**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****December
                31, 2006**  **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.)




2121
      Avenue of the Stars, Suite 1650


Los
      Angeles, CA 90067


(Address
      of principal executive offices, including zip code)




(310)
      601-2500


(Registrant’s
      Telephone Number, including area code)







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 xNo o





As
      of
      February 14, 2007, there were outstanding 11,459,730 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.**


**DECEMBER
      31, 2006 QUARTERLY REPORT ON FORM 10-QSB**


**TABLE
      OF CONTENTS**




**Page**Special
                Note Regarding Forward-Looking Statements
            
            
            1PART
                I -- FINANCIAL INFORMATIONITEM
                1. Financial Statements (Unaudited)Condensed
                Consolidated Balance Sheet as of December 31, 2006
            
            
            2Condensed
                Consolidated Statements of Operations for the Three Months and the
                SixMonths
                Ended December 31, 2006 and 2005
            
            
            3Condensed
                Consolidated Statements of Cash Flows for the Six Months Ended December31,
                2006 and 2005
            
            
            4Notes
                to Condensed Consolidated Financial Statements
            
            
            5ITEM
                2. Management’s Discussion and Plan of Operation
            
            
            11ITEM
                3. Controls and Procedures
            
            
            14PART
                II -- OTHER INFORMATIONITEM
                1. Legal Proceedings
            
            
            14ITEM
                2. Changes in Securities and Small BusinessIssuer
                Purchases of Equity Securities
            
            
            14ITEM
                3. Defaults Upon Senior Securities
            
            
            14ITEM
                4. Submission of Matters to a Vote of Security Holders
            
            
            14ITEM
                5. Other Information
            
            
            14ITEM
                6. Exhibits
            
            
            14







**SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS**





In
      this
      section, “Special Note Regarding Forward-Looking Statements,” references to
“we,” “us,” “our,” and “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 “Management’s
      Discussion and 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 any other cautionary statement in this Quarterly
      Report.





1


**Part
      I — FINANCIAL INFORMATION**




**ITEM
      1. Financial Statements**




**U.S.
                WIRELESS DATA, INC.****CONDENSED
                CONSOLIDATED BALANCE SHEET****(UNAUDITED)**




**December
                31,****2006****ASSETS**Cash
                and cash equivalents
            
            $
            785,000Loans
                receivable
            
            
            3,500,000Interest
                receivable
            
            
            199,000Prepaid
                and other current assets
            
            
            2,000Total
                Assets
            
            $
            4,486,000**LIABILITIES
                AND STOCKHOLDERS' EQUITY**LIABILITIES:Accounts
                payable and accrued liabilities
            
            $
            121,000STOCKHOLDERS'
                EQUITY:Preferred
                Stock, $.01 par value, 1,000,000 shares authorized, none
                issued
            
            
            -Common
                Stock, $.01 par value, 19,000,000 shares authorized,9,499,730
                shares issued and outstanding
            
            
            95,000Additional
                paid-in capital
            
            
            5,739,000Accumulated
                deficit
            
            
            (1,469,000
            )Total
                Stockholders' Equity
            
            
            4,365,000Total
                Liabilities and Stockholders' Equity
            
            $
            4,486,000




See
                notes to condensed consolidated financial
                statements.




2





**U.S.
                WIRELESS DATA, INC.****CONDENSED
                CONSOLIDATED STATEMENTS OF OPERATIONS****(UNAUDITED)**




**For
                the three months ended December 31,**
            
            **For
                the six months ended December 31,****2006**
            
            **2005**
            
            **2006**
            
            **2005**INCOME
                (EXPENSES):Interest
                income
            
            $
            96,000
            
            $
            -
            
            $
            194,000
            
            $
            -General
                and administrative
            
            
            (221,000
            )
            
            (25,000
            )
            
            (533,000
            )
            
            (61,000
            )NET
                LOSS
            
            $
            (125,000
            )
            $
            (25,000
            )
            $
            (339,000
            )
            $
            (61,000
            )Basic
                and diluted net loss per share:
            
            $
            (0.01
            )
            $
            (0.01
            )
            $
            (0.04
            )
            $
            (0.01
            )Weighted
                average common shares outstanding,basic
                and diluted
            
            
            9,500,000
            
            
            4,337,000
            
            
            9,500,000
            
            
            4,168,000




See
        notes
        to condensed consolidated financial statements.


