SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                  FORM 10-QSB/A

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

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


         Commission File No.:  0-22848


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


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


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



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



Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past ninety days.

                        Yes _X_                    No ___

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


Transitional Small Business Disclosure Format

                        Yes ___                    No _X_
<PAGE>
                            U.S. WIRELESS DATA, INC.
                                TABLE OF CONTENTS



PART I     FINANCIAL INFORMATION                                        Page
------     ---------------------                                        ----

Item 1.    Financial Statements (Unaudited)

           Balance Sheets --
                  September 30, 1997, and June 30, 1997...................3

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

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

           Notes to Financial Statements..................................6-9

Item 2.    Management's Discussion and Analysis...........................10-13



PART II    OTHER INFORMATION

Item 1.    Material Developments in Connection with Legal Proceedings.....13

Item 2.    Changes in Securities..........................................13

Item 3.    Defaults Upon Senior Securities................................14

Item 5.    Other Information .............................................14

Item 6.    Exhibits and Reports on Form 8-K...............................14

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


                                                                  September 30, 1997  June 30, 1997
                                                                  ------------------  -------------
                                                               (Restated - see Note 6)
                                 ASSETS
<S>                                                                <C>             <C>         
Current Assets:
        Cash ...................................................   $     68,018    $      6,083
        Accounts receivable, net of allowance for ..............        208,907         120,531
            doubtful accounts of $15,979 in 97 and $15,903 in 96
        Sales-type lease receivables ...........................         11,023               0
        Inventory, net .........................................        223,478         208,867
        Other current assets ...................................      1,212,078         113,859
                                                                   ------------    ------------
                                                                                  
                 Total current assets ..........................      1,723,504         449,340

Property and equipment, net ....................................         35,159          40,445
Notes receivable ...............................................              0               0
Other assets
                                                                         22,286          11,495
                                                                   ------------    ------------


Total assets ...................................................   $  1,780,949    $    501,280
                                                                   ============    ============
                                                                                     

                  LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
        Accounts payable .......................................   $    452,953   $     354,213
        Accrued liabilities ....................................        152,347         125,587
        Notes payable
                                                                        803,649         737,866
                                                                   ------------    ------------
                Total current liabilities
                                                                      1,408,949       1,217,666
                                                                   ------------    ------------

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

Total Liabilities ..............................................      1,453,949       1,262,666
                                                                   ------------    ------------
                                                                                     

Commitments and contingencies  (See Notes)

Stockholders' Equity:
        Common stock, no par value, 12,000,000 .................      9,192,270       5,613,952
                shares authorized; 9,192,270 and 5,613,952
                shares issued and outstanding
                at 9-31-97 and 6-30-97, respectively.
        Common stock subscribed ................................              0               0
        Additional paid-in capital .............................      8,929,209      10,613,465
        Accumulated deficit
                                                                    (17,766,529)    (16,960,853)
        Notes Receivable from Shareholder
                                                                        (27,950)        (27,950)
                                                                   ------------    ------------
                Total stockholders' equity (deficit)............        327,000        (761,386)
                                                                   ------------    ------------ 
                                                                                     


Total liabilities and stockholders' equity (deficit)............   $  1,780,949    $    501,280
                                                                   ============    ============
</TABLE>
       Accompanying Notes are an integral part of the Financial Statements

                                       3

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



                                                  Three Months Ended
                                          September 30, 1997  September 30, 1996
                                          ------------------  ------------------
                                        (Restated - see Note 6)
<S>                                          <C>            <C>        
Revenue ..................................   $   257,473    $   387,218
Cost of goods sold .......................       173,796        265,449
                                             -----------    -----------

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

Operating Expenses:
    Selling, general and administrative ..       782,441        171,157
    Research and development .............        95,314        118,469
                                             -----------    -----------
    Total operating expenses .............       877,755        289,626
                                             -----------    -----------

Loss from operations .....................      (794,078)      (167,857)


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


Net loss .................................   $  (805,676)   $  (161,890)
                                             ===========    ===========



