SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                   FORM 10-QSB

|X|  Quarterly  Report  under  Section  13 or  Section  15(d) of the  Securities
Exchange Act of 1934 for the quarterly period ended September 30, 1997

|_| Transition  Report under Section 13 or 15(d) of the Securities  Exchange Act
of 1934 for the transition period from ______ to ______.


Commission File No.: 0-22848


                            U.S. Wireless Data, Inc.
             (Exact name of registrant as specified in its charter)


                   Colorado                               84-1178691
                   --------                               ----------
          (State of incorporation)            (IRS Employer Identification No.)


                          2200 Powell Street, Suite 450
                          Emeryville, California 97608
                          ----------------------------
          (Address of principal executive offices, including zip code)



                                 (510) 596-2025
                                 --------------
              (Registrant's Telephone Number, including area code)



Check  whether the issuer (1) 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  ___


As of  September  30,  1997  there  were  outstanding  9,192,270  shares  of the
Registrant's Common Stock (no par value per share).


Transitional Small Business Disclosure Format

                         Yes ___                     No _X_



<PAGE>

                            U.S. WIRELESS DATA, INC.
                                TABLE OF CONTENTS



PART I    FINANCIAL INFORMATION                                          Page

Item 1.   Financial Statements (Unaudited)

          Balance Sheet --
                 September 30, 1997........................................3

          Statements of Operations --
                 Three Months Ended September 30, 1997 and 1996............4

          Statements of Cash Flows --
                 Three Months Ended September 30, 1997 and 1996............5

          Notes to Financial Statements....................................6-8

Item 2.   Management's Discussion and Analysis.............................9-11



PART II   OTHER INFORMATION

Item 1.   Material Developments in Connection with Legal Proceedings.......12

Item 3.   Defaults Upon Senior Securities..................................12

Item 5.   Other Information 13

Item 6.   Exhibits and Reports on Form 8-K.................................13

























<PAGE>

                            U.S. WIRELESS DATA, INC.
<TABLE>
<CAPTION>
                                  BALANCE SHEET
                                   (Unaudited)


                                                               September 30, 1997
                                                             -----------------------
                                            ASSETS

Current Assets:
<S>                                                                 <C>        
        Cash ....................................................   $    68,018
        Accounts receivable, net of allowance for ...............       208,907
            doubtful accounts of $15,979                                 15,979
                                                                         ------
                                                                        224,886

        Sales-type lease receivables ............................        11,023
        Inventory, net ..........................................       223,478
        Other current assets
                                                                        113,964
                 Total current assets ...........................       625,390

Property and equipment, net .....................................        35,159
Notes receivable ................................................       324,857
                                                                        -------
                                                                        360,026
Other assets
                                                                         22,286


Total assets ....................................................             $
                                                                        682,835


                             LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
        Accounts payable ........................................  $    452,953
        Accrued liabilities .....................................       152,347
        Notes payable
                                                                        803,649
                                                                        -------
                Total current liabilities
                                                                      1,408,949
                                                                      ---------

Long Term Debt ..................................................        45,000

Total Liabilities ...............................................     1,453,949

Commitments and contingencies  (See Notes)

Stockholders' Equity:
        Common stock, no par value, 12,000,000 ..................     9,192,270
                shares authorized; 9,192,270
                shares issued and outstanding
        Common stock subscribed .................................             0
        Additional paid-in capital ..............................     7,579,509
        Accumulated deficit
                                                                    (17,514,943)
        Notes Receivable from Shareholder
                                                                        (27,950)
                                                                        ------- 
                Total stockholders' equity ......................      (771,114)


Total liabilities and stockholders' equity ......................   $    682,835
                                                                    ============

</TABLE>



                             See Accompanying Notes
                                       3
<PAGE>




                            U.S. WIRELESS DATA, INC.
<TABLE>
<CAPTION>
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)



                                                               Three Months Ended
                                                     September 30, 1997      September 30, 1996


<S>                                                         <C>            <C>        
Revenue .................................................   $   257,473    $   387,218
Cost of goods sold ......................................       173,796        265,449
                                                                -------        -------

Gross margin (deficit) ..................................        83,677        121,769
                                                            -----------    -----------

