Pennsylvania
|
001-33365
|
23-2679963
|
||
(State or other jurisdiction of incorporation or organization)
|
(Commission File Number)
|
(I.R.S. Employer Identification No.)
|
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Item 2.02.
|
Results of Operations and Financial Condition.
|
Item 9.01
|
Financial Statements and Exhibits.
|
Exhibit No.
|
Description of Agreement
|
|
99.1
|
Press Release of the Company dated November 8, 2017
|
USA TECHNOLOGIES, INC.
|
|||
Dated: November 15, 2017
|
By:
|
/s/ Stephen P. Herbert
|
|
Stephen P. Herbert,
|
|||
Chief Executive Officer
|
Exhibit No.
|
Description of Exhibit
|
|
Press Release of the Company dated November 8, 2017
|
· |
Revenue of $25.6 million, a year-over-year increase of 19% marking the 32nd consecutive quarter of growth
|
· |
Net connections of 26,000, a year-over-year increase of 37%
|
· |
Achieved record license and transaction fee revenue of $19.9 million, a year-over-year increase of 22%
|
· |
Operating loss of $(0.6) million, compared to an operating loss of $(1.0) million in the prior year period
|
· |
Adjusted operating income (operating income as adjusted for integration and acquisition costs) of $0.2 million, compared to a loss of $(0.8) million for the prior year period
|
· |
Ended the quarter with $51.9 million in cash
|
· |
Net loss of $(0.2) million, or $(0.01) per share, compared to a net loss of $(2.5) million, or $(0.07) per share for the prior year period
|
· |
Adjusted EBITDA of $2.3 million, a year-over-year increase of 244%
|
Three months ended September 30,
|
Percent
Change
|
|||||||||||||||||||||||
($ in thousands, except shares and per share data)
|
2017
|
% of Sales
|
2016
|
% of Sales
|
Change
|
|||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
License and transaction fees
|
$
|
19,944
|
77.9
|
%
|
$
|
16,365
|
75.8
|
%
|
$
|
3,579
|
21.9
|
%
|
||||||||||||
Equipment sales
|
5,673
|
22.1
|
%
|
5,223
|
24.2
|
%
|
450
|
8.6
|
%
|
|||||||||||||||
Total revenues
|
25,617
|
100.0
|
%
|
21,588
|
100.0
|
%
|
4,029
|
18.7
|
%
|
|||||||||||||||
Costs of sales/revenues:
|
||||||||||||||||||||||||
Cost of services
|
13,326
|
66.8
|
%
|
11,243
|
68.7
|
%
|
2,083
|
18.5
|
%
|
|||||||||||||||
Cost of equipment
|
5,090
|
89.7
|
%
|
4,178
|
80.0
|
%
|
912
|
21.8
|
%
|
|||||||||||||||
Total costs of sales/revenues
|
18,416
|
71.9
|
%
|
15,421
|
71.4
|
%
|
2,995
|
19.4
|
%
|
|||||||||||||||
License and transaction gross profit
|
6,618
|
33.2
|
%
|
5,122
|
31.3
|
%
|
1,496
|
29.2
|
%
|
|||||||||||||||
Equipment gross profit
|
583
|
10.3
|
%
|
1,045
|
20.0
|
%
|
(462
|
)
|
(44.2
|
%)
|
||||||||||||||
Gross profit
|
7,201
|
28.1
|
%
|
6,167
|
28.6
|
%
|
1,034
|
16.8
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Selling, general and administrative
|
6,746
|
26.3
|
%
|
6,808
|
31.5
|
%
|
(62
|
)
|
(0.9
|
%)
|
||||||||||||||
Integration and acquisition costs
|
762
|
3.0
|
%
|
101
|
0.5
|
%
|
661
|
654.5
|
%
|
|||||||||||||||
Depreciation and amortization
|
245
|
1.0
|
%
|
208
|
1.0
|
%
|
37
|
17.8
|
%
|
|||||||||||||||
Total operating expenses
|
7,753
|
30.3
|
%
|
7,117
|
33.0
|
%
|
636
|
8.9
|
%
|
|||||||||||||||
Operating loss
|
(552
|
)
|
(2.2
|
