**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
  **WASHINGTON,
        DC 20549**
  
  **FORM
        10-QSB**
  
  x
                  **Quarterly
                      Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                      Act****of
                      1934 for the quarterly period ended****September
                      30, 2005**o
                  **Transition
                    Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                    Act of
                    1934**
 Commission
        File Number 0-22848
  **U.S.
        Wireless Data, Inc.**
 
 **(Exact
        name of small business issuer as specified in its charter)**
  Delaware
 
 (State
        of
        incorporation)
  
 84-1178691
 
 (IRS
        Employer Identification No.)
  153
        East
        53 rd Street,
        48 th Floor
 New
        York,
        NY 10022
 
 (Address
          of principal executive offices, including zip code)
 (212)
        521-5180
 
 (Registrant's
        Telephone Number, including area code)
  420
        Lexington Avenue, Suite 2450
 New
        York,
        NY 10170
 (Former
        Address if changed since last report)
  
 Check
        whether the Registrant (1) has filed all reports required to be filed by
        Section
        13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
        period that the registrant was required to file such reports), and (2) has
        been
        subject to such filing requirements for the past ninety days. Yes x    No o
 
 Indicate
        by check mark whether the Registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act). Yes x  No o
 
 As
        of
        November 14, 2005, there were outstanding 3,999,730 shares of the Registrant’s
        Common Stock ($0.01 par value per share).
 
 Transitional
        Small Business Disclosure Format. Yes o     No x
 
 
 
  **U.S.
        WIRELESS DATA, INC.**
 **(A
        Development Stage Company)**
 **SEPTEMBER
        30, 2005 QUARTERLY REPORT ON FORM 10-QSB**
 **TABLE
        OF CONTENTS**
 
 PageSpecial
                    Note Regarding Forward Looking Statements
                1PART
                    I -- FINANCIAL INFORMATION
                2ITEM
                    1. Financial Statements (Unaudited)
                2Condensed
                    Consolidated Balance Sheet as of September 30, 2005
                2Condensed
                    Consolidated Statements of Operations for the Three and Nine
                    Months Ended
                    September 30, 2005 and 2004
                3Condensed
                    Consolidated Statements of Cash Flows for the Nine Months Ended
                    September
                    30, 2005 and 2004
                4Notes
                    to Condensed Consolidated Financial Statements
                5ITEM
                    2. Management’s Discussion and Plan of Operation
                13ITEM
                    3. Controls and Procedures
                16PART
                    II -- OTHER INFORMATION
                16ITEM
                    1. Legal Proceedings
                16ITEM
                    2. Changes in Securities and Small BusinessIssuer
                    Purchases of Equity Securities
                17ITEM
                    3. Defaults Upon Senior Securities
                17ITEM
                    4. Submission of Matters to a Vote of Security Holders
                17ITEM
                    5. Other Information
                17ITEM
                    6. Exhibits
                17
 
 
 i
  **SPECIAL
        NOTE REGARDING FORWARD-LOOKING STATEMENTS**
 
 In
        this
        section, “Special Note Regarding Forward-Looking Statements,” references to
“we,”  “us,”  “our,”  “ours,” refer to U.S. Wireless Data,
        Inc.
 
 To
        the
        extent that the information presented in this Quarterly Report on Form 10-QSB
        discusses financial projections, information or expectations about our products
        or markets, or otherwise makes statements about future events, such statements
        are forward-looking. We are making these forward-looking statements in reliance
        on the safe harbor provisions of the Private Securities Litigation Reform
        Act of
        1995. Although we believe that the expectations reflected in these
        forward-looking statements are based on reasonable assumptions, there are
        a
        number of risks and uncertainties that could cause actual results to differ
        materially from such forward-looking statements. These risks and uncertainties
        are described, among other places in this Quarterly Report, in “Plan of
        Operation”.
 
 In
        addition, we disclaim any obligations to update any forward-looking statements
        to reflect events or circumstances after the date of this Quarterly Report.
        When
        considering such forward-looking statements, you should keep in mind the
        risks
        referenced above and the other cautionary statements in this Quarterly
        Report.
   1
  **Part
        I — FINANCIAL INFORMATION**
  **ITEM
        1. Financial Statements**
  **U.S.
        WIRELESS DATA, INC.**
 **(A
        Development Stage Company)**
 **CONDENSED
        CONSOLIDATED BALANCE SHEET**
 **(Unaudited)**
 
 **September
                    30,****2005****ASSETS**Current
                    assets:Cash
                
                $
                13,000**Total
                    assets**
                
                **$**
                **13,000****LIABILITIES
                    AND STOCKHOLDERS’ DEFICIENCY**Current
                    liabilities:Accrued
                    liabilities
                
                $
                34,000**Total
                    liabilities**
                
                
                **34,000**Commitments
                    and contingenciesStockholders'
                    equity deficiency:Preferred
                    stock, 1,000,000 shares authorized at $.01 par value,no
                    shares issued or outstanding at September 30, 2005
                
                
                —Common
                    stock, 19,000,000 shares authorized at $.01 par value,3,999,730
                    shares issued and outstanding at September 30, 2005
                
                
                40,000Deficit
                    accumulated
                  during
                    the development stage
                
                
                (61,000
                )**Total
                    stockholders’ deficiency**
                
                
                **(21,000**
                **)****Total
                    liabilities and stockholders’ deficiency**
                
                **$**
                **13,000**
  See
                    notes to condensed consolidated financial
                    statements.
 
