SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549
                                  
                             FORM 10-KSB
                                  
                             [Mark One]
                                  
    [  X  ]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934
               For the fiscal year ended June 30, 1996
                                  
 [      ]  TRANSITION REPORT PURSUANT TO 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.
           (Name of small business issuer in its charter)
                                  
                     Colorado                           84-1178691
        (State or other jurisdiction of            (I.R.S. Employer
         incorporation or organization)            Identification No.)
                                  
       5700 Flatiron Parkway, Boulder, Colorado           80301
       (Address of principal executive offices)        (Zip Code)
                                  
 Registrant's telephone number, including area code:  (303) 440-5464
                                  
  Securities registered pursuant to Section 12(b) of the Act:  None
                                  
    Securities registered under Section 12(g) of the Exchange Act
                                  
                  No Par Value Class A Common Stock
                          (Title of Class)

     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 90 days. Yes x No

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

     The  issuer's  revenues  for the  fiscal  year  ended  June 30,  1996  were
$1,582,553.

     The aggregate  market value of the issuer's  voting stock held as of August
30, 1996 by non-affiliates of the Registrant was approximately $648,000 based on
an average price of $.187 as of August 30, 1996.

     As of June 30, 1996,  the issuer had  4,523,333  shares of its no par value
common stock outstanding.

     The Company's Proxy Statement  covering the fiscal year ended June 30, 1996
is incorporated by reference into Part III of this Form 10-KSB.

Transitional Small Business Disclosure Format (check one):
                                  
                         Yes           No  x
                                  
<PAGE>

PART I


ITEM 1.  DESCRIPTION OF BUSINESS

(a)  Business Development.

     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-50r,  is the  world's  first  integrated  wireless  credit  card  and  check
authorization terminal using cellular communication  technology.  The POS-50r is
certified to operate on the major credit card  transaction  processing  networks
and is presently  being marketed in the U.S. by a variety of  Independent  Sales
Organizations ("ISOs"), cellular service providers, and directly by the Company.
The POS-50r allows a merchant to  electronically  authorize and capture a credit
card,  debit card or check  transaction at the point of sale virtually  anywhere
cellular voice service exists.

     Because of its unique  integration and portable design, the POS- 50r is the
only truly portable  circuit-switched  cellular-based  wireless  terminal in the
market  today.  The  POS-50r  does  not  require  AC  power  or a phone  line to
electronically authorize a credit card transaction.  Because of its portable and
wireless  nature,  the POS- 50r is well  suited  for the small to  medium  sized
mobile  retailer  or service  company.  Examples  of current  POS-50r  customers
include craft show vendors,  sporting event  concessionaires,  towing  services,
cart and kiosk  vendors  and  essentially  any  business on the go that wants to
safely  accept  credit  cards,  debit  cards or checks  for their  products  and
services.  Although this mobile market segment is experiencing  rapid growth, it
still represents only a small percentage of annual U.S. terminal shipments.

     Recently,  the Company has developed and  introduced a new line of wireless
credit card authorization  terminals targeted for the core terminal market. This
new line of wireless authorization terminals utilizes a new wireless packet data
technology  known as Cellular  Digital  Packet Data ("CDPD")  which  operates in
parallel  with the  existing  circuit-switched  cellular  voice  network.  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.

     As a key element in its CDPD terminal development strategy, the Company has
entered into an agreement with a CDPD modem  manufacturer  to supply the Company
with a CDPD  modem  for  integration  into the  Company's  new line of  terminal
products. The Company played an active role in specifying  requirements for this
CDPD modem to optimize  functionality  and  performance  when  integrated into a
point-of-sale terminal.


Direct Data Acquisition/Dissolution

     In September  1994, the Company  completed the  acquisition of Direct Data,
Inc.  ("Direct  Data"), a Hartland,  Wisconsin-based  distributor of POS-related
products including credit card terminals,  smart cards, a check reader,  receipt
printers,  and  frequency  marketing  software.   Pursuant  to  the  acquisition
agreement, the Company acquired all of the outstanding shares of common stock of
Direct Data in exchange for 700,000  shares of the  Company's  Common Stock plus
approximately  $2 million in cash.  In  addition,  the Company  agreed to assume
Richard P. Draper's  ("Draper")  personal guaranty of the $1.3 million bank debt
of Direct Data;  the Company was never in a position to fulfill this  obligation
to Draper. At the time of the Company's  acquisition of Direct Data, Draper held
approxi mately 65% of the  outstanding  shares of Direct Data and was an officer
and  director of Direct  Data.  Mr.  Draper  remained an officer and director of
Direct  Data after the  acquisition,  and also  became a director of the Company
until his resignation in April 1995.

     The Company also  provided  loans  totaling $1.9 million to Direct Data, of
which  $500,000  was loaned prior to the closing of the  acquisition.  Since its
inception,  Direct  Data had been in a loss  position  and had been  issuing and
selling equity to meet its working capital needs.  The loans made by the Company
to Direct  Data were  required  to allow  Direct  Data to  continue  to meet its
working capital requirements from September 1994 through February 1995, at which
time  the  Company  stopped  providing  additional  loans.  At the  time  of the
acquisition,  the Company had  expected  that both its and Direct  Data's  sales
performance  would generate  sufficient  cash to support both entities'  working
capital needs.  However, it became apparent in the second fiscal quarter of 1995
that neither the  Company's  nor Direct Data's  performance  would  generate the
necessary capital to fund on- going  operations,  and beginning in January 1995,
the  Company  began  reducing  its  expenses  through  a series of  layoffs  and
operational cost reductions.

     In  November  1994,  the Company had been  approached  by a large  European
company  about their  desire to acquire  Direct  Data.  Due to growing  concerns
regarding  both its and Direct Data's  performance  and  liquidity,  the Company
believed that the potential  disposition  of Direct Data could provide it with a
method to obtain debt relief for Direct Data and a needed cash infusion into the
Company,  as the holder of both an intercompany loan and as the sole shareholder
of Direct Data.  The terms of the proposed  asset sale would have provided for a
cash  payment of $1.5  million  to Direct  Data as payment  for the  assets,  an
earn-out  opportunity  by  the  Company  of up  to $1  million  based  upon  the
subsequent  performance  of the Direct Data  business (as part of the  acquiring
entity),  and the assumption of  substantially  all of Direct Data's secured and
unsecured  debt (other than the loan owed to the Company).  Since  substantially
all other of Direct  Data's debt was being assumed in the  transaction,  most of
the $1.5 million cash payment would have been paid to the Company in re- payment
of its loan and/or as a distribution  to the Company as the sole  shareholder of
Direct Data.

     The Company continued to make loans to Direct Data until mid- February 1995
(ultimately  resulting in a total of $1.9  million in loans) to fund  operations
and in order to maintain Direct Data as a viable acquisition candidate until the
sale could be closed.  Additionally,  in anticipation of the sale, Direct Data's
bank (M&I Bank)  agreed to extend its secured  $1.3  million loan from March 15,
1995 to June 15, 1995.

     In May 1995,  the Company  was  notified  by the  acquiring  party that the
planned  acquisition  of  Direct  Data  would not be  consummated.  As a result,
neither the Company nor Direct Data had the resources necessary to finance their
business operations and obligations, and the Company began exploring all options
available to it and Direct Data. The Company  issued a press release  disclosing
the failed transaction and the resulting financial concerns for both the Company
and Direct Data.

     In June 1995, Direct Data obtained an additional  extension of its M&I Bank
loan to September  1995.  Also in June 1995,  Direct Data  executed a three-year
exclusive   distribution   agreement  with  De  La  Rue  Fortronic  ("DLRF"),  a
Scotland-based  manufacturer of POS terminals, to market and sell DLRF terminals
in the U.S. In addition to its ability to earn gross margins on its distribution
of DLRF  products,  Direct Data also  agreed to  undertake,  for cash  payments,
certain software  development and market development projects for DLRF. The DLRF
agreement permitted Direct Data to, in effect,  receive advances on future gross
margins up to a maximum  advance of  $250,000.  The funding  received  from DLRF
allowed Direct Data to meet payroll and certain other  operational  expenses but
not its  creditor  obligations,  which  included  approximately  $1.3 million in
secured M&I Bank debt,  approximately  $1.1 million in unsecured trade debt, and
$1.9 million in  intercompany  loans from the  Company.  From January 1995 until
September  1995,  Direct Data's  workforce  decreased by  approximately  40%, to
approximately  23  employees.  Direct Data also  continued to negotiate  payment
terms with its trade creditors.

     Despite the cost reduction measures  described above,  Direct Data remained
in a negative  cash flow  situation.  The Company  and Direct Data  investigated
various  options for short and long term funding,  including  increasing  Direct
Data's  advance  from DLRF to above the  $250,000  maximum.  Other than the DLRF
margin advances and software development, however, no short or long term funding
opportunities had been obtained as of September 1995.

     In early  September 1995, M&I Bank gave notice to Direct Data that it would
no longer extend the loan and demanded payment in full on the September 15, 1995
due date.  Since Draper,  an officer and director of Direct Data, had personally
guaranteed  the $1.3 million bank loan,  he began  negotiating  with M&I Bank to
prevent the foreclosure of his guaranty. He ultimately paid the outstanding $1.3
million  to M&I  Bank in  early  October  1995,  and  pursuant  to his  guaranty
arrangement  with M&I Bank,  became the holder of a security  interest in all of
Direct Data's assets.

     Rather than foreclose on the assets,  Draper  contacted Direct Data and the
Company,  as the sole  shareholder  of Direct Data, to negotiate an  arrangement
whereby he would be transferred all of the assets in which he had a foreclosable
security interest. To prevent the negative effects of a foreclosure  proceeding,
(including the likelihood of  substantial  legal fees and associated  expenses),
Direct Data agreed to surrender the assets to Draper.  Separately,  the Company,
as Direct Data's shareholder,  also approved the surrender of assets ($1,032,719
at June 30,  1995 and  approximately  $710,000  at  October 5, 1995) in order to
avoid the foreclosure  proceedings and the above-discussed  negative effects. In
consideration  for that  approval,  Draper  released  the Company  from its $1.3
million  obligation  to remove him from his  personal  guaranty on the bank loan
(which the Company had never fulfilled),  and agreed that the Company would have
the option to purchase the 397,684  shares of USWD Common  Stock (the  "Shares")
beneficially  owned by Draper,  for a period of three years,  at a price of $.25
per share (the fair market value of the  Company's  Common Stock at the time the
transaction was negotiated).  Additionally, Draper granted the Company the right
to  vote  the  Shares  (which  constitute  approximately  9%  of  the  Company's
outstanding Common Stock) during the three-year option period.

     The  transfer  of assets to Draper  was  consummated  on  October  5, 1995.
Immediately  prior to the transfer,  from September 29, 1995 to October 3, 1995,
all remaining  Direct Data employees were  terminated.  As a result of the asset
transfer and Draper's earlier  re-payment of the M&I Bank debt,  Direct Data had
no assets, no secured debt,  approximately  $1.6 million in unsecured trade debt
(not including the $1.9 million  intercompany  loan from the Company) and ceased
operations.  Direct Data notified its  creditors  that it would be unable to pay
its remaining  debts,  and pursuant to the Colorado  Business  Corporation  Act,
Direct Data was dissolved effective October 19, 1995.



(b)  Business of Issuer.

Industry Overview

Credit Card and Debit Card Industry

     With over 3.2 million merchant  locations  accepting bank cards,  Americans
reached  for their  plastic  credit and debit  cards  over 12  billion  times to
purchase  over $700 billion in goods and services in 1995.  Recent  studies have
indicated that consumers spend 30% more per transaction  when using credit cards
than when using cash or checks. Credit card and debit card purchases continue to
experience  double digit growth  annually.  Unfortunately,  fraud is also on the
rise  and as a  result,  merchant  acquirers,  transaction  processors  and card
issuers are trying to minimize their losses by incenting and requiring merchants
to utilize  electronic  draft capture  ("EDC")  terminals to conduct  credit and
debit card transactions.

     An EDC terminal magnetically reads the encoded account information from the
magnetic  strip  on the  back of a  credit  or  debit  card  and  sends  it to a
transaction  processor for electronic  on-line  authorization.  The  transaction
processor  authorizes  the card with the  issuer,  electronically  captures  the
transaction,  generates  an approval  code and returns the data to the  terminal
which  prints a customer  receipt.  Presently,  the  majority  of EDC  terminals
communicate with the transaction  processor via a telephone or leased line. This
dial-up  type  transaction  process  takes  approximately  12  - 16  seconds  to
complete. At the end of the business day, the EDC terminal dials the transaction
processor  to initiate the  collection  and  electronic  deposit of funds to the
merchant's  local bank account.  Losses from fraudulent  cardholder use where no
authorization  was  obtained  at the  retail  point of sale  are  electronically
"charged back" to the merchant.

     Recent  payment  acceptance  guidelines  have been  introduced by Visa that
require a merchant to comply with  specific  procedures  in order to receive the
lowest  transaction  processing  fees  or  discount  rates.  These  requirements
include: (1) the presence of the bankcard at the point of sale, (2) transmission
of all data encoded on the card's magnetic strip, and (3) settlement  within two
days of the  authorization.  If any one of these  requirements  is not met,  the
merchant is penalized with a higher  discount rate and a surcharge is applied to
each transaction not complying with the new requirements.

     The Company  manufactures  a line of wireless  EDC  terminals  and wireless
enabling  products that allow a merchant to safely accept credit and debit cards
virtually  anywhere  cellular  and/or CDPD service is  available.  The Company's
products  comply  with the recent  payment  acceptance  guidelines  and allows a
merchant to qualify for the lowest  discount  rates when  processing  credit and
debit card transactions.


Check Payment Industry

     Checks  are  still  American  consumers  second  favorite  way to  pay  for
purchases,  behind  cash.  Americans  wrote 60  billion  checks  last  year.  Of
approximately  $2 trillion  worth of retail  purchases  nationwide,  almost $700
billion were paid with a check, of which  approximately  1% were returned unpaid
for insufficient funds or other reasons.



     Nationwide,   the  number  of  bad  checks  is  increasing.   The  cost  of
insufficient  funds  checks  often  leads  merchants  either to refuse to accept
checks  or  to  utilize  check  verification  and  guarantee   services.   Check
verification or guarantee services require the merchant to magnetically read the
MICR line of a check or hand key certain  information into an EDC terminal which
communicates  with a  database  maintained  and  operated  by  the  verification
service.  If the check is approved,  an approval code is generated and sent back
to the terminal to complete the check verification or guarantee.

     The  Company's   wireless  terminal  and  enabling  products  expand  check
verification services to mobile and fixed retail merchants where phone lines are
either  not  available  or too slow and  expensive,  and the risks of  accepting
checks are high.


