USA Technologies Inc (USAT)

[Enterprising Investor]

Trust me, I get it.

I am just wishing for some financial engineering.

We have never declared or paid cash dividends on our common stock. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends in the foreseeable future. In addition, the terms of our existing debt agreements preclude and future debt agreements may preclude us from paying dividends, and our articles of incorporation prohibit the declaration of any dividends on our common stock unless and until all unpaid and accumulated dividends on the series A convertible preferred stock have been declared and paid. Through the date of this prospectus, the unpaid and cumulative dividends on the series A convertible preferred stock are $14.99 million. As a result, we expect that only an appreciation of the price of our common stock, if any, will provide a return to investors in this offering for the foreseeable future.

The liquidation value of the Series A Preferred is now $33.68. It has $10 par value and accrues $1.50 in dividends per year (or a 15 percent dividend rate). Unpaid dividends are $23.68 per share.

In order for common shareholders to one day receive dividends, this hurdle must be cleared.