Operating Expenses:
    Selling, general and administrative .................       530,855        171,157
    Research and development ............................        95,314        118,469
                                                            -----------    -----------
                                                                626,169        289,626
                                                            -----------    -----------

Loss from operations ....................................      (542,492)      (167,857)

Interest income .........................................             0          5,967
                                                                                 
Interest expense                                                (23,900)
Other income ............................................        12,302
                                                                 ------
                                                                 11,590

Litigation settlement                                                 0              0

Loss from continuing operations .........................      (554,090)      (161,890)
                                                            -----------    -----------

Loss from discontinued operation                                 --             --
                                                            -----------    -----------

Loss before extraordinary item                                   --             --
                                                            -----------    -----------

Extraordinary gains on restructuring of payables and debt        --             --
                                                            -----------    -----------
                                                           
Net loss ................................................   $  (554,090)   $  (161,890)
                                                            ===========    ===========

Earnings (loss) per share:
    From continuing operations ..........................    $     (.07)   $      (.03)
    From discontinued operation
                                                                      0              0
    From restructuring of payables and debt
                                                                      0              0
                                                            -----------    -----------
    Net loss per share ..................................    $     (.07)   $      (.03)
                                                            ===========    ===========

Weighted average common shares outstanding ..............     7,769,847      4,653,482
                                                            ===========    ===========
</TABLE>

                             See Accompanying Notes
                                       4
<PAGE>
                            U.S. WIRELESS DATA, INC.
<TABLE>
<CAPTION>
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                                                       Three Months Ended
                                                                    9/30/97            9/30/96
                                                                    -------            -------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                  <C>          <C>       
     Net loss ...................................................... $(554,090)   $(161,890)
                                                                                   
     Depreciation and amortization .................................     5,286       20,496
     Non-cash consulting services ..................................    95,889

   Changes in assets and liabilities:
          (Increase) decrease in:
               Accounts receivable .................................   (88,377)      95,948
               Inventory ...........................................   (14,611)     (26,382)
               Other assets ........................................   (16,687)      28,608
          Increase (decrease) in:
               Accounts payable ....................................    88,740      139,100
               Accrued liabilities .................................    17,467     (100,222)

               Net cash used in operating activities ...............  (457,090)     (25,942)

CASH FLOWS FROM INVESTING ACTIVITIES:
     (Increase) in Other assets ....................................   (10,791)        --
                                                                       -------     ---------
               Net cash used in investing activities ...............   (10,791)        --


CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from issuance of stock ...............................   514,033         --
                                                                                  ---------
     Proceeds from issuance of debt
                                                                        15,783         --
                                                                     ---------    ---------
              Net cash provided by financing activities ............   529,816         --


INCREASE (DECREASE) IN CASH ........................................    61,935      (25,942)


CASH, Beginning of period
                                                                         6,083       40,350
                                                                     ---------    ---------


CASH, End of period ................................................ $  68,018    $  14,408
                                                                     =========    =========

</TABLE>

                             See Accompanying Notes

                                       5
<PAGE>

                            U.S. WIRELESS DATA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


Note 1 -- ACCOUNTING PRINCIPLES

      The balance sheet as of September  30, 1997, as well as the  statements of
      operations and of cash flows for the three months ended September 30, 1997
      and  September  30,  1996,  have been  prepared by the Company  without an
      audit. In the opinion of management,  all adjustments,  consisting only of
      normal  recurring  adjustments  necessary to present  fairly the financial
      position,  results of operations  and cash flows at September 30, 1997 and
      for all periods presented have been made.

      Certain  information  and footnote  disclosures  normally  included in the
      financial  statements  prepared  in  accordance  with  generally  accepted
      accounting principles have been condensed or omitted. It is suggested that
      these  financial  statements  be read in  conjunction  with the  financial
      statements  and notes thereto  included in the  Company's  Form 10-KSB for
      fiscal  year end June 30,  1997.  The  results of  operations  for interim
      periods presented are not necessarily  indicative of the operating results
      for the full year.


