Title of each class of securities to which transaction applies:

Aggregate number of securities to which transaction applies:

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

Proposed maximum aggregate value of transaction:

Total fee paid:

Amount Previously Paid:

Form, Schedule or Registration Statement No.:

Filing Party:

Date Filed:

Proposal No. 7: To approve amendments to the Amended and Restated Articles of Incorporation (the “Charter”) of the Company to opt out of Subchapter E of Chapter 25 of the Pennsylvania Business Corporation Law;

Proposal No. 8: To approve amendments to the Charter of the Company to opt out of Subchapter F of Chapter 25 of the Pennsylvania Business Corporation Law; and

Proposal No. 9: To hold an advisory (non-binding) vote on the enforcement of Subchapter H of Chapter 25 of the Pennsylvania Business Corporation Law.

Proposal No. 7: To approve amendments to the Charter of the Company to opt out of Subchapter E of Chapter 25 of the Pennsylvania Business Corporation Law;

Proposal No. 8: To approve amendments to the Charter of the Company to opt out of Subchapter F of Chapter 25 of the Pennsylvania Business Corporation Law; and

Proposal No. 9: To hold an advisory (non-binding) vote on the enforcement of Subchapter H of Chapter 25 of the Pennsylvania Business Corporation Law.

“FOR ALL” of Lisa P. Baird, Douglas G. Bergeron, Douglas L. Braunstein, Jacob Lamm, Michael K. Passilla, Ellen Richey, Anne M. Smalling, and Shannon S. Warren to serve as directors on the Board until the following annual meeting of Shareholders (including any and all adjournments, postponements, continuations or reschedulings thereof, or any other meeting of Shareholders held in lieu thereof) or until their respective successors are duly elected and qualified;

“FOR” the repeal of each provision of or amendment to the Bylaws adopted without the approval of Shareholders after November 11, 2019 (the date of the last publicly available Bylaws), and through the conclusion of the Annual Meeting;

“AGAINST” the proposal to approve the Rights Agreement;

“FOR” the ratification of the appointment of BDO as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2020;

“AGAINST” the proposal to approve, on an advisory (non-binding) basis, the compensation of the Company’s named executive officers, as disclosed in the Company’s proxy statement for the Annual Meeting;

for the approval, on an advisory (non-binding) basis, of a frequency of “ONE YEAR” for future advisory votes on the Company’s executive compensation.

“FOR” approval of amendments to the Amended and Restated Articles of Incorporation of the Company to opt out of Subchapter E of Chapter 25 of the Pennsylvania Business Corporation Law;

“FOR” approval of amendments to the Amended and Restated Articles of Incorporation of the Company to opt out of Subchapter F of Chapter 25 of the Pennsylvania Business Corporation Law; and

To not cast a vote on the advisory (non-binding) vote on the enforcement of Subchapter H of Chapter 25 of the Pennsylvania Business Corporation Law.

Subchapter E only applies to a “controlling person or group,” which means “a person who has, or a group of persons acting in concert that has, voting power over voting shares of the registered corporation that would entitle the holders thereof to cast at least 20% of the votes that all shareholders would be entitled to cast in an election of directors of the corporation.” Any

GOLD proxies collected by Hudson empower Hudson only to perform the ministerial task of voting as directed by the beneficial owner and Hudson is not acquiring “voting power” or becoming a “controlling person or group” as a result of performing such a task.

The proxies merely authorize Hudson to act as your agent to vote your shares of Common Stock and Series A Preferred Stock at the Annual Meeting in accordance with the directions you provide. We are not seeking discretionary authority to vote your shares. Agents of beneficial owners are expressly exempted from the definition of “controlling person or group” under Subchapter E. We believe that as agents of the Shareholders that deliver proxies, we would be exempt from the control transaction provisions under Subchapter E.

