DEFA14A 1 t73669_defa14a.htm SCHEDULE 14A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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USA TECHNOLOGIES, INC.

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The following slide presentation was presented by USA Technologies, Inc. (the "Company"), to certain shareholders on May 22, 2012, and may be used by the Company to make presentations to other Company shareholders in the future:

| Investor Presentation May 22, 2012 Steve Herbert, Chairman and CEO Dave DeMedio, CFO Veronica Rosa, VP Investor Relations

| SafeHarborStatement . All statements other than statements of historical fact included in this presentation are forward- looking statements. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to, business, financial, market and economic conditions and the outcome of the pending proxy contest. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in USA’s most recent filings with the Securities and Exchange Commission (the “SEC”), including the Form 10-Q report for the quarter ended March 31, 2012, which you will find on our website, www.usatech.com, under the “Investor Relations” tab and USAT’s Definitive Proxy Statement filed with the SEC on May 18, 2012. Undue reliance should not be placed on any such forward looking statement, which speak only as of the time they are made. The Company undertakes no obligation to update any forward looking statement, whether as a result of new information, future events or otherwise. . Non-GAAP Information: This presentation will include a discussion of Adjusted EBITDA which is a non-GAAP financial measure which we believe is useful for an understanding of our ongoing operations. This non-GAAP financial measure is supplemental to, and not a substitute for, GAAP financial measures such as net income or loss. Details of these items and a reconciliation of this non-GAAP financial measure to GAAP financial measures can be found in this presentation and in our Form 10-Q report for the quarter ended March 31, 2012 which is on our website, www.usatech.com, under the “Investor Relations” tab.

| USATechnologiesOverview MarketLeadership . Leading provider of wireless, cashless payment and machine-to-machine solutions for small ticket, self-serve retail industries such as vending and kiosk. . Provider of energy saving technology to the cold beverage industry . Cashless and contactless small ticket, unattended market is largely Large, Untapped untapped, having traditionally relied on cash transactions Market Opportunity . Millions of potential locations (connections) Recurring Revenues . Growing and reliable revenue stream driven by value-added service model Fueled by Service (network service fees; transaction processing) Model . 80% of revenues 3Q FY12 ImprovingOperationalPerformance . Working toward profitability as service connection rates and customer wins grow . Existing customers have potential for 2.5 million connections (USAT estimate) TechnologyBarriers . Proprietary technology with a strong patent portfolio . 79 patents Strengthened . New leadership; new strategic plan capitalizes on market trends, sustainable Leadership & growth and profitability Direction . Stronger board composition

| TO: Cashless payments systems and business intelligence at operational and customer level FROM: unattended, cash only options with little insight into customer behavior Cashless,Small-TicketInTransition

| MarketOpportunityisVast • The small ticket, self-serve market is largely untapped Sources: US Department of Transportation, 2008IHL Kiosk Study, 2010 (2011 *Includes self-checkout systems, ticketing kiosks projections)First Research, March 2011, June 2010Automatic check-in kiosks, food ordering kiosks, postal Merchandisers State of the Coffee Industry 2009Vending Times Census and other retail kiosks. 2010Smart Card Alliance 2006

| MarketForcesDrivingAdoption• Demandforconvenience;cashlesspreferred• Increasingrelianceonmobilephones• Smallticketgrowth• Increasingly“social” • Meetcustomerdesireforcashless• Reverseshrinkingmarginsthroughoperationalbenefits• Visa/MasterCardseeopportunitytodriveacceptance• Mobilepayments• Incrementalbusiness• Wirelessperformanceup/costsdown• MigrationtocloudbasedorSAASsolution• DeclineinhardwarecostsCONSUMERMARKET(STAKEHOLDERS) TECHNOLOGYOURCUSTOMERSThe confluence of several compelling drivers should further drive market adoption 6

| RevenuesNow80%Recurring . Revenues . $30 million annualized (based on 3Q ended 3/31/12) . 80% of revenue mix from reliable, recurring revenues . Two technology platforms . ePort & ePort Connect cashless payment networking and other services . eMiser -energy management technology . Cashless payment adoption drives substantial service base . 2,825 customers; 148,000 connections (as of 3/31/12) . “JumpStart” facilitates industry adoption and fuels service model . Continuing to innovate and launch new valued-added services (in thousands) $25,000 $20,000 $15,000 $10,000 $5,000 $0 FY2009FY2010FY2011EquipmentLicense&TransactionFees7

| Products&ServicesePortSoftwareDevelopmentKit-------------Product------------------Services------ ..ePortEDGE,ePortG8 ..G8NFCenabled ..Wireless;PCAcompliant ..Drivingconnectionsthrough“JumpStart” ..CustomersbuyePortConnectservices ..ePortConnectservice ..Currentmonthlyfeecoverstransactionprocessinganddatatelemetryservices ..Connectionsandcustomersgrowing ..EnergyMiser ..Canreducemachineenergyuseby35%- 45% ..Cansaveupto$150/machine/year8PaymentProcessingProduct,CustomerandOperationalDataTelemetryandCashPaymentSystemsEnergyConservationManagement

| BusinessModelExample Equipment Sales Gross Profit A US Bank Compa Targets • Range30% -35% • Range30% -40% Transaction Fees ePort Connect Service Fee 9ePort Connect w Terminal Incl. PerDevice• Avg.$100PerDevice• $200-$330• $30activationfeePerconnection: • $7-$10/monthformajorityofconnectedbase• MinimalcustomerchurnPerconnection: • JumpStartprogram(withePortConnect) • $12-$15/monthover3yearsPerconnection: • 3-5.95%pertransaction• Costproviders: Elavon,majorCC’s