The Company's Products

     POS-50" - The Company's  first product,  known as the POS-50,  is the first
fully-integrated,  wireless portable  credit/debit card  authorization and check
verification  terminal.  It is packaged in a compact,  lightweight  design which
includes an  ergonomic  handle for maximum  portability  . The battery  operated
POS-50" uses a  proprietary  printed  circuit board module to integrate a 3-watt
cellular transceiver, credit card terminal, rechargeable battery and a printer.

     The POS-50r has been in the U.S.  market since January 1994,  and addresses
the mobile  retail  sales and service  marketplace.  A merchant  can utilize the
POS-50r to safely accept and process a credit or debit card transaction anywhere
cellular voice service is available.

     With the  cellular  handset,  the  terminal  can also be used as a cellular
telephone.  The POS-50" may be operated in a vehicle, at a weekend craft show or
similar temporary locations,  can be carried from site-to-site or can be used at
a  fixed  location.  When a  phone  line  is  available,  intelligent  circuitry
recognizes  the connection to a phone line and  automatically  transmits data by
telephone line without using the cellular transceiver, thereby reducing cellular
charges.

     The POS-50" enhances business operations in the following ways:


Increases Sales

     Consumers  often  make  purchases  when  they  have  no cash on hand if the
merchant accepts credit cards or checks.  Research indicates that when customers
have the  option to use a credit  card,  they  spend  30% more per  transaction.
Merchants that accept alternative  methods of payment such as credit/debit cards
or checks believe such alternative methods provide a competitive  advantage over
merchants who do not.


Controls Bad Debt

     The  POS-50"  utilizes an on-line  EDC and  verification  process to access
information about a customer's credit or debit card account. Once the customer's
credit card transaction has been electronically  authorized, an approval code is
assigned and funds are electronically  "captured" (i.e., reserved to pay for the
authorized  transaction).  Since each  transaction  begins by swiping the credit
card  through  the  terminal's  magnetic  card  reader,  there is a  significant
reduction  in the risk of  fraud  loss due to  lost,  stolen,  overextended,  or
physically-altered  credit cards.  Losses from insufficient checks are collected
or guaranteed by check service Company's under a separate fee agreement with the
merchant.


Improves Cash Flow

     Once  funds  have  been  authorized  and  electronically  captured  and the
settlement  procedure  initiated,  they  are  transferred  automatically  to the
merchant's   account.   When  compared  to  paper   submission  of  credit  card
transactions,  the  POS-50"  expedites  the  funding  process by  electronically
depositing the day's credit card  transactions  into the  merchant's  local bank
account usually within 24 to 48 hours. Further, the fees charged to the merchant
for  processing  a  credit  card  transaction  are   significantly   lower  when
electronically processed and captured.

Supports Peripherals

     The POS-50"  supports a "portable  office"  environment by providing a data
port which allows laptop  computers,  portable fax machines and other peripheral
devices to be  connected  to the  POS-50" to  transmit  or receive  data via its
internal  cellular  transceiver.  Jacks  located  on the back of the  unit  make
connecting  peripherals simple. With the optional handset, the terminal can also
be used as a cellular telephone.


New Products

     POS-500 - During the third fiscal quarter of 1996,  the company  introduced
two new products  utilizing CDPD  technology.  The Company's first CDPD product,
known as the POS-500,  is a fully  integrated EDC terminal,  receipt printer and
CDPD  wireless  modem that  allows a merchant to complete a credit or debit card
transaction  in less than 5  seconds.  The  POS-500  is  designed  to target the
traditional small- to-medium sized retailer.

     Because  response  times are 3-5 times faster than dial-up  terminals,  and
per-transaction  communication costs are competitive with current dial-up costs,
the POS-500 can compete  favorably and  eventually  replace  dial-up credit card
terminal  technology  in areas where CDPD service is  available.  The POS-500 is
currently  being used by Yellow Cab company of San Francisco,  and several other
mobile and traditional retail merchants.

     TRANZ*  Enabler - The TRANZ  Enabler  was also  released  during  the third
fiscal quarter of 1996,  and was designed to enable the existing  installed base
of dial-up  EDC  terminals  to operate  over the CDPD  network  and,  therefore,
eliminate the need for a dedicated phone line. The TRANZ Enabler connects to the
printer port of an existing  dial-up terminal and utilizes power from the credit
card  terminal  power  supply.  The TRANZ  Enabler  features a printer  port for
connection  to a  receipt  printer  and can  complete  a credit  or  debit  card
transaction in less than 5 seconds.

     In addition to credit and debit card  transactions,  the TRANZ  Enabler has
recently  been  successfully  tested in an  Electronic  Benefit  Transfer  (EBT)
application.  An EBT transaction is very similar to a debit card transaction and
all the same performance and transaction cost benefits are realized.


Circuit Switched Cellular, CDPD, and EDC Terminal Technology

     The Company's  POS-50"  product  integrates  circuit-switched  cellular and
credit card  terminal  technology  to access  credit card,  debit card and check
verification services. The POS-50" terminal can be used anywhere advanced mobile
phone service (AMPS) cellular service is available. Upon card swipe and once the
sales  amount is entered  via the  terminal  keypad,  the  cellular  transceiver
acquires a cellular  channel and transmits the data over the air waves to a cell
site, which is connected to a mobile telephone  switching office (MTSO) and then
connected to the public  switched  telephone  network  (PSTN).  The call is then
routed over one of several  inter-exchange  carriers  (IEC's) to the transaction
processor.  Once an authorization is obtained, a corresponding  approval code is
returned  to  the  terminal  which  prints  a  duplicate  customer  receipt  and
electronically  captures  the entire  transaction  data.  A check  authorization
utilizes  essentially the same technology and communication path, but authorizes
the check  data with a  negative  file  maintained  by a check  verification  or
guarantee company.

     The credit card  application  software within the POS-50" is unique to each
transaction  processor (FDC,  NOVA,  CES, First USA  Merchantec,  GPS etc.) with
which it communicates.  In addition to proprietary software, each terminal has a
unique  merchant  identification  number  embedded in the software to accurately
identify the merchant and bank account information for settlement purposes.  The
application software can be updated or remotely downloaded by a unique procedure
of keystrokes by the merchant or by the terminal supplier.  Electronic passwords
prevent  unauthorized  changes in either the terminal application software or in
the identification numbers.

     The Company has entered into an agreement with a CDPD modem manufacturer to
supply CDPD modems for its products.  The Company  specified CDPD modem features
needed to optimize the  functionality  and performance of the Company's new line
of CDPD products.

     *TRANZ is a registered trademark of Verifone,  Inc. Cellular  Communication
Networks

     Presently there are cellular  communication  networks providing coverage in
over 700  metropolitan  statistical  area ("MSA") and rural service area ("RSA")
markets in the U.S. It is estimated that the present cellular service  footprint
covers 95% of the U.S.  population.  The  POS-50"  can be used in any area where
cellular coverage is present.

     With  approximately  17,000 cellular  phones being sold each day,  cellular
voice technology is rapidly becoming a commodity  service.  To support this type
of explosive  growth,  the cellular  carriers are spending a substantial part of
their revenues to expand  capacity by upgrading  their  infrastructure  with new
digital technology.  The Company believes the cellular carriers are now focusing
on incremental revenue streams,  including wireless data transmission.  Wireless
data can be transmitted over the same cellular  infrastructure  as voice. It has
been estimated that, by the year 2000, as much as 30% of cellular  revenues will
be derived from data transmission.


Wireless Data Networks

     There  are  several  terrestrial-based  wireless  data  networks  currently
providing  regional and national data services in the U.S. market.  Listed below
are several  networks  the Company  perceives  as current and  potential  future
carriers of POS data traffic.

Digital Cellular

     Present cellular networks consists of digital and analog technology.  There
are  two  digital  voice  technologies   competing  for  market  acceptance  and
dominance:   Code  Division   Multiplexing   Access  (CDMA)  and  Time  Division
Multiplexing  Access  (TDMA).  Both  digital  technologies  have the  ability to
transmit  data over their  respective  networks.  The  Company  perceives  these
networks as suitable for nationwide POS applications if the pricing structure is
competitive with other packet data networks.

Personal Communication Services (PCS)

     With  the  recent  allocation  of  additional  RF  spectrum  and the  FCC's
successful  auctioning  of these  air wave  licenses,  a  variety  of  competing
Personal  Communication  Services  ("PCS") networks are beginning to offer local
and regional  wireless voice and data services.  As these networks are developed
and  deployed,  PCS could become a viable POS wireless  access  technology.  The
future  viability of PCS as a wireless POS access  technology will be contingent
on a "standardized"  protocol and a competitive data pricing structure.  Because
PCS  technology  is  digital,  network  capacity  and  throughput  will not be a
prohibiting factor for POS traffic over a PCS network.

Cellular Digital Packet Data (CDPD)

     The Company  believes CDPD is a superior  wireless data  technology that is
well suited for POS  transaction  processing.  Presently  over 220  metropolitan
statistical  areas have CDPD service  provided by AT&T Wireless  Services,  Bell
Atlantic  NYNEX,  GTE  and  360  Communications,  and an  aggressive  deployment
schedule is expected to continue throughout the U.S., Canada and Latin America.

     Because of the encrypted  packet data and IP (internet  protocol) nature of
CDPD  technology,   CDPD-enabled  POS  terminals  can  favorably   compete  with
traditional dial-up terminal technology operating over public switched telephone
networks.  A CDPD network provides high speed (19.2 bps) wireless access between
a CDPD-enabled POS terminal and a transaction  processor,  effectively bypassing
local phone line service and the monthly costs associated with it. The result of
utilizing CDPD technology is sub-5 second authorization  response times at lower
than dial up-rates. In addition to fast,  secure and low transaction  costs, the
merchant can also  eliminate  the monthly  recurring  cost of a dedicated  phone
line, which averages between $30- 40 per month.





RAM Mobile Data

     RAM Mobile Data is a wireless  packet data network  currently  available in
over 7,500 U.S. cities and towns, covering 90% of the urban business population.
The network is very similar to, but separate  from the cellular  voice  network.
RAM is  designed  as a data- only  infrastructure.  RAM is also  connected  to a
limited  number of  transaction  processors  and  currently has credit card data
transversing their network. The Company believes,  however, that RAM Mobile Data
is not the most effective  technology for wide spread deployment due to its data
pricing structure and other factors.

Nextel

     Nextel  currently  has a digital  Specialized  Mobile Radio (SMR)  network,
based on TDMA technology,  providing voice and messaging  services in the top 50
major  metropolitan  service  areas,  covering  approximately  65% of  the  U.S.
population.  Presently,  Nextel's  network is not suitable for POS data traffic,
but it is  anticipated  that  over the next two years it will be  upgraded  to a
packet-based  data-ready  network.  When the network is upgraded to packet-based
status,  it could become a viable POS data  network if the pricing  structure is
competitive.

Metrocom

     Metrocom is currently  operating a packet-based data network in three major
cities including San Francisco, Seattle, and Washington D.C. Metrocom's Ricochet
network  is a low  power  packet  data  network  designed  for  wireless  mobile
computing  applications  including  E-mail  and  internet  access.  The  Company
perceives the Ricochet network as a potentially viable POS data network when the
coverage area expands to a nationwide footprint.


Markets

     Current  market  research   indicates  that  there  are  over  3.5  million
stand-alone  credit card terminals  installed in the U.S. market.  In 1995, over
1.1  million  POS  devices  were  shipped in the North  American  market,  a 15%
increase  from 1994.  One  contributing  factor to this healthy  increase is the
growth of debit card processing.  A debit card  transaction  requires a personal
identification  number  (PIN) to be entered into the POS  terminal,  and a large
percentage of the existing  terminal base is not debit ready. In addition to the
increased demand for debit-ready  terminals,  other market segments are emerging
for  POS  terminal   devices   including   Electronic   Benefit  Transfer  (EBT)
transactions.

     In the U.S.,  mobile service and retail sales  companies  have  experienced
large growth as Americans have developed a demand for  convenience and a need to
save time.  To a larger  extent than in past years,  the retail point of sale is
often  wherever  the customer is located,  and the merchant  must be prepared to
complete the sale at that location. Thus, a wide range of business services such
as towing services, locksmiths, concessionaires,  special event vendors, in-home
appliance repair services, mobile auto repair, delivery and similar businesses
depend almost exclusively on completing the sales transactions at the customer's
location.

     The  Company  expects  the market for its  products to increase as wireless
data  networks  become more mature with  aggressive  data  pricing and as taxis,
limousines,  sporting event  concessionaires and entertainment  providers accept
more cards and checks to accommodate customer demand for convenience.

     A recent research report  estimates that the total North American  wireless
POS  market  size is in  excess of 4 million  units  and will  increase  over 5%
annually.


International Application

     The  same  research  report  referenced  above  estimates  that  the  total
international  wireless POS market size is in excess of 4 million units and will
increase  over 5% annually.  The Company  believes that  international  markets,
particularly Latin America, where land-based telephone lines are not in place or
are unreliable,  represent  realistic market potential for the Company's POS-500
and TRANZ Enabler products.  However,  because of the lack of standardization in
bankcard  processing,  software  will have to be  developed to process with each
unique transaction  processor in these markets.  Currently,  the Company's TRANZ
Enabler is being successfully tested in a Colombian pilot program. Several Latin
American countries have operational CDPD networks and POS transaction processing
is being touted as one of the initial applications to be pursued.


Product Distribution

POS-50" Distribution

     The POS-50" can be purchased or leased through a variety of ISO's, cellular
companies or the Company directly. There are no agreements in which the reseller
or distributor is obligated to purchase product from the Company.

     The Company's most  successful  distributor  is  Cardservice  International
("CSI") of Agoura Hills,  California.  CSI  currently  processes in excess of $4
billion  in  credit  and  debit  card  transactions  for  approximately   80,000
merchants.  POS-50r sales to CSI accounts for approximately 25% of the Company's
total revenues.  The Company's  future success relies heavily on CSI's continued
support of the POS-50r product.

     In addition to CSI,  the Company has entered into  distribution  agreements
with  several  other  ISO's to sell and  provide  help desk  services  for their
POS-50"  customers.  ISO's usually use a commission- only sales force to call on
merchants to offer their credit card processing services and terminal equipment.
Presently,  ISO's  sell or  lease  nearly  80% of all  stand-alone  credit  card
terminals used in the marketplace.

     The Company has agreements with two master  distributors  that supply other
ISO's,  small  banks and other  resellers.  The Company  also sells  directly to
merchants  that  currently  have a bankcard  relationship  and are  looking  for
hardware only. Due to the lack of an  advertising  budget or a public  relations
campaign,  sales volumes have  remained  fairly flat,  with no new  distribution
channels or internal sales people added during the past fiscal year.