Hudson believes that the Company’s interpretation of Subchapter E would mean that no shareholder could ever hold proxies representing more than 20% of the voting power at a shareholder meeting and, therefore, contested proxy solicitations would be effectively prohibited for Pennsylvania corporations subject to Subchapter E. This is clearly not the intent of the statute or the reality for companies that are subject to it, as numerous prior contested proxy solicitations have occurred involving Pennsylvania corporations that had not opted out of Subchapter E with no suggestion that the soliciting shareholder had triggered Subchapter E (including the prior contested proxy solicitations involving EQT Corporation, Arconic Inc. and Metro Bancorp, Inc.).

Most importantly, the Company has itself been involved in two prior proxy contests, the first in 2010 where the shareholder nominated three candidates for election to the eight person Board and the second in 2012 where the shareholder nominated seven candidates for election to the nine person Board. At no point in the course of these contested solicitations, with each involving lawsuits between the Company and the nominating shareholder, did the Company ever make statements regarding the possibility of Subchapter E applying to the collection of proxies by the nominating shareholder.

Even if it were determined that the solicitation of proxies by Hudson triggered Subchapter E, which Hudson strongly believes not to be the case, the GOLD proxies would be null and void pursuant to the following legend included on the GOLD proxy card: “The GOLD proxy card shall be null and void ab initio and of no force or effect if it would have the effect of entitling shareholders of the Company to demand payment for their shares under Subchapter E of Chapter 25 of the Pennsylvania Business Corporation Law or would have the effect of causing Hudson Executive LP, HEC Management GP LLC, HEC Master Fund LP, HEC SPV IV LP or Douglas L. Braunstein, or their respective affiliates or associates, to become an “Acquiring Person” for purposes of the Rights Agreement, dated as of October 18, 2019, by and between the Company and American Stock Transfer & Trust Company, LLC.” We have included this legend solely to address the contingency that is reflected in the legend.

The disgorgement provisions of Subchapter H are triggered by efforts to gain “control” of a corporation or to put a corporation “in play.” Hudson’s proxy solicitation does not meet either of these conditions.

Hudson is not seeking control of the Company and has never sought control of the Company. Hudson seeks instead to elect a Board that will have the skills needed to facilitate necessary and meaningful changes in Company governance, in order to create long-term value for Shareholders. The election of board members will be by all Shareholders, not by Hudson, and the election of Hudson’s proposed slate will not result in Hudson acquiring control of the Company.

Hudson beneficially owns approximately 16.2% of the Company’s Common Stock, which is less than the 20% threshold necessary to confer presumptive “control” under Subchapter H, and Hudson has not expressed any intention of acquiring voting power over 20% or more of the Common Stock. Hudson has nominated eight independent and highly qualified candidates for election to the Board who have the expertise necessary to attract management talent and provide proper oversight of it, and to provide guidance for value creation. All eight of the Nominees are independent of the Company and a majority of them are independent of Hudson.

Hudson is not seeking to put the Company “in play” and has never done so. In fact, Hudson believes now is an especially inopportune time to pursue a sale of the Company. Hudson expects that any such transaction at this time would be against the Shareholders’ long-term interests. The only party seeking to put the Company “in play” at this time appears to be the current Board, perhaps hoping to sign a transaction prior to the Annual Meeting.

The Company has previously been subject to two contested proxy solicitations and never asserted that Subchapter H applied in connection with those solicitations. In the 2012 proxy contest, the shareholder nominated seven candidates for election to the nine person Board. At no point in that contest, which involved litigation instituted by the Company against the nominating shareholder, did the Company ever raise the possibility that Subchapter H was implicated by the shareholder’s nomination and subsequent solicitation. Hudson believes the Company’s assertions that Subchapter H is implicated by Hudson’s solicitation is merely another entrenchment tactic undertaken by the incumbent Board and intended to frustrate Hudson’s solicitation.

On January 17, 2020, Hudson delivered a letter to the Board. In the letter, Hudson proposed that the current Board resign and that the Company immediately appoint all eight of the Nominees and two new members proposed by the Company and acceptable to Hudson to the Board. Hudson emphasized that the Company’s current conditions rendered it unfit to consider a sale.

