UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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USA Technologies, Inc.
(Name of Registrant as Specified In Its Charter)
Hudson Executive Capital LP
HEC Management GP LLC
HEC Master Fund LP
HEC SPV IV LP
Lisa P. Baird
Douglas G. Bergeron
Douglas L. Braunstein
Jacob Lamm
Michael K. Passilla
Ellen Richey
Anne M. Smalling
Shannon S. Warren
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On April 6, 2020, Hudson Executive Capital LP issued the following investor presentation:
HEC Investor Presentation April 6, 2020
Disclaimer 2 The views expressed in this presentation (the “Presentation”) represent the opinions
of Hudson Executive Capital LP and/or certain affiliates (“Hudson Executive”) and the investment funds it manages that hold shares in USA Technologies, Inc. (the “Company”). This Presentation is for informational purposes only, and it does
not have regard to the specific investment objective, financial situation, suitability or particular need of any specific person who may receive the Presentation, and should not be taken as advice on the merits of any investment decision. The
views expressed in the Presentation represent the opinions of Hudson Executive, and are based on publicly available information and Hudson Executive analyses. Certain financial information and data used in the Presentation have been derived
or obtained from filings made with the Securities and Exchange Commission (“SEC”) by the Company or other companies that Hudson Executive considers comparable. Hudson Executive has not sought or obtained consent from any third party to use
any statements or information indicated in the Presentation as having been obtained or derived from a third party. Any such statements or information should not be viewed as indicating the support of such third party for the views expressed
in the Presentation. Information contained in the Presentation has not been independently verified by Hudson Executive and Hudson Executive disclaims any and all liability as to the completeness or accuracy of the information and for any
omissions of material facts. Hudson Executive disclaims any obligation to correct, update or revise the Presentation or to otherwise provide any additional materials. Neither Hudson Executive nor any of its affiliates makes any representation
or warranty, express or implied, as to the accuracy, fairness or completeness of the information contained herein and the recipient agrees and acknowledges that it will not rely on any such information. Hudson Executive recognizes that the
Company may possess confidential information that could lead it to disagree with Hudson Executive's views and/or conclusions.Funds managed by Hudson Executive currently beneficially own, and/or have an economic interest in, shares of the
Company. These funds are in the business of trading— buying and selling—securities. Hudson Executive may buy or sell or otherwise change the form or substance of any of its investments in any manner permitted by law and expressly disclaims
any obligation to notify any recipient of the Presentation of any such changes. There may be developments in the future that cause funds managed by Hudson Executive to engage in transactions that change the beneficial and/or economic interest
in the Company.The Presentation may contain forward-looking statements which reflect Hudson Executive's views with respect to, among other things, future events and financial performance. Forward-looking statements are subject to various
risks and uncertainties and assumptions. There can be no assurance that any idea or assumption herein is, or will be proven, correct. If one or more of the risks or uncertainties materialize, or if Hudson Executive's underlying assumptions
prove to be incorrect, the actual results may vary materially from outcomes indicated by these statements. Accordingly, forward-looking statements should not be regarded as a representation by Hudson Executive that the future plans, estimates
or expectations contemplated will ever be achieved.The securities or investment ideas listed are not presented in order to suggest or show profitability of any or all transactions. There should be no assumption that any specific portfolio
securities identified and described in the Presentation were or will be profitable. Under no circumstances is the Presentation to be used or considered as an offer to sell or a solicitation of an offer to buy any security, nor does the
Presentation constitute either an offer to sell or a solicitation of an offer to buy any interest in funds managed by Hudson Executive. Any such offer would be made only by means of such fund's formal placement documents, the terms of which
shall govern in all respects. Any investment in the investment funds managed by Hudson Executive is speculative and involves substantial risk, including the risk of losing all or substantially all of such investment.
