---

# UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

# Washington, D.C. 20549

---

# FORM 10-QSB

---

# [X]  Quarterly Report Pursuant to Section 13 or
15(D) of the
Securities Exchange Act of 1934

For the quarterly period ended September 30,
2000

OR

# [  ] 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 registrant as specified in its charter)

Delaware
(State of incorporation)

---

84-1178691
(IRS Employer
Identification No.)

750 Lexington Avenue, 20th FloorNew York, NY 10022
(Address of principal executive offices, including zip code)

(212) 750-7766
(Registrant's Telephone Number, including area code)

---

Check whether the
issuer (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 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 of October 18, 2000,
there were outstanding 9,528,277 shares of the Registrants Common Stock
($0.01value per share).

Transitional Small
Business Disclosure Format.
Yes [  ]     No [X]

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

Part I  FINANCIAL
INFORMATION            
    Page
  ITEM 1. Financial Statements
        Balance Sheets as of
            
    September 30 and June 30, 2000..........................
 ...........................     3
        Statements of Operations for the
three months ended
            
    September 30, 2000 and 1999.............................
 .............................     4
        Statements of Cash Flows for the
three months ended
            
    September 30, 2000 and 1999.............................
 ..............................     5
        Notes to Financial Statements...
 .............................................................. 6-8
  ITEM 2. Management's Discussion and Analysis of
Financial Condition and
    Results of Operations..................................
 ................................................. 8-11
Part II  OTHER INFORMATION
  ITEM 4.  Submission of Matters to a Vote of Security Holders................ 11-13
  ITEM 6. Exhibits and Reports on Form 8-K ..........................
 ......................    13
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Page 2
|------

|
|

# U.S. WIRELESS
DATA, INC.
BALANCE SHEETS
(Unaudited)

`September 30, 2000   June 30, 2000
ASSETS                                                                    ------------------   -------------
------

Current assets:
     Cash and cash equivalents ..........................................   $  36,680,000    $  39,231,000
     Accounts receivable, net of allowance for doubtful accounts of
         $75,000 at September 30, 2000 and June 30, 2000 ................         218,000          126,000
     Notes receivable ...................................................          82,000           79,000
     Other receivable ...................................................         176,000             --
     Inventory, net .....................................................          39,000           45,000
     Other current assets ...............................................         222,000          150,000
                                                                            -------------    -------------
         Total current assets ...........................................      37,417,000       39,631,000
Restricted cash .........................................................         576,000          459,000
Property and equipment, net .............................................       2,116,000        1,055,000
Other assets ............................................................         103,000          111,000
                                                                            -------------    -------------

Total assets ............................................................   $  40,212,000    $  41,256,000
                                                                            =============    =============
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable ...................................................   $   1,684,000    $   1,014,000
     Accrued liabilities ................................................       1,073,000          498,000
                                                                            -------------    -------------
         Total current liabilities ......................................       2,757,000        1,512,000
Deferred rent ...........................................................         157,000           52,000
Deposit due to sub-lessor ...............................................         107,000             --
                                                                            -------------    -------------
Total liabilities .......................................................       3,021,000        1,564,000
                                                                            -------------    -------------

Commitments and contingencies

Stockholders' equity:
     Preferred stock, no par value, 25,000,000 and 15,000,000 shares
        authorized at September 30, 2000 and June 30, 2000, respectively:
            Series C convertible, at $.01 stated value, liquidation value
                 $10.00 per share, aggregating $55,866,000, 8,450,000
                  shares authorized, 5,586,600 issued and outstanding ...          56,000           56,000
     Common stock, no par value, at $1.00 stated value, 200,000,000
        and 40,000,000 shares authorized at September 30, 2000
        and June 30, 2000, respectively; 9,528,277 and 8,099,187
        shares issued and outstanding at September 30, 2000 and
        June 30, 2000, respectively .....................................       9,528,000        8,099,000
     Additional paid-in capital .........................................     119,781,000      120,783,000
     Accumulated deficit ................................................     (92,174,000)     (89,246,000)
                                                                            -------------    -------------
         Total stockholders' equity .....................................      37,191,000       39,692,000
                                                                            -------------    -------------
Total liabilities and stockholders' equity ..............................   $  40,212,000    $  41,256,000
                                                                            =============    =============`