On January 21, 2020, the Board delivered a letter to Hudson rejecting Hudson’s proposal.

On January 29, 2020, the Company received a notification from Nasdaq that the Nasdaq Board of Directors declined to call for review the decision of the Nasdaq Listing Council (the “Listing Council”), and that the Listing Council’s decision, affirming the Nasdaq hearing council decision to suspend trading of the Company’s securities on Nasdaq and delist the Company’s securities, represented the final action of Nasdaq on the matter.

On January 31, 2020, the Company and Antara entered into an amendment to the Registration Rights Agreement, dated October 9, 2019, between the Company and Antara (the “Registration Rights Agreement”), pursuant to which the Company paid Antara $1,223,410 and the parties agreed to remove the Company’s obligation to file a registration statement with the SEC to register the shares previously issued to Antara.

On February 4, 2020, Nasdaq issued a press release stating that Nasdaq would delist the Company’s securities and file a Form 25 with the SEC to complete the delisting.

On February 5, 2020, Nasdaq filed a Form 25 with the SEC, with delisting to be effective February 18, 2020.

Also on February 5, 2020, Hudson issued a press release urging the Company to advance the date of the Annual Meeting in light of Nasdaq’s decision to delist the Company’s securities and disclose the Company’s correspondence with Nasdaq in the interest of transparency. Hudson also requested that the Company explain the $1.2 million payment made by the Company to Antara.

On February 6, 2020, the Company disclosed that while preparing the registration statement for Antara’s shares, the Company had concluded that it would be required under applicable SEC rules to include in the registration statement certain financial statements of Cantaloupe Systems, Inc. (“Cantaloupe”) for periods prior to the November 9, 2017 acquisition of Cantaloupe by the Company. The Company stated that it believed that it would be unreasonably time consuming and expensive to, among other things, determine whether these financial statements would need to be restated, and the Company entered into the amendment to the Registration Rights Agreement in lieu of filing the registration statement.

On February 11, 2020, the Company filed a Form 12b-25 and stated that it would not file its Quarterly Report on Form 10-Q for the quarter ended December 31, 2019 by the original due date but believed that it would be in a position to file the report within the extension provided by Rule 12b-25.

Also on February 11, 2020, Hudson filed a proxy statement supplement to the Definitive Proxy Statement to update certain information for two of the Nominees. The disclosure reflected Douglas G. Bergeron’s new role as Managing Partner of Hudson Executive and a Managing Member of HEC Management and Jacob Lamm’s new role as the Chief Operating Officer of InVisionApp Inc., a digital product design platform.

On February 14, 2020, in accordance with the requirements set forth in the Bylaws, Hudson Master Fund delivered a notice to the secretary of the Company of its decision to nominate the Nominees as candidates for election to the Board at the Annual Meeting and to propose the Shareholder Proposal.

Also on February 14, 2020, the Company announced that the Board had determined that the unaudited consolidated financial statements for the fiscal quarter ended September 30, 2019 should no longer be relied upon.

On February 18, 2020, the Company filed its Quarterly Report on Form 10-Q for the quarter ended December 31, 2019 and an amendment to its Form 10-Q for the quarter ended September 30, 2019.

On February 19, 2020, the Company held a conference call to review its second quarter fiscal 2020 financial results. During the call, Donald W. Layden, Jr., the Chairman of the Board and interim Chief Executive Officer of the Company, alleged that Hudson was trying to gain control of the Board, in doing so had triggered unspecified provisions of Pennsylvania law and were required to disgorge to the Company any profits on a sale of its shares in the Company for a period of 18 months after triggering the obligation under the statute, including as a result of an M&A transaction.

On February 21, 2020, Hudson issued a statement responding to Mr. Layden’s allegations. Hudson stated that it is not seeking to control the Company and has never sought control of the Company. Hudson reiterated that the Nominees are highly qualified and independent. Further, Hudson stated that it was not seeking to put the Company “in play” and that the only party seeking to put the Company “in play” at this time appears to be the current Board.