USA Technologies (OTC: USAT) 3 USA Technologies (OTC: USAT) provides wireless networking, cashless
transactions, and asset monitoring services, principally to the small ticket, unattended point of sale (POS) retail marketPrimarily serves the food and beverage vending industry with expansion opportunities into additional unattended retail
segments such as amusement, commercial laundry, air/vac and other kiosksHistorically, distributed retail assets have relied on cash for payment in the form of coins or bills – USAT’s systems allow for additional acceptance of cashless
payments such as credit/debit cards and mobile payments (new hardware is compatible with both Apple Pay and Android Pay)In November 2017, USAT acquired Cantaloupe Systems for ~$85mm, eliminating a major competitor and enhancing USAT’s
offering to include best-in-class vending management software (VMS) and route management systemsMeaningful ROIC for customers – estimated cashless conversion boosts revenues 25-35% while VMS reduces expenses 30-40%Opportunity to cross-sell
services between legacy Cantaloupe and USAT customer bases – integration to date has been insignificant Overview Market-leading, cashless (card, mobile) payment and telemetry designed for the self-serve retail market Capitalization
Source: Company filings and Bloomberg.Note: Debt amount excludes impact of unamortized issuance costs and debt discount. 1. Nasdaq suspended USAT’s shares from trading effective 9/26/2019. USAT was formally de-listed in February of 2020.
Significant Value Destruction Under Incumbent Leadership 4 Share Price Performance Since Last
Shareholder Meeting (April 26, 2018) Source: Bloomberg as of 4/3/2020.Note: USAT peers based on equal-weighted composite index of USAT’s April 2018 proxy peers. Peers include: AGYS, AMBR, CALD, EXA, LLNW, NSSC, NMRX, PDFS, RSYS, SQI, UPLD,
ZIXI. Excludes CVI Global, Inc., Exav Corporation, and Infrustrure, Inc., which were listed in the 2018 proxy, but could not be identified. USAT has substantially underperformed its peers and the broader market (49%) 35% (7%) May 20,
2019: HEC discloses 12% position Sept. 3, 2019: USAT discloses it is unlikely to make Sept. 9 Nasdaq filing deadline after newly discovered accounting issues relating to the Nov. 2017 Cantaloupe acquisition; requests extension until Sept.
23 Sept. 20, 2019: USAT discloses it is unlikely to make Sept. 23 Nasdaq filing deadline Nov. 4, 2019: HEC announces intention to nominate 8 independent directors Sept. 11, 2018: USAT discloses it will not file Annual Report by Sept.
13 deadline, citing internal investigation of current and prior periods, and files for 15 calendar day extension Mar. 2, 2020: USAT names full-time CEO and CFO; discloses new compensation arrangements Feb 6, 2019: USAT’s independent
accounting firm, RSM, resigns after determining it could no longer rely on management representations
5 USAT Board Has Failed to Impose Adequate Financial Controls Significant financial control break:
13-month failure to fileIndependent auditors resignedCurrent Board allowed CEO to remain in place despite significant red flagsPrior Audit Chair remains on Board and USAT proposed slateCurrent Board and Management have not resolved control
issuesOn February 18, 2020, USAT issued yet another non-reliance notice and restatement of its 9/30/2019 10-QPrior Interim CFO remains Chief Accounting Officer~$20mm spent on “investigation and restatement expenses” to dateThis figure does
not include severance packages to past executives, multiple additional hires and shareholder litigation expenses USAT Has Employed 6 Different CFOs In Less Than 5 Years
6 Nasdaq De-Listing: A Comedy Of Errors Company first notified of non-compliance by Nasdaq on
October 2, 201818 months later, USAT remains de-listed from the Nasdaq and trades over-the-counterAppealed decision with Nasdaq despite no path to successfully appeal listing rulesRepeated assurances from management and Board that problem
would be addressed As Interim CEO, Don Layden listed his key priorities “for the next 30 to 60 days” during the November 12, 2019 earnings call, ~150 days ago. He indicated that “the first and most important priority is to get back on
Nasdaq.”Used Nasdaq de-listing as excuse to delay shareholder meeting for over 1 yearDe-listing materially impairs shareholder valueInability to re-list speaks to deeper governance / control issues 5 of 7 Current Board Members Oversaw This
Failure
7 Operating Performance: Growing Costs and Share Count Without Profits Unable To Demonstrate
Sustainable Profitability Despite Highly Scalable Business Historical Reported EBITDA & Adj. EBITDA ($ in millions) Historical SG&A & Share Count (In millions) (1H20 Annualized) SG&A compounded at 25% from 2016 through