 2
  **U.S.
        WIRELESS DATA, INC.**
 **(A
        Development Stage Company)**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF OPERATIONS**
 **(Unaudited)**
 
 **Successor**
                
                **Predecessor**
                
                **Successor****Company**
                
                **Company**
                
                **Company****Three
                    months**
                
                **Three
                    months**
                
                **Cumulative
                    Period****ended**
                
                **ended**
                
                **from
                    Inception****September
                    30,**
                
                **September
                    30,**
                
                **(April
                    1, 2005) to****2005**
                
                **2004**
                
                **September
                    30, 2005****Continuing
                    operations**General
                    and administrative expenses
                
                $
                (36,000
                )
                $
                (307,000
                )
                $
                (61,000
                )Interest
                    income
                
                
                —
                
                
                15,000
                
                
                —Other
                    expenses
                
                
                —
                
                
                (1,000
                )
                
                —Loss
                    before reorganization itemsand
                    discontinued operations
                
                
                (36,000
                )
                
                (293,000
                )
                
                (61,000
                )Reorganization
                    itemsProfessional
                    fees and U.S. Trustee fees
                
                
                —
                
                
                (57,000
                )
                
                —Loss
                    before discontinued operations
                
                
                (36,000
                )
                
                (350,000
                )
                
                (61,000
                )**Discontinued
                    operations**Loss
                    on discontinued operations
                
                
                —
                
                
                (154,000
                )
                
                —Income
                    (loss) from discontinued operations’
                
                
                —
                
                
                (154,000
                )
                
                —**Net
                    loss**
                
                **$**
                **(36,000**
                **)**
                **$**
                **(504,000**
                **)**
                **$**
                **(61,000**
                **)**Basic
                    and diluted net loss per share:Loss
                    before reorganization items and discontinued operationsOperations
                
                $
                (0.01
                )
                
                (a
                )
                $
                (0.01
                )Loss
                    from discontinued operations
                
                
                —
                
                
                (a
                )
                
                —Net
                    loss per common share
                
                $
                (0.01
                )
                
                (a
                )
                $
                (0.01
                )Weighted
                    average common shares outstanding, basic and diluted
                
                
                4,000,000
                
                
                (a
                )
                
                4,000,000
  See
                    notes to condensed consolidated financial
                    statements.
 
 3
  
 **U.S.
        WIRELESS DATA, INC.**
 **(A
        Development Stage Company)**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS**
 **(Unaudited)**
 
 **Successor****Company****For
                    the three months ended September 30,**
                
                **Cumulative
                    Period****2005**
                
                **2004**
                
                **from
                    Inception****Successor**
                
                **Predecessor**
                
                **(April
                    1, 2005) to****Company**
                
                **Company**
                
                **September
                    30, 2005****CASH
                    FLOWS FROM OPERATING ACTIVITIES:**Net
                    loss
                
                $
                (36,000
                )
                $
                (504,000
                )
                $
                (61,000
                )Adjustments
                    to reconcile net loss to net cash used inoperating
                    activities:Provision
                    for doubtful accounts
                
                
                —
                
                
                50,000
                
                
                —Changes
                    in operating assets and liabilities:Accounts
                    receivable
                
                
                —
                
                
                (91,000
                )
                
                —Due
                    from factor
                
                
                —
                
                
                63,000
                
                
                —Due
                    from winning auction sale bidder
                
                
                —
                
                
                107,000
                
                
                —Prepaids
                    and other current assets
                
                
                —
                
                
                154,000
                
                
                —Accounts
                    payable and accrued liabilities
                
                
                21,000
                
                
                (101,000
                )
                
                34,000Prepetition
                    liabilities subject to compromise
                
                
                —
                
                
                185,000
                
                
                —Net
                    cash used in operating activities
                
                
                (15,000
                )
                
                (137,000
                )
                
                (27,000
                )**CASH
                    FLOWS FROM INVESTING ACTIVITIES:**Decrease
                    in restricted cash
                
                
                —
                
                
                456,000
                
                
                —Transfer
                    to Chapter 11 escrow accounts
                
                
                —
                
                
                (13,000
                )
                
                —Net
                    cash provided by investing activities
                
                
                —
                
                
                443,000
                
                
                —**CASH
                    FLOWS FROM FINANCING ACTIVITIES:**Proceeds
                    from Plan Sponsor
                
                
                —
                
                
                —
                
                
                100,000Costs
                    related to acquisition of shell
                
                
                —
                
                
                —
                
                
                (60,000
                )Payments
                    for real estate lease termination
                
                
                —
                
                
                (456,000
                )
                
                —Net
                    cash used in financing activities
                
                
                —
                
                
                (456,000
                )
                
                40,000Net
                    decrease in cash and cash equivalents
                
                
                (15,000
                )
                
                (150,000
                )
                
                13,000Cash,
                    beginning of period
                
                
                28,000
                
                
                912,000
                
                
                0Cash,
                    end of period
                
                $
                13,000
                
                $
                762,000
                
                $
                13,000
  See
                    notes to condensed consolidated financial
                    statements.
 
 4
  **U.S.
        WIRELESS DATA, INC.**
 **(A
        Development Stage Company)**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **For
        the three months ended September 30, 2005 and 2004**
 **(Unaudited)**
 
 **NOTE
        1 — THE COMPANY**
 
 U.S.
        Wireless Data, Inc. (“USWD”, the “Company”, “we”, “us”, “our” or similar terms)
        was incorporated in the state of Colorado on July 30, 1991 and was
        reincorporated in the state of Delaware on October 6, 2000. We are currently
        a
“shell” company with no operations and controlled by Trinad Capital, L.P.
        (“Trinad”), our majority shareholder. The Company intends to serve as a vehicle
        to effect an asset acquisition, merger, exchange of capital stock or other
        business combination with a domestic or foreign business.
 
 **Trinad
        and Management’s Plan of Operation**
 
 Trinad,
        a
        hedge fund dedicated to investing in micro-cap companies, is seeking to raise
        additional capital with a view to making us an attractive vehicle with which
        to
        acquire a business. It will then seek a suitable acquisition candidate. No
        such
        business has been identified and we are therefore subject to a number of
        risks,
        including: any acquisition consummated by us may turn out to be unsuccessful;
        our investors will not know what operating business, if any, will be acquired,
        including the particular industry in which the business operates, and whether
        financing that could have a dilutive effect on our present stockholders will
        be
        required in connection therewith; the historical operations of a specific
        business opportunity may not necessarily be indicative of the potential for
        the
        future; we may acquire a company in the early stage of development causing
        us to
        incur further risks; we may be dependent upon the management of an acquired
        business which has not proven its abilities or effectiveness; we will be
        controlled by a small number of stockholders and such control could prevent
        the
        taking of certain actions that may be beneficial to other stockholders; our
        common stock will likely be thinly traded, and the public market may provide
        little or no liquidity for holders of our common stock.
 