Note 2 -- FINANCIAL CONDITION AND LIQUIDITY

      The Company has incurred an  accumulated  deficit of  approximately  $17.5
      million  since  inception,  including a loss of $554 thousand in the first
      quarter of fiscal year 1998. In order to continue as a going concern,  the
      Company has  transitioned  to a  recurring  revenue  focus,  is working on
      programs to increase  revenue levels and product  margins,  is negotiating
      new  distribution   agreements  and  seeking  additional  debt  or  equity
      financing.

      Subsequent to June 30, 1997, the Company has  strengthened  the management
      team,  signed  several  significant  distribution  agreements,  which  are
      expected to build a recurring  revenue base,  started the expansion of the
      sales force and  expanded its contract  manufacturing  relationships.  The
      current sales volume is inadequate to fund the  infrastructure  growth and
      business transition.  As a result, and as part of its continuing effort to
      find working capital funding in order to continue operations,  the Company
      has entered  into certain  consulting  agreements  designed to  facilitate
      financing  relationships with third parties. While management is confident
      it  can  accomplish  this  objective,  there  is no  guarantee  that  this
      additional funding will occur in the required time frame.

      The  accompanying  consolidated  financial  statements  do not include any
      adjustments  relating to the recoverability and classification of recorded
      assets and  liabilities  that  might be  necessary  should the  Company be
      unable to continue as a going concern.


Note 3 -- NET LOSS PER SHARE

      Net loss per common  share is  computed  by  dividing  the net loss by the
      weighted  average  number of common shares  outstanding  at the end of the
      period.  Exercisable  stock  options and  warrants are not included in the
      calculation since their effect would be anti-dilutive.
<PAGE>
Note 4 -- LIVIAKIS FINANCIAL COMMUNICATIONS INC. ("LFC") - FINANCING

       As the Company  entered the first  quarter of fiscal  1998,  it faced the
       need  for  increased  liquidity  to  meet  its  obligations  and  fund  a
       significant  rollout of the CDPD TRANZ Enabler  product.  In August 1997,
       through an  introduction by the entrenet Group,  LLC.  ("entrenet"),  the
       Company  sold 3.5  million  unregistered  shares of common  stock and 1.6
       million  warrants to purchase  common stock at an exercise price of $0.01
       per share to two officers of LFC for  $500,000 in cash.  The warrants are
       exercisable  from January 15, 1998 through August 4, 2002. The securities
       sold to LFC carry future registration rights, including a one-time demand
       registration,  with  fees to be paid by the  Company  (See  also  Note 9,
       below).

       In accordance  with its agreement with entrenet,  The Company has granted
       entrenet  the to right to  receive  280,000  unregistered  shares  of the
       Company's  Common  Stock as  compensation  for an 8% finders  fee for the
       direct  source  financing.  The stock will be issued to  entrenet at such
       time as the Company has obtained  shareholder approval for an increase in
       authorized Common Stock. The agreement  provides entrenet with "piggyback
       registration rights"


Note 5 -- LIVIAKIS FINANCIAL COMMUNICATIONS INC. ("LFC") - CONSULTING

       Additionally,  in August  1997,  the Company  retained  LFC to advise and
       assist the Company in matters concerning  investor  relations,  corporate
       finance and strategic  management  and planning  covering the period from
       July 31, 1997 through July of 1998. As  compensation  for these services,
       the Company will issue a total of 300,000 unregistered  restricted shares
       of its Common Stock and $10,000 in cash as consulting  fees. The issuance
       of the shares of Common  Stock will  occur at  various  times  during the
       consulting  agreement,  commencing  November  15,  1997.  Pursuant to the
       consulting  agreement,  the Company will also pay LFC a cash fee equal to
       2.5% of the gross  proceeds  received  as a  finder's  fee for any direct
       financing  located  for  the  Company.   The  shares  will  also  contain
       registration rights as described in Note 4, above.