2019Share count up 70% since 2016 Source: Company filings and Bloomberg. 1. SG&A based on reported G&A. Excludes “investigation and restatement expenses” and integration costs. 2. Excludes 2018 non-executive director compensation
(undisclosed). FY2020 compensation only includes ~6 months of Layden’s base salary ($700k) and $300k cash bonus for conclusion of Interim CEO engagement; also includes Glen Goold’s $200k bonus for achieving compliance with period filing
obligations (per May 14, 2019 amendment) and the remaining $50k of his cash retention bonus. (Basic Shares) (SG&A)
8 Capital Allocation: Current Board Responsible for Disastrous Recent Financing Most recent
financing on October 9, 2019: expensive, dilutive and ill-advised Sold equity the day before long-awaited financial filings at ~30% discountReplaced existing bank debt with credit facility from a distressed credit investor at 9.75% interest
rate and onerous prepayment terms (1)Did not contact traditional financing sources (such as commercial banks)Excessive fees & expenses paid ($4.8mm)$1.2mm fee paid due to failure to file Registration StatementBoard received advice from
related and conflicted partyCurrent Board member’s firm paid ~$2mm for advising Company on financing Board stated that capital not needed at time of financing; has subsequently changed storyStrong interest from traditional long-only
investors, including Hudson, never solicited 5 of 7 USAT Current Directors Approved Financing Source: Company filings and Bloomberg. 1. $30mm debt commitment with $15mm initially drawn. The Company is also required to pay a commitment
termination fee equal to 3% of the second tranche under certain circumstances, including in the event that the Company does not draw down the second tranche during the availability window.
Governance: A Total Disregard For Shareholders 9 In Our View, The Company’s Actions Demonstrate
Complete Disregard For Shareholders Current Board has failed at basic duties and does not represent shareholders5 of 7 directors were appointed to the Board and have never been elected by shareholdersFailed to hold management accountable or
conduct succession planningFailure at controls oversight has led to significant loss in valueCurrent CEO and CFO installed without search processesFailure to hold a shareholder meeting for two yearsBoard’s decision to name Layden full-time
CEO further demonstrates Board entrenchmentFailed to meet primary objectives as Interim CEOExcessive interim and current compensation Multi-million dollar severance and change-of-control packages Compensation approved by three directors
immediately before their resignationDecision made less than two months prior to shareholder meetingNo evidence of a search for outside candidatesBoard has adopted a full array of shareholder-unfriendly actions to avoid accountability Adopted
a poison pillAggressively amended bylaws to make it harder to nominate directorsDelayed shareholder meeting until Court Order mandated meeting be held
Current Board: Declined Every Settlement Offer 10 All settlement proposals were initiated by
Hudson during the past year Hudson Proposal USAT Response February / March 2019 Hudson meets with Board and expresses concern and ability to help with Bank credit agreement, accounting issues and Nasdaq deadlinesHudson provides overview
of firm and backgrounds of 7 Board candidates. Hudson follows up multiple times over next several weeks to provide contact information and encourage the Company to reach out directly Company does not reach out to any of HEC’s referrals and
on April 9, Chairman tells Hudson USAT will name two new directors the following day. Chairman acknowledges the Board will still need additional board competencyOn April 10, USAT names 3 new directors; none of the individuals Hudson provided
had been contacted May 2019 Hudson discloses 12% ownership position in USAT Hudson requests call with Nominating and Governance Committee and Chairman to discuss next steps regarding USAT consideration of potential Board
candidates Chairman initially indicates a willingness to include HEC-identified candidates as part of review process if and when the Nominating and Governance committee decides to add additional board membersChairman eventually turns down
request, indicating it is “premature” to engage with Hudson and that the company is singularly focused upon releasing audited financial statements July 2019 Hudson requests that 3 directors identified by Hudson be added to the Board; Board
to remain the same size One month later, Chairman indicates the Board will turn its attention to the annual meeting and nomination process after financial statements are re-filed; indicates HEC-identified candidates will be fully