Earnings (loss) per share: ...............   $     (.10)          (.03)
                                             ===========    ===========

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

       Accompanying Notes are an integral part of the Financial Statements

                                       4
<PAGE>
                            U.S. WIRELESS DATA, INC.
<TABLE>
<CAPTION>
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                                     Three Months Ended
                                                            September 30, 1997  September 30,1996
                                                            ------------------  ------------------
                                                         (Restated - see Note 6)
<S>                                                              <C>          <C>       
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss .................................................  $(805,676)   $(161,890)
     Depreciation and amortization ............................      5,286       20,496
     Non-cash consulting services .............................    347,475

   Changes in assets and liabilities:
          (Increase) decrease in:
               Accounts receivable ............................    (88,377)      95,948
               Inventory ......................................    (14,611)     (26,382)
               Other assets ...................................    (16,687)      28,608
          Increase (decrease) in:
               Accounts payable ...............................     88,740      139,100
               Accrued liabilities ............................     26,760     (100,222)
                                                                 ---------    ---------
               Net cash used in operating activities ..........   (457,090)      (4,342)

CASH FLOWS FROM INVESTING ACTIVITIES:
     (Increase) in other assets ...............................    (10,791)        --
                                                                    ------    ---------
               Net cash used in investing activities ..........    (10,791)        --
                                                                
CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from issuance of stock ..........................    514,033         --
                                                                                     
     Repayments of notes payable ..............................       --        (21,600)
                                                                    ------
     Proceeds from issuance of notes payable
                                                                    15,783        --
                                                                    ------    ---------
              Net cash provided by financing activities .......    529,816      (21,600)


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


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


CASH, End of period ...........................................  $  68,018    $  14,408
                                                                 =========    =========   
</TABLE>

       Accompanying Notes are an integral part of the Financial Statements

                                       5
<PAGE>
                            U.S. WIRELESS DATA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


Note 1 -- ACCOUNTING PRINCIPLES

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

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


Note 2 -- FINANCIAL CONDITION AND LIQUIDITY

      The Company has incurred an  accumulated  deficit of  approximately  $17.8
      million  since  inception,  including a loss of $806 thousand in the first
      quarter of fiscal year 1998. In order to continue as a going concern,  the
      Company has  transitioned  to a  recurring  revenue  focus,  is working on
      programs to increase  revenue levels and product  margins,  is negotiating
      new  distribution   agreements  and  seeking  additional  debt  or  equity
      financing.

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

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


Note 3 -- NET LOSS PER SHARE

      Net loss per common  share is  computed  by  dividing  the net loss by the
      weighted  average  number of common shares  outstanding  at the end of the
      period.  Exercisable  stock  options and  warrants are not included in the
      calculation since their effect would be anti-dilutive.

                                       6
<PAGE>
Note 4 -- LIVIAKIS FINANCIAL COMMUNICATIONS INC. ("LFC") - FINANCING

       As the Company  entered the first  quarter of fiscal  1998,  it faced the
       need  for  increased  liquidity  to  meet  its  obligations  and  fund  a
       significant  rollout of the CDPD TRANZ Enabler  product.  In August 1997,
       through an  introduction by the entrenet Group,  LLC.  ("entrenet"),  the
       Company  sold 3.5  million  unregistered  shares of common  stock and 1.6
       million  warrants to purchase  common stock at an exercise price of $0.01
       per share to two officers of LFC for  $500,000 in cash.  The warrants are
       exercisable  from January 15, 1998 through August 4, 2002. The securities
       sold to LFC carry future registration rights, including a one-time demand
       registration,  with  fees to be paid by the  Company  (see  also  Note 5,
       below).