 Trinad
        has agreed that it will not dispose of any of our common stock held by it
        until
        an acquisition transaction has been consummated and a Current Report on Form
        8-K
        setting forth the terms of the acquisition and audited financial statements
        of
        the acquisition target have been filed with the Securities and Exchange
        Commission (“SEC”).
 
 **Reorganization
        and the Liquidation Trust**
 
 On
        March
        18, 2005, in accordance with the Plan (as defined below under the section
        titled
        Chapter 11 Proceedings), Trinad, our Plan sponsor, became the holder of 93%
        of
        our newly issued common stock as further discussed in the paragraphs below
        (the
“Reorganization”).
 
 Additionally,
        on March 18, 2005, Robert Ellin became a director and our Chief Executive
        Officer, Jay Wolf became a director and our Chief Operating Officer and Chief
        Financial Officer and Barry Regenstein became a director. Robert Ellin and
        Jay
        Wolf are the Managing Member and Managing Director of Trinad, respectively,
        and
        Barry Regenstein is an outside consultant to Trinad.
 
 In
        accordance with the Plan, Trinad contributed $400,000 in cash to the Predecessor
        Company (as defined in Note 2) and as of the close of business on March 18,
        2005
        (immediately before the Reorganization), all of the assets and liabilities
        of
        the Predecessor Company, with the exception of the public entity shell company,
        along with all contingent assets and liabilities, were transferred to the
        USWD
        Liquidation Trust (the “Liquidation Trust”). In addition, Trinad contributed
        $100,000 in cash to the Successor Company (as defined in Note 2) in exchange
        for
        93% of the new common stock issued under the Plan, with the remaining 7%
        of the
        new common stock issued to the holders of record of our Series C Preferred
        Stock
        and our Common Stock as of February 7, 2005, with 3.5% going to each class.
        Simultaneously, all of our originally outstanding Series C Preferred Stock
        and
        our Common Stock were cancelled. In accordance with the Plan, the cash in
        the
        Liquidation Trust will be used to pay administrative costs and creditors
        of the
 
 5
 
 **U.S.
        WIRELESS DATA, INC.**
 **(A
        Development Stage Company)**
 **NOTES
        CONDENSED CONSOLIDATED TO FINANCIAL STATEMENTS**
 **For
        the three months ended September 30, 2005 and 2004**
 **(Unaudited)**
 
 **NOTE
        1 — THE COMPANY (continued)**
 
 Chapter
        11 Proceedings. If there is any remaining cash in the Liquidation Trust,
        it will
        be used to settle a small portion of the aggregate $32,302,000 liquidation
        preference to which the holders of our Series C Preferred Stock as of February
        7, 2005 are entitled.
 
 **Chapter
        11 Proceedings**
 
 Prior
        to
        the Reorganization, we were principally engaged in providing wireless
        transaction delivery and gateway services to the payment processing industry.
        Since our inception, we had incurred significant losses and negative cash
        flow
        from operations. As of March 18, 2005, we had an accumulated deficit of
        approximately $142 million. Management’s concerns about capital led it to take
        additional steps to cut costs, dispose of operations and, on March 26, 2004
        (the
“Petition Date”), we filed a voluntary petition for relief under Chapter 11 of
        the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States
        Bankruptcy Court for the Southern District of New York (the “Court”), in re U.S.
        Wireless Data, Inc., Case Number 04-12075.
  We
        were
        operating as a debtor-in-possession (“DIP”) under the jurisdiction of the Court
        and in accordance with the applicable provisions of the Bankruptcy Code and
        orders of the Court (the “Chapter 11 Proceedings”) until the
        Reorganization.
 
 In
        connection with the Chapter 11 Proceedings, we executed an agreement with
        NBS
        Synapse Corporation to sell our Synapse point-of-sale gateway business to
        NBS
        for $2.85 million in cash plus up to $2.15 million credit for free payment
        processing services to be rendered to us for our vending operations plus
        the
        assumption of certain liabilities. We simultaneously had reached an agreement
        with SANI Operating Co., LLC (“SANI”) to sell our vending operations, including
        the $2.15 million credit for payment processing services from NBS, for $1.6
        million in cash plus the assumption of certain liabilities. We had also arranged
        DIP financing with SANI in order to fund our ongoing operations during the
        bankruptcy process and through the closing of the sales of the operations.
        We
        drew $925,000 on the DIP loan at March 31, 2004 and $675,000 on May 7, 2004.
        Interest accrued on the DIP loan at a rate of 6% per annum. The DIP loan
        was
        repaid, with interest, on May 11, 2004 from a deposit of the proceeds of
        the
        Auction Sales (as defined below).
 
 On
        May
        11, 2004, we completed the bankruptcy auctions for the sale of (i) our Synapse
        point-of-sale gateway business, and (ii) our vending operations (collectively,
        the “Auction Sales”). Transaction Network Services (“TNS”) was awarded by the
        Court as the winning bidder for each of the operations offered for sale.
        TNS
        paid $6 million in cash for our wireless payment processing business and
        $3.7
        million in cash for our wireless vending business, for an aggregate purchase
        price of $9.7 million in cash. The sales to TNS were completed on May 21,
        2004.
 
 On
        December 27, 2004, the Court confirmed our Amended Plan of Reorganization
        (the
“Plan”). Additional details concerning the Plan are in the Amended Disclosure
        Statement filed with the Court in November 2004 in support of the Plan, the
        Amended Plan of Reorganization and Order Confirming Amended Plan of
        Reorganization, each of which is filed as an exhibit to Form 8-K filed with
        the
        SEC on January 18, 2005.
 
 On
        January 19, 2005 we paid approximately $889,000 as an initial payment to
        creditors for pre-petition liabilities representing approximately 50% of
        “Allowed Claims”.
 