considered September / October 2019 After USAT disclosed the discovery of new accounting issues and the trading of its shares would be suspended by Nasdaq, Hudson conveys desire to have leadership change with management and the BoardNew
Board would initiate search for new CEO Chairman asks to meet on October 10th in NYC. In that meeting, the Chairman as well as two current directors (Layden and Schoch) offer Hudson one seat on a 10-11 person board, of which 7 would be
incumbent directors. USAT indicates this is its “best and final” offerOne week later, Don Layden named Interim CEO November 2019 Hudson proposes Board be reduced to 8 people: 4 incumbent and 4 directors identified by Hudson Layden would
remain Chairman; reconstituted Board would select a new CEO ( 9th Board member) The Board rejected Hudson proposal without proposing alternative approach January 2020 Hudson proposes its 8 nominees be seated immediately; 2 members of
current Board will remain. The new Board would hire a new CEO The Board rejected Hudson proposal without discussion despite the fact that Shareholders representing over 60% of voting power had signed and returned Gold proxy cards in support
of Hudson-proposed directors March 2020 Given COVID-19, Hudson reaches out to new Chairman and proposes 4 Hudson nominees be seated immediately; 4 members of current Board would remainNew Board would initiate CEO search and Layden would
forego his recently announced full-time CEO compensation package The Board publicly rejected proposal without responding to Hudson’s mark-up of the settlement agreement
Current Management: Failure To Deliver 11 What USAT Has Said Reality Nasdaq Listing Repeated
assurances from Board and then CEO, Steve Herbert, that USAT would meet Nasdaq filing deadlines. Indicated to shareholders that situation was “under control”“Let me just reiterate for a moment my key priorities as I've now had three months to
set a direction at least for the next 30 to 60 days for the company. The first and most important priority is to get back on Nasdaq” (Interim CEO Layden, 11/12/2019) Missed every Nasdaq deadline, failed in appeal of Nasdaq’s trading
suspension implemented in Sept. 2019, ultimately de-listed in Feb. 2020HEC offered resources (at no cost to the Company) in the form of management referrals and Board candidates as early as Jan. 2019 and continued to do so through
October Financial Controls “We have substantially strengthened the USAT management team and Board, improved controls and coordination within the Company, and enhanced our governance…we believe that these measures have brought USA
Technologies’ oversight and control functions in line with best practices” (CEO Herbert, 10/9/2019)“We have also made great progress in strengthening the Company’s oversight, control, and governance functions to be in line with best
practices” (Interim CEO Layden, 10/17/2019) Filed FY 2019 10-K with opinion from BDO stating that “Company did not maintain, in all material respects, effective internal control over financial reporting as of June 30, 2019, based on the COSO
criteria” (10/9/2019)Late filing notification for FY 2Q2020 10-Q (2/11/2020)Filed restatement for FY 1Q2020 10-Q (2/18/2020)Over $4mm of incremental “investigation and restatement expenses” since Layden’s remarks
Current Management: Failure To Deliver (cont’d) 12 What USAT Has Said Reality Operating
Performance “I want to assure all of you that my top priorities are to drive the company to profitability, deliver increased customer and shareholder value, and provide improved shareholder visibility by better communicating our progress”
(Chairman & CEO Herbert, 1/17/2012)“With our deliberate focus on our cost structure and our SG&A spend, we believe that adjusted EBITDA will be in the range of $10 million to $11 million as Don mentioned” (Interim CFO Goold,
11/12/2019) Reported EBITDA of ($41mm) and Adj. EBITDA of just $5mm over the last 4.5 reported yearsReaffirmed FY2020 revenue guidance but indicated USAT will not meet its Adjusted EBITDA guidance due to costs (2/19/2020)Excluding
investigation & restatement expenses, SG&A rose 23% in FY2018, 36% in FY 2019, and 81% in FY 1H2020 Governance “USAT is committed to ensuring we have best-in-class governance and will continue to act with shareholders’ best
interests in mind” (CEO Layden, 3/5/2020)“Board refreshment has been a priority, and we have recommended a slate of highly-qualified director nominees who will be able to make important collective and individual contributions to the ongoing
work to restore USAT to sustained, profitable growth. Three of the nominees named in our proxy materials are individuals also identified by HEC, and we therefore hope that HEC will act in the best interests of all shareholders by calling off