Note 6 -- LITIGATION


       In September of 1996,  the Company  agreed to terms to settle  securities
       fraud  litigation,  pending since 1994,  which was brought in relation to
       the Company's  initial  public  offering of December  1993.  The parties'
       agreement  (the  "Settlement  Agreement")  was filed in the United States
       District  Court for the  District  of  Colorado  on January  15,  1997 in
       consolidated Case N0. 94-Z-2258, Appel, et al. v. Caldwell, et al. By its
       order  approving  the  settlement,  the  court  certified  a  plaintiff's
       settlement  class and provided the mechanism  for payment of claims.  The
       Company contributed  directly or by indemnification a total of $10,000 to
       the total  settlement  fund of $2,150,000.  The remaining  portion of the
       settlement  was  contributed  by certain  underwriters  of the  Company's
       initial  public  offering and  securities  counsel.  No objections to the
       Settlement  Agreement were made. No potential  class member  opted-out of
       the settlement and all are bound by the release granted the Company.  All
       claims against the Company in those  consolidated cases were dismissed by
       final  federal  court order on  September  4, 1997.  No appeal was filed.
       Similar  state court  claims were  dismissed by Colorado  district  court
       order dated October 9, 1997.

     To resolve  cross-claims  asserted by underwriters in the litigation,  U.S.
     Wireless Data, Inc. agreed to transfer to RAS Securities Corporation,  H.J.
     Meyers & Co,  Inc.,  Sands & Co.  Ltd.  and R.J.  Steichen & Co. a total of
     600,000 U.S.  Wireless Data,  Inc. common shares upon the effective date of
     the  Settlement  Agreement.  The Company has agreed to register such shares
     upon demand not sooner than April 26, 1998.  Further, on September 17, 1997
     the Company agreed to entry of a consent  judgment  against it and in favor
     of Don Walford,  the sole  shareholder of underwriter  Walford  Securities,
     Inc., in the amount of $60,000, payable over a three-year period.

       The total charge recognized during fiscal 1997 consists of the following:
       $93,600  for the value of the common  shares  issued  based upon the fair
       market value of the Company's  common stock on the date the commitment of
       such  shares was made;  $10,000 for actual cash to be paid by the Company
       pursuant to the settlement  with  stockholders;  and $60,000 for the note
       payable executed with Don Walford as discussed above.
<PAGE>
       In July of 1997, the Company executed a two-year agreement for consulting
       services to be provided by Mr. Gary Woolley.  In addition to monthly cash
       compensation,  Mr. Wooley received a $50,000  two-year  convertible  note
       with  10%  interest  per  annum.  The  principal  balance  of the note is
       convertible  into Common Stock at $.40 per share. A dispute arose between
       Mr. Wooley and the Company and the consulting agreement was terminated at
       the end of August  1997.  Mr.  Wooley and the  Company are  currently  in
       discussion to determine if the matter can be resolved amicably.

      Note 7 -- Stock Warrants.

     As a result of the  issuance of  securities  to LFC as described in Note 4,
     above,  and  adjustments to the exercise terms of the Common Stock purchase
     warrants  issued to the  underwriters  in  conjunction  with the  Company's
     December 1993 initial  public  offering was required.  Those warrants which
     were initially  exercisable  to purchase  165,000 shares @ $12.33 per share
     are now exercisable to purchase 285,621 shares @ $7.12 per share.


Note 8 -- RECENT ACCOUNTING PRONOUNCEMENTS

       In February 1997, the Financial  Accounting Standards Board (FASB) issued
       Statement of Financial  Accounting Standard (SFAS) No. 128, "Earnings per
       Share".  SFAS No.  128,  which is  effective  for  periods  ending  after
       December 15, 1997, requires changes in the computation, presentation, and
       disclosure  of earnings per share.  All prior  period  earnings per share
       data must be restated to conform to the  provisions  of SFAS No. 128. The
       Company will adopt SFAS No. 128 during the fourth quarter of fiscal 1998,
       but does not expect the new accounting standard to have a material impact
       on the Company's reported loss per share.

       In June 1997,  the FASB  issued SFAS No.  130,  "Reporting  Comprehensive
       Income". SFAS No. 130, which is effective for all periods beginning after
       December 15, 1997,  establishes  standards for  reporting and  displaying
       comprehensive income and its components with the same prominence as other
       financial  statements.  All prior  periods must be restated to conform to
       the  provisions  of SFAS No.  130.  The  Company  will adopt SFAS No. 130
       during  the first  quarter  of fiscal  1999,  but does not expect the new
       accounting  standard to have a material impact on the Company's  reported
       financial results.