  6
  **U.S.
        WIRELESS DATA, INC.**
 **(A
        Development Stage Company)**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **For
        the three months ended September 30, 2005 and 2004**
 **(Unaudited)**
 
 **NOTE
        1 — THE COMPANY (continued)**
 
 The
        following assets and liabilities from our Balance Sheet as of the close of
        business on March 18, 2005 immediately before the Reorganization, along with
        all
        contingent assets and liabilities, were transferred to the Liquidation Trust
        (as
        provided for under the terms of the Plan) and the Company effectuated the
        completion of the Reorganization, thereby emerging from the Chapter 11
        Proceedings:
 
 ASSETSCurrent
                  assets:Cash
                  and cash equivalents
              
              $
              100,000Cash
                  and cash equivalents in escrow
              
              
              2,225,000Due
                  from Plan Sponsor
              
              
              400,000Due
                  from winning auction sale bidder
              
              
              64,000Prepaid
                  and other current assets
              
              
              13,000$
              2,802,000LIABILITIESCurrent
                  liabilities:Accounts
                  payable
              
              $
              212,000Accrued
                  liabilities
              
              
              73,000Total
                  liabilities not subject to compromise
              
              
              285,000Pre-petition
                  liabilities subject to compromise
              
              
              1,572,000Total
                  liabilities
              
              
              1,857,000
 
 “Pre-petition
        liabilities subject to compromise” were as follows:
 
 Accounts
                  payable
              
              $
              1,154,000Accrued
                  liabilities
              
              
              206,000Obligation
                  for rejected real property lease
              
              
              212,000$
              1,572,000
 
 **Loan,
        Going Concern and Liquidity Uncertainties**
 
 On
        September 23, 2005, the Company executed a loan agreement with Trinad whereby
        Trinad has agreed to loan the Company up to a principal amount of $100,000
        (the
“Loan”) at any time and from time to time prior to the Company’s consummation of
        a Next Financing (as defined below). Trinad shall make advances to the Company
        in such amounts, as the Company shall request from time to time. The Loan
        bears
        interest at the prime rate plus 1 percent per annum. The entire outstanding
        principal amount of the Loan and any accrued interest thereon shall be due
        and
        payable by the Company upon, and not prior to, the consummation of a sale
        of
        securities (other than a sale of shares of the Company’s Common Stock to
        officers, directors or employees of, or consultants to, the Company in
        connection with their provision of services to the Company), to a third party
        or
        parties with proceeds to the Company of not less than $200,000 (a “Next
        Financing”).
 
 As
        of
        September 30, 2005, we had cash of $13,000 remaining of the original $100,000
        contributed to us by Trinad, as well as the ability to draw additional funds
        up
        to $100,000 from the Loan. We believe that we will have sufficient cash
        available to us to satisfy our monetary needs for the next fiscal year as
        a
        shell company. We also believe that Trinad has the financial ability and
        intent
        to fund our financial needs to the extent reasonably necessary. Since our
        emergence from bankruptcy from effectuating the Reorganization,
  7
  **U.S.
        WIRELESS DATA, INC.**
 **(A
        Development Stage Company)**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **For
        the three months ended September 30, 2005 and 2004**
 **(Unaudited)**
 
 **NOTE
        1 — THE COMPANY (continued)**
 
 we
        have
        had no liabilities related to the Chapter 11 Proceedings. We do not currently
        have an operating business and therefore have no ability to generate cash
        flow
        from operations in order to fund our ongoing financial needs past the next
        fiscal year.
 
 **NOTE
        2 - BASIS OF PRESENTATION**
 
 The
        Company may be referred to as the “Predecessor Company” for all periods through
        the Reorganization and as the “Successor Company” for all periods after the
        recognition of the Reorganization. The Reorganization was effectuated as
        of the
        close of business on March 18, 2005; however, there was virtually no activity
        between March 19, 2005 through March 31, 2005. Therefore, for accounting
        purposes, we used March 31, 2005 as the date the Reorganization was effectuated.
 
 As
        a
        result of (i) the sale of virtually all of our operating assets in the Auction
        Sales, and (ii) the Reorganization the historical financial statements are
        irrelevant to any assessment of the Company on an ongoing basis. Accordingly,
        readers are advised not to rely on any historical financial information in
        considering an investment in or disposition of our stock.
  There
          were no revenues during the three month periods
          ended September 30, 2005 and 2004 from discontinued operations.
 8
  **U.S.
        WIRELESS DATA, INC.**
 **(A
        Development Stage Company)**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **For
        the three months ended September 30, 2005 and 2004**
 **(Unaudited)**
 
 **NOTE
        2 - BASIS OF PRESENTATION (continued)**
 
 **Basis
        of Presentation and Use of Estimates**
 
 The
        accompanying interim financial statements included herein have been prepared
        in
        accordance with accounting principles generally accepted in the United States
        of
        America and have been prepared by us, without an audit pursuant to the rules
        and
        regulations of the Security and Exchange Commission. In the opinion of
        management, all adjustments have been made, which include normal recurring
        adjustments necessary to present fairly the financial statements. Operating
        results for the periods presented are not necessarily indicative of the
        operating results for the full year. Certain information and footnote
        disclosures normally included in financial statements prepared in accordance
        with accounting principles generally accepted in the United States of America
        have been condensed or omitted. We believe that the disclosures provided
        are
        adequate to make the information presented not misleading. These unaudited
        financial statements should be read in conjunction with the audited consolidated
        financial statements and related notes included in our Annual Report for
        the
        year ended June 30, 2005 on Form 10-KSB.
 
 The
        accompanying financial statements have been prepared in accordance with
        Statement of Position 90-7 (“SOP 90-7”), “Financial Reporting by Entities in
        Reorganization under the Bankruptcy Code”. SOP 90-7 requires that the financial
        statements for periods subsequent to the Chapter 11 filing petition distinguish
        transactions and events that are directly associated with the reorganization
        from the ongoing operations of the business. All pre-petition claims were
        transferred to the Liquidation Trust on March 18, 2005 in accordance with
        the
        Reorganization. Revenues, expenses, realized gains and losses and provision
        for
        losses resulting from the reorganization are reported separately as “
        Reorganization items” in the accompanying statements of operations.
 