| UnmatchedEnd-to-EndSolutions Device Sales / Accounting Card Processing / Solution Reporting Services Merchant Services Customer Solution USA Technologies InOne Technology / Coinco First Data Crane Mdse Systems Cantaloupe Systems MEI Heartland Payments USA Technologies / Heartland Payments Apriva/USA Tech. Bank of America / First Data One-StopShoppingUSATistheonlycompanythatoffersacompleteturn-keysolution, fromactivationtocustomerservice10

| USAT is Executing a Strategy for Growth and Path to Profitability 11

| GrowthThroughMoreConnections… Market Potential VerticalMarkets . e.g. Kiosks . e.g. Leverage strength and breadth of partner Expanded Reach 1,500 + M2M sales team to drive adoption Existing Customer . Existing 2,825 customers operate Base approximately 2.5 million locations . Drive adoption in these accounts . Leverage performance data and new services Connections and Time

| GrowthThroughConnections - JumpStart • Jumpstart has accelerated adoption, increased revenues and created competitive advantage

| GrowthThroughConnections– ExpandingCustomerBase • Customer base has more than tripled since introduction of the JumpStart rental program 14

| ExpandedSalesReach- ThroughStrategicPartners • Over 1,500 Verizon Wireless M2M sales representatives M2M sales toolkit • National training kickoff in quarter ended 3/31/12 • Co-Marketing Events • April-May 2012 -USAT participates in 10 city M2M Connected Technology Tour • USAT featured in Verizon Wireless booth at CTIA nowcarryUSAT’scashlesspaymentsolutionsintheir 15

| GrowingtheValueofaConnection– ServiceExpansion . 148,000 connections as of 3/31/12 . A PCI compliant, end-to-end suite of cashless payment and telemetry services tailored to fit the needs of self- service retail industries. NewNew Cashless and M2M Prepaid and Interactive contactless Telemetry Loyalty Media payments Services Program Services (Q1 FY2013) (Q1 FY2013)

| DrivingGrowthByExpandingtheValueofaConnection Jan.2012 CustomerDemonstrationsQ32012 CustomerDemonstrationsQ32012 Introduced two-tier pricing to ePort Connect service • Increases ROI for operators by enabling them to offset processing fees Interactive Media Services • Engage consumers at the point of sale Prepaid & Loyalty Program • Reloadable card; cash back rewards and coupons 17

| MobileReadiness . NFC-based mobile payment is poised to further push cashless . 65,000 NFC-enabled ePort devices already mobilized . Opportunities: couponing, incentives, prepay, loyalty, social media integration…

| ImprovingOperationalPerformance . Substantially stronger recurring revenue base due to increased connections and customers . More than $2 million in annualized efficiencies through revenue, cost and expense actions taken since CEO transition . Enabled USAT to quickly move to positive adjusted EBITDA for the third quarter ended March 31, 2012

| BalanceSheet20• Nolossesfundedin3Q; thisisexpectedtocontinuefor4Qexcludingproxycosts. • Currently,ourprimaryuseofcashisJumpstart; usingJumpstartstrategicallytoaccelerateadoption, increasedrevenuesandcreatedcompetitiveadvantages

| PathtoProfitabilityFueledbyGrowingRecurringRevenueBase Quarterly Revenue Trend (in thousands) Expect continued $10,000 $8,000 $6,000 $4,000 $2,000 $0 License&TransactionFeesnow80%ofrevenuesTotalRevenue• PositiveEBITDAfor3/31/12• 2,825customersgrowthin• 148,000connectionsrevenuesrecurring 6/30/2010 9/30/2010 12/31/2010 3/31/2011 6/30/2011 9/30/2011 12/31/2011 3/31/2012 6/30/2012 Adjusted EBITDA (see reconciliation of Net Loss to Adjusted EBITDA) (in thousands) Estimate -and excludes proxy $2,000 Includes CEO costs severance & related costs $0 -$2,000 6/30/2010 9/30/2010 12/31/2010 3/31/2011 6/30/2011 9/30/2011 12/31/2011 3/31/2012 6/30/2012 -$4,000

| SummaryUSATechnologies(Nasdaq:USAT) . Positioned to capture benefits of market shift to cashless . Growing recurring revenue customer & connection base . Growth strategies building scale and closing in on profitability . New verticals and expanded service opportunities

| Appendix 23

| Non-GAAPReconciliation Adjusted EBITDA ------- ----- - . Adjusted EBITDA represents net income (loss) before interest income, interest expense, income taxes, depreciation, amortization, and change in fair value of warrant liabilities and stock -based compensation expense. We have excluded the non-operating item, change in fair value of warrant liabilities, because it represents a non-cash charge that is not related to USA Technologies' (USAT) operations. We have excluded the non-cash expenses, stock-based compensation, as it does not reflect the cash-based operations of USAT. Adjusted EBITDA is a non-GAAP financial measure which is not required by or defined under GAAP (Generally Accepted Accounting Principles). The presentation of this financial measure is not intended to be considered in isolation or as a substitute for the financial measured prepared and presented in accordance with GAAP, including the net income or net loss of USAT or net cash used in operating activities. Management recognizes that non- GAAP financial measures have limitations in that they do not reflect all of the items associated with USAT's net income or net loss as determined in accordance with GAAP, and are not a substitute for or a measure of USAT's profitability or net earnings. Adjusted EBITDA is presented because USAT believes it is useful to investors as a measure of comparative operating performance and liquidity, and because it is less susceptible to variances in actual performance resulting from depreciation and amortization and non-cash charges for changes in fair value of warrant liabilities and stock-based compensation expense.