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


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

       Additionally, in July 1997, the Company retained LFC to advise and assist
       the Company in matters concerning investor  relations,  corporate finance
       and strategic  management and planning  covering the period from July 25,
       1997  through  July of 1998.  As  compensation  for these  services,  the
       Company will issue a total of 300,000  unregistered  restricted shares of
       its Common Stock and $10,000 in cash as consulting  fees. The issuance of
       the  shares of Common  Stock  will  occur at  various  times  during  the
       consulting  agreement,  commencing  November  15,  1997.  Pursuant to the
       consulting  agreement,  the Company will also pay LFC a cash fee equal to
       2.5% of the gross  proceeds  received  as a  finder's  fee for any direct
       financing  located  for  the  Company.   The  shares  will  also  contain
       registration rights as described in Note 4, above.

       Since the LFC related financing  transaction  described in Note 4 and the
       LFC   Consulting   Agreement   were   entered  into  by  the  Company  at
       approximately  the same time, the Company has treated these  transactions
       as one transaction for accounting  purposes.  To properly  ascribe a fair
       value to the Consulting  Agreement,  the Company  obtained an independent
       valuation of the Company's share price from an accredited valuation firm.
       Based on the fair  market  value of the common  stock  determined  by the
       valuation, the total of all shares issuable in the transactions,  and the
       cash proceeds received, the Consulting Agreement was valued at $1,390,000
       and recorded as prepaid consulting services with a corresponding increase
       in equity.  The consulting  services will be amortized on a straight-line
       basis over the term of the Consulting  Agreement (one year) as an element
       of operating expense, within selling,  general and administrative expense
       in the  statement  of  operations,  commencing  with the  July  25,  1997
       effective date of the agreement.


Note 6 - PRIOR PERIOD ADJUSTMENTS

       As discussed in notes 4 and 5, the Company entered into certain financing
       and consulting  transactions in exchange for cash and common stock.  Such
       consulting  transactions  were originally  recorded based on the value of
       the stock issued as  determined  by the value  received for the Company's
       common  stock in a sale of common  stock and  warrants to LFC in exchange
       for cash. It was  subsequently  determined that an independent  valuation
       should be obtained to determine the value of the  Company's  common stock
       issued as a result of the LFC financing  transaction  and the  consulting
       agreement as a combined transaction.

       As a  result  of the  issuance  of  securities  to  LFC at the  initially
       determined  value of the Common Stock,  as described in Note 4, above, an
       adjustment to the excerise  terms of the Common Stock  purchase  warrants
       issued to the underwriters in connection with the Company's December 1993
       initial public offering was thought to be required. Those warrants, which
       were  initially  exercisable  to  purchase  165,000  shares at $12.33 per
       share,  were adjusted to be  exercisable  to purchase  285,621  shares at
       $7.12 per share.  Based on the revised  valuation  of the LFC  consulting
       contract,  the  adjustment  to the  exercise  terms of the warrants is no
       longer applicable.
                                        7
<PAGE>
       As a result of the change in the value of the  Company's  Common Stock as
       described  above,  the financial  statements  for September 30, 1997 have
       been  restated  to  reflect  the  revised  valuation  of  the  consulting
       contract.  This  restatement  did not impact cash flow during the current
       period. A summary of the impact for the periods presented is shown below:
<TABLE>
<CAPTION>
                                                                  September 30, 1997
                                                         Reported                    Restated
                                                         ------------------------------------
                                                                      (Unaudited)

       BALANCE SHEET
<S>                                                   <C>                           <C>         
       Total Assets                                   $      682,835                $  1,780,949
       Additional paid-in-capital                     $    7,579,509                $  8,929,209
       Accumulated Deficit                            $  (17,514,943)               $(17,766,529)
       Total Stockholders' Equity                     $     (771,114)               $    327,000
       Total Liabilities and Stockholders' Equity     $      682,835                $  1,780,949

</TABLE>
<TABLE>
<CAPTION>
       STATEMENT OF OPERATIONS                                     Three Months Ended
                                                                   September 30, 1997
                                                       Reported                      Restated
                                                       --------------------------------------
                                                                      (Unaudited)
<S>                                                    <C>                          <C>      
       Selling, general and administrative             $    530,855                 $ 782,441
       Net Loss                                        $   (544,090)                $(805,676)
       Loss per common share                           $      (0.07)                $   (0.10)