 The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States of America requires management to
        make
        estimates and assumptions that affect the reported amounts of assets and
        liabilities and disclosure of contingent assets and liabilities at the dates
        of
        the financial statements and the reported amounts of revenue and expenses
        during
        the reporting period. Actual results could differ from those estimates.
 
 All
        of
        the common stock that was outstanding prior to March 26, 2004 was cancelled
        and
        new shares of common stock were issued in accordance with the Plan. The
        reorganization value of the assets of the emerging entity immediately before
        the
        date of confirmation exceeded the total of all post-petition liabilities
        and
        allowed claims, therefore, the Company did not qualify for fresh start
        accounting under SOP 90-7 and continued its basis of accounting.
 
 The
        Company is subject to a number of risks similar to those of other development
        stage companies including dependence on key individuals, dependence on outside
        sources of capital, completion of an asset acquisition, merger, exchange
        of
        capital stock or other business combination with a domestic or foreign business.
        There are no assurances, however, that the Company will be able to obtain
        additional financing or achieve the completion of on asset acquisition, merger
        or other business combination on favorable terms.
 
 **Reclassifications**
 Certain
        amounts in the prior period financial statements have been reclassified to
        conform to the current presentation.
   9
  **U.S.
        WIRELESS DATA, INC.**
 **(A
        Development Stage Company)**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **For
        the three months ended September 30, 2005 and 2004**
 **(Unaudited)**
 
 **NOTE
        2 - BASIS OF PRESENTATION (continued)**
 
 **Stock-based
        Compensation**
 
 We
        account for employee stock-based compensation cost using the intrinsic value
        method of accounting prescribed by the Accounting Principles Board Opinion
        No.
        25, “Accounting for Stock Issued to Employees” (“APB No. 25”). The Company has
        adopted the disclosure-only provisions of Statement of Financial Accounting
        Standards (“SFAS”) No. 123, “Accounting for Stock Based-Compensation” and SFAS
        No. 148, “Accounting for Stock-Based Compensation - Transition and Disclosure”
        for employee stock arrangements. Restricted stock or stock awards are recorded
        as compensation expense over the vesting period, if any, based on the market
        value on the date of grant.
 
 For
        options issued to non-employees, we utilize the fair value method prescribed
        in
        SFAS No. 123.
 
 Prior
        to
        the effective date of the Plan, we had four fixed stock-based compensation
        plans. The exercise price of each option granted pursuant to these plans
        was
        equal to the market price of the Company’s common stock on the date of grant.
        Accordingly, pursuant to APB No. 25, no compensation cost has been recognized
        for such grants. Had compensation cost been determined based on the fair
        value
        at the grant dates for such awards consistent with the method prescribed
        by SFAS
        No. 123, the Company’s net loss and loss per share for the periods indicated
        would have been as follows:
 Three
                            months ended September 30,2005
                        
                        2004SuccessorCompany
                        
                        PredecessorCompanyLoss
                            from continuing operations
                        
                        $
                        (25,000
                        )
                        $
                        (350,000
                        )Loss
                            from discontinued operations
                        
                        
                        —
                        
                        
                        (154,000
                        )Net
                            loss, as reported
                        
                        
                        (25,000
                        )
                        
                        (504,000
                        )Deduct:
                            Total stock-based compensation expense determined under
                            fair value based
                            method
                        
                        
                        —
                        
                        
                        (77,000
                        )Pro
                            forma net loss
                        
                        $
                        (25,000
                        )
                        $
                        (581,000
                        )Per
                            share, as reported (a)From
                            continuing operations
                        
                        $
                        (0.01
                        )
                        
                        (a
                        )From
                            discontinued operations
                        
                        
                        —
                        
                        
                        (a
                        )Net
                        
                        $
                        (0.01
                        )
                        
                        (a
                        )Per
                            share, pro forma (a)From
                            continuing operations
                        
                        $
                        (0.01
                        )
                        
                        (a
                        )From
                            discontinued operations
                        
                        
                        —
                        
                        
                        (a
                        )Net
                        
                        $
                        (0.01
                        )
                        
                        (a
                        )
  (a)
                            See Note 4.
 
  10
  **U.S.
        WIRELESS DATA, INC.**
 **(A
        Development Stage Company)**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **For
        the three months ended September 30, 2005 and 2004**
 **(Unaudited)**
 
 **NOTE
        2 - BASIS OF PRESENTATION (continued)**
 
 **Stock-based
        Compensation (continued)**
 
 In
        determining the fair value of each option, we used the Black-Scholes
        option-pricing model as prescribed by SFAS No. 123 using the following
        assumptions: dividend yield of zero, expected volatility of 123%, an average
        expected option life of 3.5 years and an average risk-free interest rate
        of
        2.31% for the year ended June 30, 2003. We did not grant options during the
        year
        ended June 30, 2004 or the nine months ended March 31, 2005.
 
 As
        of the
        effective date of the Plan and as provided for under the provisions of the
        Plan,
        all outstanding warrants and options expired worthless.
 
 **NOTE
        3 - AUCTION SALES**
 
 Loss
        from
        the discontinued operations relating to the Auction Sales are as follows:
 **Three
                              months ended**September 30,**2005**
                      
                      **2004**Revenues
                      
                      $
                      —
                      
                      $
                      —Loss
                          from operations
                      
                      
                      —
                      
                      
                      (307,000
                      )
 **NOTE
        4 — NET LOSS PER SHARE**
 
 Net
        loss
        per common share is computed in accordance with the provisions of SFAS No.
        128,
“Earnings per Share”. SFAS No. 128 establishes standards for the computation,
        presentation, and disclosure of earnings per share. Basic per share amounts
        are
        computed by dividing the net loss available to common stockholders by the
        weighted average number of common shares outstanding during the year. Diluted
        per share amounts incorporate the incremental shares issuable upon the assumed
        exercise of the Company’s stock options and warrants and assumed conversion of
        convertible securities. During the periods presented in the Statements of
        Operations, such incremental amounts have been excluded from the calculation
        since their effect would be anti-dilutive. Such stock options, warrants and
        conversions could potentially dilute earnings per share in the future.
 