its unnecessary proxy contest” (CEO Layden, 3/5/2020) 5 of 7 directors on USAT’s slate oversaw multiple missed Nasdaq deadlines, ultimately resulting in a de-listing in Feb 2020, 17 months after initial filing delay3 Hudson nominees named to
Company slate without prior engagement or even a courtesy notice before public press releaseThose 3 Hudson nominees sent letter to Board voicing disapproval of its process and publicly urged shareholders to vote Gold proxy card5 of 7
directors on USAT’s slate approved value-destructive, off-market financing5 of 7 directors on USAT’s slate approved “poison pill” and additional bylaw changes that frustrate shareholder franchise 5 of 7 directors delayed annual meetingFor
over 12 months, USAT has failed to engage with HEC in a constructive dialogue around a settlement
What Other Shareholders Are Saying? 13 “Our investment in the company was predicated on Hudson
winning since we considered the stock uninvestable under your leadership. The current board was responsible for governance during a period when USAT materially misstated its quarterly filings and financial statements”“In 2018 and 2019, USAT
reported GAAP net losses attributable to common shares of $11.9 million and $32.7 million, respectively, despite having a scalable business with high recurring revenues”“Between September 10, 2018, the day before USAT announced that it would
not be able to file its 10-K in a timely manner, and October 14, 2019, when Hudson publicly announced that they were going to nominate candidates for the board of directors, USAT stock lost more than 50% of its value. Based on this track
record alone, we believe you are unqualified for your current positions” 22NW Open Letter to USAT Concerning Proxy Battle (January 27, 2020) “The comedy of errors that this board has overseen, the latest being the announcement of an
inability to file the Form 10-Q for the fiscal quarter ended December 31, 2019 on time, leaves the current board in an indefensible position”“…we think it is clear that the board is not acting in the best interest of shareholders. Lest the
board has forgotten, we remind you that board members owe fiduciary duties to shareholders, and we urge the board to ‘do the right thing’ now” Fisher Park Capital Open Letter to USAT Board of Directors (February 13, 2020) Source:
https://www.prnewswire.com/news-releases/fisher-park-capital-open-letter-to-usat-board-of-directors-301004217.html ; https://www.prnewswire.com/news-releases/22nw-open-letter-to-usat-concerning-proxy-battle-300992939.htmlNote: Bold formatting
added by HEC for emphasis.
What Other Shareholders Are Saying? (cont’d) 14 Source:
https://www.prnewswire.com/news-releases/usa-technologies-shareholder-kurt-king-issues-letter-to-board-of-directors-calling-out-egregious-corporate-governance-actions-in-advance-of-annual-meeting-on-april-30-301019039.htmlNote: Bold
formatting added by HEC for emphasis. “As we now know, the auditor's resignation last February was not the end of the management and governance failures. Subsequent events included the failure to meet Nasdaq's deadline for filing delinquent
financials last September, the financing done with Antara under egregious terms in October, the need to restate FY19 and 1Q FY20 financials disclosed in February of 2020, and USAT's cringe-inducing delisting from Nasdaq also announced in
February. Operating performance has deteriorated under your watch and the company continues to burn cash”“This letter is prompted by your troubling announcement of leadership changes on March 2. You made several seemingly-permanent and likely
expensive decisions despite the high likelihood the current board, CEO and CFO will be replaced following the April 30 annual meeting”“The most egregious of your recent decisions is that USAT's newly-appointed permanent CEO, Don Layden, will
be entitled to a multi-million dollar exit package when his two-month tenure presumably ends on April 30. Further resources will be wasted by the exit of your newly-hired CFO. The disingenuousness of your March 2 actions was most clear in
your addition of three of Hudson's board nominees to your own board slate without the nominees' knowledge, creating the false impression the nominations were the result of some sort of desirable middle-ground agreement”“I believe it would be
disastrous for USAT shareholders were you to somehow win the upcoming vote. USAT's legacy management and board came to be widely distrusted by investors thanks to mis-management and the perceived deceptiveness of its senior leaders; I think
