<SEC-DOCUMENT>0001140361-20-009421.txt : 20200623
<SEC-HEADER>0001140361-20-009421.hdr.sgml : 20200623
<ACCEPTANCE-DATETIME>20200422111033
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001140361-20-009421
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20200422

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			USA TECHNOLOGIES INC
		CENTRAL INDEX KEY:			0000896429
		STANDARD INDUSTRIAL CLASSIFICATION:	CALCULATING & ACCOUNTING MACHINES (NO ELECTRONIC COMPUTERS) [3578]
		IRS NUMBER:				232679963
		STATE OF INCORPORATION:			PA
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		100 DEERFIELD LANE
		STREET 2:		SUITE 300
		CITY:			MALVERN
		STATE:			PA
		ZIP:			19355
		BUSINESS PHONE:		6109890340

	MAIL ADDRESS:	
		STREET 1:		100 DEERFIELD LANE
		STREET 2:		SUITE 300
		CITY:			MALVERN
		STATE:			PA
		ZIP:			19355

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	USA ENTERTAINMENT CENTER INC
		DATE OF NAME CHANGE:	19931029
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
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      <div style="text-align: center;">Lurio &amp; Associates, P.C.</div>
      <div style="text-align: center;">Suite 3120, 2005 Market Street</div>
      <div style="text-align: center;">Philadelphia, Pennsylvania 19103</div>
      <div style="text-align: center;">215-665-9300</div>
      <div style="text-align: center;">215-665-8582 FAX</div>
      <div style="text-align: center;">April 22, 2020</div>
      <div><br>
      </div>
      <div><u>Via Electronic Delivery and EDGAR</u></div>
      <div><br>
      </div>
      <div>Nicholas P. Panos, Esq.</div>
      <div>Senior Special Counsel</div>
      <div>Office of Mergers &amp; Acquisitions</div>
      <div>Division of Corporation Finance</div>
      <div>Securities and Exchange Commission</div>
      <div>100 F Street, N.E.</div>
      <div>Washington, D.C. 20549-3561</div>
      <div>&#160;</div>
      <table cellspacing="0" cellpadding="0" id="z5b58184cb1f04804a7de4738c9f0ed9e" class="DSPFListTable" style="font-family: 'Times New Roman'; font-size: 10pt; width: 100%; text-align: left; color: #000000;">

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            <td style="width: 36pt; vertical-align: top; align: right;">Re:</td>
            <td style="width: auto; vertical-align: top;">
              <div>USA Technologies, Inc.</div>
            </td>
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      <div style="margin-left: 36pt;">DEFA14A preliminary proxy statement filings made on Schedule 14A</div>
      <div style="margin-left: 36pt;">Filed on February 21 and April 14, 2020 by USA Technologies, Inc.</div>
      <div style="margin-left: 36pt;">File No. 001-33365</div>
      <div><br>
      </div>
      <div style="color: #000000;">Dear Mr. Panos:</div>
      <div style="color: #000000;">&#160;</div>
      <div style="text-indent: 36pt; color: rgb(0, 0, 0); text-align: justify;">This office represents USA Technologies, Inc. (the &#8220;Company&#8221;). This letter will respond to the comment letter dated April 14, 2020 from you to Donald W. Layden, Jr., the
        President and Chief Executive Officer of the Company, regarding the above captioned filings.</div>
      <div><br>
      </div>
      <div style="text-indent: 36pt; color: rgb(0, 0, 0); text-align: justify;">For your convenience, each response is prefaced by the exact text of the Staff&#8217;s corresponding comment in bold, italicized text.</div>
      <div><br>
      </div>
      <div style="color: #000000; font-weight: bold;"><u>Definitive Additional Materials filed under cover of Schedule 14A on April 14, 2020</u></div>
      <div><br>
      </div>
      <div style="color: #000000; font-weight: bold;"><u>Investor Presentation April 2020</u></div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" id="z00f2d2a7a8c140e7a79efdc06b471b0c" class="DSPFListTable" style="font-family: 'Times New Roman'; font-size: 10pt; width: 100%; text-align: left; color: #000000;">

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            <td style="width: 18pt; vertical-align: top; align: right; color: #000000; font-style: italic; font-weight: bold;">1.</td>
            <td style="width: auto; vertical-align: top;">
              <div style="color: rgb(0, 0, 0); font-style: italic; font-weight: bold; text-align: justify;">The disclosure indicates &#8220;USAT and HEC reached [a] tentative agreement&#8221;, but then asserts that &#8220;HEC refused to honor the agreement.&#8221; The contention
                that HEC &#8220;refused to honor&#8221; a tentative agreement suggests HEC defaulted on an obligation. Given that the agreement was not finalized according to the registrant&#8217;s own characterization, please confirm that USAT will refrain from creating
                the implication in future filings that HEC breached a contract.</div>
            </td>
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      <div><br>
      </div>
      <div style="text-align: justify;"><u>Response</u>:<font style="color: rgb(31, 73, 125);">&#160;</font>The Company acknowledges the Staff&#8217;s comment and the Company will refrain from creating the implication in future filings that HEC breached a contract.</div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" id="z16b6f4361ca44fb0a43f7f1aedca254c" class="DSPFListTable" style="font-family: 'Times New Roman'; font-size: 10pt; width: 100%; text-align: left; color: #000000;">