       In June 1997, the FASB issued SFAS No. 131,  "Disclosures  about Segments
       of an  Enterprise  and  Related  Information."  SFAS  No.  131,  which is
       effective for fiscal years beginning after December 15, 1997, establishes
       new disclosure  requirements for operating segments,  including products,
       services,  geographic areas, and major customers.  The Company will adopt
       SFAS No. 131 for the 1999 fiscal  year.  The Company  does not expect the
       new  accounting  standard  to have a  material  impact  on the  Company's
       reported financial results.


Note 9 -- SUBSEQUENT EVENTS

     Subsequent to September  1997,  the Company  received two bridge loans from
     the principals of Liviakis Financial Communications Inc. totaling $275,000,
     pending  completion of more  permanent  financing.  Following a significant
     funding,  the company will repay the bridge loans along with interest of 9%
     percent per annum.

     Subsequent to September 1997, the Company has been working on structuring a
     private  offering of securities  targeted to raise between $2 to $4 million
     through the sale of convertible debt from "accredited investors" as defined
     in  Rule  501  of  Regulation  D  under  the  Securities  Act of  1933.  In
     conjunction  with this  financing,  the Company  intends to submit proposed
     amendments to its Articles of  Incorporation  at the upcoming  shareholders
     meeting to  authorize  the  creation of  Preferred  Stock and  increase the
     number of authorized  shares of Common Stock available to the Company.  The
     Company  also  anticipates  that it will be required to register  shares of
     common stock underlying the securities sold in the offering.  No assurances
     can be  given  that the  Company  will be  successful  in  completing  this
     financing.


<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


       RESULTS OF OPERATIONS

       U.S.  Wireless  Data,  Inc., a Colorado  corporation,  (the  "Company" or
       "USWD"),  was  organized  on July 30, 1991 for the purpose of  designing,
       manufacturing  and marketing a line of wireless and portable  credit card
       and check authorization  terminals. The Company's first product, known as
       the POS-50(R),  is the world's first integrated  wireless credit card and
       check  authorization  terminal using cellular  communication  technology.
       With over 4,000 POS-50(R)  terminals in the  marketplace,  the Company is
       recognized  as the  leader in  providing  wireless  terminal  transaction
       equipment for the mobile  marketplace.  The POS-50 product  accounted for
       most of the sales recorded in the first quarter ended September 30, 1997.

       Over  the  past  two and a half  years,  USWD  has  focused  its  product
       development  effort on incorporating  Cellular Digital Packet Data (CDPD)
       technology  into its product line.  CDPD is a high-speed  digital  packet
       data,  internet  protocol (IP) based technology that operates in parallel
       with  current  cellular  voice  networks.  It is designed  for high speed
       encrypted data transmission over the air-link and will not interfere with
       or degrade  cellular voice  traffic.  Because of the high speed nature of
       CDPD technology,  and the ability to bypass the public switched telephone
       network,  the  Company's  new  line  of  CDPD-based  terminals  can  have
       significant  performance and communication  cost advantages when compared
       with the traditional  dial-up terminals  currently being sold in the U.S.
       market  today.  The  result is that the  Company  now offers two new CDPD
       products that reduce the current authorization time from approximately 15
       seconds to 3 to 5 seconds.

       The most  significant  USWD  product is the TRANZ*  Enabler  which allows
       current  VeriFone  Tranz(R)  330 or  Tranz(R)  380  users to  immediately
       convert their terminals and printers from a land-line  telephone  dial-up
       mode to a  high-speed  wireless  mode of  operation.  By  effecting  this
       technological   upgrade,   the  cost  of  dedicated  telephone  lines  is
       eliminated as are the delays  created by busy telephony  networks  during
       peak periods of  authorization  activity.  Furthermore,  the efficiencies
       created by adopting the CDPD  technology and USWD's alliance with a major
       transaction  processor  enabled U.S.  Wireless  Data to develop a pricing
       schedule  which  lowers  transaction  and/or  discounts  rates  that most
       retailers  are   currently   paying  to  handle  credit  and  debit  card
       transactions.  The  TRANZ  Enabler  is  directed  at  the  existing  U.S.
       installed  base of  more  than  3.5  million  TRANZ  330  and  TRANZ  380
       terminals. *TRANZ is a registered trademark of Verifone, Inc.