POS-500 and TRANZ Enabler Distribution

     Presently,  NOVA  Information  Systems,  a  transaction  processor  and ISO
organization,  is selling  the POS-500 to selected  pilot  merchants.  After the
initial pilot phase, and customer service procedures are finalized,  the Company
anticipates  that NOVA will use its direct sales force and ISO  organization  to
market the POS-500 and TRANZ  Enabler to their new and existing  merchant  base.
AT&T  Wireless   Service  and  GTE  have  publicly   announced  joint  marketing
arrangements  with NOVA in which they will promote and market the Company's CDPD
products and services.  The sale of the  Company's  POS-500 to Yellow Cab of San
Francisco was initiated by GTE and a NOVA ISO.

     First USA  Merchantech,  formally  known as  GENSAR,  is the third  largest
transaction  processor  in the U.S.  and is  marketing  the POS- 500  through  a
limited  number of ISO's.  Bell Atlantic  NYNEX Mobile has publicly  announced a
partnership  with  First  USA  Merchantech  to  promote  CDPD POS  products  and
services. To date, several POS-500 units have been placed by Bell Atlantic NYNEX
and First USA in high profile merchant locations.

     Several other  transaction  processors and ISO organizations are interested
in distributing the Company's  products,  but currently are not actively engaged
due to the lack of  CDPD-enabled  terminal  software.  The Company is  currently
pursuing  software  development in cooperation  with the various  processors and
ISO's  including  CSI. Due to the  Company's  financial  condition,  application
software is being developed and prioritized only if funded by a third party.


Competition

     Currently, the Company believes it has no direct POS-50r competitor that is
manufacturing an integrated,  battery powered,  circuit-switched  cellular-based
terminal  and printer  product.  However,  the company  has  identified  several
non-integrated  cellular based solutions that compete with the POS-50r,  but are
not as elegant or functional.  These  non-integrated  solutions range from a few
hundred  dollars  to a few  thousand  dollars  depending  upon the  distribution
channels and the type and number of components.

     The Company has  identified  several  potential  competitors  attempting to
develop CDPD-based terminals and solutions.  Hypercom, a Phoenix-based  terminal
manufacturer,  has publicly  announced their CDPD-based  terminal  product.  The
Company perceives this product as direct competition to the POS-500.


Manufacturing

     Initially,  the Company had a  manufacturing  relationship  with  Solectron
Corporation, a California-based electronics manufacturer, to produce the POS-50r
terminals for the Company.  The Company  utilized an outside supplier to produce
the  injection-molded  plastics required to house the POS-50r components.  Other
components,  printed circuit boards, assembly,  testing,  packaging and shipping
were supplied and performed by Solectron on a  cost-per-unit  basis,  subject to
review and negotiation.

     The Company received confirmation from the FCC in late October 1993 that no
specific  regulatory  approval for commercial  sale of the terminal was required
and as of June 30, 1995 the Company had purchased approximately 2,900 units from
Solectron.  Because of the aggressive  build schedule  originally  initiated and
later halted by the Company,  Solectron  had  realized a  significant  materials
exposure with its component suppliers. When sales volumes did not materialize as
expected,  resulting  in a cash flow  problem,  the  Company  could not meet its
financial obligations to Solectron.

     The Company began negotiations with Solectron in December 1995 to liquidate
the remaining raw materials inventory (which totaled approximately  $1,472,000),
and in April 1996 signed a Memorandum of Agreement and Mutual  Release of Claims
with  Solectron,  releasing each other from any and all past,  present or future
claims, demands, or damages, whether known or not known.  Concurrently with this
agreement,  Solectron  signed  an  agreement  with  CSI and  Uniform  Industrial
Corporation  ("UIC") for the bulk sale of all raw materials.  The materials were
shipped from  Solectron to UIC and have been sent to Taiwan for the future build
of 2,000  additional  units.  The  Company  has entered  into an  Agreement  for
Manufacture  and Purchase  with UIC and CSI for the future  production  of 2,000
POS-50  terminals.  Under  the  terms of the  agreement,  UIC  will  manufacture
additional  product  with no  up-front  cost to the  Company,  CSI will agree to
purchase a minimum  amount of each  production  run,  and the Company will pay a
royalty to both UIC and CSI based on future product sales.

     In  1992,  the  Company  agreed  to  purchase   approximately   9,000  card
reader/keyboard  terminal components from a supplier, to be used by Solectron in
the  manufacturing  of the  POS-50r.  At June 30,  1994,  the  Company had taken
delivery on 5,100 units. The Company took delivery on another 830 units in early
1995, and currently is obligated to purchase 1,970 units. The Company has signed
a promissory note for $472,000 and is currently paying interest only on the note
until the Company's  financial  condition  improves.  The supplier has, however,
sold 200 of the  outstanding  inventory  to other users and thereby  reduced the
Company's  obligation by the corresponding sales amount. The Company has been in
discussion with the noteholder  regarding a possible  restructuring of the terms
and conditions of the note.


Customers

     CSI has been the  Company's  single  largest  customer,  with  sales to CSI
representing  approximately  28% and 25% of the Company's  POS- 50r revenues for
the twelve months ended June 30, 1995,  and June 30, 1996  respectively.  CSI is
one of the fastest  growing  credit card  processing  companies in the U.S. with
1,400 agents and a customer base of over 75,000  merchants  processing an annual
bank card volume in excess of $3 billion.  The  Company's  remaining  revenue is
comprised of sales to a variety of ISOs and direct sales.  To date,  the Company
has shipped  approximately  2,700 POS-50r  terminals  and is currently  shipping
approximately 100 terminals per month. The Company currently relies on CSI for a
substantial  part of its business and expects this  relationship  to continue to
strengthen.  However,  if CSI were to discontinue  the POS-50r product line, the
Company  would face a substantial  decrease in revenues.  To minimize this risk,
the Company has developed  reseller  relationships  with several other companies
engaged in the credit card terminal business.  See "Management's  Discussion and
Analysis of Financial Condition and Results of Operations - Financial Condition,
Capital Resources and Liquidity".





Patents, Trademarks and Licenses

     The  Company  applied  for two  patents on certain  aspects of the  POS-50"
product. A design patent was granted in June 1994 and the second patent has been
abandoned.  The  Company  expects to file  additional  patents as it  determines
appropriate.

     The POS-50" is a registered  trademark of the Company. The Company enforces
its mark in all its marketing  material and advertising  campaigns.  The Company
may register future product related trademarks if appropriate.

     The  Company  has a license to certain  proprietary  software  and  related
technology  owned by its credit card terminal  supplier.  The Company's  license
limits its use of the proprietary software, however, the limited availability of
the  supplier's  technology  also  should  impede  others from  duplicating  the
technology. Any proprietary technology involved in the primary components of the
Company's products , including the cellular and CDPD transceiver,  printer,  and
interface module is owned by the respective component supplier. The Company does
not  claim  any  proprietary  rights  with  respect  thereto  except  as to  the
integrated use in the Company's  products.  Similar  components are available to
the  Company  in  the  event  a  supplier  discontinues  the  production  of its
component, although some product redesign may be required.


Government Regulation

     The  POS-50",  POS-500 and TRANZ  Enabler  use  cellular RF channels in the
800-900  megahertz  bandwidth  and are subject to regulation by the FCC for both
cellular  transmission and unintentional  interference  radiation.  The products
incorporate either a circuit-switched  cellular or CDPD transceiver manufactured
by suppliers that comply with the  appropriate  FCC  requirements  and have been
issued an FCC identification number.

     The  Company  has  received  confirmation  from  the FCC  that the POS- 50"
terminal  product does not require FCC approval to sell the terminal in the U.S.
marketplace.

     The  POS-50",  POS-500 and TRANZ  Enabler  have passed all known UL and CSA
requirements in testing conducted at an independent certified test site.

     Most foreign countries accept United States federal regulatory approval for
purposes  of  permitting  commercial  sales  of  electronic  products;  however,
specific  regulatory  approval of the product may be required in some  countries
and could become an obstacle to sales of the product in such areas.


Research and Development

     A substantial  portion of the Company's  early  activities were involved in
the engineering and development of the initial  POS-50r  terminal  product.  The
Company  completed  development in early 1993. During the last two fiscal years,
ending  June 30, 1995 and 1996,  the  Company  expended  $502,477  and  $458,407
respectively, in research and product development activities.

     The  Company   employs   four  people  who  are  engaged  in  research  and
development.  Current efforts are focused on CDPD-based  products and on POS-50r
enhancement,  including  bringing a new  manufacturer  on line,  cost reduction,
product efficiency and reliability,  customization and software development. The
Company expects to add personnel to its R&D staff as the financial  condition of
the Company improves and/or additional development contracts are obtained.


Employees

     As of August 31, 1994, the Company had 30 full-time employees including its
officers;  sales and marketing  staff;  product  research and development  team;
manufacturing,   technical  and  customer   support  staff  and   administrative
functions. Since January 1995, because of its deteriorating financial condition,
the  Company  has had to impose a series of  layoffs  and  presently  employs 11
full-time people.

ITEM 2.  DESCRIPTION OF PROPERTY

     The  Company is  headquartered  in Boulder,  Colorado,  where it has leased
approximately  4,800  square  feet of office  space under a two year lease which
commenced in June 1996 for gross monthly  rental of  approximately  $5,200.  The
Company also leases 4,800 square feet of office and laboratory space in Colorado
Springs,  Colorado  pursuant to a lease for 36 months  starting  May 1, 1994 for
which the Company pays a monthly rent of $5,538.

     In December  1995,  the Company  entered  into an  agreement to sublease to
another  company  approximately  3,000  square  feet of its office  space in its
Colorado  Springs  facility for a monthly rate of $3,337.  The sublease  extends
through the period of the original lease.



ITEM 3.  LEGAL PROCEEDINGS

     In early  September  1994,  two  shareholders  filed a Colorado state court
class action lawsuit in Denver District Court against the Company,  three of its
directors,  and others  (Jacques A. Machol  III, et al. v. U.S.  Wireless  Data,
Inc.,  et al.).  The lawsuit  alleges  various  fraudulent  acts,  omissions and
misrepresentations  by the  defendants  in  connection  with the initial  public
offering of and subsequent trading in the Company's stock.

     A second  shareholder class action complaint against the Company,  three of
its directors, and others was filed by one shareholder in late September 1994 in
U.S. District Court, Denver, Colorado (Jeffry Appel on behalf of himself and all
others similarly situated, v. Maurice R. Caldwell Jr., Rod L. Stambaugh, Leonard
Trout, Donald L. Walford,  Frank LaHue, U.S. Wireless Data, Inc., among others).
The  complaint  also  arises  out of the  Company's  public  offering  and makes
allegations  similar to those made in the first  complaint.  The Denver District
Court lawsuit has been stayed by court order so as to avoid duplication with the
U.S. District Court lawsuit.

     In February 1995, another class action complaint was filed in U.S. District
Court,  Denver,  Colorado by the same  plaintiff  who had  previously  filed the
Colorado State Court class action in early September 1994 (Jacques A. Machol III
and Prism Partners I on behalf of themselves and all others similarly  situated,
v. U.S. Wireless Data, Inc., Maurice R. Caldwell Jr., Rod L. Stambaugh,  Leonard
Trout,  Donald L.  Walford,  Frank LaHue,  among  others).  The  Defendants  and
allegations are the same as in the original and subsequent  lawsuits.  The court
has  consolidated  the two federal cases and a trial date has been scheduled for
March 1997.  Several  settlement  discussions  have been held,  but to date,  no
formal agreement has been reached.

     The Company  believes  these  lawsuits are without merit and denies that it
engaged in any fraudulent acts or omissions,  or otherwise  violated  Federal or
Colorado  law.  In each case,  the  Company  intends to  vigorously  contest the
litigation  on  its  merits,  as  well  as  the  suitability  of  the  plaintiff
shareholders to act for the alleged class.  Nonetheless,  because  litigation of
this type involves  inherent  risks,  it is not possible for the Company at this
time to make an assessment of potential exposure,  nor to predict with precision
what the ultimate outcome will be.



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

     No matter was submitted to a vote of the Company's  shareholders during the
fourth quarter of the Company's fiscal year ended June 30, 1996.










PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a)  Market Information.

     The Company's  Common Stock was traded on and quoted in the National Market
System of the National  Association of Securities  Dealers  Automated  Quotation
System  (NASDAQ)  under the symbol  USWDA  since the  Company's  initial  public
offering on December 3, 1993 until July 6, 1995,  when the  Company's  stock was
de-listed  from  NASDAQ for  failure to meet the minimum bid price or the market
value  of  public  float  requirements.  As a  result,  the  Company's  stock is
currently  trading on the OTC  Bulletin  Board under the symbol  USWDA.  For the
fiscal quarter  indicated,  the following  table shows the high and low reported
closing prices of the Company's  Common Stock as reported on the NASDAQ National
Market System (for fiscal  quarters prior to and including the fourth quarter of
fiscal 1995) and on the OTC Bulletin  Board (for fiscal  quarters  including and
after such date.)
<TABLE>
<CAPTION>

                                                       High                Low
<S>                                                  <C>                  <C>
First ..................................              3 19/32              2 1/8
Quarter '95
Second .................................              3 1/2                1 1/2
Quarter '95
Third ..................................              2 1/4                15/16
Quarter '95
Fourth .................................              1 1/4                1/4
Quarter '95
First ..................................              15/32                1/8
Quarter `96
Second .................................              15/32                3/32
Quarter `96
Third ..................................              1 1/16               7/64
Quarter `96
Fourth .................................              27/32                9/32
Quarter `96
</TABLE>

     The above  quotations  were furnished by The NASDAQ Stock Market,  Inc. and
the OTC Bulletin Board. Such quotations  represent prices between dealers and do
not include retail  mark-ups,  mark-downs or  commissions  and may not represent
actual transactions.

(b)  Holders.

     As of June 30, 1996,  the Company had  approximately  230  shareholders  of
record of its Common Stock.

(c)  Dividends.

     The Company has not declared  cash  dividends on its Common Stock since its
inception and the Company does not  anticipate  paying any cash dividends in the
foreseeable future.



ITEM  6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF        OPERATIONS

Results of Operations

Results of Operations

     The Company was  incorporated  on July 30, 1991, and was in the development
stage until the quarter ended September 30, 1994. Since  inception,  the Company
has  raised  equity  capital  through  the  sale  of its  securities,  completed
development  of its initial  product,  negotiated  agreements  with suppliers of
components,  developed a marketing strategy,  and initiated sales of the POS-50
portable credit card and check  verification  terminal.  During fiscal 1995, the
Company  continued to promote its product through the cellular  reseller channel
and, in the second  half of fiscal  1995,  enhanced  its  marketing  strategy by
focusing sales efforts on the ISO channels and began development on its new CDPD
product line. In fiscal 1996,  the Company  continued its efforts on the POS-50
and in the  second  half of the year  introduced  two new  CDPD-based  products.
Substantially  all the  revenue of the Company for the past fiscal year has been
derived from the sale of inventories for which the Company had previously  paid.
These inventories have now been significantly depleted. As a result, the Company
must purchase  inventory for future product sales.  These additional costs have,
and will continue to, result in smaller per-unit working capital infusion. Given
these additional cash  requirements and lower net cash inflow,  coupled with the
Company's current financial  condition,  the Company would be unable to continue
as a going  concern.  See  "Management's  Discussion  and  Analysis of Financial
Condition and Results of Operations Financial  Condition,  Capital Resources and
Liquidity."