Also on February 21, 2020, the Company issued a press release again asserting its belief that Hudson had triggered the disgorgement provisions of Subchapter H.

On February 28, 2020, the Company issued a press release announcing the appointment of Mr. Layden as President and Chief Executive Officer and Michael Wasserfuhr as Chief Financial Officer. The press release also announced the Company’s slate of nominees for the Annual Meeting, which included three of Hudson’s Nominees, Ms. Baird, Ms. Richey and Ms. Smalling.

On March 2, 2020, Hudson filed a proxy statement supplement to the Definitive Proxy Statement to reflect Lisa P. Baird’s new role as Commissioner of the National Women’s Soccer League beginning on March 10, 2020.

On March 3, 2020, Hudson issued a press release expressing its concerns with the Company’s search process for its CEO and CFO. Ms. Baird, Ms. Richey and Ms. Smalling stated that prior to USAT’s announcement of its director slate, they had not been contacted by the Company or its representatives and that in their view the Company’s action to unilaterally add them to the Company’s slate reflected the Company’s disregard for Shareholders and was an attempt to manipulate the election process. Ms. Baird, Ms. Richey and Ms. Smalling also encouraged Shareholders to vote for Hudson’s Nominees on the GOLD proxy card.

On March 5, 2020, the Company issued a press release announcing the filing the Company Proxy Statement. The Company also announced that its poison pill, which was adopted in October 2019, will automatically expire at the time of the Annual Meeting.

On March 17, 2020, Mr. Layden met with Mr. Braunstein at Hudson’s New York City office. In the days following the meeting, the Company and its counsel engaged in discussions with Hudson and its counsel regarding a settlement.

On March 24, 2020, the Company filed its definitive proxy statement for the Annual Meeting and issued a press release regarding its discussions with Hudson. Later on the same day, Hudson issued a press release responding to what it believed was the Company’s mischaracterization of recent discussions.

On March 27, 2020, Hudson petitioned the Pennsylvania Court to reopen Hudson’s prior lawsuit and adjudicate the Company in civil contempt for refusing to honor the Pennsylvania Court’s order. In its petition, Hudson requests that the Pennsylvania Court enter an order (i) adjudging the Company in contempt, (ii) compelling the Company to hold and conclude the Annual Meeting on April 30, 2020, (iii) compelling the Company to present the candidates proposed by Hudson for a shareholder vote at the Annual Meeting, (iv) declaring that Hudson has not triggered Subchapter E, and (v) compelling the Company to count the votes Hudson casts by proxy at the Annual Meeting.

Name of Beneficial Owner (1)

Lisa P. Baird

Glen E. Goold

Stephen P. Herbert

Kelly Ann Kay

Donald W. Layden, Jr.

Matthew W. McConnell

Robert L. Metzger

Patricia A. Oelrich

James M. Pollock

Ellen Richey

Sunil Sabharwal

William J. Schoch

Anne M. Smalling

Ingrid S. Stafford

Anant Agrawal

Michael Lawlor

Priyanka Singh

All current directors and executive officers as a group (12 persons)

Name and Address of Beneficial Owner

Antara Capital LP

Ardsley Advisory Partners LP

BlackRock, Inc.

Hudson Executive Capital LP

Oakland Hills BV

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and derives from either voting or dispositive power with respect to securities. Shares of common stock issuable upon conversion of the series A preferred stock or shares of common stock issuable upon exercise of options currently exercisable, or exercisable within 60 days of March 2, 2020, are deemed to be beneficially owned for purposes hereof.

The percentage of common stock beneficially owned is based on 64,174,824 shares outstanding as of March 2, 2020.

Reflects 8,982 shares which have not yet vested, and over which Mr. Goold has sole voting power but no dispositive power.

Based on information available to the Company as of December 12, 2019. Includes 63,805 shares of common stock beneficially owned by Mr. Herbert’s spouse.

Reflects 10,778 shares which have not yet vested, and over which Ms. Kay has sole voting power but no dispositive power.