%)
|
(950
|
)
|
(4.4
|
%)
|
398
|
41.9
|
%
|
|||||||||||||
|
||||||||||||||||||||||||
Other income (expense):
|
||||||||||||||||||||||||
Interest income
|
80
|
0.3
|
%
|
73
|
0.3
|
%
|
7
|
9.6
|
%
|
|||||||||||||||
Interest expense
|
(209
|
)
|
(0.8
|
%)
|
(212
|
)
|
(1.0
|
%)
|
3
|
(1.4
|
%)
|
|||||||||||||
Change in fair value of warrant liabilities
|
—
|
—
|
(1,490
|
)
|
(6.9
|
%)
|
1,490
|
(100.0
|
%)
|
|||||||||||||||
Total other expense, net
|
(129
|
)
|
(0.5
|
%)
|
(1,629
|
)
|
(7.5
|
%)
|
1,500
|
(92.1
|
%)
|
|||||||||||||
Loss before income taxes
|
(681
|
)
|
(2.7
|
%)
|
(2,579
|
)
|
(11.9
|
%)
|
1,898
|
73.6
|
%
|
|||||||||||||
Benefit for income taxes
|
468
|
1.8
|
%
|
115
|
0.5
|
%
|
353
|
307.0
|
%
|
|||||||||||||||
Net loss
|
(213
|
)
|
(0.8
|
%)
|
(2,464
|
)
|
(11.4
|
%)
|
2,251
|
91.4
|
%
|
|||||||||||||
Cumulative preferred dividends
|
(334
|
)
|
(1.3
|
%)
|
(334
|
)
|
(1.5
|
%)
|
—
|
—
|
||||||||||||||
Net loss applicable to common shares
|
$
|
(547
|
)
|
(2.1
|
%)
|
$
|
(2,798
|
)
|
(13.0
|
%)
|
$
|
2,251
|
80.5
|
%
|
||||||||||
Net loss per common share - basic and diluted
|
$
|
(0.01
|
)
|
$
|
(0.07
|
)
|
$
|
0.06
|
84.2
|
%
|
||||||||||||||
Weighted average number of common shares outstanding - basic and diluted
|
47,573,364
|
38,488,005
|
9,085,359
|
23.6
|
%
|
As of and for the three months ended
|
||||||||||||||||||||
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
||||||||||||||||
($ in thousand)
|
2017
|
2017
|
2017
|
2016
|
2016
|
|||||||||||||||
Connections:
|
||||||||||||||||||||
Gross New connections
|
28,000
|
70,000
|
40,000
|
25,000
|
22,000
|
|||||||||||||||
% from existing customer base
|
82
|
%
|
93
|
%
|
88
|
%
|
80
|
%
|
86
|
%
|
||||||||||
Net New connections
|
26,000
|
64,000
|
35,000
|
21,000
|
19,000
|
|||||||||||||||
Total connections
|
594,000
|
568,000
|
504,000
|
469,000
|
448,000
|
|||||||||||||||
Customers:
|
||||||||||||||||||||
New customers added
|
550
|
300
|
500
|
500
|
350
|
|||||||||||||||
Total customers
|
13,250
|
12,700
|
12,400
|
11,900
|
11,400
|
|||||||||||||||
Volumes:
|
||||||||||||||||||||
Total number of transactions (millions)
|
121.1
|
114.8
|
104.9
|
100.1
|
95.1
|
|||||||||||||||
Transaction volume (millions)
|
$
|
239.2
|
$
|
225.6
|
$
|
202.5
|
$
|
191.5
|
$
|
183.4
|
||||||||||
Financing structure of connections:
|
||||||||||||||||||||
JumpStart
|
4.1
|
%
|
3.3
|
%
|
8.6
|
%
|
6.8
|
%
|
7.7
|
%
|
||||||||||
QuickStart & All Others *
|
95.9
|
%
|
96.7
|
%
|
91.4
|
%
|
93.2
|
%
|
92.3
|
%
|
||||||||||
Total
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
September 30,
|
June 30,
|
|||||||
($ in thousands, except shares)
|
2017
|
2017
|
||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
51,870
|
$
|
12,745
|
||||
Accounts receivable, less allowance of $3,445 and $3,149, respectively
|
10,288
|
7,193
|
||||||
Finance receivables, less allowance of $22 and $19, respectively
|
3,082
|
11,010
|
||||||
Inventory
|
8,240
|
4,586
|
||||||
Prepaid expenses and other current assets
|
1,122
|
968
|
||||||
Total current assets
|
74,602
|
36,502
|
||||||
Non-current assets:
|
||||||||
Finance receivables, less current portion
|
7,742
|
8,607
|
||||||