     In 1993, the Company established a contractual  relationship with Solectron
Corporation  in  Milpitas,  California  for  subcontract  manufacturing  of  the
POS-50r. The Company ordered and received  approximately 2,900 POS-50r terminals
through June 1995.  The Company  built a large  inventory  of finished  goods to
facilitate    promptly    filling    orders   from    customers.    Because   of
higher-than-desirable  inventory  levels and poor  sales  results,  the  Company
stopped production by Solectron in April 1994. Discussions with Solectron during
the Company's third fiscal quarter of 1995 led to a conclusion that $1.4 million
of raw materials  inventory held by Solectron  should be recorded as a liability
on  the  Company's  financial  statements.   During  fiscal  1996,  the  Company
negotiated  an  arrangement  whereby  Solectron  sold  all of the raw  materials
inventory  and  concurrently  signed a mutual  release  with the  Company.  As a
result,  the Company  recognized a $1,099,412 gain on the  restructuring  of its
debt to Solectron. The Company then signed an agreement with UIC and CSI for the
future  manufacture and sale of an additional 2,000 POS-50r units. See "Business
of Issuer - Manufacturing."

     During fiscal 1995, the Company  acquired all of the outstanding  shares of
Direct Data, a distributor of POS-related products. During fiscal year 1996, the
Direct Data assets were surrendered to Direct Data's secured creditor in lieu of
the creditor's  foreclosure on a past due $1.3 million  obligation.  Direct Data
was left with no assets,  ceased  operations,  and was  dissolved on October 19,
1995.  As a result of the surrender of Direct Data's assets in settlement of the
$1.3  million  obligation  and the  dissolution  of  Direct  Data,  the  Company
recognized  a gain on  restructuring  of payables  and debt of  $2,332,411.  See
"Description of Business - Direct Data Acquisition/Dissolution."


Fiscal 1996 Compared to Fiscal 1995

     Net  sales of  $1,582,553  for  fiscal  1996  decreased  from net  sales of
$1,720,689  generated  during fiscal 1995. This decrease is attributable  to: a)
the sale of approximately 100 fewer POS-50r units than in previous year, and; b)
the sale of used units at decreased  sales price.  This  decrease was  partially
offset by initial  sales of the  Company's new CDPD products in the last half of
fiscal 1996.

     Gross  margins  decreased  from a  negative  $131,571  in fiscal  1995 to a
negative  $1,303,879  for fiscal  1996.  This  decrease  was  attributable  to a
$1,525,000 write-down of inventories during fiscal 1996, as a result of declines
in market  value of such  inventories  relative  to cost.  The fiscal 1995 gross
margin  included  a $217,800  write-down  of  finished  goods  inventory  to the
lower-of-cost-or-market value.

     Selling,  general and administrative  expenses decreased from $3,866,624 in
fiscal 1995 to $1,365,235 in fiscal 1996. This decrease was due primarily to: a)
reduced  legal  expenses  in 1996 from the  approximately  $550,000  incurred in
fiscal 1995 (related to the  acquisition  of Direct Data,  negotiations  for the
sale of Direct Data  (subsequently  terminated)  and class action lawsuits filed
against the Company); b) significant  reductions in all advertising,  promotion,
public relations and investor relations programs due to lack of working capital,
and; c) headcount  reductions in sales,  marketing and administration  over 1995
staffing levels.

     Research and development expenses decreased from $502,477 in fiscal 1995 to
$458,407 in fiscal 1996, due primarily to a reduction in engineering staff.

     Interest  income  decreased  from  $79,714 in fiscal 1995 to $685 in fiscal
1996, as a result of declining levels of cash to invest.


Financial Condition, Capital Resources and Liquidity

     The Company continues to have significant  concerns regarding its financial
condition and liquidity.  Since May 1995, when the Company was notified that the
transaction to sell its Direct Data subsidiary had been terminated,  the Company
has  continued  to reduce its  expenses  through  cost  controls  and  workforce
reduction.  It also has been successful in securing  additional  orders from its
largest  customer,  CSI, and in selling off the  majority of its finished  goods
inventory,  for which it had previously paid. As a result,  the Company has been
able to maintain operations, although it has been unable to significantly reduce
its  obligation  to its largest  creditor.  The Company has recently  negotiated
favorable  arrangements for future manufacture of its products with little or no
cash required until the finished product is sold. While this will  significantly
assist the Company's cash flow, it can no longer rely on the full sales price of
the product to meet its working capital  requirements.  Instead, it must succeed
on the gross  margin of its product  sales.  This will  require that the Company
achieve an increased  order rate on its POS- 50r and new CDPD  products in order
to sustain  operations.  The Company has engaged in  discussions  with  terminal
providers and transaction processors regarding potential engineering development
contracts, which if entered into would provide additional working capital to the
Company.  While the Company believes that its relationship with CSI continues to
be strong,  the Company is highly  dependent upon its sales to CSI, and the loss
of, or a  significant  decrease  in those  sales  would have a material  adverse
effect on the Company's cash position and its ability to sustain operations.  At
June 30, 1996, the Company's  working capital decreased to a deficit of $131,881
from  $1,631,278  on June 30, 1995.  The decrease  primarily  resulted  from the
Company's operating loss for the year of $3.1 million.

     As a result of these  developments,  including  the  failure to sell Direct
Data,  and its  subsequent  liquidation,  and in  order to  continue  as a going
concern,  the  Company  will need to  increase  its  revenue  levels and product
margins,  negotiate product development  contracts,  generate positive cash flow
from operations and/or acquire additional debt or equity financing.


Subsequent Event

     Subsequent  to June 30,  1996,  the Company  has  continued  to  experience
inadequate  sales volume on its product lines.  As a result,  and as part of its
continuous  efforts  to find  working  capital  funding  in  order  to  continue
operations,  the Company has extended offers to two parties to make  investments
in the Company for a  significant  portion of its equity.  Each has indicated an
interest in such investment and discussions are currently in progress.  However,
due to a number of factors,  including the outstanding class action  litigation,
the  Company's  poor  sales,  the  Company's  serious  cash  flow and  liquidity
situation and other issues that could affect the  Company's  ability to continue
as a going concern,  there can be no assurance that any such transaction will be
consummated  with one of these or with any other party.  The carrying  values of
reported assets could be negatively affected if the Company does not continue as
a going concern.


                                       2
<PAGE>




ITEM 7:   FINANCIAL STATEMENTS
                                                                 Page


Report of Independent Accountants                                  17


Balance Sheet - as of June 30, 1996                                18


Statement of Operations - for the fiscal years ended
     June 30, 1996 and June 30, 1995                               19


Statement of Cash Flows - for the fiscal years ended
     June 30, 1996 and June 30, 1995                               20


Statement  of  Changes in Stockholders' Equity (Deficit)  -  
   for  the period from July 1, 1994 through June 30, 1996         21


Notes to Financial Statements                                   22-27


                                       1
<PAGE>


ITEM  8:  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
          AND FINANCIAL DISCLOSURE

(Not Applicable)



                                       3
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
     Stockholders of U.S. Wireless Data, Inc.

     In our opinion, the accompanying balance sheet and the related statement of
operations,  of  changes in  stockholders'  equity  (deficit)  and of cash flows
present  fairly,  in all  material  respects,  the  financial  position  of U.S.
Wireless  Data,  Inc. (the  "Company") at June 30, 1996,  and the results of its
operations and its cash flows for each of the two years in the period ended June
30, 1996, in conformity with generally  accepted  accounting  principles.  These
financial  statements are the  responsibility of the Company's  management;  our
responsibility  is to express an opinion on these financial  statements based on
our audits.  We conducted  our audits of these  statements  in  accordance  with
generally accepted auditing standards which require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and  disclosures  in the financial  statements,
assessing the  accounting  principles  used and  significant  estimates  made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe  that our audits  provide a reasonable  basis for the opinion  expressed
above.

     The accompanying  financial statements have been prepared assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial statements, the Company has suffered significant recurring losses from
operations and has an accumulated  deficit of $16,096,463 that raise substantial
doubt about the Company's  ability to continue as a going concern.  Management's
plans in regard to this matter are  described  in Note 1.  Additionally,  due to
matters  concerning the Company's ability to continue as a going concern,  there
is also  significant  uncertainty  surrounding  the net realizable  value of the
Company's  inventory  balances  at June 30,  1996  (see Note 2).  The  financial
statements do not include any adjustments  that might result from the outcome of
these uncertainties.

     As  discussed  in Note 11 to the  financial  statements,  the  Company is a
defendant in class action lawsuits alleging various  fraudulent acts,  omissions
and  misrepresentations in connection with the Company's initial public offering
of and subsequent  trading in the Company's  stock.  The ultimate outcome of the
litigation cannot be determined at present.  No provision for any liability that
may result  from this  litigation  has been made in the  accompanying  financial
statements.



PRICE WATERHOUSE LLP

Boulder, Colorado
September 28, 1996


                                       4
<PAGE>



<TABLE>
<CAPTION>


                      U.S. WIRELESS DATA, INC.
                            BALANCE SHEET
                         As of June 30, 1996



                              ASSETS

<S>                                                    <C>
Current assets:
   Cash and cash equivalents ..................   $     40,350
   Accounts receivable, net of allowance
     for doubtful accounts of $31,210
                                                       177,127
   Inventory, net .............................        495,185
   Other current assets
                                                        35,706
                                                  ------------
        Total current assets ..................        748,368

Property and equipment, net
                                                        97,461
Other assets
                                                        22,756
                                                  ------------

Total assets ..................................   $    868,585
                                                  ============



           LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)

Current liabilities:
   Accounts payable ...........................   $    242,387
Accrued liabilities ...........................        217,596
   Notes payable ..............................        420,266
Total current liabilities .....................        880,249

Commitments and contingencies (Notes 9 and 11)

Stockholders' equity (deficit):
   Common stock, no par value,
      12,000,000 shares authorized,
      4,523,333 shares issued and outstanding,
      stated 4,440,565 value $1.00
   Common stock subscribed ....................        142,544
   Additional paid-in capital .................     11,501,690
   Accumulated deficit ........................    (16,096,463)
       Total stockholders' equity (deficit) ...        (11,664)

Total liabilities and stockholders'
    equity (deficit) ..........................   $    868,585
</TABLE>


                                  
                                  
                                  
                                  
                                  
                                  
   The accompanying notes are an integral part of these financial
                             statements.
                                  
                                  

                                       5
<PAGE>
                                  
                                  
<TABLE>
<CAPTION>
                                  
                                  
                      U.S. WIRELESS DATA, INC.
                       STATEMENT OF OPERATIONS
                                  


                                                      Fiscal Year Ended
                                                    June 30,       June 30,
                                                      1996           1995
<S>                                                <C>             <C>                                                         
Revenue ......................................       1,582,553        1,720,689

Cost of goods sold ...........................       2,886,432        1,852,260

Gross margin (deficit) .......................      (1,303,879)        (131,571)

Operating Expenses:
    Selling, general and administrative ......       1,365,235        3,866,624
    Research and development .................         458,407          502,477

                                                     1,823,642        4,369,101

Loss from operations .........................      (3,127,521)      (4,500,672)

Write-off of goodwill ........................            --         (5,997,434)
Interest income ..............................             685           79,714
Interest expense .............................         (33,621)         (22,806)
Other expense ................................          (4,506)         (22,874)

Loss from continuing operations...............      (3,164,963)     (10,464,072)

Loss from discontinued operation  ............        (309,206)      (1,808,440)

Loss before extraordinary item ...............      (3,474,169)     (12,272,512)

Extraordinary gains on restructuring of
payables and debt ............................       3,431,823             --

Net loss .....................................     $   (42,346)     (12,272,512)

Earnings (loss) per share:
    From continuing operation  ...............     $      (.72)           (2.48)
    From discontinued operations .............            (.07)            (.43)
    From restructurings of payables and
debt .........................................             .78             --
    Net loss per share .......................                                $
                                                          (.01)           (2.91)

Weighted average common shares
outstanding ..................................       4,418,618        4,212,787
</TABLE>



                                  
                                  
                                  
                                  
   The accompanying notes are an integral part of these financial
                             statements.
<TABLE>
<CAPTION>



                      U.S. WIRELESS DATA, INC.
                       STATEMENT OF CASH FLOWS
                                                                      
                                                             Fiscal
                                                          Year Ended
                                                       
                                                      June 30,      June 30,
                                                       
                                                        1996          1995
<S>                                                <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                  
   Net loss ..................................     $   (42,346)     (12,272,512)
   Adjustments to reconcile net income
to net cash used in operating
activities:
        Write-off of goodwill ................            --          5,997,434
        Gain on restructuring of .............      (3,431,823)            --
payables and debt
        Loss due to market decline of ........       1,525,026             --
inventory
        Depreciation and amortization ........         107,525          286,011
        Stock issued for services ............           3,880             --
   Changes in assets and liabilities:
        Accounts receivable ..................         197,293           50,970
        Inventory ............................       1,702,058           (1,832)
        Other current assets .................          93,048          (70,013)
        Accounts payable .....................         (46,764)         792,129
        Accrued liabilities ..................        (686,707)
                                                                        403,679
        Related party payable
                                                          --            262,361
   Net cash used in operating
activities ...................................        (578,810)      (4,551,773)

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of equipment and furniture ......          (3,000)         (39,991)
   Proceeds from sale of equipment ...........          23,296             --
   (Increase) decrease in other assets .......            (565)
                                                                        490,333
   Purchase of Direct Data, Inc. .............
                                                          --         (1,479,793)
      Net cash provided by (used in)
investing activities .........................          19,731       (1,029,451)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from issuance of debt ............         292,678             --
   Repayment of notes payable ................            --         (1,052,874)
   Net proceeds from issuance of stock
                                                        12,650           13,125
      Net cash provided by (used in)
financing activities .........................         305,328       (1,039,749)

(DECREASE) IN CASH ...........................        (253,751)      (6,620,973)

CASH, Beginning of period
                                                       294,101        6,915,074

CASH, End of period ..........................          40,350          294,101

Supplemental disclosures of cash flow
information:
   Cash paid during the year for
interest .....................................          33,621          146,569

Supplemental schedule of non-cash
investing and financing activities:
   Inventory purchased with debt .............            --            472,800

   Inventory purchased with stock ............         162,500             --

   Stock issued for services .................           3,880             --

   Non cash extinguishment of debt and
payables
      Fair value of assets transferred .......            --          1,031,868
      Payables and debt extinguished
                                                     4,463,691             --
      Gains on restructuring of payables
and debt .....................................       3,431,823             --
</TABLE>

     Purchase of all outstanding  stock of Direct Data, Inc. for $1,479,793 (net
of $611,715 of cash acquired) and 700,000 shares of the Company's  common stock.
In conjunction with the acquisition, liabilities were assumed as follows:

<TABLE>
<S>                                                                   <C>
Fair value of assets acquired ............................            $8,051,125
Consideration paid
                                                                       3,885,254
Liabilities assumed ......................................            $4,165,871
</TABLE>
                                  
   The accompanying notes are an integral part of these financial
                             statements.