Includes 225,000 shares of common stock issuable upon exercise of stock options granted to Mr. Layden that are exercisable as of March 2, 2020, and 195,727 shares which have not yet vested and over which Mr. Layden has sole voting power but no dispositive power.

Includes 16,667 shares of common stock issuable upon exercise of stock options granted to Mr. McConnell that are exercisable as of March 2, 2020, and 24,127 shares which have not yet vested and over which Mr. McConnell has sole voting power but no dispositive power.

Includes 9,927 shares which have not yet vested, and over which Mr. Metzger has sole voting power but no dispositive power.

Includes 8,811 shares which have not yet vested, and over which Ms. Oelrich has sole voting power but no dispositive power.

Includes 8,587 shares of common stock issuable upon exercise of stock options granted to Mr. Pollock that are exercisable as of, or within 60 days of, March 2, 2020.

Reflects 10,778 shares which have not yet vested, and over which Mr. Sabharwal has sole voting power but no dispositive power.

Includes 20,000 shares of common stock issuable upon exercise of stock options granted to Mr. Schoch that are exercisable as of March 2, 2020, and 9,927 shares which have not yet vested, and over which Mr. Schoch has sole voting power but no dispositive power.

Includes 8,811 shares which have not yet vested, and over which Ms. Stafford has sole voting power but no dispositive power.

Includes 1,199 shares which have not yet vested, and over which Mr. Agrawal has sole voting power but no dispositive power.

Based on information available to the Company as of January 7, 2019. Includes 83,334 shares of common stock issuable upon exercise of stock options granted to Ms. Singh that are exercisable as of March 2, 2020.

Based upon a Schedule 13D filed on October 16, 2019, as amended or modified thereafter, including by Amendment no. 3 thereof filed on February 3, 2020 with the Securities and Exchange Commission, each of the following persons has shared voting and dispositive power over an aggregate of 5,152,087 shares of common stock: Antara Capital Master Fund LP (the “Master Fund”), Antara Capital Fund GP LLC, Antara Capital LP, which serves as the investment advisor to the Master Fund, Antara Capital GP LLC, the general partner of Antara Capital LP, and Himanshu Gulati, the managing member of each of Antara Capital GP LLC and Antara Capital Fund GP LLC. The business address of each of the foregoing persons is 500 Fifth Avenue, Suite 2320, New York, New York 10110.

Based upon a Schedule 13G filed on February 7, 2020 with the Securities and Exchange Commission, the following persons have shared voting and dispositive power over an aggregate of 4,851,000 shares of common stock as follows: Ardsley Partners Renewable Energy Fund, L.P. (the “Renewable Energy Fund”) has shared voting and dispositive power over 500,000 shares; Ardsley Ridgecrest Partners Fund, L.P. (the “Ridgecrest Fund”) has shared voting and dispositive power over 1,000 shares; Ardsley Partners Fund II L.P. (the “Fund II”) has shared voting and dispositive power over 732,000 shares; Ardsley Partners Advanced HealthcareFund, L.P. (the “Advanced Healthcare Fund”) has shared voting and dispositive power over 3,617,280 shares; and each of Ardsley Advisory Partners LP (the “Advisor”), Ardsley Advisory Partners GP LLC, the general partner of Advisor, Philip J. Hempleman, Advanced Healthcare Fund, and Ardsley Partners I GP LLC, the general partner of each of Renewable Energy Fund, Ridgecrest Fund, Fund II, and Advanced Healthcare Fund has shared voting and dispositive power over 4,851,000 shares. The business address of each of the foregoing persons is 262 Harbor Drive, Stamford, CT 06902.

Based upon a Schedule 13G filed on February 8, 2019 with the Securities and Exchange Commission, BlackRock, Inc. has sole voting and dispositive power over 3,893,655 shares. The principal business address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.