3





**U.S.
                WIRELESS DATA, INC.****CONDENSED
                CONSOLIDATED STATEMENTS OF CASH FLOWS****(UNAUDITED)**




**For
                the six months ended December 31,****2006**
            
            **2005****CASH
                FLOWS FROM OPERATING ACTIVITIES:**Net
                loss
            
            $
            (339,000
            )
            $
            (61,000
            )Adjustments
                to reconcile net loss to net cashused
                in operating activities:Changes
                in assets and liabilities:Interest
                receivable
            
            
            (179,000
            )
            
            -Due
                from related parties
            
            
            20,000
            
            
            -Prepaid
                and other current assets
            
            
            2,000
            
            
            -Accounts
                payable and accrued liabilities
            
            
            (40,000
            )
            
            3,000Net
                cash used in operating activities
            
            
            (536,000
            )
            
            (58,000
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES:**Proceeds
                from sales of common stocks
            
            
            -
            
            
            1,000,000Net
                cash provided by financing activities
            
            
            -
            
            
            1,000,000Net
                increase (decrease) in cash and cash equivalents
            
            
            (536,000
            )
            
            942,000CASH
                AND CASH EQUIVALENTS, beginning of period
            
            
            1,321,000
            
            
            28,000CASH
                AND CASH EQUIVALENTS, end of period
            
            $
            785,000
            
            $
            970,000




See
                notes to condensed consolidated financial
                statements.


4


**U.S.
      WIRELESS DATA, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





**(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”).





**Management’s
      Plan of Operation**


The
        Company has raised additional capital with a view to making us an attractive
        vehicle with which to acquire a business. On June 14, 2006, the Company entered
        into an Agreement and Plan of Merger, which was amended and restated on February 6,
        2007
        ( “Merger
        Agreement”) with StarVox Communications, Inc. (“StarVox”). Prior to the closing,
        $500,000 of the loans receivable will be repaid to the Company and upon closing,
        the remaining loans receivable will be canceled, and the shares of StarVox
        common and preferred stock outstanding immediately prior to the effective
        time
        of the merger shall be converted on a pro rata basis automatically into the
        right to receive approximately 301,594 shares of fully paid and non-assessable
        shares of the Company’s preferred stock which, when converted, will equal
        approximately 22,224,700 fully paid and non-assessable shares of the Company’s
        common stock. At the closing of the merger, the stockholders of the Company
        will, by stockholder consent, increase the authorized number of shares of
        preferred stock and common stock to ensure that there are sufficient authorized
        shares available. Additionally, at the effective time of the merger, each
        outstanding option to acquire StarVox capital stock, whether vested or unvested,
        will be assumed by the Company and will be deemed to constitute an option
        to
        acquire, on the same terms and conditions, the same number of shares of the
        Company’s common stock as the holder of such option would have been entitled to
        receive pursuant to the merger had such holder exercised such option in full
        including unvested shares, immediately prior to the effective time. At closing,
        the Company will issue warrants to acquire shares of the Company’s preferred
        stock, with such number of shares of the Company’s preferred stock to be based
        on the exchange ratio used in the merger, to existing warrant holders of
        StarVox
        such that the holder of such warrants upon exercise will receive that number
        of
        shares of the Company’s common stock as such holder would have been entitled to
        receive pursuant to the merger had such holder exercised such warrants
        immediately prior to the effective time of the merger, with the same expiration
        date as currently exists and at a per share exercise price proportionately
        adjusted for the exchange ratio.