<TABLE>
<CAPTION>

                                        
                                 U.S. WIRELESS DATA, INC.
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                        
                                        
                                        
                                                                     COMMON                     
                                    CLASS A             CLASS B      STOCK     PAID IN    ACCUM.
                                 SHARES      AMOUNT    SHARES   AMOUNT  SUBSCRIB   CAPITAL   DEFICIT
                                                                          ED
<S>                              <C>         <C>             <C>           <C>           <C>       <C>            <C> 
BALANCES, June 30, 1994 ...      3,680,678   $  3,596,602      5,232          6,540         --     $ 10,495,752      (3,781,605)

  Shares issued for Direct
Data acquisition at
     $2.56 per share ......        700,000        700,000       --             --           --        1,093,750            --

  Warrant exercised at ....          5,000          5,000       --             --           --            8,125            -- 
$2.625 per share

  Conversion of Class B ...          5,232          6,540     (5,232)        (6,540)        --             --              -- 
stock to Class A stock

  Net loss ................           --             --         --             --           --             --       (12,272,512)
                                                                                                                    ----------- 

BALANCES, June 30, 1995 ...      4,390,910      4,308,142       --             --           --       11,597,627     (16,054,117)


  Shares issued for .......         18,123         18,123       --             --           --          (14,243)           --   
services at $.10 - .46 per
share

  Stock options exercised .          9,300          9,300       --             --           --           (7,300)           --   
at $.215 per share

  Warrant exercised at $.10        100,000        100,000       --             --           --          (90,000)           --   
per share

  Director stock option ...          5,000          5,000       --             --           --           (4,350)           --   
exercised at $.13 per share

 Stock subscription .......           --             --         --             --        142,544         19,956            --   

  Net loss ................           --             --         --             --           --             --           (42,346)


BALANCES, June 30, 1996 ...      4,523,333   $  4,440,565       --             --        142,544     11,501,690     (16,096,463)
               === ====          =========   ============                                =======     ==========     =========== 
</TABLE>





   The accompanying notes are an integral part of these financial statements.
                      U.S. WIRELESS DATA, INC.
                    NOTES TO FINANCIAL STATEMENTS

NOTE 1.  OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Operations

     U.S.  Wireless Data, Inc. (the "Company") was  incorporated in the State of
Colorado on July 30, 1991. It designed,  developed and  manufactured  a wireless
credit card  authorization and check  verification  terminal and began marketing
this  product  in the third  quarter  of fiscal  1994.  During  fiscal  1995 and
continuing into fiscal 1996, the Company began generating its first  significant
revenue  from  product  sales.  Prior to fiscal  1995,  the  Company  was in the
development stage.


Financial Condition

     The Company has  incurred an  accumulated  deficit of  approximately  $16.1
million since  inception and has incurred  additional  losses  subsequent to the
year ended June 30, 1996. In order to continue as a going  concern,  the Company
intends to: sustain or increase  revenue levels and product  margins;  negotiate
product  development  contracts;  generate  positive cash flow from  operations;
and/or acquire additional debt or equity financing.

     Subsequent  to June 30,  1996,  the Company  has  continued  to  experience
inadequate  sales volume on its product lines.  As a result,  and as part of its
continuous  efforts  to find  working  capital  funding  in  order  to  continue
operations,  the Company has extended offers to two parties to make  investments
in the Company for a  significant  portion of its equity.  Each has indicated an
interest in such investment and discussions are currently in progress.  However,
due to a number of factors,  including the outstanding class action  litigation,
the  Company's  poor  sales,  the  Company's  serious  cash  flow and  liquidity
situation and other issues that could affect the  Company's  ability to continue
as a going concern,  there can be no assurance that any such transaction will be
consummated with one of these or with any other party.

     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.


Use of Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the amounts  reported in the financial  statements  and
accompanying notes. Actual results could differ from the estimates used.


Cash and Cash Equivalents

     The Company  considers  all highly  liquid  investments  purchased  with an
original  maturity  of  three  months  or  less  to be  cash  equivalents.  Cash
equivalents are carried at cost which approximates fair value.


Inventories

     Inventories  are  stated  at the  lower  of  cost  or  market,  cost  being
determined by the first-in, first-out method.


Property and Equipment

     Property  and  equipment   are  stated  at  cost.   The  Company  uses  the
straight-line  method of depreciation based on the estimated useful lives of the
assets (generally three to seven years).  Maintenance and repairs are charged to
operations as incurred.
     
     
Revenue Recognition and Major Customers

     Direct sales are  recognized  upon shipment of products to  customers.  The
Company  also leases  products to  customers  with an option to buy. The leasing
arrangements  are accounted for as sales-type  leases.  During fiscal 1996,  two
customers,  Cardservice  International,   Inc.  ("CSI")  and  Superior  Bankcard
Services, accounted for 25% and 11% of revenue,  respectively.  During 1995, one
customer, CSI, accounted for 22% of revenue. Research and Development Costs

     Research and development costs are expensed as incurred.
     
     
Net Loss Per Share

     Net income  (loss)  per share is based on the  weighted  average  number of
shares of  common  stock  outstanding  during  each  respective  period.  Shares
issuable upon the  conversion of stock options and warrants were not included in
the calculation since their effect was anti-dilutive.


Fair Value of Financial Instruments

     The carrying value of assets and liabilities  reported on the balance sheet
is a reasonable estimate of their fair value.


Recent Pronouncements

     Adoption of new accounting standard. The Company has reviewed Statements of
Financial  Accounting  Standards  No.  121,  Accounting  for the  Impairment  of
Long-Lived  Assets to Be Disposed Of, and No. 123,  Accounting  for Stock- Based
Compensation,  for  applicability.  Based  on  management's  estimates  and  its
intention to continue to apply its existing  accounting for stock  options,  the
adoption of these  standards  in not  expected to have a material  effect on the
Company's financial statements.



NOTE 2.  INVENTORY
<TABLE>
<CAPTION>

                                   June 30,
                                     1996
<S>                               <C>

Inventory consists of:
   Raw material ...............   $ 139,575
   Finished goods .............     298,800
   Spare parts and accessories      161,233
    Lower  of  cost  or  market
    reserve ...................    (104,423)
                                  ---------
                                  $ 495,185
                                  =========
</TABLE>
     
     The  Company  has  established  a reserve  against  finished  goods and raw
materials to reflect the estimated net  realizable  value of the inventory as of
June 30, 1996, based on current selling prices.



NOTE 3.  PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>

                                        June 30,
                                         1996
<S>                                   <C>
Property and equipment consists of:
        Equipment and furniture ...   $ 295,520
        Tooling ...................     124,267
             Less:  accumulated
     depreciation and amortization     (322,326)
                                      ---------
                                      $  97,461
                                      =========

</TABLE>




NOTE 4.  ACCRUED LIABILITIES
<TABLE>
<CAPTION>

                                        June 30,
                                          1996
<S>                                    <C>
Accrued liabilities  consists of:
           Accrued wages/commissions   $ 49,793
           Customer advances .......     94,875
           Other
                                         72,928
                                       $217,596
</TABLE>



NOTE 5.  NOTES PAYABLE

     The  $420,266  note  payable to a supplier is  currently  in default as the
Company is only making monthly interest payments.  As of September 29, 1996, the
supplier  had not called the note.  The note bears  interest  at 8% and is fully
collateralized  with certain  inventory.  The Company  plans on making  interest
payments only until the note is re-negotiated or satisfied.



NOTE 6.  STOCKHOLDERS' EQUITY

Stock Classes

     In fiscal 1995, the Company's  shareholders approved the elimination of the
distinction  between Class B common stock and Class A common stock and increased
the number of authorized  shares to 12,000,000.  All common stock outstanding at
June 30, 1996 is Class A common stock.

Stock Options

     In September 1992, the Company adopted an incentive stock option plan and a
non-qualified  stock option plan covering  600,000  shares of the Class B common
stock.  In October  1994,  the  Shareholders  approved an amendment to the stock
option plan increasing the number of available shares to 880,000 and eliminating
the  Class B  designation.  In  December  1995,  the  Shareholders  approved  an
amendment to the stock option plan making certain clarifications to the plan and
providing  for the annual grant of an option for 20,000  shares to  non-employee
directors.
<TABLE>
<CAPTION>
     
     
                          Options    Exercise
                                     Price
<S>                      <C>        <C>                                                 
Balance June 30, 1994    502,500    $2.20 to $5.13

     Granted ........     95,000    $         2.56

     Terminated .....   (135,000)   $4.00 to $4.50

Balance June 30, 1995    462,500    $2.20 to $5.13
             --- ----    -------    -----    -----

     Granted ........    827,849    $.13 to $.215
     Terminated .....   (482,500)   $.215 to $5.13
     Exercised ......    (14,300)   $.13 to $.215

Balance June 30, 1996    793,549    $.13 to $5.13
             === ====    =======    ====    =====
</TABLE>
     
     At June 30, 1996, there were 371,595 options exercisable.  The
     options generally vest over two to four years.
     
     
     
Stock Warrants

     In fiscal  1993,  the  Company  granted  warrants  to one  officer  and one
director of the Company to purchase  an  aggregate  of 250,000  shares of common
stock at $4.00 per share. In connection with the Company's December 1993 initial
public  offering,  the Company issued  warrants to the  underwriters to purchase
165,000 shares of the Company's common stock at $12.33 per share.

     In fiscal 1994, in  conjunction  with the  acquisition  of Direct Data, the
Company granted warrants to four former  shareholders of Direct Data to purchase
29,548 shares of common stock at $2.625 per share. In October 1994, warrants for
the purchase of 5,000 shares of common stock were  exercised and 5,752  warrants
expired.

     In October 1995, as partial  consideration  for entering into a development
contract,  the Company granted warrants to a customer to purchase 100,000 shares
of common stock at $0.10 per share. This warrant was subsequently exercised.

     As of June 30, 1996,  433,796 warrants remain outstanding and fully vested.
These  warrants have a weighted  average  exercise  price of $7.11 and expire at
various dates through 2003.



NOTE 7.  INCOME TAXES

     At June 30, 1996,  the Company had net  operating  loss  carryforwards  for
federal income tax purposes of approximately $10,350,000.  Annual utilization of
the loss  carryforwards is subject to significant  limitations due to changes in
the Company's ownership which could result in little or no benefit being derived
from these  carryforwards.  Future changes in ownership could further reduce the
annual availability of these benefits.  If unused, the carryforwards will expire
beginning in 2007.
     
     Deferred  income  taxes  reflect  the net tax  effects  of:  (a)  temporary
differences between the carrying amounts of assets and liabilities for financial
reporting  purposes  and the  amounts  used for  income  tax  purposes,  and (b)
operating  loss and tax credit  carryforwards.  The tax  effects of  significant
items comprising the Company's deferred taxes are as follows:

<TABLE>
<CAPTION>
     
                                          June 30,
                                      1996        1995
<S>                                 <C>             <C>
    Deferred tax assets
      Net operating loss
          carry-forwards ........   $ 3,880,000      5,003,000
              Depreciation ......       (12,000)       (22,000)
              Inventory reserves        195,000        154,000
               Allowance for  bad        35,000         66,000
          debts
              Other .............        28,000         15,000
                                      4,126,000      5,216,000
(Valuation allowance) ...........    (4,126,000)    (5,216,000)
       Net deferred tax asset ...   $      --             --
</TABLE>

     Deferred  tax assets  have been  reduced to zero by a  valuation  allowance
based on current  evidence which indicates that it is not considered more likely
than not that these benefits will be realized. The valuation allowance decreased
by  $1,090,000  during  the year  ended  June  30,  1996,  primarily  due to the
dissolution  of Direct Data.  The  valuation  allowance  increased by $3,711,000
during the year ended June 30,  1995,  primarily  due to  additional  losses for
which no tax benefit was recorded.
     
     The difference between the zero provision for income taxes and the expected
amount  determined  by applying  the federal  statutory  rate to the loss before
income  taxes  results   primarily  form  a  reduction  of  net  operating  loss
carryforwards  due to the dissolution of Direct Data for the year ended June 30,
1996 and due to an increase in the  valuation  allowance for the year ended June
30, 1995.
     
NOTE 8.  EMPLOYEE BENEFIT PLAN

     In April 1994, the Company  established a qualified  Section 401(K) Savings
Plan.  The Plan  allows  eligible  employees  to  contribute  up to 15% of their
salaries on a pre-tax basis.  The Company did not make any  contributions to the
Plan during fiscal year 1996.


NOTE 9.  COMMITMENTS AND CONTINGENCIES

Lease Commitments

     The Company  leases its office  facilities  under various  operating  lease
arrangements.   Most  of  the  leases  contain  certain  provisions  for  rental
adjustments.  In addition, the leases require the Company to pay property taxes,
insurance  and normal  maintenance  costs.  Future  minimum  rentals under these
arrangements are as follows:
     
     
                           Rental     Sublease
                          Payments     Income

                 1997   $  117,066      33,367
                 1998       59,437        --
                 ----       ------          
                        $  176,503      33,367
                        ==========      ======

     Rent expense was $70,545 and $21,688 was received in sublease
income during fiscal 1996.



NOTE 10.  EXTRAORDINARY GAINS AND DISCONTINUED OPERATION

     During the year ended June 30, 1996, the Company recognized $3.4 million in
gains related to the restructuring of debt and payables as follows:

Release of guarantee of bank debt by
former officer of Direct Data ......   $  593,132
Release of liability for inventory
by supplier ........................    1,099,412

Liabilities of dissolved Direct Data
subsidiary .........................    1,739,279
                                       $3,431,823

     The release of  guarantee  of bank debt by a former  officer of Direct Data
("the Officer") occurred as a result of the September 1995 demand for payment by
a financial institution creditor of a $1.3 million loan made to Direct Data. The
loan was  guaranteed  by the  Officer  who paid the loan and  became a  security
holder of Direct Data's assets in early October 1995.  The Company was obligated
to remove the Officer from his guarantee of the bank loan, and in  consideration
for  release of such  liability,  surrendered  the assets of Direct  Data to the
Officer on October 5, 1995. The excess  carrying value of the debt over the book
value (which  approximated fair value) of the assets surrendered in satisfaction
of the obligation was $593,132. In connection with this transaction, the Officer
granted the Company an option to repurchase 397,684 shares of Company stock from
the  Officer  at a price of $.25 per  share,  as well as the  right to vote such
shares.