 As
        of the
        close of business on March 18, 2005, our assets, liabilities and contingencies
        were transferred to the Liquidation Trust (as provided for under the terms
        of
        the Plan) and the Company effectuated the completion of the Reorganization.
        In
        addition, all issued and outstanding shares of the Company’s capital stock were
        cancelled and new shares were issued. The Company’s current operations are not
        representative or comparable to that of the Company prior to March 18, 2005
        and,
        accordingly, net loss per share is not presented for periods prior to March
        18,
        2005.
  11
  **U.S.
        WIRELESS DATA, INC.**
 **(A
        Development Stage Company)**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **For
        the three months ended September 30,2005 and 2004**
 **(Unaudited)**
 
 **NOTE
        5 — SUPPLEMENTAL CASH FLOW INFORMATION**
 
 Supplemental
        disclosure of cash flow information:
 
 $0
        and
        $96,000 was paid in cash for interest for the three months ended September
        30,
        2005 and 2004, respectively.
 
 Supplemental
        disclosure of non-cash financing and investing activities:
 
 Three
        months ended September 30, 2005 and 2004
  1.
              Conversion
                  of 10,000 shares of Series C Convertible Preferred Stock into 16,667
                  shares of Common Stock during the three months ended September
                  30,
                  2004.
 
 12
  **ITEM
        2. MANAGEMENT’S PLAN OF OPERATION**
 
 **Special
        Note Regarding Forward-Looking Statements**
 
 We
        may,
        in discussions of our future plans, objectives and expected performance in
        periodic reports filed by us with the Securities and Exchange Commission
        (“SEC”)
        (or documents incorporated by reference therein) and in written and oral
        presentations made by us, include projections or other forward-looking
        statements within the meaning of Section 27A of the Securities Exchange Act
        of
        1933 or Section 21E of the Securities Act of 1934, as amended. Such projections
        and forward-looking statements are based on assumptions, which we believe
        are
        reasonable but are, by their nature, inherently uncertain. You are cautioned
        that any such forward looking statements are not guarantees of future
        performance and involve risks and uncertainties, and that actual results
        may
        differ materially from those projected in the forward looking statements
        as a
        result of various factors. The factors that might cause such differences
        include, among others, the following: (i) our inability to obtain sufficient
        cash to fund ongoing obligations and continue as a going concern; (iii) our
        ability to carry out our operating strategy; and (iv) other factors including
        those discussed below. We undertake no obligation to publicly update or revise
        forward looking statements to reflect events or circumstances after the date
        of
        this Quarterly Report on Form 10-QSB or to reflect the occurrence of
        unanticipated events.
 
 **Overview**
 
 U.S.
        Wireless Data, Inc. (“USWD”, the “Company”, “we”, “us”, “our” or similar terms)
        was incorporated in the state of Colorado on July 30, 1991 and was
        reincorporated in the state of Delaware on October 6, 2000. We are currently
        a
“shell” company with no operations and controlled by Trinad Capital, L.P.
        (“Trinad”), our majority stockholder. The Company intends to serve as a vehicle
        to effect on asset acquisition, merger, exchange of capital stock or other
        business combination with a domestic or foreign business.
 
 
 The
        Company may be referred to as the “Predecessor Company” for all periods through
        the Reorganization (as defined below) and as the “Successor Company” for all
        periods after the recognition of the Reorganization. The Reorganization was
        effectuated as of the close of business on March 18, 2005; however, there
        was
        virtually no activity between March 19, 2005 through March 31, 2005. Therefore,
        for accounting purposes, we used March 31, 2005 as the date the Reorganization
        was effectuated. Accordingly, the financial statements we have presented
        for the
        fiscal year ended June 30, 2005 are presented in 2 periods (the Predecessor
        Company for the nine month period July 1, 2004 through March 31, 2005, and
        the
        Successor Company for the three month period April 1, 2005 through June 30,
        2005).
 
 As
        a
        result of (i) the sale of virtually all of our operating assets in the Auction
        Sales (as defined below), and (ii) the Reorganization, very little of what
        is
        included in this Report on Form 10-QSB is relevant to any assessment of the
        Company on an ongoing basis. Accordingly, readers are advised not to rely
        on any
        historical information in considering an investment in or disposition of
        our
        stock.
 
 **Trinad
        and Management’s Plan of Operation**
 
 Trinad,
        a
        hedge fund dedicated to investing in micro-cap companies, is seeking to raise
        additional capital with a view to making us an attractive vehicle with which
        to
        acquire a business. It will then seek a suitable acquisition candidate. No
        such
        business has been identified and we are therefore subject to a number of
        risks,
        including: any acquisition consummated by us may turn out to be unsuccessful;
        our investors will not know what operating business, if any, will be acquired,
        including the particular industry in which the business operates, and whether
        financing that could have a dilutive effect on our present stockholders will
        be
        required in connection therewith; the historical operations of a specific
        business opportunity may not necessarily be indicative of the potential for
        the
        future; we may acquire a company in the early stage of development causing
        us to
        incur further risks; we may be dependent upon the management of an acquired
        business which has not proven its abilities or effectiveness; we will be
        controlled by a small number of stockholders and such control could prevent
        the
        taking of certain actions that may be beneficial to other stockholders; our
        common stock will likely be thinly traded, and the public market may provide
        little or no liquidity for holders of our common stock.
 
 13
  Trinad
        has agreed that it will not dispose of any of our common stock held by it
        until
        an acquisition transaction has been consummated and a Current Report on Form
        8-K
        setting forth the terms of the acquisition and audited financial statements
        of
        the acquisition target have been filed with the Securities and Exchange
        Commission (“SEC”).
 
 **Reorganization
        and the Liquidation Trust**
 
 On
        March
        18, 2005, in accordance with the Plan (as defined below under the section
        titled
        Chapter 11 Proceedings), Trinad, our Plan sponsor, became the holder of 93%
        of
        our newly issued common stock as further discussed in the paragraphs below
        (the
“Reorganization”).
 