       The  second  CDPD  product  created  by the  Company  is the  POS-500,  a
       self-contained  card terminal and printer that provides the same mobility
       features of the POS-50(R)  product and also  incorporates  the processing
       benefits of the TRANZ Enabler. The unit is geared for the user who either
       does not  have a  dial-up  terminal/printer  in  place  or  requires  the
       advantages of the CDPD technology in a mobile application.

       In mid fiscal  year 1997,  the  Company  made a  fundamental  decision to
       change  the  manner  in  which  it  generates  revenue.  If  successfully
       implemented,  this significant decision transforms the Company from being
       a "box maker" in which it earned one time wholesale margins from the sale
       of its products to earning recurring revenue by providing wireless credit
       card and debit card processing  services to retail merchants.  In January
       1997 the Company  executed a Member Service  Provider  ("MSP")  agreement
       with NOVA Information  Systems ("NOVA"),  the nation's 7th largest credit
       card transaction processor.  As a registered MSP of NOVA, the Company can
       enroll merchants to process their credit and debit card transactions with
       NOVA.  This MSP  agreement  allows U.S.  Wireless Data to earn revenue on
       each card swipe and every dollar  processed by merchants  enrolled by the
       Company.


<PAGE>
       Another key element of USWD's  strategic  direction is the close alliance
       with large communications  carriers such as GTE Mobilnet.  In addition to
       the CDPD  service  agreement  signed in fiscal 97, GTE  Wireless and U.S.
       Wireless  Data,  Inc.,  in August 1997,  announced a joint  marketing and
       operating agreement to distribute USWD's proprietary TRANZ Enabler credit
       card  processing  system using GTE's CDPD  network.  Both  companies  are
       engaged in a nation  wide  deployment,  which will extend  TRANZ  Enabler
       sales to  merchants  through  over  450 GTE  sales  representatives.  The
       agreement   contains  certain   operational  and  financial   performance
       criteria,  directly related to the joint marketing program, which must be
       met by  the  Company.  The  Company  is  building  a  sales  and  support
       organization to provide local support for the GTE sales  representatives.
       By leveraging the sales  organizations  of the major CDPD providers,  the
       Company has the  potential to quickly  reach a large number of merchants.
       The Company plans to execute similar joint marketing  agreements with the
       other CDPD service providers with which it currently has cellular service
       resale agreements.

       In August 1997, the Company retained Liviakis  Financial  Communications,
       Inc.  to advise  and assist the  Company in matters  concerning  investor
       relations,   corporate   finance  and  strategic   management   planning.
       Remuneration  for the consulting  agreement  which has a term of one year
       includes  $10,000 in cash over a one year  period and  300,000  shares of
       unregistered  stock  with  150,000  shares  of the stock  payable  over a
       10-month period.  The Company completed a private placement of restricted
       securities  pursuant to Regulation D of the  Securities  Act of 1933 with
       two officers of  Liviakis.  The Company  raised  $500,000 in cash for 3.5
       million  shares of common  stock and 1.6  million  warrants  to  purchase
       common  stock for $.01 per  share,  exercisable  from  January  15,  1998
       through August 4, 2002. The securities carry future registration  rights,
       including  a one-time  demand  registration,  with fees to be paid by the
       Company.

       In September  1997, the Company signed an agreement with Unicard  Systems
       Inc. to develop terminal  application software that will perform both the
       Unicard  enrollment  process  as well as  deliver  wireless  credit  card
       transaction processing. Unicard Systems will become a registered agent of
       U.S.  Wireless Data and has placed an initial order for 400 TRANZ Enabler
       units.  Unicard  Systems is a Dallas based  service  provider to over 500
       restaurants and nightclubs in Texas.

       In October 1997, the Company  signed an exclusive  agreement with GoldCan
       Recycling, Inc. for wireless monitoring of its state of the art automated
       aluminum  redemption  centers.  This is the first  application  of USWD's
       TRANZ Enabler technology outside the credit card/point-of-sale  industry.
       USWD will receive a monthly  equipment and wireless  service fee on every
       TRANZ Enabler placed by GoldCan. GoldCan anticipates placing in excess of
       3,000 units over the next three years.