     During its fiscal  year  1995,  the  Company  entered an  agreement  with a
supplier,  whereby the  Company  became  liable for the  purchase of certain raw
materials the supplier procured for  manufacturing of Company  products.  During
1996,  the Company and the  supplier  agreed that the Company  would  settle the
liability of $1.4 million for consideration of approximately  $325,000, and that
the  Company  or its  designee  would  take  possession  of the  raw  materials.
Accordingly,  the Company has  recognized  a gain of $1.1 million as a result of
restructuring the liability.

     During  October  1995,  the  Company   dissolved   Direct  Data.  Upon  the
dissolution of Direct Data,  approximately  $1.7 million of unsecured trade debt
remained unpaid and the creditors were notified that Direct Data would be unable
to pay its remaining  obligations.  The Company believes it has no liability for
future claims  arising from the unpaid  obligations  of Direct Data;  therefore,
such  unpaid  obligations  have been  recognized  by the  Company as a gain from
restructuring of liabilities of the dissolved Direct Data subsidiary.

     Management believes Direct Data represented a separate and material line of
business from the Company. The pretax loss on disposal has been accounted for as
a loss from  discontinued  operations and prior years financial  statements have
been  reclassified  to reflect the  disposition.  Revenue of Direct Data for the
years ended June 30, 1996 and 1995 was $657,667 and $2,040,566 respectively,



NOTE 11.  LITIGATION

     In early  September  1994,  two  shareholders  filed a Colorado state court
class action lawsuit in Denver District Court against the Company,  three of its
directors,  and others  (Jacques A. Machol  III, et al. v. U.S.  Wireless  Data,
Inc.,  et al.).  The lawsuit  alleges  various  fraudulent  acts,  omissions and
misrepresentations  by the  defendants  in  connection  with the initial  public
offering of and subsequent trading in the Company's stock.

     A second  shareholder class action complaint against the Company,  three of
its directors, and others was filed by one shareholder in late September 1994 in
U.S. District Court, Denver, Colorado (Jeffry Appel on behalf of himself and all
others similarly situated, v. Maurice R. Caldwell Jr., Rod L. Stambaugh, Leonard
Trout, Donald L. Walford,  Frank LaHue, U.S. Wireless Data, Inc., among others).
The  complaint  also  arises  out of the  Company's  public  offering  and makes
allegations  similar to those made in the first  complaint.  The Denver District
Court lawsuit has been stayed by court order so as to avoid duplication with the
U.S. District Court lawsuit.

     In February 1995, another class action complaint was filed in U.S. District
Court,  Denver,  Colorado by the same  plaintiff  who had  previously  filed the
Colorado State Court class action in early September 1994 (Jacques A. Machol III
and Prism Partners I on behalf of themselves and all others similarly  situated,
v. U.S. Wireless Data, Inc., Maurice R. Caldwell Jr., Rod L. Stambaugh,  Leonard
Trout,  Donald L.  Walford,  Frank LaHue,  among  others).  The  Defendants  and
allegations are the same as in the original and subsequent  lawsuits.  The court
has  consolidated  the two federal cases and trial has been  scheduled for March
1997.  Several  settlement  discussions  have been held,  but to date, no formal
agreement has been reached.

     The Company  believes  these  lawsuits are without merit and denies that it
engaged in any fraudulent acts or omissions,  or otherwise  violated  Federal or
Colorado  law.  In each case,  the  Company  intends to  vigorously  contest the
litigation  on  its  merits,  as  well  as  the  suitability  of  the  plaintiff
shareholders to act for the alleged class.  Nonetheless,  because  litigation of
this type involves  inherent  risks,  it is not possible for the Company at this
time to make an assessment of potential exposure,  nor to predict with precision
what the ultimate outcome will be.



NOTE 12.  RELATED PARTIES

     A director  of the  Company is also an  officer  of the  Company's  largest
customer,  Cardservice  International,  Inc.  ("CSI").  Additionally,  CSI  owns
approximately 5% of the Company's  outstanding common stock as of June 30, 1996.
Sales to CSI  approximated  $482,000 and $398,000 in fiscal years 1995 and 1996,
respectively.  As of June 30, 1996, CSI had prepaid $94,875 toward future orders
and also owed the Company $2,197.

     During fiscal 1996,  CSI advanced the Company  $162,500 for the purchase of
raw materials in exchange for 142,544  shares of common stock issued  subsequent
to June 30, 1996 at 150% of then  current  fair market  value plus  registration
rights  after one year on all stock  owned by CSI.  This  transaction  increased
CSI's  ownership to from 2% to 5%.  Additionally,  the Company will make royalty
payments to CSI on future sales of POS-50r  product built with the raw materials
purchased  using the amounts  advanced  from CSI. As of June 30, 1996,  no units
were built using the raw materials referred to above.

     During  fiscal 1995, a  shareholder  advanced the  Company's  wholly- owned
subsidiary,  Direct Data, funds for operations.  At June 30, 1995,  $262,000 was
payable to this related party. Additionally,  prior to the acquisition of Direct
Data, a shareholder  loaned Direct Data $167,000 for its  operations in exchange
for a note payable.



PART III


ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE
                 WITH SECTION 16(a) OF THE EXCHANGE ACT.

     The information required by this item is incorporated by reference from the
U.S.  Wireless Data, Inc. 1996 Proxy Statement  sections  entitled  "Election of
Directors" and "Compliance with Section 16(a) of the Securities  Exchange Act of
1934."



ITEM 10.  EXECUTIVE COMPENSATION

     The information required by this item is incorporated by reference from the
U.S.  Wireless  Data,  Inc. 1996 Proxy  Statement  section  entitled  "Executive
Compensation."



ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

     The information required by this item is incorporated by reference from the
U.S.  Wireless Data,  Inc. 1996 Proxy  Statement  section  entitled  "Beneficial
Ownership of Common Stock."



ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this item is incorporated by reference from the
U.S.  Wireless  Data,  Inc.  1996  Proxy  Statement  section  entitled  "Certain
Transactions."




ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

(a)    List of Exhibits Required by Item 601 of Regulation S-B
Exhibit   Description                                     Page No.
      
2.1    Articles of Dissolution for Direct Data, Inc. (5)     N/A
3.1    Copy of Amended Articles of Incorporation (6)         N/A
3.2    Copy of Amended Bylaws (6)                            N/A
10.1   License and Volume Purchase Agreement with OMRON      N/A
       Systems of America with Solectron Addendum (1)
10.2   "Engineering Statement for Cellular Credit            N/A
       Authorization Terminal" filed with Federal
       Communications Commission (1)
                                                              
10.3   POS-50r Manufacturing Plan Proposal (1)               N/A
10.4   Security Agreement, Solectron Corporation, dated      N/A
       August 12, 1993 (1)
10.5   Purchase Order to Solectron Corporation, dated July   N/A
       23, 1993 (1)
10.6   Agreement to Purchase Shares from Brent J.            N/A
       Phillips, dated April 23, 1993 (1)
10.7   Sprint Cellular Reseller Agreement (3)                N/A
10.8   CommNet Cellular Reseller Agreement (3)               N/A
10.9   Direct Data Acquisition Agreement (3)                 N/A
10.10  Agreement and Plan of Reorganization between USWD,    N/A
       FC Acquisition, Inc., Direct Data, Inc. and certain
       shareholders of Direct Data, Inc., including the
       following exhibits thereto:  Agreement and Plan of
       Merger, Form of Warrant, Form of Employment
       Agreement entered into by each of Richard P.
       Draper, Richard W. Taylor and Larry N. Schroeder,
       Shareholder Agreement between the Company and
       Richard P. Draper, Registration Rights Agreement
       between the Company and certain Direct Data, Inc.
       shareholders, and Side Agreement between Direct
       Data, Inc., the Company, Richard P. Draper and
       Larry N. Schroeder (4)
                                                              
10.11  Promissory Note with OMRON Systems, Inc. (6)          N/A
10.12  Supply Agreement with Novatel Communications LTD.     N/A
       (6)
10.13  Purchase Agreement with Cardservice International     N/A
       (6)
10.14  Purchase Agreement with Superior Bankcard Service     N/A
       (6)
10.15  Purchase Agreement with National Bankcard             N/A
       Association, Inc. (6)
10.16  Release Agreement with Richard P. Draper (6)          N/A
10.17  Surrender Agreement between Direct Data, Inc. and     N/A
       Richard P. Draper (6)
10.18  Copy of Amended 1992 Stock Option Plan                 
10.19  Agreement for Manufacture and Purchase between         
       USWD, Uniform Industrial Corp and Cardservice
       International, Inc.
                                                              
10.20  Memorandum of Agreement and Mutual Release of          
       Claims between USWD and Solectron Corporation
21.1   List of Subsidiaries (6)                              N/A
21.2   Articles of Incorporation for Direct Data, Inc.       N/A
       (f/k/a FC Acquisition, Inc.) (6)
21.3   Bylaws of Direct Data, Inc., (f/k/a FC Acquisition,   N/A
       Inc.) (6)
27     Financial Data Schedule                                

(1)  Incorporated by reference to the reference Exhibit and Exhibit
number in Registration Statement No. 33-69776-D.
(2)  Incorporated by reference to Exhibit Number 28-2 of Registration
Statement No. 33-69776-D.
(3)  Incorporated by reference to the Company's report on Form 10-KSB
filed on September 29, 1994 (Control No. 94203937).
(4)  Incorporated by reference to the Company's Form 8-K filed on
September 23, 1994 (Control No. 94208250).
(5)  Incorporated by reference to the Company's Form 8-K filed on
October 23, 1995.  (Control No. 95208607).
(6)  Incorporated by reference to the Company's report on Form 10-KSB
filed on October 13, 1995.  (Control No. 95201388)

(b)  Reports on Form 8-K

      There  were no reports on Form 8-K that were filed  during  the
last quarter of the fiscal year ended June 30, 1996.

SIGNATURES

     In accordance  with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.

     Dated:  October 14, 1996


U.S. WIRELESS DATA, INC.



\s\Michael J. Brisnehan   President and Principal Executive    October 14. 1996
Michael J. Brisnehan                Officer


     In  accordance  with the Exchange Act, this Report has been signed below by
the following  persons on behalf of the  Registrant and in the capacities and on
the dates indicated:




\s\ Michael J. Brisnehan  President and Principal Executive     October 14, 1996
Michael  J. Brisnehan     Officer, Chief  Financial Officer,
                          Director and Principal Accounting 
                          officer

\s\  Rod L. Stambaugh    Vice President/Marketing and           October 14, 1996
Rod L. Stambaugh         Business Development and
                         Chairman of the Board of Directors




\s\ Alan  B. Roberts     Director                               October 14, 1996
Alan B. Roberts




\s\ Chester N. Winter    Director                               October 14, 1996
Chester N. Winter




\s\ Caesar Berger        Director                               October 14, 1996
Caesar Berger





                                                                 Exhibit 10.18
                      
                              WIRELESS DATA, INC.
                   AMENDED AND RESTATED 1992 STOCK OPTION PLAN
    
     Purpose of Plan.  The purpose of this 1992 Stock Option Plan ("Plan") is to
secure and retain key  employees and  directors  responsible  for the success of
U.S.  Wireless  Data,  Inc.  ("Company")  and  to  reward  those  associated  as
consultants with the Company.  This Plan is intended to motivate such persons to
exert their best efforts on behalf of the Company,  to encourage stock ownership
and to provide such persons with proprietary interests in, and a greater concern
for,  the welfare of, and an incentive to continue  service  with,  the Company.
Options issued  pursuant to this Plan will  constitute  incentive  stock options
within the meaning of 422A of the  Internal  Revenue Code of 1986  ("Code"),  as
amended  ("Incentive  Stock  Options")  or other  options  ("Nonstatutory  Stock
Options").  Incentive Stock Options and Nonstatutory Stock Options  (corectively
referred to as "Options")  may both be granted  hereunder and any Option granted
which for any reason does not qualify as an Incentive  Stock  Option,  including
any Option  granted to a director  of the Company who is not also an employee of
the Company, shall be a Nonstatutory Stock Option.

     2. Stock Subject to the Plan.  The number of shares of the Company's no par
value  common stock  ("Common  Stock")  which may be optioned  under the Plan is
880,000 shares. Such shares may consist, in whole or in part, of unissued shares
or treasury shares.  The maximum number of shares issuable pursuant to the Plan,
including shares subject to outstanding Options,  shall be subject to adjustment
as provided in Section 7 of the Plan.  No Option shall be granted under the Plan
after  September 1, 2002. No Incentive  Stock Options shall be granted under the
Plan to any employee  where the aggregate  fair market value  (determined at the
time the Option is granted) of the stock with respect to which  Incentive  Stock
Options are  exercisable for the first time by such employee during any calendar
year  (under  all such  plans  of the  Company  and its  parent  and  subsidiary
corporations)  shall exceed $100,000;  provided that Nonstatutory  Stock Options
granted under the Plan may exceed these limits.  For purposes of this Plan,  the
fair market  value of Common Stock ("Fair  Market  Value")  subject to an Option
shall be either  equal to (i) the average of the bid and ask prices  reported in
the  over-the-counter  market at the close of business on the date the Option is
granted or (ii) the average of the closing bid and ask price per share of Common
Stock of the  Company  on the date the Option is  granted,  as  reported  by the
National  Association of Securities  Dealers  Automated  Quotation System. If no
market exists, the Committee (as defined in Section 3 below) shall determine the
Fair Market Value for purposes of this Plan. If any outstanding Option under the
Plan for any  reason  expires  or is  terminated,  the  shares of  Common  Stock
allocable to the unexercised  portion of such Option may again be optioned under
the Plan subject to the limitations, terms and conditions of the Plan. The Board
of  Directors,  and the proper  officers of the Company  shall from time to time
take  appropriate  action  required for delivery of Common Stock,  in accordance
with the Options and any exercises thereof.