## The
above statement gives retroactive effect to a one-for-four reverse stock split
effectuated on October 18, 2000

## The
accompanying notes are an integral part of the financial statements

|Page 3
|------

|
|

# U.S. WIRELESS
DATA, INC.
STATEMENTS OF OPERATIONS
(Unaudited)

`For the three months ended September 30,
                                                        ----------------------------------------
                                                                  2000            1999
                                                                  ----            ----
Net revenues:
    Synapse, recurring ...................................   $   101,000    $    15,000
    Synapse, non-recurring ...............................        39,000         30,000
                                                             -----------    -----------
    Total Synapse ........................................       140,000         45,000
    Equipment related ....................................        11,000         99,000
                                                             -----------    -----------
                                                                 151,000        144,000
                                                             -----------    -----------

Cost of revenues:
    Carrier charges ......................................        98,000         87,000
    Equipment charges ....................................         8,000         87,000
                                                             -----------    -----------
                                                                 106,000        174,000
                                                             -----------    -----------

Gross profit (loss) ......................................        45,000        (30,000)
                                                             -----------    -----------
Operating expenses:
    Selling, general and administrative ..................     3,260,000      1,118,000
    Research and development .............................       350,000        191,000
                                                             -----------    -----------
       Total operating expenses ..........................     3,610,000      1,309,000
                                                             -----------    -----------
       Loss from operations ..............................    (3,565,000)    (1,339,000)

Interest expense .........................................          --         (221,000)
Interest income ..........................................       627,000           --
Other income, net ........................................        10,000        128,000
                                                             -----------    -----------

Net loss .................................................    (2,928,000)    (1,432,000)

Preferred stock dividends ................................          --         (850,000)
                                                             -----------    -----------

Net loss available to common stockholders ................   $(2,928,000)   $(2,282,000)
                                                             ===========    ===========

Basic and diluted net loss per share, (after provision for
   preferred stock dividends) ............................   $     (0.35)   $     (0.48)
                                                             ===========    ===========

Weighted average common shares outstanding - basic/diluted     8,335,000      4,750,000
                                                             ===========    ===========`

## The
above statement gives retroactive effect to a  one-for-four reverse stock split
effectuated on October 18, 2000

## The
accompanying notes are an integral part of the financial statements

|Page 4
|------

|
|

# U.S. WIRELESS
DATA, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)

`For the three months ended September 30,
                                                             ----------------------------------------
                                                                         2000           1999
                                                                         ----           ----

CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss ...................................................   $ (2,928,000)   $ (1,432,000)
    Adjustments to reconcile net loss to net cash used in
     operating activities:
        Depreciation and amortization ..........................         88,000          37,000
        Deferred rent ..........................................        105,000            --
        Non-cash consulting services and other .................        370,000         352,000
        Loss on asset disposal .................................          5,000            --
        Gain on sale of merchant portfolio .....................           --          (124,000)
        Non-cash interest expense ..............................           --            27,000
        Changes in current assets and liabilities:
           Accounts receivable .................................        (92,000)         95,000
           Notes receivable ....................................         (2,000)           --
           Other receivable ....................................       (176,000)           --
           Inventory ...........................................          5,000          73,000
           Other current assets ................................        (72,000)        (16,000)
           Accounts payable ....................................        672,000        (156,000)
           Accrued liabilities .................................        574,000         396,000
                                                                   ------------    ------------
           Net cash used in operating activities ...............     (1,451,000)       (748,000)
                                                                   ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
        Purchase of fixed assets ...............................     (1,155,000)        (29,000)
        Proceeds from sale of merchant portfolio ...............           --           450,000
        Restricted cash ........................................       (117,000)           --
        (Increase) decrease in other assets ....................          8,000         (25,000)
        Increase in deposits ...................................        107,000            --
                                                                   ------------    ------------
           Net cash (used in) provided from investing activities     (1,157,000)        396,000
                                                                   ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
        Proceeds from issuance of common stock .................           --           100,000
        Principal payment on borrowings ........................           --           (25,000)
        Proceeds from exercises of warrants ....................         57,000            --
                                                                   ------------    ------------
           Net cash provided from financing activities .........         57,000          75,000
                                                                   ------------    ------------