Other assets
|
750
|
687
|
||||||
Property and equipment, net
|
11,850
|
12,111
|
||||||
Deferred income taxes
|
28,205
|
27,670
|
||||||
Intangibles, net
|
578
|
622
|
||||||
Goodwill
|
11,492
|
11,492
|
||||||
Total non-current assets
|
60,617
|
61,189
|
||||||
Total assets
|
$
|
135,219
|
$
|
97,691
|
||||
|
||||||||
Liabilities and shareholders’ equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
14,211
|
$
|
16,054
|
||||
Accrued expenses
|
3,795
|
4,130
|
||||||
Line of credit, net
|
7,051
|
7,036
|
||||||
Capital lease obligations and current obligations under long-term debt
|
2,649
|
3,230
|
||||||
Income taxes payable
|
10
|
10
|
||||||
Deferred gain from sale-leaseback transactions
|
197
|
239
|
||||||
Total current liabilities
|
27,913
|
30,699
|
||||||
Long-term liabilities:
|
||||||||
Capital lease obligations and long-term debt, less current portion
|
1,049
|
1,061
|
||||||
Accrued expenses, less current portion
|
62
|
53
|
||||||
Deferred gain from sale-leaseback transactions, less current portion
|
99
|
100
|
||||||
Total long-term liabilities
|
1,210
|
1,214
|
||||||
Total liabilities
|
$
|
29,123
|
$
|
31,913
|
||||
Shareholders’ equity:
|
||||||||
Preferred stock, no par value, 1,800,000 shares authorized, no shares issued
|
—
|
—
|
||||||
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preferences of $19,109 and $18,775 at September 30, 2017 and June 30, 2017, respectively
|
3,138
|
3,138
|
||||||
Common stock, no par value, 640,000,000 shares authorized, 50,194,731 and 40,331,645 shares issued and outstanding at September 30, 2017 and June 30, 2017, respectively
|
286,463
|
245,999
|
||||||
Accumulated deficit
|
(183,505
|
)
|
(183,359
|
)
|
||||
Total shareholders’ equity
|
106,096
|
65,778
|
||||||
Total liabilities and shareholders’ equity
|
$
|
135,219
|
$
|
97,691
|
Three months ended September 30,
|
||||||||
($ in thousands)
|
2017
|
2016
|
||||||
OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(213
|
)
|
$
|
(2,464
|
)
|
||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||
Non-cash stock based compensation
|
576
|
211
|
||||||
Gain on disposal of property and equipment
|
(18
|
)
|
—
|
|||||
Non-cash interest and amortization of debt discount
|
15
|
105
|
||||||
Bad debt expense
|
118
|
97
|
||||||
Depreciation and amortization
|
1,492
|
1,301
|
||||||
Change in fair value of warrant liabilities
|
—
|
1,490
|
||||||
Excess tax benefits
|
67
|
—
|
||||||
Deferred income taxes, net
|
(535
|
)
|
(115
|
)
|
||||
Recognition of deferred gain from sale-leaseback transactions
|
(43
|
)
|
(215
|
)
|
||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(3,192
|
)
|
(1,038
|
)
|
||||
Finance receivables
|
8,771
|
(5
|
)
|
|||||
Inventory
|
(3,648
|
)
|
(2,223
|
)
|
||||
Prepaid expenses and other current assets
|
(217
|
)
|
(224
|
)
|
||||
Accounts payable and accrued expenses
|
(2,168
|
)
|
(3,175
|
)
|
||||
Income taxes payable
|
—
|
(10
|
)
|
|||||
Net cash provided by (used in) operating activities
|
1,005
|
(6,265
|
)
|
|||||
INVESTING ACTIVITIES:
|
||||||||
Purchase of property and equipment, including rentals
|
(992
|
)
|
(810
|
)
|
||||
Proceeds from sale of property and equipment, including rentals
