Knobias ClipReport (8-8-2007)

Submitted from Knobias ClipReport

Tuesday’s session saw what’s been the norm for the past few days which was highly volatile action with most traders’ attention aimed at the Fed’s decision and subsequent rhetoric.

Most in the market knew that the Fed wasn’t prepared to change the rate in the face of inflation even though the subprime market needs it as a life preserver. The Fed did acknowledge the recent turmoil in the credit markets and housing. They also acknowledged that the “downside risks to growth have increased somewhat” but they still see economic growth expanding “at a moderate pace over coming quarters” and they continue to “maintain that inflation is the predominant risk”.

With these statements, it seems the Fed could be taking steps towards a more neutral policy. Whether the overall market agrees is something that won’t be known for some time.

In the small cap space, one name saw an increase in attention on some pretty large news. Shares of USA Technologies Inc (USAT) soared Tuesday after announcing an agreement with MasterCard Worldwide (MA) for cashless payment terminals into Coca-Cola Enterprises vending machines in several markets nationwide.

Coca-Cola Enterprises Inc. will install the new terminals in selected vending machines in the Atlanta, Boston, Chicago, Denver, Las Vegas, Miami, New York and Seattle markets. The deployment of up to 7,500 G-6 e-Port terminals represents the broadest single deployment of the cashless vending terminals to date, and more than doubles the number of e-Port terminals installed in Coca-Cola system vending machines in the United States.

In addition to providing greater speed and convenience for consumers, e-Port and PayPass help vending machine operators improve efficiency by allowing companies to monitor and manage their vending machines online.

USA Technologies is a provider of a suite of networked devices and associated wireless non-cash payment, control/access management, remote monitoring and data reporting services. Its devices and associated services enable the owners and operators of everyday, stand-alone, distributed assets, such as vending machines, personal computers, copiers, faxes, kiosks and laundry equipment, the ability to remotely monitor, control and report on the results of these distributed assets, as well as the ability to offer their customers alternative cashless payment options. The Company has marketing agreements with Cingular Wireless, Honeywell, Blackboard and others. Its customers include Marriott Hotels, Sony Electronics, Canteen, Aramark and PepsiCo. Others include Best Western, Promus Hotel Corporation (Doubletree, Red Lion, Hampton, Embassy Suites) and Holiday Inn.

Customers for its energy management products include energy utility companies and operators of glass front coolers. When equipped with the VendingMiser(R) or VM2iQ(R), refrigerated beverage vending machines use less energy. It can reduce the power consumption of a cold drink vending machine by an average of up to 46%. SnackMiser(TM) reduces the amount of electricity used by non-refrigerated snack vending machines.

USAT was recently added to the Russell Microcap(TM) Index after the Russell Investment Group reconstituted its family of U.S. indexes on June 22.

For the fiscal third quarter ended March 31, 2007, the Company reported revenue of $2,690,414 compared with $1,618,776 for the corresponding three-months in fiscal year 2006. Q3 losses were $0.45 per share versus losses of $0.74 for the same period in 2006. The Company has an accumulated deficit of 142.8 million and cash on hand of $5.7 million.


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