There
      can
      be no assurance that the merger will be consummated or, if consummated, that
      it
      will be consummated on the terms set forth in the Merger Agreement. We are
      therefore subject to a number of risks, including: this or any other acquisition
      consummated by us may turn out to be unsuccessful; 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.





As
      of
      December 31, 2006, the Company had approximately $785,000 of cash, which
      management believes is sufficient to satisfy our monetary needs for the next
      fiscal year.





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.


5


**U.S.
      WIRELESS DATA, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





**(Unaudited)**





**NOTE
      2 - BASIS OF PRESENTATION**





**Principles
      of Consolidation**





The
      consolidated financial statements include the accounts of U.S. Wireless Data,
      Inc. and its wholly owned subsidiary, StarVox Acquisition, a California
      corporation, which was formed as a shell company on June 6, 2006 to merge with
      StarVox Communications, Inc. (collectively, the "Company"). All significant
      inter-company accounts and transactions have been eliminated in consolidation.
      The Company had no subsidiaries as of December 31, 2005.





**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 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, 2006 on Form 10-KSB.





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 revenues and expenses
      during the reporting period. Actual results could differ from those estimates.





The
      Company is subject to a number of risks including dependence on key individuals,
      dependence on outside sources of capital, completion of an asset acquisition,
      merger, and 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 an
      asset acquisition, merger or other business combination on favorable
      terms.





**Cash
      and Cash Equivalents**





Investments
      in money market funds and highly liquid investments purchased with an original
      maturity of three months or less are classified as cash equivalents. Cash
      equivalents are carried at cost, which approximates fair value. We maintain
      all
      of our cash balances with major financial institutions, which, at times, may
      exceed the Federal Deposit Insurance Corporation limit of up to $100,000. The
      Company has not experienced any losses as a result of this policy, and
      management believes there is little risk of loss.




**Income
      Taxes**






We
      follow
      Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for
      Income Taxes”, issued by the Financial Accounting Standards Board (“FASB”).
      Under the asset and liability method of SFAS No. 109, deferred tax assets and
      liabilities are recognized for the future tax consequences attributable to
      differences between the financial statement carrying amounts of existing assets
      and liabilities and their respective tax bases. Since the Company has no prior
      history of profits, management has recorded a full valuation allowance as it
      is
      more likely than not that the deferred tax assets will not be
      realized.


6


**U.S.
      WIRELESS DATA, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





**(Unaudited)**





**NOTE
      2 - BASIS OF PRESENTATION (continued)**





**Stock-based
      Compensation**




On
      January 1, 2006, the Company adopted Statement of Financial Accounting
      Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123(R)”),
      which requires the measurement and recognition of compensation expense for
      all
      share-based payment awards made to employees and directors based on estimated
      fair values. SFAS 123(R) supersedes the Company’s previous accounting under
      Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to
      Employees” (“APB 25”), for periods beginning in fiscal 2006. In March 2005, the
      Securities and Exchange Commission issued Staff Accounting Bulletin No. 107
      (“SAB 107”) relating to SFAS 123(R). The Company has applied the provisions of
      SAB 107 in its adoption of SFAS 123(R).





The
      Company adopted SFAS 123(R) using the modified prospective transition method,
      which requires the application of the accounting standard as of January 1,
      2006, the first day of the Company’s third quarter in fiscal year 2006. The
      Company’s consolidated financial statements as of and for the year ended
      June 30, 2006 reflect the impact of SFAS 123(R). In accordance with the
      modified prospective transition method, the Company’s consolidated financial
      statements for prior periods have not been restated to reflect, and do not
      include, the impact of SFAS 123(R). Stock-based compensation expense recognized
      under SFAS 123(R) for the year ended June 30, 2006 was approximately $381,000,
      which consisted of warrants granted to Board Members and an Officer  (see
      Note
      5). There was no stock-based compensation expense related to employee equity
      awards for the year ended June 30, 2005 under APB 25.