     3.   Administration.

     a. The Plan shall be administered by a committee of "disinterested" members
of the Board of Directors of the Company (the  "Board")  consisting  of not less
than two members appointed by the Board and serving at the Board's pleasure (the
"Committee,').  A "disinterested"  director is a director who has not received a
discretionary  grant or award  of the  Company's  equity  securities  under  any
Company plan during the twelve (12) months prior to service on the Committee, or
who  participates  only in an  automatic  option  grant or stock  award  program
(including any program where a director  elects to receive some or all of his or
her retainer in stock or options) where there is no discretion  over the timing,
pricing  or  amount  of  the   award,   and  which   meets  the   "disinterested
administrator"  requirements  of Rule 16b-3 of the  Securities  Exchange  Act of
1934, as amended (the "1934 Act"). With respect to persons subject to Section 16
of the 1934 Act,  transactions  under this Plan are  intended to comply with all
applicable  conditions  of Rule 16b-3 or its  successors  under the 1934 Act. As
used herein, the term Board shall also mean the Committee of the Board.

     The  Committee is  authorized  and  empowered to  administer  the Plan and,
consistent  with the terms of the Plan,  to (a)  select  the  employees  to whom
Options  are to be granted  and to fix the number of shares and other  terms and
conditions  of the  Options to be  granted;  (b)  determine  the date upon which
Options shall be granted and the terms and conditions of the granted  Options in
a manner  consistent with the Plan, which terms need not be identical as between
Options or Optionees;  and (c) interpret the Plan and the Options  granted under
the Plan.

     b. The Board may from time to time adopt such rules and  regulations  as it
may deem advisable for the administration of the Plan, and may alter,  amend, or
rescind any such rules and regulations in its  discretion.  The Board shall have
the power to interpret  or amend or  discontinue  the Plan,  except that certain
amendments  shall be subject to the  provisions  of Section 10 of the Plan.  All
decisions made by the Board in the administration and interpretation of the Plan
shall be binding and conclusive for all purposes.

     c. Once  appointed,  the Committee  shall continue to serve until otherwise
directed by the Board.  Subject to the foregoing and Section 3(a),  from time to
time the Board may increase  the size of the  Committee  and appoint  additional
members thereof,  remove members (with or without cause) and appoint new members
in substitution  therefor,  fill vacancies however caused, or remove all members
of the Committee and thereafter directly administer the Plan.


     4.   Eligibility.

     a. Employees, directors and consultants of the Company, or of any parent or
subsidiary  of the Company,  shall be eligible to be granted  Options  under the
Plan. The only employees of the Company  eligible to receive grants of Incentive
Stock Options under the Plan shah be employees (including officers and directors
of the Company who are also employees) who are from time to time responsible for
the  management,  growth or success of the Company's  business and who have been
selected  by the  Committee.  A director  of the  Company  may not be granted an
Incentive  Stock  Option  unless he or she is also an employee of the Company or
any parent or subsidiary of the Company.  "Parent" and  "subsidiary"  shall have
the  meanings  defined  in  Section  424 of  the  Code.  Grants  of  Options  to
nonemployee  directors,  whether  or  not  such  director  is a  member  of  the
Committee, can only be made pursuant to the terms specified in Section 5 below.

     b. The type of Option,  the number of shares which may be  purchased  under
such Option, the exercisability of such Option, the Option's expiration date and
the purchase  price per share,  shall be designated by the Committee at the time
the Option is granted, provided, that if the Committee does not specify the type
of Option,  and if all qualifications for the grant of an Incentive Stock Option
are met, such Option shall be an Incentive Stock Option;  and provided  further,
that unless the Committee  specifically  provides for an exercise schedule which
is different from the standard schedule provided for in Section 6(f) hereof, the
standard  exercise  schedule  shall be  applied to such  Option.  Subject to the
exception under Section 6(b), no person may be granted an Incentive Stock Option
if such person,  at the time the Option is granted,  owns shares of Common Stock
possessing  more than 10% of the total  voting  power or value of all classes of
stock of the Company or any parent or  subsidiary  corporation.  For purposes of
calculating such stock ownership,  the attribution  rules of stock ownership set
forth in Section 424(d) of the Code, as amended,  shall apply.  Accordingly,  an
optionee, with respect to whom such 10% limitation is being determined, shall be
considered  as owning  Common Stock owned  directly or  indirectly by or for the
optionee's  brothers and sisters  (whether by the whole or half-blood),  spouse,
ancestors  and  lineal  descendants;  and any Common  Stock  owned  directly  or
indirectly  by or for a  corporation,  partnership,  estate or  trust,  shall be
considered as being owned  proportionately by or for its shareholders,  partners
or beneficiaries.

     5.  Grants to  Non-Employee  Directors.  Grants of Options to  non-employee
directors  may only be made  pursuant to the  provisions  of this Section 5. For
services  rendered as members of the Board of Directors  and in order to attract
and retain qualified non-employee directors, each non-employee director shall be
granted Nonstatutory Stock Options as follows (subject to adjustment pursuant to
Section 7 hereof):

     a. On December 5, 1995,  to the  non-employee  directors  who served on the
Board of Directors  prior to such date, (i) for each full fiscal year of service
on the Board of Directors prior to fiscal year 1996,  Nonstatutory Stock Options
to  purchase  20,000  shares  of the  Company's  Common  Stock and (ii) for each
partial  fiscal year of service on the Board of  Directors  prior to fiscal year
1996,  Nonstatutory  Stock Options to purchase the number of shares  (rounded to
the nearest whole number)  determined by multiplying  (x) 20,000 by (y) a ratio,
the numerator of which is the number of days the director  served as such during
such  fiscal year and the  denominator  of which is 365;  all such  Nonstatutory
Stock  Options  shall be treated (for purposes of vesting only) as if granted on
the date such director was first  appointed or elected to the Board (for subpart
(i), above) or the anniversary date of such election or appointment (for subpart
(ii),  above),  in each case in the  applicable  fiscal year of service to which
such grant  applies,  and shall vest over the one year period  subsequent to the
date of grant at the rate of 25% every three months;  b. On December 5, 1995, in
addition to the  Nonstatutory  Stock  Options  granted  pursuant to Section 5(a)
above, to each non-employee director serving on such date (even if first elected
as a member of the Board of Directors on such date), a Nonstatutory Stock Option
to purchase  20,000  shares of the Company's  Common Stock,  which Options shall
vest over the two year period  subsequent to the date of grant at the rate of 25
% every six months;

     c. After December 5, 1995, to each  newly-elected or appointed  nonemployee
director on the first day of service on the Board of Directors,  a  Nonstatutory
Stock Option to purchase  20,000  shares of the Company's  Common  Stock,  which
Options  shall vest over the two year period  subsequent to the date of grant at
the rate of 25% every six months; and

     d. After  December 5, 1995, in addition to the  Nonstatutory  Stock Options
granted  pursuant to Sections 5(a), 5(b) and 5(c),  above, to each  non-employee
director  for so long as such  non-employee  director is serving on the Board of
Directors,  on each  anniversary  of the  date on  which  such  person  became a
director of the Company,  a Nonstatutory  Stock Option to purchase 20,000 shares
of the Company's Common Stock, which Options shall vest over the two year period
subsequent to the date of grant at the rate of 25% every six months.

     Subject  to the  qualifications  set forth in  Section  6(i),  (k) and (1),
Options  granted under this Section 5 shall expire to the extent not  exercised,
ten (10) years from the date of grant.


     6.  Terms and  Conditions.  All  Options  granted  under this Plan shall be
subject  to the  terms  and  conditions  of  this  Plan,  except  to the  extent
specifically provided otherwise, including all of the following:

     a. Option Price.  Subject to the  provisions  of Section  6(b),  the option
price per share for all Options  shall be  determined by the Committee but shall
not be less than 100% of the Fair  Market  Value of such  shares at the time the
Option is granted.

     b.  More than 10%  Shareholder.  If an  employee  owns more than 10% of the
voting  power or value of all  classes of stock of the  Company or any parent or
subsidiary  corporation,  at the time an Incentive Stock Option is granted under
the Plan,  the Committee  may issue an Incentive  Stock Option to such person at
not less than I 10 % of the Fair Market  Value of Common  Stock.  Any  Incentive
Stock Option  granted to any employee who owns more than 10% of the voting power
or value of all  classes of stock of the  Company  or any  parent or  subsidiary
corporation,  shall not be  exercisable  after the expiration of five years from
the date such Option is granted.

     c.  Limitations  on Grant of  Options.  Subject  to the  limitations  under
Section  6(b) of this Plan,  no Option  shall be granted  which may be exercised
more than ten years after the date it was granted.



     d. Limitation on Exercise of Option. Persons who beneficially own more than
ten percent of a class of the Company's equity  securities,  executive  officers
and  directors  of the  Company  (collectively,  "Insiders")  who are granted an
Option  under the Plan  shall not sell the Common  Stock  acquired  through  the
exercise of such Option  sooner than six months  following  the date of grant of
such Option.

     e.  Payment  for  Shares.  Payment  in full  shall be made  for all  shares
pursuant to the exercise of an Option.  The purchase price may, at the Company's
discretion, be paid by assignment to the Company of outstanding shares of Common
Stock of the  Company  owned by the  optionee  for a period  of at least six (6)
months  prior  to the  date of  exercise  and  having a Fair  Market  Value  (as
determined  pursuant  to Section 2 above)  equal to the  purchase  price or that
portion  thereof  being  paid in  outstanding  stock.  The  Company  may issue a
certificate  which  reflects the net number of shares  issuable after payment of
the exercise price in already owned Common Stock,  so that the previously  owned
certificate  need not actually be tendered.  All Options  shall be exercised for
100 shares, or a multiple thereof or for the full number of shares for which the
Option is then  exercisable.  No optionee  shall have the right to  dividends or
other rights of a stockholder  with respect to shares subject to an Option until
the optionee has given written notice of exercise of the  optionee's  Option and
paid in full for such shares.

     f.  Manner of  Exercise.  Any Option  granted  pursuant to this Plan may be
exercised  at such time or times as set forth in the Option,  by the delivery of
written notice to the Chief Financial  Officer of the Company,  provided that if
such optionee is the Chief Financial Officer of the Company such notice shall be
delivered to another executive officer of the Company,  together with payment in
full for the number of shares to be purchased  pursuant to such  exercise.  Such
notice (i) shall state the election to exercise the Option, (ii) shall state the
number of shares in respect of which the Option is being exercised,  (iii) shall
state the optionee's  address,  (iv) shall state the optionee's  social security
number,  (v)  shall  contain  such  representations  and  agreements  concerning
optionee's  investment  intent with respect to such shares of Common  Stock,  if
reasonably requested by the Company, and (vi) shall be signed by optionee.

     Except as to  Nonstatutory  Stock  Options  granted  pursuant  to Section 5
hereof  or  unless  otherwise  determined  by the  Board  and set  forth  in the
optionee's  incentive  Stock Option  Certificate  or  Nonstatutory  Stock Option
Certificate,  as  applicable,  options  granted  under the Plan shall mature and
become  exercisable  as to 24% of the total shares  covered by the Option on the
first  anniversary  from the date of grant, and 2% per month  thereafter,  until
fully vested, so long as the optionee remains an employee of the Company.

     g. Other Representations or Warranties.  As a further condition to exercise
of any Option  granted under the Plan,  the Company may require each optionee to
make any  representation  and  warranty to the Company as may be required by any
applicable law or regulation.



     h.  Holding  Period o  Shares.  No shares of  Common  Stock  acquired  upon
exercise  of an  Option  granted  under  this  Plan  shall be sold or  otherwise
disposed of within the meaning of Section 425(c) of the Code, at any time before
the later of two years  from the date of the grant of an Option  under this Plan
or one year after the date of exercise of the Option.  However,  an optionee who
has  acquired  shares of Common Stock upon  exercise of a stock  Option  granted
under this Plan,  who  transfers  such shares to a trustee,  receiver,  or other
similar  fiduciary  in  any  proceeding  under  Title  II of the  United  States
Bankruptcy  Law or any other similar  insolvency  proceeding at a time when such
optionee  is  insolvent  shall not have been  deemed to have made a transfer  or
disposition  for  purposes of this  subsection,  nor shall one who  acquires the
shares from the Company with another  person in joint  tenancy be deemed to have
made a transfer or disposition.

     i. Death of Optionee. If an optionee dies, any Option previously granted to
the  optionee   shall  be  exercisable   by  the  personal   representative   or
administrator  of the  deceased  optionee's  estate,  or by any  trustee,  heir,
legatee or  beneficiary  who shall have  acquired the Option  directly  from the
optionee by will or by the laws of descent and  distribution  at any time within
one year after his  death,  but not more than ten years  (five  years if Section
6(b) is  applicable)  after the date of  granting of the  Option,  provided  the
deceased optionee was entitled to exercise such Option at the time of his death.

     j. Retirement.  If an optionee's  employment with the Company terminates by
reason of retirement,  any Option previously granted to him shall be exercisable
within three months  after the date of such  termination,  but not more than ten
years (five years if Section 6(b) is  applicable)  after the date of granting of
the Option,  and then only to the extent to which it was exercisable at the time
of such termination by retirement;  provided, however, that if the optionee dies
within three months after termination by retirement,  any unexercised Option, to
the  extent  to  which  it was  exercisable  at the  time  of his  death,  shall
thereafter  be  "exercisable  for one year after the date of his death,  but not
more than ten years after the date of granting of the Option.

     k.  Disability.  If an  optionee  becomes  disabled  within the  meaning of
Section  105(d)(4) of the Code, and at the time of such  disability the optionee
is  entitled to  exercise  such  Option,  the  optionee  shall have the right to
exercise  such Option  within one year after such  disability  provided that the
optionee  exercises  within ten years  after the date of grant  thereof (or five
years if Section  6(b) is  applicable),  and then only to the extent to which it
was exercisable at the time of such disability.

     1. Optionee's Termination.  Optionees granted an Option under the Plan must
exercise such Option (i) within three months of the date such optionee ceased to
be employed by the Company or a  corporation  or subsidiary  thereof  issuing or
assuming the Option in a transaction  set forth under Section 7 of this Plan (as
to Options  granted to  employees)  or (ii) within three months of the date when
the  optionee  ceased to serve as a director of the Company (as to  Nonstatutory
Stock Options granted to or held by nonemployee  directors).  Such options shall
only be exercisable to the extent to which they were  exercisable at the time of
such termination of employment or service on the Board of Directors.

     m. Leave of Absence.  For the purposes of this Plan (i) a leave of absence,
duly authorized in writing by the Company for military  service or sickness,  or
for any other purpose approved by the Company,  if the period of such leave does
not  exceed  90 days and (ii) a leave of  absence  in  excess  of 90 days,  duly
authorized  in  writing  by  the  Company   provided  the  optionee's  right  to
re-employment  is  guaranteed  either by  statute or by  contract,  shall not be
deemed a termination of employment.

     n.  Non-transferability  of Options. No option granted under this Plan will
be  transferable  by the optionee  other than by will or the laws of descent and
distribution.   During  the  lifetime  of  the  optionee,  the  Option  will  be
exercisable only by optionee.


