USA Technologies, Inc., a leader in the networking of wireless, non-cash transactions, announced it has signed a securities purchase agreement with institutional investors to purchase $10.7 million of common stock in a private placement. Under the terms of the transaction, the company has agreed to sell an aggregate of 5,200,000 shares of its common stock at $2.064 per share and warrants to purchase up to 3,900,000 additional shares in the aggregate of its common stock. The warrants will be exercisable commencing on the 6 month and 1 day anniversary of the closing date at an exercise price of $2.6058 per share and will have a five-year term commencing on the initial exercisability date.
The completion of the offering is subject to the satisfaction of customary closing conditions and is expected to close on or before March 24, 2011.
Chardan Capital Markets LLC acted as sole placement agent to USA Technologies, Inc. for this transaction.
The proceeds of the offering would be used primarily to support the expansion of the Company's JumpStart program under which USA Technologies, Inc. generated over 32,000 new connections in calendar year 2010.
"Our JumpStart program, which allows our customers to deploy cashless payment technology with zero upfront capital investment, was successful in 2010 and was a key driver of our growth. The proceeds of this offering would be used primarily to continue the program in calendar year 2011. We believe this would allow us to penetrate new business opportunities, and provide continued growth within our existing customer and prospect base," said George Jensen, chairman and chief executive officer of USA Technologies in a prepared statement. "We also believe that cashless payment acceptance is accelerating at a more rapid pace, and last year's growth in our connections was indicative of a major shift in the acceptance of cashless payments in small-ticket unattended retail industries like vending, laundry, kiosk, amusement and car wash. With JumpStart, we can better support the plans of these owners and operators."
The company's JumpStart program enables customers to implement the ePort cashless solution with no upfront investment. Under JumpStart, customers can opt for either the ePort G8, which accepts contactless payments, or ePort EDGE, a one-piece cashless reader and controller combo designed for quick installation. The JumpStart package also includes the ePort Connect® service for wireless connectivity, card processing, consumer services, online reporting, and over-the-air machine alerts. ePort Connect is the payment industry's leading payment service for unattended, wireless, cashless transactions, and is PCI Level One compliant for the highest level of security.
In calendar year 2010, the company added approximately 46,000 connections to its network, 71 percent of which were under the JumpStart program. As of Dec. 31, 2010, there were approximately 109,000 devices connected to the company's network, approximately 31 percent of which were the result of the JumpStart program. The company counts its ePort connections upon shipment of an active terminal to a customer under contract, at which time activation on its network is performed by the company, and the terminal is capable of conducting business via the company's network and related services. The company recently announced that it had processed a record 6.4 million small-ticket transactions representing $10.3 million–equal to over $120M in annualized transactions.