many investors came to view USAT as uninvestable for these reasons" “Regarding Hudson, its involvement seems like a downside-free win for USAT and its shareholders. USAT should benefit significantly from the successful, big-company standards
and practices likely to be imparted by the new board, as well as the board's relationships across the fintech industry. The opportunity seems ripe for the board to recruit a stellar new CEO and CFO given the abundant talent available due to
recent consolidation activity in fintech” USA Technologies Shareholder Kurt King Issues Letter to Board of Directors (March 6, 2020)
Hudson Executive Capital’s Recommendations 15 Bolstering Senior Management Team HEC has retained
executive search firm Korn Ferry to identify qualified CEO candidates from the financial payments and technology industries. HEC has conducted over 35 interviews to evaluate candidate interest and qualificationsIf HEC’s nominees are elected
to the Board, the new Board will form a CEO search committee, which will further conduct interviews, select a final candidate, negotiate terms and make a recommendation to the full BoardHEC has tapped into its extensive executive network to
identify a number of leading finance, sales and marketing, and technical candidates that it is prepared to recommend New Board should conduct a Day One business review and initiate a CEO search committee. Douglas Bergeron would be an ideal
director to lead these efforts. He was CEO of VeriFone, a highly relevant USAT-industry participant, from 2001-2013 Board Expertise New Board should overhaul all committees, appointing senior industry experts to Audit, Governance,
Compensation, and CEO Search Assess strategic direction of the Company and ensure necessary resources and expertise are available for management team to pursue profitable growth strategy Financial Discipline Cultivate a culture of
accelerated and responsible growth – singular focus on connection growth is not appropriate Bring discipline to product profitability and generating operating cash flowInstall rigorous capital allocation processes to determine most attractive
ROI for shareholder capitalAssess near-term business impact of COVID-19 and adjust capital spending accordingly Shareholder Engagement Improve company disclosure and shareholder dialogue to rebuild credibility in the marketplace
16 Highly-Qualified Independent Director Nominees For 10 Member Board Candidate Background Lisa
BairdCommissioner of National Women’s Soccer League Previously Chief Marketing Officer for New York Public Radio and Untied States Olympic and Paralympic CommitteeExtensive experience in branding, development and marketing for several
Fortune 50 companies, including IBM, General Motors, Warner-Lambert Company, Bristol-Myers Squibb Company, Johnson & Johnson, and Procter & GambleMs. Baird has strong marketing and operating experience and a proven record of creating,
building, enhancing and leading well-known brands as a result of the leadership positions she has held Doug BergeronManaging Partner, Hudson Executive Capital Led the acquisition of Verifone Systems, Inc. a company that provides
technology for electronic payment transactions at the point-of-sale, from Hewlett-Packard in 2001. Served as CEO until 2013Chairman of the Board of the Directors of Nyotron, a cyber security software company, and a member of the Board of
Directors of Pipeworks Studios, a consumer and commercial games studioMr. Bergeron draws on his experience as a chief executive officer, turnaround specialist and private equity investor Additionally, through his experience in the payments
industry and in a broad range of industries, Mr. Bergeron will provide the Board with valuable insight regarding the financial and strategic aspects of the Company’s business Doug BraunsteinFounder and Managing Partner, Hudson Executive
Capital Over 30 years of industry experience and held a variety of positions during his tenure at JPMorgan Chase & Co., which included Chief Financial Officer and member of the company’s Operating Committee as well as Vice Chairman Head
of JPM’s Americas Investment Banking and Global M&A departments from 2008 to 2010, and Global Head of Industry Coverage from 2002 to 2007Served as a member of JPM’s Executive Committee and the Investment Bank Management Committee for over
a decadeMr. Braunstein’s extensive executive experience and background in investment strategy and banking as well as his strong financial background makes him well qualified to serve as a director Jacob LammCOO, InVision App COO of
Invision App, Inc., a digital product design platformPreviously served as Executive Vice President of CA Technologies, a provider of information technology management software and solutions, from 2009 to 2019, where he was responsible for