Net decrease in cash and cash equivalents ......................     (2,551,000)       (277,000)

Cash and cash equivalents, beginning of period .................     39,231,000         425,000
                                                                   ------------    ------------

Cash and cash equivalents, end of period .......................   $ 36,680,000    $    148,000
                                                                   ------------    ------------`

## The
accompanying notes are an integral part of the financial statements

|Page 5
|------

|
|

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

Note 1 - BASIS OF
PRESENTATION

The
accompanying financial statements included herein have been prepared by U.S.
Wireless Data, Inc. (The "Company" or "USWD"), without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain amounts
in the financial statements of the prior period have been reclassified to
conform to the current period presentation for comparative purposes. The
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB and Rule 310 of Regulation S-B. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.

The
results of operations of any interim period are not necessarily indicative of
the results of operations to be expected for the fiscal year. For further
information, refer to the financial statements and accompanying footnotes
included in the Company's Form 10-KSB for the year ended June 30, 2000.

Please
note that the Common stock and per share prices in the financial statements and
related notes have been retroactively adjusted to give effect to the 1 for 4
reverse stock split that was effectuated on October 18, 2000.

Note 2 - THE COMPANY

The
Company was incorporated in the state of Colorado on July 30, 1991 and was
reincorporated in the state of Delaware on October 6, 2000 pursuant to a
resolution passed by the Board of Directors and adopted by the Company's
Shareholders at the 1999 Annual Shareholders meeting held on September 7, 2000.
Effective October 6, 2000, with the Company's reincorporation in the state of
Delaware, the par value of the Common and Preferred stock has changed from no
par value to $0.01 par value per share. The Company's goal is to be the premier
provider of wireless transaction services. The Company's business strategy is
focused on our recently developed proprietary technology that brings together
three large, rapidly growing industries -transaction processing, wireless data
transport and the Internet - to enable wireless transaction processing. The
Company's Synapse service ("SYNAPSE")(SM) (formerly Wireless Express Payment
Service or WEPS) provides a gateway between all of the parties to a wireless
point of sale ("POS") transaction. By providing a seamless interface between a
merchant's POS terminals, wireless carriers and card processors, credit, debit
and other card transactions can be processed in most instances as fast as cash,
without the cost and inconvenience of being tethered to a telephone line. In
addition, SYNAPSE's Internet-based tools offer on-line, real-time transaction
monitoring, remote diagnostics and automated terminal activation.

Note 3 - INVENTORY

`September 30,     June 30,
                                                         2000           2000
                                                     ------------      --------
       Inventory consists of:
            Raw material .............................. $  177,000   $  177,000
          Finished goods ..............................    354,000      360,000
          Lower of cost or market reserve .............   (492,000)    (492,000)
                                                         ---------    ---------
                                                         $  39,000    $  45,000
                                                         =========    =========`

The Company has established
a reserve against finished goods and raw materials to reflect the estimated net
realizable value of the inventory as of September 30, 2000 and June 30,
2000.

Page 6

|
|

Note 4 - NET LOSS PER
SHARE

Earnings
(loss) per common share (EPS) is computed using Statement of Financial
Accounting Standards (SFAS) No. 128, Earnings per Share. SFAS No.
128 establishes standards for the computation, presentation, and disclosure of
earnings per share. Basic per share amounts are computed by dividing the net
loss available to common stockholders by the weighted average number of common
shares outstanding during the year. Diluted per share amounts incorporate the
incremental shares issuable upon the assumed exercise of the Companys
stock options and warrants and assumed conversion of convertible securities.
During fiscal 2001 and 2000, such incremental amounts have been excluded from
the calculation since their effect would be anti-dilutive. Such stock options,
warrants and conversions could potentially dilute earnings per share in the
future.