SFAS
      123(R) requires companies to estimate the fair value of share-based payment
      awards on the date of grant using an option-pricing model. The value of the
      portion of the award that is ultimately expected to vest is recognized as
      expense over the requisite service period in the Company’s consolidated
      statement of operations. SFAS 123(R) requires forfeitures to be estimated at
      the
      time of grant and revised, if necessary, in subsequent periods if actual
      forfeitures differ from those estimates. Prior to the adoption of SFAS 123(R),
      the Company accounted for employee equity awards and employee stock purchases
      using the intrinsic value method in accordance with APB 25, as allowed under
      Statement of Financial Accounting Standards No. 123, “Accounting for
      Stock-Based Compensation”  (“SFAS 123”). Under the intrinsic value
      method, no stock-based compensation expense had been recognized in the Company’s
      consolidated statement of operations, other than as related to acquisitions,
      because the exercise price of the Company’s stock options granted to employees
      and directors equaled the fair market value of the underlying stock at the
      date
      of grant.





The
      fair
      value of share-based payment awards is estimated at the grant date using the
      Black-Scholes option valuation model. The Company’s determination of fair value
      of share-based payment awards on the date of grant using an option-pricing
      model
      is affected by the Company’s stock price as well as assumptions regarding a
      number of highly complex and subjective variables. These variables include,
      but
      are not limited to, the Company’s expected stock price volatility over the term
      of the awards, and actual and projected employee stock option exercise
      behaviors.





On
      November 10, 2005, the FASB issued FASB Staff Position No. 123(R)-3,
“Transition Election Related to Accounting for Tax Effects of Share-Based
      Payment Awards.” The Company has elected to adopt the modified prospective
      transition method provided in the FASB Staff Position for calculating the tax
      effects of stock-based compensation pursuant to SFAS 123(R). The alternative
      transition method includes simplified methods to establish the beginning balance
      of the additional paid-in capital pool (“APIC pool”) related to the tax effects
      of employee stock-based compensation, and to determine the subsequent impact
      on
      the APIC pool and consolidated statements of cash flows of the tax effects
      of
      employee stock-based compensation awards that are outstanding upon adoption
      of
      SFAS 123(R).





7




**U.S.
      WIRELESS DATA, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





**(Unaudited)**





**NOTE
      2 - BASIS OF PRESENTATION (continued)**




**Fair
      Value of Financial Instruments**




The
      carrying value of the Company’s financial instruments, including loans
      receivable, interest receivable and accrued liabilities, approximates their
      fair
      values due to their relatively short-term nature.




**NOTE
      3 - LOANS RECEIVABLE AND MERGER AGREEMENT**





On
      April
      20, 2006, the Company provided a bridge loan of $300,000 to StarVox. The loan
      is
      due on demand, bears interest at the rate of 10% per annum and is secured by
      a
      lien on all of the assets of StarVox.





On
      June
      14, 2006, the Company provided a senior secured loan in the amount of $3,200,000
      to StarVox. The loan is due on demand, bears interest at the rate of 10% per
      annum and is secured by all the assets of StarVox.