corporate strategy, M&A, venture investing, strategic alliances, and new business incubationMr. Lamm’s more than 25 years of experience in information technology software and infrastructure would make him a valuable member of the
Board Only two directors affiliated with Hudson Executive
17 Highly-Qualified Independent Director Nominees (cont’d) Candidate Background Michael
PassillaDirector, Priority Technology Holdings Served as Vice Chairman at Chase Merchant Services, the global payment processing division of JPMorgan Chase &Co, from 2016 to 2018Prior to that, he was the Chief Executive Officer of Chase
Merchant Services from 2013 to 2016Mr. Passilla was the Chief Executive Officer and President of Elavon, Inc., a global payments processing firm, from 2010 to 2013Mr. Passilla’s extensive industry experience would make him a valuable member
of the Board Ellen Richey Ellen Richey served as Vice Chairman of Risk and Public Policy of Visa Inc. (Visa), a global payments technology company, from 2014 to 2019, and as Chief Risk Officer from 2017 to 2019. In such roles, Ms. Richey
oversaw risk management, including enterprise risk, settlement risk, operational resilience, internal audit, and risks to the integrity of the broader payments ecosystem, and served as a member of Visa’s senior executive committeeDuring 2014,
Ms. Richey concurrently served as Chief Legal Officer, assuming responsibility for the legal function in addition to her risk responsibilities From 2007 to 2013, Ms. Richey served as Executive Vice President and Chief Enterprise Risk Officer.
In that role, she was responsible for oversight of Visa’s compliance, audit and risk teams, including payment system risk, settlement risk and enterprise riskMs. Richey’s extensive experience in the payments industry and in risk management,
compliance and audit would make her a valuable member of the Board Anne Smalling President and Managing Partner, HM International President and Managing Partner of HM International, LLC (HMI), a privately-held business that acquires
undervalued assets and builds a steady trajectory of worth since 1999. As President and Managing Partner, Ms. Smalling provides oversight and supervision of the operating businesses in their succession, strategic planning, financing,
acquisition and divestitures and major capital expendituresServes as the Chair of the Boards of Directors of Quality Sausage Company, LLC, which is a leader in custom/proprietary pre-cooked meats and pepperoni supplying products to industrial
and foodservice customers, since 2014, and American Innovations, a provider of compliance solutions to oil and gas pipelines thru an integrated family of hardware, software and professional services, since 2004Ms. Smalling’s operational
expertise and experience in strategic planning and financing, in a broad range of industries, would make her a valuable member of the Board Shannon WarrenOwner and Principal of SSW Consulting LLC Ms. Warren was the Chief Control Officer
of JPMorgan Chase & Co. (JPM), a global financial services firm, from 2012 to 2016. In this role, she established the Oversight and Control function, designed the framework for the identification and management of operational risk in all
products and services offered by JPM, implemented more comprehensive operational risk management technology and managed supervisory regulatory relationships globallyPrior to this role, Ms. Warren was the Corporate Controller and held several
additional finance roles at JPM since joining in 2000, and has expertise with accounting and financial reporting mattersMs. Warren has over 20 years of experience in banking, audit and consulting services that would make her a valuable member
of the Board
18 Conclusion: Change Is Needed At USAT USAT’s Board has overseen significant shareholder value
destructionUSAT’s Board has failed to impose adequate financial controls, which have led to the company’s continued failure to get re-listed by NasdaqUSAT’s Board has failed to increase profitability while simultaneously growing costs and
share count USAT’s Board has been a poor steward of shareholder capital as demonstrated by the highly dilutive 2019 equity financingUSAT’s Board has continually delayed the annual meeting and taken a number of defensive actions, all of which
evidence a disregard for corporate governance and shareholder accountabilityUSAT’s management has failed to deliver on its promises, which has resulted in the loss of credibility with investorsMeanwhile, Hudson Executive Capital has nominated
a highly qualified slate of 8 individuals with a plan to turn around USAT that involves retaining a world-class entrepreneur CEO Vote The GOLD Proxy Card At The Upcoming Shareholder Meeting