     7.   Recapitalization or Merger.

     a. If the  outstanding  shares of Common  Stock which are  eligible for the
granting of Options hereunder,  or subject to Options theretofore granted, shall
at any  time be  changed  or  exchanged  by  declaration  of a  stock  dividend,
split-up,  subdivision  or  combination  of  shares,  recapitalization,  merger,
consolidation  or other  corporate  reorganization  in which the  Company is the
surviving  corporation,  the number  and kind of shares  subject to this Plan or
subject to any  Options  previously  granted,  and the Option  prices,  shall be
appropriately and equitably adjusted, so as to maintain the proportionate number
of shares without changing the aggregate option price.

     b. In the  event of a  dissolution  or  liquidation  of the  Company,  or a
merger, consolidation,  sale of all or substantially all of its assets, or other
corporate  reorganization in which the Company is not the surviving  corporation
and the holders of Common Stock receive securities of another  corporation,  any
outstanding  Options  hereunder shall terminate as of the effective date of such
event,  provided that  immediately  prior to such event each optionee shall have
the right to exercise any unexpired Options in whole or in part, including those
Options which are not yet vested  pursuant to the applicable  vesting  schedule.
The  Board  may,  in its  sole  discretion,  negotiate  for  the  assumption  or
replacement of any Options not exercised by an optionee with comparable  options
to purchase the stock of such other  corporation.  The Company shall afford each
person who holds an Option under this Plan with at least 30 days advance written
notice of such event.

     The existence of this Plan, or of any Options  hereunder,  shall not in any
way  prevent any  transaction  described  in this  section,  nor shall  anything
contained  in this  Plan  prevent  the  issuance  of a  replacement  option by a
surviving corporation.

     8. Use of  Proceeds.  Proceeds  from the sale of stock  pursuant to Options
granted under this Plan shall constitute general funds of the Company.




     9. Reservation of Issuance of Shares. The Company shall at all times during
the  duration of this Plan reserve and keep  available  such number of shares of
Common Stock as will be  sufficient to satisfy the  requirements  of all Options
granted  pursuant to this Plan,  and shall pay all  original  issue and transfer
taxes with  respect to the  issuance of shares  pursuant to the exercise of such
Options,  and shall pay all of the fees and  expenses  necessarily  incurred  in
connection with the exercise of such Options and the issuance of such shares.


     10.  Amendments.  The Board of Directors may amend,  alter,  or discontinue
this Plan, but no amendment,  alteration or discontinuation  shall be made which
would impair the rights of any optionee  under any Options  previously  granted,
without the optionee's consent, subject to any provisions otherwise in the Plan,
or which, without the approval of the shareholders, would:

     i) Except as is  provided  in  Section 7 of this Plan,  increase  the total
number of shares reserved for the purposes of the Plan;

     ii) Change the persons (or class of  persons)  eligible to receive  Options
under the Plan; or

     iii) Materially increase the benefits accruing to Insiders under the Plan.

     Subject to the foregoing, the provisions of Section 5 of the Plan which set
forth terms and  conditions of Option grants to non- employee  directors,  shall
not be amended  more than once every six (6) months  other than to comport  with
changes in the Internal Revenue Code, Title I of the Employee  Retirement Income
Security Act or the rules promulgated thereunder.

     11. Indemnification. In addition to such other rights of indemnification as
they may have as  directors,  the  members  of the  Committee  and the  Board of
Directors  shall be  indemnified  by the Company  against  reasonable  expenses,
including  attorneys' fees actually  incurred in connection with the defenses of
any action, suit or proceeding,  or in connection with any appeal therefrom,  to
which  they or any of them  may be a party  by  reason  of any  action  taken or
failure  to act  under or in  connection  with the  Plan or any  Option  granted
thereunder, and against all amounts paid by them in settlement thereof (provided
such  settlement  is  approved  by  independent  legal  counsel  selected by the
Company) or paid by them in  satisfaction  of  judgment  in any action,  suit or
proceeding,  except in  relation  to matters as to which it shall be adjudged in
such action,  suit or proceeding,  that such member of the Board of Directors is
liable for gross negligence,  fraud or willful  misconduct in the performance of
the  director's  duties so long as within 60 days after  institution of any such
action, suit or proceeding,  the director shall in writing offer the Company the
opportunity,  at its own  expense,  to handle and defend  such  action,  suit or
proceeding.

     12. Approval of  Shareholders.  The Plan shall take effect upon approval by
the holders of a majority of the shares of the Company's Common Stock present at
a meeting attended by a quorum of shareholders, which approval must occur within
12 months  after the date the Plan is  adopted  by the Board of  Directors.  13.
Miscellaneous.  Unless  the  context  requires  otherwise,  wards  denoting  the
singular may be construed as denoting the plural, and words of the plural may be
construed as denoting the singular,  and words of one gender may be construed as
denoting such other gender as is appropriate.  Paragraph  headings are not to be
considered part of this Plan and are included solely for convenience and are not
intended to be full or accurate descriptions of the contents thereof.


Adopted:  September 16, 1992
Amended:  August 12, 1994 (approved by shareholders on October
28, 1994)
Amended:  September 14, 1995 (approved by shareholders on
December 5, 1995)

                                
                                
                                
                                                    EXHIBIT 10.19
                                
             AGREEMENT FOR MANUFACTURE AND PURCHASE
    
     This Agreement for  Manufacture  and Purchase (the  "Agreement") is entered
into as of the 22nd of  April,  1996,  by and among  U.S.  WIRELESS  DATA,  INC.
("USWD"),  UNIFORM INDUSTRIAL CORPORATION ("UIC") and CARDSERVICE INTERNATIONAL,
INC. ("CSl"), UIC and CSI shall collectively be referred to as the "Investors."

     A.   USWD designs, markets and sells a wireless and portable
credit card and check authorization terminal known as the POS-
500 (the "USWD Product).

     B.   UIC intends to manufacture the USWD Product.

     C.   CSI is a customer of USWD that purchases the USWD
Product.

     NOW,  THEREFORE,  in  consideration  of the  agreements set forth below and
other good and valuable consideration, the parties agree as follows:

     1.  Purchase  of  Parts.  Under  the  terms of a  separate  agreement,  the
Investors  purchased  certain  parts (the  "Parts")  from  Solectron  California
Corporation  and the Parts were shipped to UIC. UIC and USWD shall in good faith
review  the  Parts  and  determine  which  Parts  will  be  kept  by UIC for the
manufacture  of the USWD Product (the "Usable  Parts") and which will be sent by
UIC to USWD (the "Excess Parts"),  which  determination and shipment shall occur
within thirty (30) days after  receipt by UIC of the Parts.  Title to the Excess
Parts will  transfer  to USWD upon such  shipment by UIC.  UIC shall  employ the
Usable Parts exclusively for the manufacture of the USWD Product.  USWD shall be
permitted  to dispose  of the Excess  Parts in any manner it sees fit and retain
all proceeds from such disposition;  provided, however, that for the thirty (30)
day period  following  receipt by UIC of the Parts,  UIC shall have the right to
purchase from USWD any of the Excess Parts at 25% of the original unit cost paid
by  Solectron  for such Excess  Parts.  UIC shall pay cash for such Excess Parts
upon delivery.

     2. Orders from UIC. It is USWD's good faith  intention to order up to 2,000
units of the USWD  Product  from UIC  based on  orders  USWD  receives  from its
customers.  UIC will be the exclusive  manufacturer  of such 2,000 units.  After
satisfying orders for the 2,000 units of USWD Product called for hereunder,  UIC
will  have the  opportunity  to build  additional  USWD  Product  as long as UIC
remains competitive.  Within 5 days after execution of this Agreement, CSI shall
submit a purchase order for 200 units of the USWD Product to USWD and USWD shall
submit a purchase  order to UIC for 500 units of the USWD Product.  In the event
USWD places  subsequent orders for the USWD Product each such order shall be for
a minimum  quantity of 500 units of the USWD  Product.  All of the USWD  Product
ordered from UIC shall be shipped FOB UIC's facility in Fremont, California. UIC
shall  use its best  efforts  to ship the USWD  Product  within  ___ days  after
receiving an order from USWD. CSI shall use its best efforts to continue to sell
the USWD Product.


     3. Prices.  Exhibit A attached hereto provides detail regarding the pricing
applicable under this Agreement.

     a. The  prices  of the USWD  Product  ordered  pursuant  to this  Agreement
payable  to UIC  shall be  $434.62  per unit for the  first  thousand  units and
$381.12 for the second thousand  units.  These prices shall be in force only for
2,000 units of the USWD Product.

     b. USWD shall pay to UIC a one time Tooling/NRE:PCB fee, shown as item 2 on
Exhibit A. Such fee shall be paid by USWD to UIC as follows:  1/3 upon execution
of this Agreement,  1/3 upon first article submission by UIC to USWD for review,
and the final 1/3 upon final article approval by USWD.

     c.  Cellular  kits are not  included in the Unit Prices  shown in item 1 on
Exhibit A. If more  cellular  kits are needed  for the  manufacture  of the USWD
Product  pursuant  to this  Agreement,  the actual  price for such kits shall be
added to the purchase price shown in item 3 of Exhibit A.

     d. The prices  shown on Exhibit A do not  include  test  fixtures  and test
programs which shall be provided by USWD to UIC at no charge to Investors.

     4. Payment Terms.  The payment terms  applicable under this Agreement shall
be as follows:

     a. All orders for the USWD Product placed by CSI (the "CSI Units') shall be
paid for by CSI  directly  to UIC upon  delivery of such  products to CSI.  Such
amounts will be based on the full per unit retail price  charged by USWD to CSI.
Upon receipt of such  payments,  UIC may retain the purchase  price per unit (as
shown on Exhibit A) for such units delivered to CSI and for an additional number
of units up to 300  units,  per 500 unit  order.  If  funds  remain  after  such
application,  UIC shall  remit the  balance to USWD  within  five (5) days after
receipt from CSI. Payment received by UIC for the USWD Product which are not CSI
Units shall be referred to as "Prepaid Units."

     b. Upon  receipt of funds from CSI,  UIC shall  within  five (5) days after
such payment deliver to USWD the Prepaid Units plus 100 additional  units of the
USWD Product.  Such 100  additional  units shall be referred to as the "Advanced
Units." As UIC receives payment for the Advanced Units, UIC shall make available
for  shipment  to USWD  additional  units in  accordance  with a forecast  to be
provided by USWD, up to a maximum of 100 such units of USWD Product  outstanding
at any given time.

     c. USWD  shall pay UIC for all of the USWD  Product  which is  ordered  for
customers  of USWD other than CSI within five (5) days after  receipt by USWD of
payments  from such  customers.  Such payments to UIC shall be based on the unit
prices set forth on Exhibit A.

     d. After paying UIC for the CSI Units,  the Prepaid  Units and the Advanced
Units,  USWD shall apply any  remaining  funds it receives  for the USWD Product
pursuant to this  Agreement  to the  payment of a fee to CSI.  Such fee shall be
based on the number of the USWD Product  ordered under this  Agreement for which
USWD has  received  payment,  at the rate of $150 for each USWD  Product for the
first thousand units ordered  hereunder and thereafter  $100 for each subsequent
USWD Product ordered hereunder, as agreed by CSI.

     5.  Counterparts.  This  Agreement  may be executed in  counterparts  which
together shall constitute but one and the same document.  Such  counterparts may
be transmitted by telecopy,  the telecopy to have full force and effect as if it
were an original.

     6. Governing Law. The provisions of this Agreement shall be governed by the
laws of the State of  Colorado  except  its  choice of law  rules,  and shall be
binding upon the successors or assigns of the parties  permitted by the terms of
this Agreement.

     7.  Assignment.  This Agreement  shall not be assigned by any Party without
the prior written  consent of the other two parties,  which consent shall not be
unreasonably withheld.

     8. Arbitration. Any controversy or claim arising out of or relating to this
Agreement,  or the breach thereof, shall be settled by arbitration  administered
by the  American  Arbitration  Association  in  accordance  with its  Commercial
Arbitration  Rules and judgment on the award  rendered by the  arbitrator may be
entered in any court having jurisdiction thereof.

     IN WITNESS WHEREOF,  the parties have entered into this Agreement as of the
date first set forth above.


U.S. WIRELESS       UNIFORM INDUSTRIAL       CARDSERVICE
DATA, INC.               CORPORATION              INTERNATIONAL,
INC.



                                                    EXHIBIT 10.20
                                
                    MEMORANDUM OF AGREEIMENT
                               AND
                    MUTUAL RELEASE OF CLAIMS
                                

     This Memorandum of Agreement  entered into this 16th day of April,  1996 by
and  between  Solectron  California  Corporation  ("Solectron")  located  at 847
Gibraltar Drive, Milpitas, California and US Wireless Data, Inc. ("US Wireless")
located at 5700 Flatiron Parkway, Boulder, Colorado 80301

     WHEREAS  Solectron  and US Wireless  entered  into a Purchase  Agreement on
January 21, 1994.

     WHEREAS pursuant to said Purchase Agreement,  Solectron purchased materials
with a value of $1,427,000 as of January 29, 1995.  Solectron has retained title
to said materials.

     WHEREAS US Wireless has  previously  acknowledged  financial  liability for
this sum and has  indicated  it's  inability to  compensate  Solectron  for said
indebtedness.

     WHEREAS  Solectron  desires to liquidate said materials in a bulk sale form
("Bulk Materials") to unrelated third parties, to wit: Cardservice International
and Uniform Industrial Corporation (collectively "Purchaser"),  Solectron and US
Wireless hereby agree as follows:

I .  Purchaser has agreed to purchase from Solectron, the Bulk
     Material on an "as-is" condition and without warranty at the
     agreed price of $325,000 payable on or about April 16,1996.

2.   US Wireless expressly consents to the foregoing sale of Bulk
Materials.

3.   Effective upon payment of the purchase price as set forth
     above in paragraph 1 above, US Wireless and Solectron shall
     hereby release, acquit and forever discharge each other and
     their respective predecessors, successors, assignee,
     directors, officers, shareholders, employees, agents, legal
     representatives, subsidiaries and affiliates, of and from
     any and all claims, demands, damages, attorneys fees, costs,
     actions, causes of actions, and suits in equity, of
     whatsoever kind or nature whether theretofore or thereafter
     accruing or whether KNOWN OR NOT KNOWN, out of or relating
     to the Bulk Material purchased hereunder, or any other
     matters between Solectron and US Wireless or any amounts
     owing between Solectron and US Wireless.


AGREED:

     US Wireless Data, Inc.                  Solectron California
                                             Corporation

     By: M.J. Brisnehan                     By: Donald Landry

     Name: Michael J. Brisnehan             Name: Donald P. Landry

     Title: President                       Title: Controller