On
        June
        14, 2006, the Company entered into an Agreement and Plan of Merger, which
        was
        amended and restated on February 6, 2007 (“Merger Agreement”) with StarVox.
        Prior to the closing, $500,000 of the loans receivable will be repaid to
        the
        Company and upon closing, the remaining loans receivable will be converted
        into
        capital of the newly merged entity, and the shares of StarVox common and
        preferred stock outstanding immediately prior to the effective time of the
        merger shall be converted on a pro rata basis automatically into the right
        to
        receive approximately 301,594 shares of fully paid and non-assessable shares
        of
        the Company’s preferred stock which, when converted, will equal approximately
        22,224,700 fully paid and non-assessable shares of the Company’s common stock.
        At the closing of the merger, the shareholders of the Company will, by
        shareholder consent, increase the authorized number of shares of preferred
        stock
        and common stock to ensure that there are sufficient authorized shares
        available. Additionally, at the effective time of the merger, each outstanding
        option to acquire StarVox capital stock, whether vested or unvested, will
        be
        assumed by the Company and will be deemed to constitute an option to acquire,
        on
        the same terms and conditions, the same number of shares of the Company’s common
        stock as the holder of such option would have been entitled to receive pursuant
        to the merger had such holder exercised such option in full including unvested
        shares, immediately prior to the effective time. At closing, the Company
        will
        issue warrants to acquire shares of the Company’s preferred stock, with such
        number of shares of the Company’s preferred stock to be based on the exchange
        ratio used in the merger, to existing warrant holders of StarVox such that
        the
        holder of such warrants upon exercise will receive that number of shares
        of the
        Company’s common stock as such holder would have been entitled to receive
        pursuant to the merger had such holder exercised such warrants immediately
        prior
        to the effective time of the merger, with the same expiration date as currently
        exists and at a per share exercise price proportionately adjusted for the
        exchange ratio.
  StarVox
        is a facilities-based next generation Infrastructure and Applications service
        provider that offers wholesale and retail traditional voice services and
        enhanced Voice-Over-Internet Protocol (“VoIP”) services over its domestic VoIP
        network and its international wholesale network. StarVox’s domestic VoIP network
        provides over 300 Points of Presence (POPs) which allows access from about
        80%
        of business sites. StarVox also provides local services to about 65% of business
        sites. A full suite of traditional and enhanced products is available to
        wholesale and retail customers. The international wholesale network offers
        reliable cost-effective worldwide connectivity to both established and emerging
        carriers. StarVox owns both its application technologies and domestic and
        international VoIP networks, which gives it a competitive advantage. StarVox
        works with a variety of channels (such as, ISPs, CLECs, Telecom Agents,
        Carriers, Affinity Groups, Property Management Groups, etc.) that are interested
        in migrating customers from traditional separate voice and data communications
        connections to a converged voice/data connection. StarVox offers a complete
        “turnkey” package of services to its channels with individual branding. StarVox
        services target small, medium and larger sized businesses (both single site
        and
        multi-site) that are interested in lowering their communications monthly
        costs
        by 20% to 40% by migrating to a converged service. In June 2006, StarVox
        acquired all of the outstanding stock of Capital Telecommunications Inc.
        (“CTI”)
        for $12,000,000 in cash and assumption of all outstanding
        liabilities. CTI is a registered competitive local exchange carrier with
        the
        Federal Communications Commission and is headquartered in York,
        Pennsylvania.


8





**U.S.
      WIRELESS DATA, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





**(Unaudited)**





**NOTE
      3 - LOANS RECEIVABLE AND MERGER AGREEMENT (continued)**




The
      closing of the transaction is subject to certain conditions. There can be no
      assurance that the merger will be consummated or, if consummated, that it will
      be consummated on the terms set forth in the Merger Agreement.




**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 period. 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 condensed
      consolidated statements of operations, 5,750,000 warrants to purchase common
      stock have been excluded from the calculation since their effect would be
      anti-dilutive.





**NOTE
      5 - EXECUTIVE COMPENSATION**





On
      January 18, 2006, upon the appointment of Mr. David Chazen as President and
      a
      member of the Board of Directors, the Company agreed to compensate Mr. Chazen
      for his services as President at a rate of $10,000 per month. This compensation
      arrangement can be terminated by either the Company or Mr. Chazen upon written
      notice to the other party. In addition, for agreeing to serve as a member of
      the
      Company’s Board of Directors, Mr. Chazen was granted a warrant to purchase
      150,000 shares of the Company’s common stock, having an exercise price of $1.00
      and an expiration date of January 18, 2008. Furthermore, on January 18, 2006,
      Mr. Barry Regenstein, a member of the Company’s Board of Directors, was granted,
      for his services as a member, a warrant to purchase 50,000 shares of the
      Company’s common stock, having an exercise price of $1.00 and an expiration date
      of January 18, 2008. The warrants granted to Messrs. Chazen and Regenstein
      contain standard piggyback registration rights, provided, however, the shares
      of
      common stock issued upon exercise will be subject to restrictions on resale
      for
      a period of one year from the date of exercise. The Company recognized
      approximately $300,000 of stock-based compensation expense related to the
      issuance of the warrants.





