------- | --------- | -
|Deferred tax assets:      |                                   |      |            |           |  
|                          | Net operating loss carryforwards  |      | $          | 1,834,000 |  
|                          | Deferred and accrued compensation |      |            | 91,000    |  
|                          | Intangible assets                 |      |            | 176,000   |  
|                          | Accrued liabilities               |      |            | 115,000   |  
|                          | Excess capital losses             |      |            | 273,000   |  
|                          | Other, net                        |      |            | 37,000    |  
|                          |                                   |      |            |           |  
|Deferred tax assets       |                                   |      | 2,526,000  |           |  
|Deferred tax liabilities: |                                   |      |            |           |  
|                          | Property and equipment            |      |            | (301,000  | )
|                          | Installment sales                 |      |            |          |  
|                          |                                   |      |            |           |  
|Deferred tax liabilities  |                                   |      | (301,000   | )         |  
|Net deferred tax assets   |                                   |      | 2,225,000  |           |  
|Valuation allowance       |                                   |      | (2,225,000 | )         |  
|                          |                                   |      |            |           |  
|Total                     |                                   | $    |           |           | $
|                          |                                   |      |            |           |  

The
net valuation allowance decreased by $138,000 and $531,000 during the years ended March 30, 2002 and March 31, 2001, respectively.

The
valuation allowance increased by $23,000 and $384,000 in the years ended March 30, 2002 and March 31, 2001, respectively, related to excess tax benefits resulting from
stock option exercises. If and when the Company is able to utilize these excess tax benefits in future periods, the reduction in the valuation allowance will be credited directly to additional
paid-in capital.

10.    Operating Leases

The Company has non-cancelable operating leases for office space. The Company incurred rent expense of $843,027 and $786,254 for the years ended
March 30, 2002 and March 31, 2001, respectively. Future minimum rent payments under existing non-cancelable operating leases are $902,301 in fiscal 2003, $914,940 in fiscal
2004, $925,986 in fiscal 2005, $551,035 in fiscal 2006, $143,040 in fiscal 2007 and $35,760 each fiscal year thereafter.

In
addition to the non-cancelable leases for office space, the Company is contingently liable for an equipment lease that was assumed by Echopass. The lease calls for monthly
payments of $15,130 through June 2003 and monthly payments of $6,140 thereafter, through June 2004.

11.    Retirement Plan

The Company has a qualified defined contribution retirement plan under Section 401(k) of the Internal Revenue Code. The plan covers all employees who meet
minimum age and service

F-15

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requirements, and allows participants to defer a portion of their annual compensation on a pretax basis. In addition, employer contributions are made at the discretion of the Board of Directors.
Participants are fully vested at all times in employee contributions. Employer contributions vest over a six-year period. No employer contributions were made during 2002 or 2001.

12.    Common Stock

Stock Options

The Company has adopted a stock option plan (the "Plan") pursuant to which the Company's Board of Directors may grant stock options to officers and key employees.
The Plan authorizes grants of options to purchase up to 3,500,000 shares of authorized but unissued common stock. Stock options are granted with an exercise price not less than the stock's fair market
value at the date of grant. All stock options granted to employees have ten-year terms; stock options granted to members of the Board of Directors generally have a five-year
term. The number of shares granted, vesting period, and price per share are determined by the Board of Directors. Stock options vest over three or four years. At March 30, 2002, there were
630,496 additional shares available for grant under the Plan.

Stock
option activity under the Plan, relating to qualified and nonqualified options during the periods indicated is as follows:

|                                         |  | Year ended March 30, 2002 |   | Year ended March 31, 2001
|---------------------------------------- |  | ------------------------- | - | -------------------------
|
|Balance outstanding at beginning of year |  | 1,759,424                 |   | $                        
|Granted                                  |  | 1,238,420                 |   |                          
|Exercised                                |  | (4,791                    | ) |                          
|Forfeited                                |  | (727,272                  | ) |                          
|                                         |  |                           |   |                          
|Balance outstanding at end of year       |  | 2,265,781                 |   |                          
|                                         |  |                           |   |                          
|Exercisable at end of year               |  | 707,404                   |   | $                        
|                                         |  |                           |   |                          

F-16

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The
following table summarizes information about stock options outstanding at March 31, 2001:

|Exercise
Price |  | Number
Outstanding
at
March 30, 2002 |  | Weighted-
Average
Remaining
Contractual Life |  | Weighted-
Average
Exercise Price |      | Number
Exercisable
at
March 30, 2002 |         | Weighted-
Average
Exercise Price
|-------------- |  | ------------------------------------ |  | -------------------------------------------- |  | -------------------------------- | ---- | ------------------------------------ | ------- | --------------------------------
|$0.72          |  | 359,920                              |  | 9.97                                         |  | $                                | 0.72 |                                      |        |                                 
|0.93           |  | 426,000                              |  | 8.88                                         |  |                                  | 0.93 |                                      | 3,750   |                                 
|1.20  1.50    |  | 255,500                              |  | 7.96                                         |  |                                  | 1.32 |                                      | 100,000 |                                 
|1.65           |  | 31,000                               |  | 9.30                                         |  |                                  | 1.65 |                                      |        |                                 
|1.75           |  | 294,050                              |  | 6.55                                         |  |                                  | 1.75 |                                      | 233,547 |                                 
|2.08  2.25    |  | 227,708                              |  | 8.09                                         |  |                                  | 2.11 |                                      | 25,708  |                                 
|2.31  3.06    |  | 274,354                              |  | 6.19                                         |  |                                  | 2.69 |                                      | 190,663 |                                 
|3.13  4.81    |  | 218,249                              |  | 6.93                                         |  |                                  | 3.98 |                                      | 112,405 |                                 
|5.44           |  | 5,000                                |  | 8.06                                         |  |                                  | 5.44 |                                      | 1,250   |                                 
|6.25           |  | 174,000                              |  | 4.93                                         |  |                                  | 6.25 |                                      | 40,081  |                                 
|               |  |                                      |  |                                              |  |                                  |      |                                      |         |                                 
|               |  | 2,265,781                            |  | 7.75                                         |  |                                  | 2.10 |                                      | 707,404 |                                 
|               |  |                                      |  |                                              |  |                                  |      |                                      |         |                                 