Note 5 - STOCKHOLDERS'
EQUITY

On
September 15, 2000, ComVest Capital Management LLC exercised its warrants for
1,429,090 shares of Common stock at an exercise price of $0.04 per share.

For
the first quarter of fiscal 2001, $370,000 was charged to compensation expense
for options issued to four Board Members that were granted on March 29, 2000.

For
the quarter ended September 30, 2000, 966,500 stock options were issued to
employees with the exercise price equal to the closing stock price on the date
of grant.

Note 6 - SUBSEQUENT
EVENTS

On
October 6, 2000, the Company reincorporated in Delaware from Colorado.

On
October 18, 2000, the Company effectuated a one-for-four reverse stock split of
the Company's outstanding Common stock.

On
October 30, 2000, the Company entered into an agreement (the "Agreement") to
acquire substantially all of the assets, subject to certain liabilities, of
CellGate Technologies LLC, a Delaware limited liability company ("CellGate").
CellGate is the leading manufacturer of integrated wireless IP (Internet
Protocol) modem adapters and a provider of wireless IP services for transaction
processing. The modem adapters offer a cost-efficient means for merchants to
convert their credit card terminals from landline to wireless data transmission
and the contemplated acquisition is designed to accelerate the Company's
expansion into the fixed POS wireless market. The assets to be acquired include
an exclusive (except as to AT&T Wireless and its affiliates) license to the
AT&T Wireless technology that makes the conversion of a transaction from
landline to wireless possible for traditional dial-up point of sale terminals
and other dial-up devices.

The
acquisition will be made for One Million Dollars ($1,000,000) and Five Hundred
Sixty-Two Thousand Five Hundred (562,500) shares of the Company's Common stock.
The Company has agreed, subject to certain conditions, to pay additional
consideration to CellGate, if the average Closing Price (as defined in the
Agreement) of the Company's Common stock for the Twenty (20) consecutive trading
days ending with the trading day immediately preceding the one-year anniversary
of the closing date is less than $16.00 per share as adjusted for any stock
splits, stock dividends or similar events. Such additional consideration shall
be an amount equal to: (i) the number of the shares which have not previously
been sold or transferred, subject to certain exceptions, multiplied by (ii) the
amount, if any, not to exceed $10.00, by which such average Closing Price (as
defined in the "Agreement") is less than $16.00. No less than 50% of such amount
shall be paid in cash, and the balance shall be paid, at the Company's option,
in cash or shares of Common stock having a value, based on such average Closing
Price provided that such average Closing Price for such purposes shall not be
less than $6.00 per share, the option, prior to the anniversary of the closing.
The Company is not required to pay the additional consideration as to any shares
remaining with CellGate and its members if, (i) for a period of at least Twenty
(20) consecutive trading days the average price of the Common stock is $16.00
per share, (ii) the average weekly trading volume for such period is at least
140,000 shares, and (iii) the shares issued to CellGate are registered for
resale under the Securities Act of 1933 and are free of the lock-up (described
in the Agreement), to purchase all or a portion of the remaining shares at a
price of $32.00 per share, payable in cash. Consummation of the acquisition is
subject to certain conditions, including receipt of certain third party
consents.

Page 7

|
|

ITEM 2.   MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Special Note Regarding
Forward-Looking Statements

The
following discussion and analysis should be read in conjunction with our
Consolidated Financial Statements and the notes thereto appearing elsewhere in
this Form 10-QSB. All statements contained herein that are not historical facts,
including but not limited to, statements regarding our current business strategy
and our plans for future development and operations, are based upon current
expectations. These statements are forward-looking in nature and involve a
number of risks and uncertainties. Generally, the words anticipates,
believes, estimates, expects and similar
expressions as they relate to us and our management are intended to identify
forward looking statements. Actual results may differ materially. Among the
factors that could cause actual results to differ materially are those set forth
in our Annual Report on Form 10-KSB under the caption Risk Factors.
We wish to caution readers not to place undue reliance on any such
forward-looking statements, which statements speak only as of the date made.

