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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-102)
INFORMATION TO BE
INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND
AMENDMENTS THERE TO FILED PURSUANT TO
RULE 13d-2(a)
Under the Securities Exchange Act of 1934
(Amendment No. __ )*
(Name of Issuer)
Common Stock, $.25 Par Value
(Title of Class of Securities)
(CUSIP Number)
Great Gable Master Fund, Ltd.
Attention: Jacques Soenens
601 California Street, Suite 400
San Francisco, California 94108
(415) 986-1116
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. þ
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 9 Pages)
* The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
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CUSIP No. |
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816918205 |
13D |
Page |
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2 |
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of |
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9 |
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1 |
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NAMES OF REPORTING PERSONS:
Great Gable Master Fund, Ltd. |
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I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY): |
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20-1931215 |
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2 |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):
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(a) o |
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(b) þ(1) |
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3 |
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SEC USE ONLY: |
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4 |
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SOURCE OF FUNDS (SEE INSTRUCTIONS): |
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WC |
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5 |
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e): |
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o |
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6 |
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CITIZENSHIP OR PLACE OF ORGANIZATION: |
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Cayman Islands
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7 |
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SOLE VOTING POWER: |
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NUMBER OF |
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766,254 |
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SHARES |
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SHARED VOTING POWER: |
BENEFICIALLY |
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OWNED BY |
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0 |
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EACH |
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SOLE DISPOSITIVE POWER: |
REPORTING |
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PERSON |
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766,254 |
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WITH |
10 |
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SHARED DISPOSITIVE POWER: |
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0 |
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11 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: |
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766,254 |
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12 |
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS): |
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o
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13 |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): |
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18.4% |
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14 |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS): |
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OO |
(1) The Reporting Person may be deemed to be part of a group with Douglas S. Land, Thomas Rooney, DSL Capital Group, Inc. and Plutus Transeo Fund, L.P. The Reporting Person expressly disclaims the existence of a group.
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CUSIP No. |
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816918205 |
13D |
Page |
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3 |
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of |
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9 |
Item 1. Security and Issuer.
The securities to which this statement relates are shares (the Shares) of common stock, par
value $.25 per share, of Sento Corporation, a Utah corporation with principal executive offices
located at 420 East South Temple, Suite 400, Salt Lake City, Utah 84111 (the Issuer).
Item 2. Identity and Background.
(a),
(b), (c) and (f) This statement is being filed by Great
Gable Master Fund, Ltd. an exempted company organized under the laws
of the Cayman Islands, B.W.I. (Great
Gable or Reporting Person). Great Gable is principally engaged as an investment management
company and for that purpose, acquires and holds varying assets, lends capital and conducts any
other business as described in its Memorandum of Articles and
Association. Great Gable Partners, LP, an exempted company organized
under the laws of the Cayman Islands, B.W.I. (Gable Partners), is the investment adviser to the Reporting Person. The business address
and principal executive offices of the Reporting Person and Gable
Partners are located at 601 California Street, Suite 750, San Francisco,
California 94108.
(d) and (e) During the last five years, none of the persons identified in this Item 2 has
been convicted of any criminal proceeding (excluding traffic violations or similar misdemeanors),
or has been a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
The aggregate purchase price of the 766,254 Shares beneficially owned by Great Gable was
$1,000,000.00. Great Gable used working capital to purchase such
Shares. Such consideration is exclusive of the additional
consideration required to be paid upon conversion as described in
Item 5.
Item 4. Purpose of Transaction.
The Issuer anticipates reporting a net loss of approximately $2.58 per diluted share, for the
year ended March 31, 2007, compared with a net loss of approximately $.04 per diluted share for the
year ended March 31, 2006. This deteriorating financial performance is largely the result of lower
than expected margins with certain clients, loss of business with several large clients, training
expenses and higher wages paid to attract and retain specific personnel. The filing for bankruptcy
protection by a significant customer of the Issuer materially changed the financial position of the
Issuer. As a result, certain of the holders of the Issuers Series B Shares including the
Reporting Person, Douglas S. Land, Thomas Rooney, DSL Capital Group, Inc. and Plutus Transeo Fund,
L.P. (each, an Investor and, collectively, the Investors) have provided credit support to the
Issuer to induce the Issuers lender, Silicon Valley Bank (the Lender), to continue to provide
credit to the Issuer. In light of the circumstances surrounding the loss of the Issuers
significant customer, the Investors have also provided other assistance to the Issuer, including
financial advisory services and advice regarding various strategic alternatives.
