MALVERN, PA -- USA Technologies Inc. announced that it has signed an agreement with institutional investors to purchase $10.7 million of common stock in a private placement. The proceeds of the offering would be used primarily to support the expansion of the company's JumpStart program, which allows its customers to deploy its ePort cashless payment technology with no upfront capital investment,
Under the terms of the transaction, the company has agreed to sell an aggregate 5,200,000 shares of its common stock at $2.064 per share and warrants to purchase up to 3,900,000 additional shares in the aggregate of its common stock. The warrants will be exercisable commencing on the 6 month and 1 day anniversary of the closing date at an exercise price of $2.6058 per share, and will have a five-year term commencing on the initial exercisability date.
The completion of the offering is expected to close on or before March 24.
Under JumpStart, customers can opt for either the ePort G8, which accepts contactless payments, or ePort EDGE, a one-piece cashless reader and controller. The JumpStart package also includes the ePort Connect service for wireless network access, card processing, consumer services, online reporting and over-the-air machine alerts.
In 2010, USAT reportedly added approximately 46,000 connections to its network, 71% of which were under the JumpStart program. As of Dec. 31, 2010, there were some 109,000 devices connected to the company's network, about 31% of which it said were the result of the JumpStart program, according to USAT.
The company recently announced that it has processed a record 6.4 million small-ticket transactions representing $10.3 million, equal to over $120M in annualized transactions.