The
      fair
      value of each option grant was estimated on the date of grant using the
      Black-Scholes option-pricing model with the following assumptions:





Expected
                Life (years)
            
            
            2Interest
                Rate
            
            
            4.35
            %Volatility
            
            
            446
            %Dividend
                Yield
            
            
            0





On
      February 13, 2006, upon the appointment of Mr. David Goddard as a member of
      the
      Board of Directors, he was granted a warrant to purchase 50,000 shares of the
      Company’s common stock, having an exercise price of $1.00 and an expiration date
      of February 13, 2008. The warrant contains standard piggyback registration
      rights, provided, however, the shares of common stock issued upon exercise
      will
      be subject to restrictions on resale for a period of one year from the date
      of
      exercise. The Company recognized approximately $81,000 of stock-based
      compensation expense related to the issuance of the warrants.





9




**U.S.
      WIRELESS DATA, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





**(Unaudited)**





**NOTE
      5 - EXECUTIVE COMPENSATION**  **(continued)**





The
      fair
      value of each option grant is estimated on the date of grant using the
      Black-Scholes option-pricing model with the following assumptions:





Expected
                Life (years)
            
            
            2Interest
                Rate
            
            
            4.68
            %Volatility
            
            
            321
            %Dividend
                Yield
            
            
            0





**NOTE
      6 - RELATED PARTY TRANSACTIONS**





On
      March
      10, 2006, a Management Agreement between Trinad Management, LLC ("Trinad")
      and
      the Company, pursuant to which Trinad agrees to provide the Company with certain
      management services (the "Management Services"), including, without limitation,
      the sourcing, structuring and negotiation of a potential business combination
      involving the Company, became effective. As compensation for such Management
      Services the Company will pay Trinad a monthly management fee of $30,000 for
      a
      period of five years. The Company may terminate the agreement by paying a
      termination fee of $1,000,000. As of December 31, 2006, Trinad and its
      affiliates collectively own approximately 40% of the Company's issued and
      outstanding common stock. The Company incurred $180,000 in management fees
      to
      Trinad during the six months ended December 31, 2006.





**NOTE
      7** - **COMMITMENTS
      AND CONTINGENCIES**




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.




**NOTE
      8 - SUBSEQUENT EVENT**




During
      January 2007, 32 of the Company’s warrant holders exercised their warrants
      utilizing a cashless exercise under which the number of shares to be issued
      was
      determined by multiplying the number of warrants being exercised by the ratio
      of
      the average closing price of the Company’s stock for the five days preceding the
      exercise date minus the exercise price divided by the average closing price.
      3,920,000 warrants were exercised at exercise price of $2.00 per share,
      resulting in the issuance of 1,960,000 shares of common stocks at a value of
      $4.00 per share.




10




**ITEM
      2. MANAGEMENT’S DISCUSSION AND 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; (ii) our
      ability to carry out our operating strategy; and (iii) 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.