       Between October and November 1997, the Company  received two bridge loans
       from Liviakis Financial Communications,  Inc. totaling $275,000,  pending
       completion of more permanent  financing.  Following a funding of at least
       $1 million, the Company will repay the bridge loan along with interest of
       nine percent.

       In early August 1997, the Company announced the appointment of Evon Kelly
       to the  position  of Chief  Executive  Officer.  At this same  time,  Rod
       Stambaugh assumed the position of President.  Also in August, the Company
       hired Clyde  Casciato,  Vice President  Sales;  Tom Cote,  Vice President
       Major Accounts; and in September hired Robert Robichaud,  Chief Financial
       Officer. In September 1997, the Company executed a lease for office space
       in Emeryville,  California.  The lease provides for  approximately  4,500
       square  feet at an initial  rate of $9,942 per month  commencing  October
       1997,  and  containing an initial term of 5 years.  The monthly rent will
       progress to a rate of $11,640 in year five.

       Net Sales

       Net sales of $257,473 for the first quarter of fiscal 1998 decreased from
       net sales of $387,218  generated during the first fiscal quarter of 1997.
       Unit  sales  decreased  in part  because of a  decrease  in direct  sales
       headcount  during fiscal 97 as the company  continued to face significant
       financial pressure.  In addition,  efforts were focused on completing the
       development  of a business  plan,  which will  shift the  company  from a
       per-unit sales approach to a recurring  revenue model.  Efforts were also
       focused  on  completing  negotiations  with  GTE and  establishing  a new
       management  team to execute the new  business  plan.  The POS-50  product
       accounted  for most of the  sales  recorded  in the first  quarter  ended
       September 30, 1997.

<PAGE>
       Gross Margin

       Gross margins in the first fiscal  quarter of 1998 were $83,687  compared
       to $122,008 for the same period in fiscal 1997.  As a percent of revenue,
       gross margins increased by approximately 1.4%, despite the sale of to the
       sale of $83,000 of TRANZ Enabler sales demo units at cost for the new GTE
       marketing  rollout.  The  increase was due  primarily  to more  favorable
       margins on the POS-50(R) product as a result of reduced product cost.


       Operating Expenses

       Selling,  general  and  administrative,   and  research  and  development
       expenses  increased  from $171,157 in the first fiscal quarter of 1997 to
       $530,855 in the first fiscal  quarter of 1998.  This  increase was due to
       expenditures  of $150,000 for consulting  fees related to the development
       of  the  new  business  plan,  increased  compensation  expense  for  new
       additions to the management team and increased  travel and  communication
       expense related to the new marketing  program.  The Company  continues to
       add sales and support personnel to impliment the new marketing  programs.
       In the near term operating expense will rise in advance of sales revenue.

       Research and  development  expenses  decreased from $118,469 in the first
       fiscal  quarter of 1996 to $95,314 in the first  fiscal  quarter of 1998.
       This  decrease was due to reduced  occupancy  and  allocation of overhead
       spending expense.


       Other Income/(Expense)

       Other income/(expense)  decreased from $5,967 in the third fiscal quarter
       of 1997 to $(11,598) in the first fiscal  quarter of 1998.  This decrease
       was due  primarily  to an increase in interest  expense  related to notes
       payable.


       Financial Condition, Capital Resources and Liquidity

       The  Company  continues  to  have  significant   concerns  regarding  its
       financial  condition and liquidity.  While the Company is optimistic with
       its  medium  and  long  term  opportunities,  it is  constrained  by  its
       immediate  financial  condition and requirement for increased  liquidity.
       The Company has  accumulated a deficit of  approximately  $17.50  million
       since inception and currently has a negative  working  capital  position.
       The  Company's  CDPD  based   products,   the  GTE  joint  marketing  and
       distribution agreement, pending distribution agreements and transition to
       a recurring revenue focus present an opportunity for significant  revenue
       growth,  an eventual  return to  profitability,  and the  generation of a
       positive cash flow from  operations.  At present,  the development of the
       Company's  infrastructure  and  expansion  of  the  sales  and  marketing
       organization  requires  additional   financing.   Implementation  of  the
       Company's  business  plan is  dependent  on the  infusion  of new debt or
       equity financing.  As of the date of this report,  the Company is seeking
       to raise  between $2 to $4 million.  The Company is working both directly
       and through its consultants to secure additional debt or equity financing
       which is expected  to fund the  Company's  growth.  While  management  is
       confident it can accomplish  this  objective,  there is no guarantee that
       this additional funding will occur in the required time frame.
<PAGE>
Part II