The Issuer issued a letter to the Investors on June 21, 2007, attached hereto as Exhibit A
(Letter), under which the Investors may acquire beneficial ownership of more than 50% of the
Issuers Shares in the aggregate. Each of the Investors is acting on its own behalf in furtherance
of its investment purposes and there is no current plan or proposal among or between any of them to
act in concert with respect to the future voting or disposition of the Shares. On July 12, 2007,
after a period of investigating the financial and operating condition of the Issuer (as disclosed
in the Form 12b-25 filed by the Issuer on July 2, 2007), and discussions and negotiations with the
Lender, the Reporting Person, and the other Investors, determined to accept the terms of the
Letter, and proceed to negotiate and enter into definitive documents under which the Investors
would acquire beneficial ownership of at least a majority of the Issuers Shares in the aggregate
(or other securities convertible into or exchangeable for Shares).
The Investors do not have any present plans or proposals to change the current board of
directors or management of the Issuer, or to change the Issuers charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of control of the Issuer by
any person; however, each of the Investors has advised the Issuer regarding strategic alternatives.
If the Investors acquire beneficial ownership of a majority of the Shares in the aggregate, they
would have the ability to elect the board of directors of the Company and effect an
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CUSIP No. |
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816918205 |
13D |
Page |
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4 |
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of |
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9 |
extraordinary transaction, such as a merger, reorganization or sale of assets, involving the
Issuer and/or its subsidiaries.
The above-referenced issuance of Shares to the Investors may cause a material change in the
present capitalization of the Issuer or cause the Issuers securities to be delisted from The
Nasdaq Capital Market.
Item 5. Interest in Securities of the Issuer.
(a) and
(b) The Reporting Person owns units consisting of shares of the
Issuer's Series B Convertible Participating Preferred Stock (Series
B Shares) and warrants (Warrants) which are convertible, upon
payment of additional consideration, into the number of Shares
beneficially owned by the Reporting Person as reported in this
statement. As of July 20, 2007, Great Gable owned beneficially 766,254 Shares representing
approximately 18.4% of the 4,170,026 Shares outstanding as reported in publicly available
information. Each of Great Gable and Gable Partners, on behalf of
Great Gable as its investment adviser, had sole voting and dispositive power with respect to all 766,254 Shares.
(c) None.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the
Issuer.
Except as otherwise set forth in this statement, the Reporting Person does not have any
contract, arrangement, understanding or relationship (legal or otherwise) with any person with
respect to any securities of the Issuer, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or voting of any securities of the Issuer,
finders fees, joint ventures, loan or option arrangements, puts or calls, guaranties of profits,
division of profits or loss or the giving or withholding of proxies.
Item 7.
Material to be Filed as Exhibits.
Exhibit A Letter from the Issuer to the Investors
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CUSIP No. |
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816918205 |
13D |
Page |
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5 |
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of |
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9 |
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this statement is true, complete and correct.
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July 20, 2007 |
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Date |
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Great Gable Master Fund, Ltd. |
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By:
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/s/ Jacques Soenens |
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Jacques Soenens, its Managing Partner |
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CUSIP No. |
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816918205 |
13D |
Page |
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6 |
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of |
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9 |
Exhibit A
June 21, 2007
PLUTUS TRANSEO FUND, L.P.
DSL CAPITAL, LLC
GREAT GABLE MASTER FUND, LTD.