OVERVIEW

During
fiscal 2000, we repositioned ourself as a facilitator of wireless transaction
and data services. We are a device-neutral, wireless carrier-neutral, merchant
acquirer and front-end processor neutral enabler of wireless transaction
processing services through our SYNAPSE service. SYNAPSE provides a gateway
between all of the parties within a wireless point-of-sale (POS)
transaction. By providing a seamless interface between a merchants POS
terminals, wireless carriers and transaction processors, credit, debit and other
card transactions can be processed almost as fast as cash, without the cost and
inconvenience of being tethered to a telephone line. In addition, SYNAPSES
Internet-based tools offer online, real-time transaction monitoring and
reporting, remote diagnostics and automated terminal activation.

We
provide merchant acquirers, Independent Sales Organizations (ISOs)
and payment processors with a wireless transaction management service that can
be utilized at both conventional and emerging merchant segments, permits the
retrieval of on-line/real-time transactional reports and diagnostics via the
Internet and simplifies the customer service and application development effort.

In
late March and May 2000, we raised an aggregate of $55.8 million of gross
proceeds in a private placement.

RESULTS OF OPERATION -
FISCAL 2001 COMPARED TO FISCAL 2000

Revenue

Revenue
from services of $140,000 for the first quarter of fiscal 2001 increased 200%
from $45,000 generated during first quarter of fiscal 2000 as we continued the
implementation of our new business model. We have phased out our direct offering
of wireless credit card processing services and terminals to merchants in fiscal
1999 and are now marketing SYNAPSE to merchant acquirers, ISOs and front-end
processors. We currently have over 100 "Clients" (merchant acquirers, payment
processors or independent service organizations) under contract for SYNAPSE.
Revenue from SYNAPSE should continue increasing as the number of active
terminals increase from growth in the number of clients and merchants. We are
also working to increase the number of SYNAPSE certified devices and obtaining
communications connectivity to, and integration with, additional payment
processors.

Revenues
from equipment sales decreased to $1,000 in the first quarter of fiscal 2001
from $99,000 in the first quarter of fiscal 2000 as we completed the transition
from one-time product sales to a recurring revenue model based on the SYNAPSE
service. For the first quarter of fiscal 2001, total revenues increased to
$151,000 from $144,000 in the same quarter of the prior fiscal year.

|Page 8
|------

|
|

Gross Profit

We
recorded a gross profit of $45,000 in the first quarter of fiscal 2001 compared
to a gross loss of $30,000 in the first quarter of fiscal 2000. Cost of services
include the initial setup and ongoing communications costs associated with
terminals connected through SYNAPSE. With the transition to SYNAPSE, the spread
in revenue and associated cost is impacted by the initialization of new
terminals, the quantity of active terminals, transaction volume and the
associated rates we bill our clients for such services versus our charges from
the various carrier networks. We expect the gross profit margins to improve
substantially in fiscal 2001 versus fiscal 2000 as SYNAPSE revenues increase and
become the primary revenue stream.

Operating Expenses

A
number of expenses increased as we began to use the proceeds of our $55.8
million private placement to ramp up in support of our SYNAPSE launch. During
most of fiscal 2000, capital constraints prevented us from making significant
expenditures.

As
part of the implementation of our new business model, our personnel increased
from 23 at the end of September 1999 to 58 by the end of September 2000.

Selling,
general and administrative expense was $3,567,000 in the first quarter of fiscal
2001,versus $1,118,000 in fiscal 2000. Compensation and other costs have
increased due to the growth of our staff. Marketing and promotions have also
increased.

Research
and development expenses increased to $350,000 in the first quarter of fiscal
2001 from $191,000 in the first quarter of fiscal 2000. This increase was due
primarily to an increase in the number of employees and full time consultants
that are focused on the implementation and development of SYNAPSE.

Interest and Other

Interest
expense of $221,000 for the first quarter or fiscal 2000 includes interest on 6%
Debentures, a note payable and $187,000 accrued for late effective registration
penalties on the 6% Debentures and series B Preferred Stock. A portion of these
penalties and interest were waived. The 6% Debenture, Series B Preferred Stock
and note payable had all been paid off by the end of fiscal 2000.