</TABLE>
Note 7 -- LITIGATION


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

     To resolve  cross-claims  asserted by underwriters in the litigation,  U.S.
     Wireless Data, Inc. agreed to transfer to RAS Securities Corporation,  H.J.
     Meyers & Co,  Inc.,  Sands & Co.  Ltd.  and R.J.  Steichen & Co. a total of
     600,000 U.S.  Wireless Data,  Inc. common shares upon the effective date of
     the Settlement Agreement,  which was April 25, 1997. The Company has agreed
     to  register  such  shares  upon  demand  not sooner  than April 26,  1998.
     Further,  on  September  17, 1997 the Company  agreed to entry of a consent
     judgment  against it and in favor of Don Walford,  the sole  shareholder of
     underwriter  Walford  Securities,  Inc., in the amount of $60,000,  payable
     over a three-year  period.  The total charge  recognized during fiscal 1997
     consists  of the  following: 

                                       8
<PAGE>
     $93,600  for the value of the  common  shares  issued  based  upon the fair
     market value of the  Company's  common stock on the date the  commitment of
     such  shares was made;  $10,000  for actual  cash to be paid by the Company
     pursuant  to the  settlement  with  stockholders;  and $60,000 for the note
     payable executed with Don Walford as discussed above.

     In July of 1997, the Company  executed a two-year  agreement for consulting
     services to be provided by Mr.  Gary  Wooley.  In addition to monthly  cash
     compensation,  Mr. Wooley received a $50,000 two-year convertible note with
     10%  interest  per  annum.  The  note  principal  balance  of the  note  is
     convertible  into Common Stock at $.40 per share.  A dispute  arose between
     Mr. Wooley and the Company and the  consulting  agreement was terminated at
     the end of August  1997.  Mr.  Wooley  and the  Company  are  currently  in
     discussion to determine if the matter can be resolved amicably.



Note 8 -- RECENT ACCOUNTING PRONOUNCEMENTS

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

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

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


Note 9 -- SUBSEQUENT EVENTS

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

     Subsequent to September 1997, the Company has been working on structuring a
     private  offering of securities  targeted to raise between $2 to $4 million
     through the sale of convertible debt from "accredited investors" as defined
     in  Rule  501  of  Regulation  D  under  the  Securities  Act of  1933.  In
     conjunction  with this  financing,  the Company  intends to submit proposed
     amendments to its Articles of  Incorporation  at the upcoming  shareholders
     meeting to  authorize  the  creation of  Preferred  Stock and  increase the
     number of authorized  shares of Common Stock available to the Company.  The
     Company  also  anticipates  that it will be required to register  shares of
     common stock underlying the securities sold in the offering.  No assurances
     can be  given  that the  Company  will be  successful  in  completing  this
     financing.
                                        9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     FORWARD-LOOKING STATEMENTS

     The  Company  may,  in  discussions  of its future  plans,  objectives  and
     expected  performance  in periodic  reports  filed by the Company  with the
     Securities and Exchange Commission (or documents  incorporated by reference
     therein) and in written and oral presentations made by the Company, include
     projections  or other  forward-looking  statements  within  the  meaning of
     Section 27A of the  Securities Act of 1933 or Section 12E of the Securities
     Act of 1934, as amended.  Such projections and  forward-looking  statements
     are based on assumptions which the Company believes are reasonable, but are
     by their nature inherently  uncertain.  In all cases,  results could differ
     materially from those projected.  Some of the important  factors that could
     cause  actual  results  to  differ  from  any  such  projections  or  other
     forward-looking  statements  are  detailed  in other  reports  filed by the
     Company under the Securities Exchange Act of 1934,  including the Company's
     Annual Report on Form 10-KSB, for the fiscal year ended June 30, 1997.

     Amounts in this  discussion and analysis have been restated as disclosed in
     Note 6 of the Notes to the Financial Statements.