|
45
|
—
|
||||||
Net cash used in investing activities
|
(947
|
)
|
(810
|
)
|
||||
FINANCING ACTIVITIES:
|
||||||||
Cash used in retirement of common stock
|
—
|
(31
|
)
|
|||||
Proceeds from exercise of common stock warrants
|
—
|
6,193
|
||||||
Issuance of common stock in public offering, net
|
39,888
|
—
|
||||||
Repayment of capital lease obligations and long-term debt
|
(821
|
)
|
(161
|
)
|
||||
Net cash provided by financing activities
|
39,067
|
6,001
|
||||||
Net increase (decrease) in cash and cash equivalents
|
39,125
|
(1,074
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
12,745
|
19,272
|
||||||
Cash and cash equivalents at end of period
|
$
|
51,870
|
$
|
18,198
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Interest paid in cash
|
$
|
107
|
$
|
87
|
||||
Income taxes paid in cash (refund), net
|
$
|
—
|
$
|
—
|
||||
Supplemental disclosures of noncash financing and investing activities:
|
||||||||
Equipment and software acquired under capital lease
|
$
|
227
|
$
|
254
|
||||
Three months ended
September 30, 2017
|
||||||||||||||||
Percentage
Change
|
||||||||||||||||
($ in thousand)
|
2017
|
2016
|
Change
|
|||||||||||||
Net loss
|
$
|
(213
|
)
|
$
|
(2,464
|
)
|
$
|
2,251
|
91.4
|
%
|
||||||
Less interest income
|
(80
|
)
|
(73
|
)
|
(7
|
)
|
9.6
|
%
|
||||||||
Plus interest expense
|
209
|
212
|
(3
|
)
|
(1.4
|
%)
|
||||||||||
Less income tax benefit
|
(468
|
)
|
(115
|
)
|
(353
|
)
|
307.0
|
%
|
||||||||
Plus depreciation expense
|
1,448
|
1,257
|
191
|
15.2
|
%
|
|||||||||||
Plus amortization expense
|
44
|
44
|
—
|
—
|
||||||||||||
EBITDA
|
$
|
940
|
$
|
(1,139
|
)
|
$
|
2,079
|
182.5
|
%
|
|||||||
Plus loss on fair value of warrant liabilities
|
—
|
1,490
|
(1,490
|
)
|
(100.0
|
%)
|
||||||||||
Plus stock-based compensation
|
576
|
211
|
365
|
173.0
|
%
|
|||||||||||
Plus integration and acquisition costs
|
762
|
101
|
661
|
654.5
|
%
|
|||||||||||
Adjustments to EBITDA
|
1,338
|
1,802
|
(464
|
)
|
(25.7
|
%)
|
||||||||||
Adjusted EBITDA
|
$
|
2,278
|
$
|
663
|
$
|
1,615
|
243.6
|
%
|
Three months ended
September 30, 2017
|
||||||||||||||||
Percentage
Change
|
||||||||||||||||
($ in thousand)
|
2017
|
2016
|
Change
|
|||||||||||||
Operating loss
|
$
|
(552
|
)
|
$
|
(950
|
)
|
$
|
398
|
41.9
|
%
|
||||||
Plus integration and acquisition costs
|
762
|
101
|
661
|
654.5
|
%
|
|||||||||||
Adjusted operating income/(loss)
|
$
|
210
|
$
|
(849
|
)
|
$
|
(1,059
|
)
|
124.7
|
%
|
Three months ended
September 30,
|
||||||||||||||||
Percentage
Change
|
||||||||||||||||
($ in thousands, except shares and per share data)
|
2017
|
2016
|
Change
|
|||||||||||||
Net loss
|
$
|
(213
|
)
|
$
|
(2,464
|
)
|
$
|
2,251
|
91.4
|
%
|
||||||
Non-GAAP adjustments:
|
||||||||||||||||
Non-cash portion of income tax benefit
|
(468
|
)
|
(115
|
)
|
(353
|
)
|
307.0
|
%
|
||||||||
Fair value of warrant adjustment
|
—
|
1,490
|
(1,490
|
)
|
(100.0
|
%)
|
||||||||||
Litigation related professional fees
|
—
|
33
|
(33
|
)
|
(100.0
|
%)
|
||||||||||
Integration and acquisition costs
|
762
|
101
|
661
|
654.5
|
%
|
|||||||||||
Non-GAAP net income/(loss)
|
81
|
(955
|
)
|
1,036
|
(108.5
|
%)
|