Interest
income amounted to $627,000 for the first quarter of fiscal 2001 versus
negligible amounts for the first quarter of fiscal 2000. Prior to March 2000,
the Company had substantial liquidity problems. Our receipt of the net cash from
the three closings of the $55.8 million private placement beginning in March
2000 provides us with a large cash balance from which we earn interest and other
investment income.

Other
income of $128,000 for the first quarter of fiscal 2000 included a $124,000 gain
on the July 1999 sale of a portion of our merchant credit card portfolio to PMT
Services Inc., a wholly owned subsidiary of Nova Corporation. The transaction
resulted in a cash payment to us of $450,000. The sale included approximately
450 installed TRANZ Enabler point-of-sale devices owned by us and deployed with
certain merchants. Other income of $10,000 in the first quarter of fiscal 2001
included rental income of $21,000 offset by taxes of $11,000.

Preferred Stock Dividends

Preferred
Stock Dividends for the first quarter of fiscal 2000 includes $778,000 to
accrete the value of the Series B preferred stock up to its redemption value by
the date at which mandatory redemption is available to the holders. The balance
of the preferred stock dividend amount represents Series A and Series B
Preferred Stock dividends that were accrued but not paid in the first quarter of
fiscal 2000. There were no dividends declared or paid on the Series C Preferred
Stock, the only class of Preferred Stock currently outstanding during the first
quarter of fiscal 2001.

|Page 9
|------

|
|

FINANCIAL CONDITION,
CAPITAL RESOURCES AND LIQUIDITY

The
funds from the private placement free management from the daily struggles of
operating with little to no liquidity and provide a long-term solution to our
cash needs. Our Burn Rate, which excludes capital expenditures and
other noncash charges and is adjusted for one time items, approximated $735,000
for the month of September 2000. The monthly Burn Rate in the future could be
affected by a number of factors, including revenues from SYNAPSE and changes in
rates charged by our carriers for wireless airtime and the impact of any
acquisitions.

During
the implementation of our new business plan, we expect expenses to continue to
exceed revenues, at least during the initial phases of the plan. Interest income
provided from the available cash balance will help to reduce monthly deficits.
Our unrestricted cash position of $36.7 million as of September 30, 2000,
provides, in managements opinion, the financial resources to pursue our
business plan and fund monthly deficits. Our currently anticipated capital
equipment expenditures for technology infrastructure are not extensive.

U.S.
Wireless Data, Inc. (the Company) has entered into an agreement (the
Agreement) to acquire substantially all of the assets, subject to
certain liabilities, of CellGate Technologies LLC, a Delaware limited liability
company (CellGate). CellGate is the leading manufacturer of
integrated wireless IP (Internet Protocol) modem adapters and a provider of
wireless IP services for transaction processing. The modem adapters offer a
turnkey, cost-efficient means for merchants to convert their credit card
terminals from landline to wireless data transmission without any other hardware
or software modification, and the contemplated acquisition is designed to
accelerate the Companys expansion into the fixed wireless market. The
assets to be acquired include an exclusive (except as to AT&T Wireless and
its affiliates) license to the AT&T Wireless technology that makes the
conversion from landline to wireless transaction possible for traditional
dial-up point of sale terminals and other dial-up devices.

CellGate
estimates that there are over 4 million terminals that could conceivably be
converted from landline technology to a fixed wireless solution. By using the
CellGate adapter, merchants can eliminate the monthly costs of phone lines for
terminals and improve the speed of their transactions (wireless transactions
take about 2-5 seconds, as compared to landline transactions that take about
10-20 seconds). This solution also is expected to open up the market to
merchants that could not previously take credit cards because of speed issues,
such as quick service restaurants, which potentially represent hundreds of
millions of transactions. In addition to faster and, in many cases, less
expensive transaction costs, merchants have access to detailed transaction
reporting and analysis via U.S. Wireless Datas Synapse(sm)platform.