 Additionally,
        on March 18, 2005, Robert Ellin became a director and our Chief Executive
        Officer, Jay Wolf became a director and our Chief Operating Officer and Chief
        Financial Officer and Barry Regenstein became a director. Robert Ellin and
        Jay
        Wolf are the Managing Member and Managing Director of Trinad, respectively,
        and
        Barry Regenstein is an outside consultant to Trinad.
 
 In
        accordance with the Plan, Trinad contributed $400,000 in cash to the Predecessor
        Company and as of the close of business on March 18, 2005 (immediately before
        the Reorganization), all of the assets and liabilities of the Predecessor
        Company, with the exception of the public entity shell company, along with
        all
        contingent assets and liabilities, were transferred to the USWD Liquidation
        Trust (the “Liquidation Trust”). In addition, Trinad contributed $100,000 in
        cash to the Successor Company in exchange for 93% of the new common stock
        issued
        under the Plan, with the remaining 7% of the new common stock issued to the
        holders of record of our Series C Preferred Stock and our Common Stock as
        of
        February 7, 2005, with 3.5% going to each class. Simultaneously, all of our
        originally outstanding Series C Preferred Stock and our Common Stock were
        cancelled. In accordance with the Plan, the cash in the Liquidation Trust
        will
        be used to pay administrative costs and creditors of the Chapter 11 Proceedings.
        If there is any remaining cash in the Liquidation Trust, it will be used
        to
        settle a small portion of the aggregate $32,302,000 liquidation preference
        to
        which the holders of our Series C Preferred Stock as of February 7, 2005
        are
        entitled.
 
 **Chapter
        11 Proceedings**
 
 Prior
        to
        the Reorganization, we were principally engaged in providing wireless
        transaction delivery and gateway services to the payment processing industry.
        Since our inception, we had incurred significant losses and negative cash
        flow
        from operations. As of March 18, 2005, we had an accumulated deficit of
        approximately $142 million. Management’s concerns about capital led it to take
        additional steps to cut costs, dispose of operations and, on March 26, 2004
        (the
“Petition Date”), we filed a voluntary petition for relief under Chapter 11 of
        the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States
        Bankruptcy Court for the Southern District of New York (the “Court”), in re U.S.
        Wireless Data, Inc., Case Number 04-12075.
  We
        were
        operating as a debtor-in-possession (“DIP”) under the jurisdiction of the Court
        and in accordance with the applicable provisions of the Bankruptcy Code and
        orders of the Court (the “Chapter 11 Proceedings”) until the
        Reorganization.
 
 In
        connection with the Chapter 11 Proceedings, we executed an agreement with
        NBS
        Synapse Corporation to sell our Synapse point-of-sale gateway business to
        NBS
        for $2.85 million in cash plus up to $2.15 million credit for free payment
        processing services to be rendered to us for our vending operations plus
        the
        assumption of certain liabilities. We simultaneously had reached an agreement
        with SANI Operating Co., LLC (“SANI”) to sell our vending operations, including
        the $2.15 million credit for payment processing services from NBS, for $1.6
        million in cash plus the assumption of certain liabilities. We had also arranged
        DIP financing with SANI in order to fund our ongoing operations during the
        bankruptcy process and through the closing of the sales of the operations.
        We
        drew $925,000 on the DIP loan at March 31, 2004 and $675,000 on May 7, 2004.
        Interest accrued on the DIP loan at a rate of 6% per annum. The DIP loan
        was
        repaid, with interest, on May 11, 2004 from a deposit of the proceeds of
        the
        Auction Sales (as defined below).
 
 On
        May
        11, 2004, we completed the bankruptcy auctions for the sale of (i) our Synapse
        point-of-sale gateway business, and (ii) our vending operations (collectively,
        the “Auction Sales”). Transaction Network Services (“TNS”) was awarded by the
        Court as the winning bidder for each of the operations offered for sale.
        TNS
        paid $6 million in cash for our wireless payment processing business and
        $3.7
        million in cash for our wireless vending business, for an aggregate purchase
        price of $9.7 million in cash. The sales to TNS were completed on May 21,
        2004.
  14
 On
        December 27, 2004, the Court confirmed our Amended Plan of Reorganization
        (the
“Plan”). Additional details concerning the Plan are in the Amended Disclosure
        Statement filed with the Court in November 2004 in support of the Plan, the
        Amended Plan of Reorganization and Order Confirming Amended Plan of
        Reorganization, each of which is filed as an exhibit to Form 8-K filed with
        the
        SEC on January 18, 2005.
 
 On
        January 19, 2005 we paid approximately $889,000 as an initial payment to
        creditors for pre-petition liabilities representing approximately 50% of
        “Allowed Claims”.
 
 The
        following assets and liabilities from our Balance Sheet as of the close of
        business on March 18, 2005 immediately before the Reorganization, along with
        all
        contingent assets and liabilities, were transferred to the Liquidation Trust
        (as
        provided for under the terms of the Plan) and the Company effectuated the
        completion of the Reorganization, thereby emerging from the Chapter 11
        Proceedings:
 
 ASSETSCurrent
                  assets:Cash
                  and cash equivalents
              
              $
              100,000Cash
                  and cash equivalents in escrow
              
              
              2,225,000Due
                  from Plan Sponsor
              
              
              400,000Due
                  from winning auction sale bidder
              
              
              64,000Prepaid
                  and other current assets
              
              
              13,000$
              2,802,000LIABILITIESCurrent
                  liabilities:Accounts
                  payable
              
              $
              212,000Accrued
                  liabilities
              
              
              73,000Total
                  liabilities not subject to compromise
              
              
              285,000Pre-petition
                  liabilities subject to compromise
              
              
              1,572,000Total
                  liabilities
              
              
              1,857,000
 
 “Pre-petition
        liabilities subject to compromise” were as follows:
 
 Accounts
                  payable
              
              $
              1,154,000Accrued
                  liabilities
              
              
              206,000Obligation
                  for rejected real property lease
              
              
              212,000$
              1,572,000
 **Loan,
        Going Concern and Liquidity Uncertainties**
 
 On
        September 23, 2005, we executed a loan agreement with Trinad whereby Trinad
        has
        agreed to loan us up to a principal amount of $100,000 (the “Loan”) at any time
        and from time to time prior to our consummation of a Next Financing (as defined
        below). Trinad shall make advances to us in such amounts, as we shall request
        from time to time. The Loan bears interest at the prime rate plus 1 percent
        per
        annum. The entire outstanding principal amount of the Loan and any accrued
        interest thereon shall be due and payable by us upon, and not prior to, the
        consummation of a sale of securities (other than a sale of shares of our
        Common
        Stock to officers, directors or employees of, or consultants to, us in
        connection with their provision of services to us), to a third party or parties
        with proceeds to us of not less than $200,000 (a “Next Financing”).
 
