SUBSEQUENT EVENTS

9 Months Ended

Mar. 31, 2013

Subsequent Events [Abstract]

SUBSEQUENT EVENT

9. SUBSEQUENT EVENTS

Line of Credit

On April 15, 2013, USA Technologies, Inc. (the “Company”) and Avidbank Corporate Finance, a division of Avidbank (the “Bank”), entered into a Third Amendment (the “Third Amendment”) to the Loan and Security Agreement dated as of June 21, 2012 previously entered into by them, as amended by a First Amendment thereto dated as of January 1, 2013, and by a Second Amendment thereto dated as of April 2, 2013 (collectively, the “Loan Agreement”). The Loan Agreement provides for a secured asset-based revolving line of credit facility (the “Line of Credit”). The Third Amendment provides that, among other things, the aggregate amount available under the Line of Credit will be increased from $3.0 million to $5.0 million, and the maturity date of the Line of Credit will be extended for another twelve months, or until June 21, 2014.

Prior to the Third Amendment, the aggregate amount of advances available to the Company under the Line of Credit could not exceed the lesser of (i) $3.0 million, or (ii) 75% of eligible accounts receivable as defined in the Loan Agreement plus 80% of the prior two months transaction processing revenues and networking service fees as defined in the Loan Agreement, provided that the amounts advanced on account of such processing revenues and service fees could not exceed $2.0 million without the Bank’s prior consent.

The Third Amendment provides that the aggregate amount of advances now available to the Company under the Line of Credit cannot exceed the lesser of (i) $5.0 million, or (ii) 80% of the prior three months transaction processing revenues and networking service fees as defined in the Loan Agreement.

Prior to the Third Amendment, the Company was required to maintain a balance of unrestricted cash in accounts with the Bank of at least $3.0 million. The Third Amendment now provides that if the amount of the Company’s monthly “net cash provided by (used in) operating activities” including Jumpstart investments, as set forth in the Company’s monthly cash flow statements prepared in accordance with GAAP (the “RML”) is negative, the Company must maintain a balance of unrestricted cash in accounts with the Bank plus the availability under the Line of Credit of at least six times the RML. If the RML is positive, then in lieu of the foregoing requirement, the Company must maintain a minimum ratio of current assets to current liabilities of at least 1.00 to 1.00.

On April 29, 2013, the Company and the Bank entered into a Fourth Amendment (“Fourth Amendment”) to the Loan and Security Agreement to change the RML from the monthly “net cash provided by (used in) operating activities” including Jumpstart investments to the average monthly amount (based on the prior three months) of the Company’s “net cash provided by (used in) operating activities” including JumpStart investments, as set forth in the Company’s monthly cash flow statements prepared in accordance with GAAP.

Common Stock

In April 2013, based on performance of the Company’s Common Stock an additional, 23,810 shares of Common Stock became vested under the CEO Incentive Plan (see Note 7).