The
acquisition will be made for One Million Dollars ($1,000,000) and Five Hundred
Sixty-Two Thousand Five Hundred (562,500) shares of the Companys Common
Stock. The Company has agreed, subject to certain conditions, to pay additional
consideration to CellGate, if the average Closing Price (as defined in the
Agreement) of the Companys Common Stock for the Twenty (20) consecutive
trading days ending with the trading day immediately preceding the one-year
anniversary of the closing date is less than $16.00 per share as adjusted for
any stock splits, stock dividends or similar events. Such additional
consideration shall be an amount equal to: (i) the number of the shares which
have not previously been sold or transferred, subject to certain exceptions,
multiplied by (ii) the amount, if any, not to exceed $10.00, by which such
average Closing Price (as defined in the Agreement) is less than
$16.00. No less than 50% of such amount shall be paid in cash, and the balance
shall be paid, at the Companys option, in cash or shares of Common Stock
having a value, based on such average Closing Price provided that such average
Closing Price for such purposes shall not be less than $6.00 per share, the
option, prior to the anniversary of the closing. The Company is not required to
pay the additional consideration as to any shares remaining with CellGate and
its members if, (i) for a period of at least Twenty (20) consecutive trading
days the average price of the Common Stock is $16.00 per share, (ii) the average
weekly trading value for such period is at least 140,000 shares, and (iii) the
shares issued to CellGate are registered for resale under the Securities Act of
1933 and are free of the lock-up (as described in the Agreement), to purchase
all or a portion of the remaining shares at a price of $32.00 per share, payable
in cash. Consummation of the acquisition is subject to certain conditions,
including receipt of certain third party consents.

In
connection, as discussed above, we have entered into an agreement to acquire
substantially all the assets of Cellgate Technologies, LLC, and if the
acquisition is consummated, the Burn Rate would likely increase based on
Cellgates recent current monthly burn rate of approximately $350,000.

Prior
to March 2000, we faced significant challenges due to our then current financial
condition and lack of liquidity. We have incurred recurring losses from
operations and have an accumulated deficit of approximately $92.2 million at
September 30, 2000.

Seasonal Variation of
Business

We
anticipate that the recurring revenue generated under SYNAPSE agreements with
merchant acquirers and credit card processors will be relatively immune to
seasonal variations, although we expect that transaction related revenue will
reflect seasonal variations paralleling consumer spending patterns, generally
increasing somewhat during the Christmas holiday season. The placement of
point-of-sale terminals can be expected to be slower during that season as well,
due to the reluctance of merchants to change processors during premier shopping
seasons.

|Page 10
|-------

|
|

# Part II OTHER
INFORMATION

ITEM 4.   SUBMISSION OF
MATTERS TO A VOTE OF SECURITY HOLDERS

Our
1999 Annual Meeting of Shareholders was held at the New York Marriott East Side,
525 Lexington Avenue, New York, New York 10017 at 2:00 p.m., Eastern time, on
September 7, 2000. The following matters were voted upon at the Annual Meeting
of Shareholders:

Election of a Board of
Directors for One Year Terms.

`Name                                 NUMBER OF COMMON SHARES VOTED
        ----                                 -----------------------------

                                             For               Against          Abstain
                                             ---               -------          -------
        Dean M. Leavitt                      18,920,747          --             105,035
        Alvin C. Rice                        18,932,197          --              92,585
        Chester N. Winter                    18,932,197          --              92,585
        Amy L. Newmark                       18,899,874          --             125,908
        Michael S. Falk                      18,932,597          --              93,185

        Name                                 NUMBER OF SERIES C PREFERRED VOTED
        ----                                 ----------------------------------

                                             For               Against          Abstain
                                             ---               -------          -------
        Barry A. Kaplan                      3,173,000          --               --
        Edwin Cooperman                      3,173,000          --               --`

The Amendment of the
Articles of Incorporation to Increase our Authorized Share Capital.

For
           
              
      Against      
           
          Abstain
18,511,111           
     
     397,060       
             
         77,611

Number of Series C
Preferred Shares Voted

For
           
              
      Against      
           
          Abstain
3,153,000

The Change of Domicile
from Colorado to Delaware.