Based upon a Schedule 13D filed on May 20, 2019, as amended or modified thereafter, including by Amendment No. 8 thereof filed on February 18, 2020 with the Securities and Exchange Commission, each of the following persons has shared voting and dispositive power over 10,385,172 shares of common stock: Hudson Executive Capital LP; HEC Management GP LLC, which is the general partner of Hudson Executive Capital LP; and Douglas L. Braunstein, who is the managing partner of Hudson Executive Capital LP and the managing member of HEC Management GP LLC. The business address of each of the foregoing persons is 570 Lexington Avenue, 35th Floor, New York, NY 10022.

Based upon an Amendment No. 3 to Schedule 13G filed on January 27, 2020 with the Securities and Exchange Commission, each of the following persons has voting and dispositive power over 3,300,052 shares of common stock: Oakland Hills BV, Malabar Hill NV, who is the statutory director of Oakland Hills BV, and Drs F.H. Fentener van Vlissingen, who is the statutory director of Malabar Hill NV. The principal business address of each of the foregoing persons is Albert Hahnplantsoen 23, 1077 BM, Amsterdam, The Netherlands.

Name of Beneficial Owner

Legion Partners Asset Management, LLC

All current directors and executive officers as a group (12 persons)

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and derives from either voting or investment power with respect to securities. The percentage of series A preferred stock beneficially owned is based on 445,063 shares outstanding as of March 2, 2020.

Based upon a Schedule 13D/A filed on November 4, 2016 with the Securities and Exchange Commission, each of the following persons has shared voting and dispositive power over 44,250 shares of series A preferred stock: Legion Partners Asset Management, LLC, Legion Partners, LLC, Legion Partners Holdings, LLC, Christopher S. Kiper, Bradley S. Vizi and Raymond White. Of the aforementioned 44,250 shares, Legion Partners, L.P. I has shared voting and dispositive power over 37,054 shares, and Legion Partners, L.P. II has shared voting and dispositive power over 7,196 shares. The business address of each of the foregoing persons is 9401 Wilshire Boulevard, Suite 705, Beverly Hills, California 90212.

The undersigned hereby appoints Douglas L. Braunstein, Scott S. Winter and Richard M. Brand, and each of them, with full power of substitution, as proxies for the undersigned and authorizes them to represent and vote, as designated, all of the shares of common stock and Series A convertible preferred stock of USA Technologies, Inc., a Pennsylvania corporation (“USAT” or the “Company”), that the undersigned would be entitled to vote if personally present at the Annual Meeting of Shareholders of USAT, including any adjournments or postponements thereof or any special meeting that may be called in lieu thereof.

If this proxy is properly executed and submitted, it will be voted in accordance with your instructions. If you do not specify how the proxy should be voted on a proposal, this proxy will not be voted on such proposal.

The GOLD proxy card shall be null and void ab initio and of no force or effect if it would have the effect of entitling shareholders of the Company to demand payment for their shares under Subchapter E of Chapter 25 of the Pennsylvania Business Corporation Law or would have the effect of causing Hudson Executive LP, HEC Management GP LLC, HEC Master Fund LP, HEC SPV IV LP or Douglas L. Braunstein, or their respective affiliates or associates, to become an “Acquiring Person” for purposes of the Rights Agreement, dated as of October 18, 2019, by and between the Company and American Stock Transfer & Trust Company, LLC.

Vote by Internet

Please access https://www.proxyvotenow.com/usat-hud (please note you must type an “s” after “http”). Then, simply follow the easy instructions on the voting site. You will be required to provide the unique Control Number printed below.

Vote by Telephone

Please call toll-free in the U.S. or Canada at 1-866-776-5623 on a touch-tone telephone. (If outside the U.S. or Canada, call 1-646-880-9090.) Then, simply follow the easy voice prompts. You will be required to provide the unique Control Number printed below.

CONTROL NUMBER

You may vote by telephone or Internet 24 hours a day, 7 days a week.

Your telephone or Internet vote authorizes the named proxies to vote your shares in the same manner

as if you had marked, signed and returned a proxy card.

vote as in
this sample

Signature

Signature

Please sign exactly as your name(s) is (are) shown on the share certificate to which the Proxy applies. When shares are held by joint tenants, both should sign. When signing as an attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person.