**Management’s
      Discussion and Plan of Operation**


The
        Company has raised additional capital with a view to making us an attractive
        vehicle with which to acquire a business. On June 14, 2006, the Company entered
        into an Agreement and Plan of Merger, which was amended and restated on February 6,
        2007 (“Merger
        Agreement”) with StarVox Communications, Inc. Prior to the closing, $500,000 of
        the loans receivable will be repaid to the Company and upon closing, the
        remaining loans receivable will be canceled, and the shares of StarVox common
        and preferred stock outstanding immediately prior to the effective time of
        the
        merger shall be converted on a pro rata basis automatically into the right
        to
        receive approximately 301,594 shares of fully paid and non-assessable shares
        of
        the Company’s preferred stock which, when converted, will equal approximately
        22,224,700 fully paid and non-assessable shares of the Company’s common stock.
        At the closing of the merger, the stockholders of the Company will, by
        stockholder consent, increase the authorized number of shares of preferred
        stock
        and common stock to ensure that there are sufficient authorized shares
        available. Additionally, at the effective time of the merger, each outstanding
        option to acquire StarVox capital stock, whether vested or unvested, will
        be
        assumed by the Company and will be deemed to constitute an option to acquire,
        on
        the same terms and conditions, the same number of shares of the Company’s common
        stock as the holder of such option would have been entitled to receive pursuant
        to the merger had such holder exercised such option in full including unvested
        shares, immediately prior to the effective time. At closing, the Company
        will
        issue warrants to acquire shares of the Company’s preferred stock, with such
        number of shares of the Company’s preferred stock to be based on the exchange
        ratio used in the merger, to existing warrant holders of StarVox such that
        the
        holder of such warrants upon exercise will receive that number of shares
        of the
        Company’s common stock as such holder would have been entitled to receive
        pursuant to the merger had such holder exercised such warrants immediately
        prior
        to the effective time of the merger, with the same expiration date as currently
        exists and at a per share exercise price proportionately adjusted for the
        exchange ratio.




There
      can
      be no assurance that the merger will be consummated or, if consummated, that
      it
      will be consummated on the terms set forth in the Merger Agreement. We are
      therefore subject to a number of risks, including: this or any other acquisition
      consummated by us may turn out to be unsuccessful; 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.




11





On
      March
      10, 2006, the Company and Trinad Management, LLC ("Trinad Management") entered
      into a Management Agreement, pursuant to which Trinad Management agrees to
      provide the Company with certain management services (the "Management
      Services"), including, without limitation, the sourcing, structuring and
      negotiation of a potential business combination involving the Company. As
      compensation for such Management Services the Company will pay Trinad Management
      a monthly management fee of $30,000 for a period of five years. The Company
      may
      terminate the agreement by paying a termination fee of $1,000,000. Trinad and
      its affiliates collectively own approximately 40% of the Company's issued
      and outstanding common stock. The Company paid $180,000 in fees to Trinad
      Management during the six months ended December 31, 2006.





**Stock
      Sales and Liquidity**





On
      December 31, 2005, the Company sold 1,000,000 units; on January 18, 2006, the
      Company sold 950,000 units; on March 10, 2006, the Company sold 800,000 units;
      and on March 31, 2006, the Company sold 2,750,000 units. Each unit sold
      consisted of one share of common stock and one warrant, and the sales price
      of
      each unit was $1.00 per unit. The Company’s stock prices on the dates of closing
      were $1.65, $1.50, $1.65 and $2.30, respectively. The Company realized net
      proceeds of $5,413,000 after the costs of the offering. The warrants have an
      exercise price of $2 per share and expire as follows: 1,000,000 in December
      2007, 950,000 in January 2008 and 3,550,000 in March 2008. The total fair value
      of the units totaled approximately $21,000,000 upon issuance.





As
      of
      December 31, 2006, the Company had approximately $785,000 of cash, which
      management believes is sufficient to satisfy our monetary needs for the next
      fiscal year.





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.





**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 the disclosure of contingent assets and liabilities at the
      dates
      of the financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ from those estimates.