       ITEM 1 -- LEGAL PROCEEDINGS

       In September of 1996,  the Company  agreed to terms to settle  securities
       fraud  litigation,  pending since 1994,  which was brought in relation to
       the Company's  initial  public  offering of December  1993.  The parties'
       agreement  (the  "Settlement  Agreement")  was filed in the United States
       District  Court for the  District  of  Colorado  on January  15,  1997 in
       consolidated Case N0. 94-Z-2258, Appel, et al. v. Caldwell, et al. By its
       order  approving  the  settlement,  the  court  certified  a  plaintiffs'
       settlement  class and provided the mechanism  for payment of claims.  The
       Company  contributed  $10,000 to the total settlement fund of $2,150,000.
       The  remaining  portion  of the  settlement  was  contributed  by certain
       underwriters  of the Company's  initial  public  offering and  securities
       counsel.  No  objections  to  the  Settlement  Agreement  were  made.  No
       potential  class member  opted-out of the settlement and all are bound by
       the release granted the Company.  All claims against the Company in those
       consolidated  cases  were  dismissed  by  final  federal  court  order on
       September 4, 1997.  No appeal was filed.  Similar state court claims were
       dismissed by Colorado district court order dated October 9, 1997.

     To resolve  cross-claims  asserted by underwriters in the litigation,  U.S.
     Wireless Data, Inc. agreed to transfer to RAS Securities Corporation,  H.J.
     Meyers & Co,  Inc.,  Sands & Co.  Ltd.  and R.J.  Steichen & Co. a total of
     600,000 U.S.  Wireless Data,  Inc. common shares upon the effective date of
     the  Settlement  Agreement.  The Company has agreed to register such shares
     upon demand not sooner than April 26, 1998.  Further, on September 17, 1997
     the Company agreed to entry of a consent  judgment  against it and in favor
     of Don Walford,  the sole  shareholder of underwriter  Walford  Securities,
     Inc., in the amount of $60,000, payable over a three-year period.

       In July of 1997, the Company executed a two-year agreement for consulting
       services to be provided by Mr. Gary  Wooley.  In addition to monthly cash
       compensation,  Mr. Wooley received a $50,000  two-year  convertible  note
       with 10% interest per annum. The note is convertible into Common Stock at
       $.40 per share.  A dispute  arose  between Mr. Wooley and the Company and
       the  consulting  agreement was  terminated at the end of August 1997. Mr.
       Wooley and the Company are  currently in  discussion  to determine if the
       matter can be resolved without litigation.

ITEM 2 -- CHANGES IN SECURITIES

         See Note 7 -  Stock Warrants in Notes to Financial Statements.


<PAGE>
ITEM 3 -- DEFAULTS UPON SENIOR SECURITIES

         The  Company  is  indebted  to  Omron  Systems,  Inc.  under a  Secured
         Installment  Note dated March 27,  1995,  for the  principal  amount of
         $387,866  and  interest  thereon.  The terms of such note  required the
         Company to make  payments of  principal  and  interest  each month from
         April 1995 through  December  1995,  at which time the note became due.
         The Company made one principal  payment,  and monthly interest payments
         through October 1996, in accordance with the terms of the note, but has
         made no other principal payments under this note and for that reason is
         in  default.  The  Company  continues  to  discuss  options  with Omron
         regarding the possible  restructuring or mutually agreeable  settlement
         of this note.


ITEM 5 -- OTHER INFORMATION

         See Note 9 - Subsequent Events in Notes to Financial Statements.



ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K

         a) Exhibits required by Item 601 of Regulation S-B

              27 Financial Data Schedule
<PAGE>
                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                                  U.S. WIRELESS DATA, INC.
                                                  Registrant


Date:    November 16,1997                        By: \s\ Evon Kelly
-----    ----------------                        ------------------
                                                  Chief Executive Officer


         November 16,1997                         By: \s\ Robert E. Robichaud
         ----------------                         ---------------------------
                                                  Chief Financial Officer