USA Technologies CEO Stephen Herbert has stepped down against the backdrop of a proxy war ignited by the company’s biggest investor, New York-based hedge fund Hudson Executive Capital, Biz Journals reported on Friday (Oct. 18).
Board member Donald W. Layden Jr. will step in as interim CEO for the Pennsylvania-based company. USA Technologies (USAT) provides cashless and mobile solutions for the self-service retail space, which includes vending machines, kiosks and gas stations.
"I leave USA Technologies in a strong competitive position," Herbert said, pointing to a recent $50 million debt and equity investment by New York hedge fund Antara Capital Partners.
Herbert was with the firm for 23 years and served as CEO for the past eight years. He took over as the firm’s head following the resignation of George Jensen, who stepped down after allegedly revealing insider information on an investor board.
Herbert’s exit follows a plan by Hudson Executive Capital to take over the USAT board. The hedge fund said it had “exhausted every reasonable means” to help the struggling FinTech. The fund has a 16 percent stake in USA Technologies, and has said it wanted to see the firm’s CEO and CFO replaced.
USAT has suffered two-year losses totaling $43 million. Its shares were suspended from Nasdaq in late September for missing annual and quarterly report deadlines.
Problems began for USAT in September 2018 when its annual report was delayed, causing its stock prices to plummet. Its stock further slipped in February, losing about 45 percent of its value after an SEC filing by the firm revealed that RSM US LLP, the firm’s auditor, resigned over concerns tied to financial reporting. The SEC filing also noted that RSM had not completed its audit for the fiscal year ending June 30, 2018.