 As
        of
        September 30, 2005, we had cash of $13,000 remaining of the original $100,000
        contributed to us by Trinad, as well as the ability to draw additional funds
        up
        to $100,000 from the Loan. We believe that we will have sufficient cash
        available to us to satisfy our monetary needs for the next fiscal year as
        a
        shell company. We also believe that Trinad has the financial ability and
        intent
        to fund our financial needs to the extent reasonably necessary. Since our
        emergence from bankruptcy from effectuating the Reorganization, we have had
        no
        liabilities related to the Chapter 11 Proceedings. We do not currently have
        an
        operating business and therefore have no ability to generate cash flow from
        operations in order to fund our ongoing financial needs past the next fiscal
        year.
  15
 **CRITICAL
        ACCOUNTING POLICIES**
 
 The
        accompanying financial statements have been prepared in accordance with
        accounting principles generally accepted in the United States of America.
 
 **Estimates
        and assumptions**
 
 The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States of America requires management to
        make
        estimates and assumptions that affect the reported amounts of assets and
        liabilities and disclosure of contingent assets and liabilities at the dates
        of
        the financial statements and the reported amounts of revenue and expenses
        during
        the reporting period. Actual results could differ from those estimates.
 
 **Financial
        Reporting by Entities in Reorganization under the Bankruptcy
        Code**
 
 The
        accompanying financial statements have been prepared in accordance with
        Statement of Position 90-7 (“SOP 90-7”), “Financial Reporting by Entities in
        Reorganization under the Bankruptcy Code”. SOP 90-7 requires that the financial
        statements for periods subsequent to the Chapter 11 filing petition distinguish
        transactions and events that are directly associated with the reorganization
        from the ongoing operations of the business.
 
 All
        of
        the common stock that was outstanding prior to March 26, 2004 was cancelled
        and
        new shares of common stock were issued in accordance with the Plan. The
        reorganization value of the assets of the emerging entity immediately before
        the
        date of confirmation exceeded the total of all post-petition liabilities
        and
        allowed claims, therefore, the Company did not qualify for fresh start
        accounting under SOP 90-7 and continued its basis of accounting.
 
 **QUANTITATIVE
        AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**
 
 We
        currently have no floating rate indebtedness, hold no derivative instruments,
        and do not earn foreign-sourced income. Accordingly, changes in interest
        rates
        or currency exchange rates do not generally have a direct effect on our
        financial position. Changes in interest rates may affect the amount of interest
        we earn on available cash balances as well as the amount of interest we pay
        on
        borrowings. To the extent that changes in interest rates and currency exchange
        rates affect general economic conditions, we may also be affected by such
        changes.
 
 **ITEM
        3. CONTROLS AND PROCEDURES**
 
 **(a)
        Evaluation of Disclosure Controls and Procedures.** Our
        principal executive officer and principal financial officer, after evaluating
        the effectiveness of our disclosure controls and procedures (as defined in
        Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered
        by this Quarterly Report on Form 10-QSB, have concluded that, based on such
        evaluation, our disclosure controls and procedures were adequate and effective
        to ensure that material information relating to us, was made known to them
        by
        others within those entities, particularly during the period in which this
        Quarterly Report on Form 10-QSB was being prepared.
 
 **(b)
        Changes in Internal Controls.** There
        were no significant changes in our internal control over financial reporting,
        identified in connection with the evaluation of such internal control that
        occurred during our last fiscal quarter, that have materially affected, or
        are
        reasonably likely to materially affect, our internal control over financial
        reporting.
 
 **PART
        II — OTHER INFORMATION**
 
 **ITEM
        1. LEGAL PROCEEDINGS**
 We
        are
        not currently subject to any material legal proceedings. However, we may
        from
        time to time become a party to legal proceedings arising in the ordinary
        course
        of our business.




16


**ITEM
        2. CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
        SECURITIES**
 
 None.
 
 **ITEM
        3. DEFAULTS UPON SENIOR SECURITIES**
 
 None.
 
 **ITEM
        4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**
 
 None.
 
 **ITEM
        5. OTHER INFORMATION**
 
 None
 
 **ITEM
        6. EXHIBITS**
 
 **Exhibit
        No. Description of Exhibit**
  31.1
              Certification
                  of Principal Financial Officer
                  Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.
                  Section 1350
  31.2
                Certification
                    of Principal Financial Officer Pursuant to Section 302 of the
                    Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
                    1350
  32.1
                Certification
                    of Principal Executive Officer and Principal Financial Officer
                    Pursuant to
                    Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
                    1350
   17
 
 
 **SIGNATURES**
  In
        accordance with Section 13 or 15 of the Exchange Act, the Registrant caused
        this
        Report to be signed on its behalf by the undersigned, thereunto duly authorized.
 **U.S.
                  WIRELESS DATA, INC.**Date: 
                November 13, 2005
              By:
              /s/ 
                Robert EllinRobert
                EllinChief
                Executive Officer(Principal
                  Executive
                  Officer)
  Date: 
                November 13, 2005
              By:
              /s/ 
                Jay WolfJay
                WolfChief
                  Operating Officer andChief
                  Financial Officer(Principal
                  Financial
                  Officer)
   S-1