     RESULTS OF OPERATIONS

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

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

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

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

                                       10
<PAGE>
     In mid fiscal year 1997, the Company made a fundamental  decision to change
     the manner in which it generates revenue. If successfully implemented, this
     significant  decision  transforms  the Company  from being a "box maker" in
     which it earned one time wholesale margins from the sale of its products to
     earning recurring revenue by providing  wireless credit card and debit card
     processing  services  to retail  merchants.  In  January  1997 the  Company
     executed a Member Service Provider ("MSP")  agreement with NOVA Information
     Systems  ("NOVA"),   the  nation's  7th  largest  credit  card  transaction
     processor. As a registered MSP of NOVA, the Company can enroll merchants to
     process  their  credit and debit  card  transactions  with  NOVA.  This MSP
     agreement allows U.S.  Wireless Data to earn revenue on each card swipe and
     every dollar processed by merchants enrolled by the Company.

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

     In July 1997, the Company retained Liviakis Financial Communications,  Inc.
     to advise and assist the Company in matters concerning  investor relations,
     corporate finance and strategic  management  planning.  Remuneration to LFC
     under  the  Consulting  Agreement  which  has a term of one  year  includes
     $10,000 in cash over a one year period and 300,000  shares of  unregistered
     stock with  150,000  shares of the stock  issuable at November 15, 1997 and
     150,000 additional shares issuable over the 10-month period thereafter. The
     Company completed a private placement of restricted  securities pursuant to
     Regulation  D of the  Securities  Act of 1933 with two  officers  of LFC in
     August 1997.. The Company raised $500,000 in cash for 3.5 million shares of
     common stock and 1.6 million warrants to purchase common stock for $.01 per
     share,  exercisable  from  January 15,  1998  through  August 4, 2002.  The
     securities carry future  registration  rights,  including a one-time demand
     registration,  with  fees  to be  paid by the  Company.  See  "Note 4 - LFC
     Financing" and "Note 5 - LFC  Consulting" in Notes to Financial  Statements
     for a description of the accounting treatment for these transactions.

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

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

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

     In early August 1997, the Company  announced the  appointment of Evon Kelly
     to the  position  of  Chief  Executive  Officer.  At this  same  time,  Rod
     Stambaugh  assumed the position of President.  Also in August,  the Company
     hired Clyde Casciato,  Vice President Sales; Tom Cote, Vice President Major
     Accounts; and in September hired Robert Robichaud, Chief Financial Officer.
     In  September  1997,  the  Company  executed  a 

                                       11
<PAGE>
     lease for office space in  Emeryville,  California.  The lease provides for
     approximately  4,500  square  feet at an  initial  rate of $9,942 per month
     commencing  October 1997,  and  containing an initial term of 5 years.  The
     monthly rent will progress to a rate of $11,640 in year five.


     Net Sales

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


     Gross Margin

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


     Operating Expenses

     Selling, and general and administrative expenses increased from $171,157 in
     the first fiscal quarter of 1997 to $782,441 in the first fiscal quarter of
     1998.  Approximately  $347  thousand of the  increase was  attributable  to
     primarily non-cash consulting charges for financial consulting services and
     development of the Company's new business plan. The Balance of the increase
     was  due  to  increased  compensation  expense  for  new  additions  to the
     management team and increased travel and  communication  expense related to
     the new marketing  program.  The Company continues to add sales and support
     personnel  to  support  the  new  marketing  programs.  In the  near  term,
     operating expense will continue to increase ahead of revenue.

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


     Other Income/(Expense)

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


     Financial Condition, Capital Resources and Liquidity

     The Company continues to have significant  concerns regarding its financial
     condition and  liquidity.  While the Company is optimistic  with its medium
     and long term  opportunities,  it is constrained by its immediate financial
     condition  and  requirement  for  increased  liquidity.   The  Company  has
     accumulated a deficit of  approximately  $17.8 million since  inception and
     currently has a negative working capital position. The Company's CDPD based
     products,  the GTE joint  marketing  and  distribution  agreement,  pending
     distribution agreements and transition to a recurring revenue focus present
     an  opportunity  for  significant  revenue  growth,  an eventual  return to
     profitability,  and the generation of a positive cash flow from operations.