Gentlemen:
Sento Corporation, a Utah corporation (the Corporation), in order to induce Plutus Capital,
Chesapeake Group, and Great Gable Partners (the Preferred Shareholders) to provide credit
support in the amount of $450,000.00 on June 21, 2007 to the Corporations existing secured lender
thereby providing immediate credit availability to fund the payroll and other critical expenses
of the Corporation and its affiliates, Sento Technical Services Corporation and Xtrasource
Acquisition, Inc. (the Initial Credit Support), hereby agree that, provided the
Preferred Shareholders provide the Initial Credit Support, the Corporation will promptly take all
steps necessary, including without limitation, obtaining any necessary stockholder, exchange or
Securities and Exchange Commission approval and any waivers of rights from the Corporations
existing stock, warrant, option or debt holders, to:
(i) negotiate and enter into binding documentation with respect to and consummate and
effect the issuance of convertible, subordinated debt securities to the Preferred
Shareholders that, at the time of issuance, are immediately convertible at the
election of the Preferred Shareholders, into such number of the Corporations common stock
that, following conversion, and considered on a fully diluted and as converted to common
stock basis (including without limitation the conversion of all then outstanding options,
warrants, preferred stock and any other convertible security of the Corporation), the
Preferred Shareholders will own (including for purposes of this calculation shares of common
stock that would be obtained by the Preferred Shareholders upon conversion of their
preferred stock currently held) at least 50.1% but no more than 60% of the Corporations
common stock and convert into a greater portion of the Corporations common stock if certain
performance and financial covenants are not met (including an obligation to implement the
cost cutting plans outlined by the corporations financial advisor BBK);
(ii) grant the Preferred Shareholders the right to appoint such number of the
members of the Corporations Board of directors as the Preferred Shareholders may determine
in their sole discretion; provided that, the Corporation will be in compliance with the
rules and regulations promulgated by the Securities and Exchange Commission and all other
applicable laws;
(iii) unless the Corporation faces a material, imminent risk of loss from the actions of
a creditor or customer that necessitates immediate action by the
Corporation (an Imminent
Threat), require the Corporation to give the Preferred Shareholders not less
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CUSIP No. |
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816918205 |
13D |
Page |
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7 |
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than 48 hours written notice of any action that the Corporation is intending to lake
or refrain from taking that could reasonably be expected to have a material adverse effect on
the Corporation, its assets or prospects, including but not limited
to, any bankruptcy
filing, or in the case of an Imminent Threat, prior written notice as soon as reasonably
practicable under the circumstances; provided that, each of the Preferred Shareholders has
agreed to be bound by the Corporations policy concerning
insider trading; and
(iv) commit the Corporation to register for public sale such securities and the common
stock underlying such securities on terms acceptable to the Preferred Shareholders.
With respect to paragraph (i) above, she Preferred Shareholders may determine, in their sole
discretion, to obtain the rights and economic benefits contemplated
and anticipated under paragraph (i)
through: (1) a form of debt, subject only to liens in favor of the Corporations existing secured
lender, which may, at the option of the Preferred Shareholders: (A) be secured or unsecured, (B)
be convertible into common stock and/or accompanied by warrants to purchase, at a nominal value,
shares of common stock, and/or (C) provide for substantial
closing fees, interest rate, and
success, exit and other fees the event of a sale, recapitalization,
restructuring (in or out of
bankruptcy), merger or similar transaction of the Corporation:
(2) with the consent of the
Corporation, which consent will not be unreasonably withheld, a different form of security (debt
or otherwise) or structure; provided that, such change would not require the Corporation to
violate any applicable law.
The
Corporation hereby agrees that it will, by no later than June 22, 2007, obtain a
settlement and general release from the prior shareholders of Xtrasource Acquisition, Inc. for any
and all claims that they may have, past, present or future against
the Corporation; including
without limitation, any claims relating, directly or indirectly, to the payment of any earn-out
that may be due to such shareholders of Xtrasource Acquisition, Inc., all in form and substance
reasonably acceptable to the Preferred Shareholders.
To the extent effecting any of the above is impossible due to circumstances beyond the
control of the Corporation, the Corporation will use its best efforts to take any action or enter
into any transaction with the Preferred Shareholders necessary to provide the Preferred
Shareholders with rights as substanially similar to the above as possible.