**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.





**Stock-based
      Compensation**




On
      January 1, 2006, the Company adopted Statement of Financial Accounting
      Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123(R)”),
      which requires the measurement and recognition of compensation expense for
      all
      share-based payment awards made to employees and directors based on estimated
      fair values. SFAS 123(R) supersedes the Company’s previous accounting under
      Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to
      Employees” (“APB 25”) for periods beginning in fiscal 2006. In March 2005, the
      Securities and Exchange Commission issued Staff Accounting Bulletin No. 107
      (“SAB 107”) relating to SFAS 123(R). The Company has applied the provisions of
      SAB 107 in its adoption of SFAS 123(R).




12





The
      Company adopted SFAS 123(R) using the modified prospective transition method,
      which requires the application of the accounting standard as of January 1,
      2006, the first day of the Company’s third quarter in fiscal year 2006. The
      Company’s consolidated financial statements as of and for the year ended
      June 30, 2006 reflect the impact of SFAS 123(R). In accordance with the
      modified prospective transition method, the Company’s consolidated financial
      statements for prior periods have not been restated to reflect, and do not
      include, the impact of SFAS 123(R). Stock-based compensation expense recognized
      under SFAS 123(R) for the year ended June 30, 2006 was approximately $381,000
      which consisted of warrants granted to Board Members and an Officer. There
      was
      no stock-based compensation expense related to employee equity awards for the
      year ended June 30, 2005 under APB 25.





SFAS
      123(R) requires companies to estimate the fair value of share-based payment
      awards on the date of grant using an option-pricing model. The value of the
      portion of the award that is ultimately expected to vest is recognized as
      expense over the requisite service period in the Company’s consolidated
      statement of operations. SFAS 123(R) requires forfeitures to be estimated at
      the
      time of grant and revised, if necessary, in subsequent periods if actual
      forfeitures differ from those estimates. Prior to the adoption of SFAS 123(R),
      the Company accounted for employee equity awards and employee stock purchases
      using the intrinsic value method in accordance with APB 25, as allowed under
      Statement of Financial Accounting Standards No. 123, “Accounting for
      Stock-Based Compensation”  (“SFAS 123”). Under the intrinsic value
      method, no stock-based compensation expense had been recognized in the Company’s
      consolidated statement of operations, other than as related to acquisitions,
      because the exercise price of the Company’s stock options granted to employees
      and directors equaled the fair market value of the underlying stock at the
      date
      of grant.





The
      fair
      value of share-based payment awards is estimated at the grant date using the
      Black-Scholes option valuation model. The Company’s determination of fair value
      of share-based payment awards on the date of grant using an option-pricing
      model
      is affected by the Company’s stock price as well as assumptions regarding a
      number of highly complex and subjective variables. These variables include,
      but
      are not limited to, the Company’s expected stock price volatility over the term
      of the awards, and actual and projected employee stock option exercise
      behaviors.





On
      November 10, 2005, the FASB issued FASB Staff Position No. 123(R)-3,
“Transition Election Related to Accounting for Tax Effects of Share-Based
      Payment Awards.” The Company has elected to adopt the modified prospective
      transition method provided in the FASB Staff Position for calculating the tax
      effects of stock-based compensation pursuant to SFAS 123(R). The alternative
      transition method includes simplified methods to establish the beginning balance
      of the additional paid-in capital pool (“APIC pool”) related to the tax effects
      of employee stock-based compensation, and to determine the subsequent impact
      on
      the APIC pool and consolidated statements of cash flows of the tax effects
      of
      employee stock-based compensation awards that are outstanding upon adoption
      of
      SFAS 123(R).





13




**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.





**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 Executive Officer Pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
                1350





32.1
            
            Certification
                Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Subsection
                (A)
                and (B) of Section 1350, Chapter 63 of Title 18, United States
                Code





14




**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.**Dated:
          February 14, 2007
            By:
            /s/
              Robert EllinRobert
              EllinChief Executive Officer(Principal Executive Officer)Dated:
          February 14, 2007
            
            /s/
                Jay WolfJay
              WolfChief
              Operating Officer andChief Financial Officer(Principal Financial
              Officer)




15