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            <td style="width: 18pt; vertical-align: top; align: right; color: #000000; font-style: italic; font-weight: bold;">2.</td>
            <td style="width: auto; vertical-align: top;">
              <div style="color: rgb(0, 0, 0); font-style: italic; font-weight: bold; text-align: justify;">USAT represents that HEC has demanded the &#8220;effective control&#8221; of the registrant&#8217;s Board and &#8220;made clear&#8221; that it will not settle unless it receives
                &#8220;control of the Company.&#8221; The shareholder nominees, if elected, will owe fiduciary duties and otherwise be accountable to all shareholders. While HEC has proposed for election eight nominees, each of whom has been described as being
                independent from the registrant, HEC itself, as a matter of law and fact, will not be obtaining &#8220;control&#8221; of the Board or the registrant in the event that its proxy solicitation is successful. Please refrain from using this inexact
                formulation in future filings.</div>
            </td>
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      <div>&#160;</div>
      <div style="text-align: justify;"><u>Response</u>: The Company respectfully disagrees that HEC will not be obtaining control of the Company&#8217;s Board or the Company as a matter of law or fact in the event that its proxy solicitation is successful. HEC
        owns nearly 20% of the Company&#8217;s stock, and if successful at the annual meeting, will be placing its nominees as a majority of the board of directors, including the founder of HEC and a managing partner of HEC, in addition to an investor in HEC.</div>
      <div><br>
      </div>
      <div style="text-align: justify; text-indent: 36pt;">The fact that a director may owe fiduciary duties to all shareholders or that HEC does not own more than 50% of the shares is not conclusory evidence of a lack of control of HEC under analysis of
        &#8220;affiliate status&#8221; under Securities and Exchange Commission rules, including under Rule 144 promulgated under the Securities Act of 1933, as amended. Courts have likewise found a lack of independence of directors from a particular shareholder
        despite the directors owing fiduciary duties to all shareholders. For example, in <font style="font-style: italic;">In re Oracle Corp. Derivative Litigation</font>, 2018 WL&#160;1381331 (Del. Ch. Mar.&#160;19, 2018), the Chancery Court found that a majority
        of the board of directors was not independent of the company&#8217;s founder and chairman, who owned approximately 28% of the company&#8217;s shares, with respect to the acquisition of another company controlled by the founder and chairman. The Court also
        found that three independent directors were not independent for purposes of evaluating the acquisition where the directors had substantial business ties with the founder and chairman, and two of the three directly owed their director positions to
        the founder and chairman because a majority of non-founder stockholders disapproved of their performance on the compensation committee.</div>
      <div><br>
      </div>
      <div style="text-indent: 36pt;">In recognition of the Staff&#8217;s comment, the Company will qualify any statements regarding &#8220;control&#8221; by HEC as one of belief or opinion in any future filings.</div>
      <div><br>
      </div>
      <div style="color: #000000; font-weight: bold;"><u>Definitive Additional Materials filed under cover of Schedule 14A on February 21, 2020</u></div>
      <div><br>
      </div>
      <div style="color: #000000; font-weight: bold;"><u>Conference call and webcast to review its second quarter fiscal year 2020 financial results</u></div>
      <div><br>
      </div>
      <div style="color: rgb(0, 0, 0); font-style: italic; font-weight: bold; text-align: justify;">3. The public remarks indicated that the &#8220;Board has remained steadfast in their position that if there is going to be a change in the majority of the board,
        then USAT shareholders deserve a premium for their shares to allow for a change of control.&#8221; The reference to a &#8220;control premium&#8221; implies that HEC is in fact acquiring control of the registrant as opposed to simply exercising its rights as a
        stockholder to nominate and vote upon a slate of new directors. Given that HEC will not own a controlling position in the registrant even if its solicitation is successful, it remains unclear why any control premium would be due. We also are
        unaware of any legal requirement that obligates a non-management party to pay a control premium or any proxy solicitation undertaken in compliance with Section 14(a) and corresponding Regulation 14A in which a person soliciting proxies paid a
        &#8220;premium&#8221; or &#8220;control premium&#8221; to security holders in exchange for a vote in favor of their candidates. In future filings, please refrain from creating the impression that a &#8220;premium&#8221; is legally or otherwise required to be paid given the Rule 14a-9
        prohibition against omissions of material fact necessary to accurately make statements in light of the circumstances under which they are made.</div>
      <div><br>
      </div>
      <div style="text-align: justify;"><u>Response</u>: The Company acknowledges the Staff&#8217;s comment and in future filings the Company will qualify any such statements as one of belief or opinion.</div>
      <div><br>
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      <div>&#160;</div>
      <div style="text-align: center; color: #000000;">*&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;*&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;*&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;*</div>
      <div style="color: #000000;">&#160;</div>
      <div style="text-indent: 36pt; color: #000000;">Please contact Eduardo Gallardo, Esquire, at (212) 351-3847, or the undersigned at (215) 665-9300, if you have any questions or comments regarding this letter.</div>
      <div style="color: #000000;">&#160;</div>
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              <div>Sincerely,</div>
            </td>
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            <td style="width: 50%; vertical-align: top;" rowspan="1">&#160;</td>
            <td style="width: 50%; vertical-align: top;" rowspan="1">&#160;</td>
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            <td style="width: 50%; vertical-align: top;">&#160;</td>
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              <div><u>/s/ Douglas M. Lurio</u></div>
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            <td style="width: 50%; vertical-align: top;">&#160;</td>
            <td style="width: 50%; vertical-align: top;">
              <div>Douglas M. Lurio</div>
            </td>
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            <td style="width: 27pt; vertical-align: top; align: right;">cc:</td>
            <td style="width: auto; vertical-align: top;">
              <div>Donald W. Layden, Jr.</div>
            </td>
          </tr>

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      <div style="margin-left: 27pt;">Eduardo Gallardo, Esquire</div>
      <div style="margin-left: 27pt;">James J. Moloney, Esquire</div>
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