The Corporation will reimburse the Preferred Shareholders for their reasonable legal fees and
costs expended in negotiating, documenting and consummating the transactions contemplated herein,
including without limitation, such fees and costs associated with the provision of any credit
support to the Corporations existing secured lender.
In addition, the Corporation agrees that it will not issue any equity or debt securities
following execution and delivery of this letter agreement prior to full consummation of the
transactions contemplated herein, other than (i) In connection with the transactions contemplated
by this letter agreement, (ii) in connection with the exercise or conversion of currently
outstanding options, warrants or other derivative securities in accordance with their terms, (iii)
in connection with the issuance of options to employees of the Corporation other than officers or
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CUSIP No. |
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816918205 |
13D |
Page |
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directors of the Corporation pursuant to the Corporations existing employee stock option
plans, and (iv) subject to terms and conditions that are in form
and substance acceptable to the Preferred Shareholders, as reasonably
necessary to resolve, in whole or in part, the obligations that the
Corporation owes or may owe to the prior shareholders of Xtrasource
Acquisition, Inc., or to Centurion Southwest, LLC; provided that, if the Initial Credit Support is not provided by June 21, 2007, then the
obligations contained in this paragraph shall terminate.
The
undersigned hereby represents and warrants that the undersigned has the full authority to
execute and deliver this letter agreement and that this letter agreement is fully binding
upon the Corporation.
As evidenced by the signatures of the Preferred Shareholder set forth below,
the Preferred Shareholders agree to (i) provide to the Corporations existing
secured lender (for use by the Corporation), in the form of the purchase of last-out
participations, of $450,000 by wire transfer on June 21, 2007, and (ii) thereafter
agree, subject to the Preferred Shareholders having already obtained, on an as
converted basis, at least 50.1% of the common voting stock of the Corporation by
August 1, 2007 and to the satisfaction of certain benchmarks by the Corporation and
such other terms and conditions as may be agreed upon by the Preferred Shareholders,
the Corporation, and the existing secured lender, to fund from time to time, as may be
necessary, as much as $1,000,000 to the Corporations existing secured lender (for use by the
Corporation), in the form of the purchase of last-out participations or junior secured
debt (as may be agreed to in writing by the Preferred Shareholders and the Corporation)
which the Preferred Shareholders may elect thereafter to exchange for equity
securities to be issued to the Preferred Shareholders on terms acceptable to the
Preferred Shareholders. Notwithstanding anything to the contrary above, the obligation
of the Preferred Shareholders shall be a several obligation, with each Preferred
Shareholder obligated, subject to such terms and conditions, to fund one-third(l/3) of such funding commitment.
The
consideration provided by the Preferred Shareholders by providing the Credit Support is
hereby acknowledged by the Corporation to be reasonable, sufficient and adequate
consideration for the transactions contemplated by this letter agreement. The Corporation has
entered into this agreement with the advice of counsel, willingly and not under any undue
influence, fraud or duress. Upon advice of counsel to the Corporation, the Corporation
agrees that, and hereby represents that, provided the Preferred Shareholders use commercially
reasonable efforts to work with the Corporation to effect the transactions contemplated in
this letter agreement, that the transactions contemplated in this letter agreement can be
substantially effected by August 1, 2007.
The Board of Directors of the Company has reviewed and approved the execution and
delivery of this letter agreement and consummation of the
transactions contemplated herein.
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Sincerely yours,
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/s/ Kim A. Cooper
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Mr. Kim A. Cooper |
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President and Chief Executive Officer |
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CUSIP No. |
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816918205 |
13D |
Page |
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9 |
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AGREED TO: |
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PLUTUS TRANSEO FUND, L.P. |
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By:
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Plutus Capital Management LLP |
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Its Investment Advisor |
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By: |
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/s/
Hasan Sabri |
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Hasan Sabri, Chief Operating Officer |
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July 16, 2007 |
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DSL CAPITAL, LLC |
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By: |
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/s/ Douglas S. Land |
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Douglas S. Land, Managing Director |
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July 18, 2007 |
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GREAT GABLE MASTER FUND, LTD. |
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By: |
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/s/ Jacques Soenens |
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Jacques Soenens, Managing Partner |
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July 18, 2007 |
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