A securities class action lawsuit has been filed against a company that provides the vending industry with wireless, cashless and micro-transaction solutions and networking services following allegations that the firm violated federal securities laws by making materially false and misleading statements.
The class action filing against USA Technologies Inc. was made in the U.S. District Court for the Eastern District of Pennsylvania on behalf of investors who purchased shares in the company during the class period between Sept. 29, 2014 and Sept. 29, 2015 following allegations that it violated the Securities Exchange Act of 1934, a press release stated. The suit alleges that the USA Technologies did not reveal to investors the true nature of weaknesses in its business policies.
USA Technologies provides “wireless networking, cashless transactions, asset monitoring, and other value-added services,” according to the press release. Its solutions are typically utilized by the small ticket, unattended point of sale market both in the U.S. and abroad.
“There were substantial problems with the company’s internal controls.”
The class action suit alleges that the company’s officials failed to disclose that there were substantial problems with the design and operating effectiveness of its internal controls concerning financial reporting. The complaint also claims that in total these deficiencies were a material weakness in internal controls, making all public statements regarding business policy false and misleading.
On Sept. 29 USA Technologies announced that it would not be able to file its annual report on Form 10-K for the fiscal year ended June 30 on time. The company explained the delay was due to issues with internal controls over its financial reporting. The biggest issues were related to customer accounts and receivable balances concerning processing and service fees. The processes in place did not identify a number of small balance accounts that could be uncollectable, which led to the company increasing its bad debt reserve by close to $450,000. This led to an after tax charge of nearly $270,000.
Following this announcement, USA Technologies stock dropped $0.28, or 10.1 percent, to close at $2.49 on Sept. 30.
For more information on this case or other class action litigations, please contact Adam Foulke at 203-987-4949 or firstname.lastname@example.org.