Number of Common
Shares Voted

For
           
              
      Against      
           
          Abstain
      
           
          Not Voted
18,913,968           
     
      75,240       
             
           36,574
        
             
         9,554,213

Number of Series C
Preferred Shares Voted

For
           
              
      Against      
           
          Abstain
3,163,000

The Adoption of our 2000
Stock Option Plan

Number of Common Shares
Voted

For
           
              
      Against      
           
          Abstain
      
           
          Not Voted
18,499,033           
     
     429,632       
             
         97,117
         
             
         9,554,213

Number of Series C
Preferred Shares Voted

For
           
              
      Against      
           
          Abstain
3,068,000

|Page 11
|-------

|
|

The approval of the
one-for-four reverse stock split.

Number of Common
Shares Voted

For
           
              
      Against      
           
          Abstain
27,771,911           
     
     727,066       
             
         81,018

Number of Series C
Preferred Shares Voted

For
           
              
      Against      
           
          Abstain
3,123,000

The Ratification of M.R.
Weiser & Co. LLP as our Independent Auditors and Public Accountants.

Number of Common
Shares Voted

For
           
              
      Against      
           
          Abstain
28,477,147           
     
      62,069       
             
         40,799

Number of Series C
Preferred Shares Voted

For
           
              
      Against      
           
          Abstain
3,133,000

The
change in domicile was effective as of October 6, 2000 and the reverse stock
split was effectuated on October 18, 2000.

ITEM 6.  EXHIBITS AND
REPORTS ON FORM 8-K

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

| | 3.1
Certificate of Incorporation filed by the Company with the Delaware Secretary of
State on August 3, 2000.
| | -------------------------------------------------------------------------------------------------------------

| | 3.2
Amended Certificate of Incorporation filed by U.S. Wireless Data, Inc. with the
Secretary of the State of Delaware.
| | -----------------------------------------------------------------------------------------------------------------------

| | 27.1
Financial Data Schedule.
| | -----------------------------

b)
Reports on Form 8-K

On
September 8, 2000, the Company filed a report on Form 8-K reporting the change
in location of our principal executive offices.

On
September 19, 2000, the Company filed a report on Form 8-K reporting the results
of our Shareholders meeting held on September 7, 2000 and the amendment of
certain warrants.

On
November 6, 2000, the Company filed a report on Form 8-K reporting the
Acquisition Agreement with Cellgate Technologies, LLC.

|Page 12
|-------

|
|

# 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
        November 14, 2000
             
   
        By: /s/ Dean M. Leavitt
             
             
             
              
             
        Dean M. Leavitt
             
             
             
              
             
        Chief Executive Officer

In
 accordance with the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons in the capacities and
on the dates indicated.

Signatures 
            
             
             
              
                 
Title             
             
             
              
             
Date

/s/ Dean M. Leavitt
Dean M. Leavitt         
             
             
              
            Chief
Executive Officer and Chairman     November 14, 2000
           
             
              
              
             
              
        of the Board of the Company
           
             
              
              
             
              
        (Principal Executive Officer)/s/ Peter J. Adamski       
             
              
              
Peter J. Adamski           
             
             
              
            Senior
Vice President, Chief Financial     November 14, 2000
           
             
              
              
             
              
        Officer and Treasurer
           
             
              
              
             
              
        (Principal Financial Officer)
/s/ Kelly McLaughlin
Kelly McLaughlin         
             
             
              
          Controller 
              
             
              
        November 14, 2000
           
             
              
              
             
          
            
(Principal Accounting Officer)
/s/ Edwin M. Cooperman
Edwin M. Cooperman          
             
             
              
Director             
             
               
             
  November 14, 2000
/s/ Michael S. Falk
Michael S. Falk              
             
              
                 
     Director             
             
             
              
  November 14, 2000
/s/ Barry A. Kaplan
Barry A. Kaplan              
             
              
                
    Director            
             
             
               
  November 14, 2000
/s/ Amy L. Newmark
Amy L. Newmark               
             
              
              
   Director            
             
             
               
  November 14, 2000
/s/ Alvin C. Rice
Alvin C. Rice                
             
              
                
       Director            
             
             
               
  November 14, 2000
/s/ Chester N. Winter
Chester N. Winter            
             
              
              
     Director            
             
               
             
  November 14, 2000

|Page 13
|-------

|
|