                                       12
<PAGE>
     At present,  the development of the Company's  infrastructure and expansion
     of the sales and  marketing  organization  requires  additional  financing.
     Implementation of the Company's  business plan is dependent on the infusion
     of new debt or equity financing. As of the date of this report, the Company
     is seeking to raise  between $2 to $4 million.  The Company is working both
     directly and through its  consultants to secure  additional  debt or equity
     financing which is expected to fund the Company's growth.  While management
     is confident it can accomplish this  objective,  there is no guarantee that
     this additional funding will occur in the required time frame.



Part II


     ITEM 1 -- LEGAL PROCEEDINGS

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

     To resolve  cross-claims  asserted by underwriters in the litigation,  U.S.
     Wireless Data, Inc. agreed to transfer to RAS Securities Corporation,  H.J.
     Meyers & Co,  Inc.,  Sands & Co.  Ltd.  and R.J.  Steichen & Co. a total of
     600,000 U.S.  Wireless Data,  Inc. common shares upon the effective date of
     the Settlement Agreement,  which was April 25, 1997. The Company has agreed
     to  register  such  shares  upon  demand  not sooner  than April 26,  1998.
     Further,  on  September  17, 1997 the Company  agreed to entry of a consent
     judgment  against it and in favor of Don Walford,  the sole  shareholder of
     underwriter  Walford  Securities,  Inc., in the amount of $60,000,  payable
     over a three-year period.

     In July of 1997, the Company  executed a two-year  agreement for consulting
     services to be provided by Mr.  Gary  Wooley.  In addition to monthly  cash
     compensation,  Mr. Wooley received a $50,000 two-year convertible note with
     10% interest per annum.  The note is convertible  into Common Stock at $.40
     per share.  A dispute  arose  between  Mr.  Wooley and the  Company and the
     consulting  agreement was  terminated at the end of August 1997. Mr. Wooley
     and the Company are  currently in discussion to determine if the matter can
     be resolved amicably.


ITEM 2 - CHANGES IN SECURITIES

     Recent Sales of Unregistered Securities:

     July 2, 1997: $16,825  promissory note was issued for cash of $16,000;  the
     note was converted into a convertible  Demand Note (see April - June,  1997
     transactions described above) on or about July 30, 1997;

     August 6, 1997:  2,625,000  shares of Common Stock,  and  1,200,000  common
     stock purchase warrants exercisable at $.01 per share from January 15, 1998
     until August 4, 2002, to John M. Liviakis for $375,000 in cash;

     August  6,1997:  875,000  shares of Common Stock,  and 400,000 Common Stock
     purchase warrants exercisable at $.01 per share from January 15, 1998 until
     August 4, 2002, to Robert B. Prag for $125,000 in cash;

                                       13
<PAGE>
     The Company  relied upon the  registration  exemption  contained in Section
     4(2) of the  Securities  Act of 1933 for  these  transactions.  None of the
     transactions involved a public offering. Representations were received from
     the  purchasers of the  securities to the effect that the  purchasers  were
     taking for  investment  purposes only and not with a view to  distribution;
     "restricted  securities"  legends were imprinted on all stock certificates;
     and  stop-transfer  instructions  were lodged with the  Company's  transfer
     agent as to all shares of common stock issued in the transactions.




ITEM 3 -- DEFAULTS UPON SENIOR SECURITIES

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




ITEM 5 -- OTHER INFORMATION

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



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

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

              27 Financial Data Schedule


                                   SIGNATURES


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


                                              U.S. WIRELESS DATA, INC.
                                              Registrant


Date:    May 12,1998                          By: \s\ Evon Kelly
                                                  ------------------
                                                 Chief Executive Officer


         May 12, 1998                         By: \s\ Robert E. Robichaud
                                                  -----------------------
                                                 Chief Financial Officer

  
                                       14