The
fair value of each option grant is estimated on the date of grant using the Black Scholes option-pricing model with the following weighted-average assumptions: 2002 
expected dividend yield of zero percent, risk-free interest rate of 4.48 percent, expected life of 5 years, and expected stock-price volatility of 90.37 percent; 2001
 expected dividend yield zero percent, risk-free interest rate of 4.61 percent, expected life of 5 years, and expected stock-price volatility of
92.91 percent.

The
Company applies APB 25 in accounting for options issued under the Plan. Had the Company determined compensation cost based on the fair value at the grant date for its stock options
under SFAS 123, the Company's net income (loss) would have been changed to the pro forma amounts indicated below:

|                                |  |             |  | 2002 |          | 2001 |  
|------------------------------- |  | ----------- |  | ---- | -------- | ---- | -
|Net income (loss)               |  | As reported |  | $    | 560,756  |      | $
|                                |  | Pro forma   |  |      | (191,058 | )    |  
|Basic income (loss) per share   |  | As reported |  |      | 0.07     |      |  
|                                |  | Pro forma   |  |      | (0.02    | )    |  
|Diluted income (loss) per share |  | As reported |  |      | 0.07     |      |  
|                                |  | Pro forma   |  |      | (0.02    | )    |  

The
full impact of calculating compensation cost for stock options under SFAS 123 may not be representative of the effects on reported net income (loss) for future years.

F-17

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Stock Warrants

Outstanding warrants to purchase shares of the Company's common stock are as follows:

Number of warrants

Exercise price

Expiration date378,751

$
2.50

May 2002130,000


5.00

February 200335,000


5.00

February 200310,000


4.25

May 200350,000


2.50

May 200360,000


1.60

March 200430,000


2.12

December 2004693,751


Warrants Issued for Services

In fiscal 2002 and 2001, Sento issued a total of 180,000 warrants in exchange for consulting services. As of March 30, 2002, all but 30,000 warrants issued
for services have expired. These warrants have been accounted for pursuant to Emerging Issues Task Force (EITF) Issue No. 96-18. Accordingly, the warrants are periodically revalued
based on the then fair market value of the underlying common stock during the performance period.

Employee Stock Purchase Plan

The Company has adopted a stock purchase plan under which 500,000 shares of common stock are reserved for future issuance to employees of the Company. The purpose
of the stock purchase plan is to provide a method whereby employees of the Company may acquire a proprietary interest in the Company through the purchase of shares of common stock. The stock purchase
plan is intended to qualify as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code. As of March 30, 2002, the Company had sold 172,243 shares to employees of
the Company under this plan.

13.    Related Party Transactions

GT InvestmentsIn March of 1999, Sento entered into a consulting agreement with GT Investments, a
company that is wholly owned by Gary B. Filler, Sento's Chairman. Under the agreement, Sento pays GT Investments a monthly fee for services provided by Mr. Filler. In March of 2001, Sento
contracted with GT Investments to provide consulting services to its wholly owned subsidiary, Sento Training Corporation, which was disposed of during fiscal 2002. The total expense incurred by Sento
under its arrangement with GT Investments during the years ended March 31, 2002 and 2001 was $97,738 and $109,611, respectively. The consulting agreement is cancelable by either party at any
time.

F-18

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14.    Recently Issued Accounting Pronouncements

SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. Use of the
pooling-of-interests method is no longer permitted. SFAS No. 141 also includes guidance on the initial recognition and measurement of goodwill and other intangible
assets acquired in a business combination that is completed after June 30, 2001.

SFAS
No. 142 no longer permits the amortization of goodwill and indefinite-lived intangible assets. Instead, these assets must be reviewed annually (or more frequently under
certain conditions) for impairment in accordance with this statement. This impairment test uses a fair value approach rather than the undiscounted cash flows approach previously required by SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." Intangible assets that do not have indefinite lives will
continue to be amortized over their useful lives and reviewed for impairment in accordance with SFAS No. 121 or SFAS No. 142.). This Statement is effective for years beginning after
December 15, 2001.

In
August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." This Statement addresses financial accounting
and reporting for the impairment or disposal of long-lived assets. This Statement supersedes FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of," and the accounting and reporting provisions of APB Opinion No. 30, "Reporting the Results of Operations and Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions," for the disposal of a segment of a business (as previously defined in that
Opinion). This Statement is effective for years beginning after December 15, 2001.

Management
does not expect that the above mentioned accounting pronouncements will have a material impact on the Company's consolidated financial position, results of operations, or
liquidity.

F-19

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