U.S. Wireless Data Reports Fiscal 2003 Financial Results and Current Financial Condition

Total operating expenses declined by $11,147,000 or 52%, while the net loss improved by $16,972,000 or 66%. Net cash used in operating activities declined by $5,896,000 or 51% for the year ended June 30, 2003. REVENUE Revenue for the year ended June 30, 2003 was $3,725,000, as compared to $2,521,000 for the prior fiscal year, a 48% increase. Service revenue was $3,404,000, up from $1,951,000 in the prior fiscal year, a 75% increase. Service revenue was derived primarily from the growing base of active wireless sites that use USWDs proprietary Synapse service to process payments transactions. Product sales decreased to $321,000, from $570,000 during the prior fiscal year. Product sales for the year included the sale of certain third-party products purchased on behalf of a client and other one-time product sales. GROSS PROFIT Gross profit for fiscal 2003 was $1,033,000, compared to a loss of $2,253,000 in the prior fiscal year. This increase was primarily due to a decrease in the write-down of inventory of Synapse Adapters and other CDPD-based inventory. For the years ended June 30, 2003 and 2002, gross profit was reduced by write-downs of inventory of $579,000 and $3,481,000, respectively. Without the write-downs of inventory, the improvement in total gross profit was primarily attributed to the growth of active sites for Synapse services. The increase was partially offset by the decrease in gross profit from product sales. Gross profit from services for the year ended June 30, 2003 was $1,600,000, compared to $1,127,000 for the prior fiscal year, a $473,000 or 42% increase. Gross profit from product sales for the year ended June 30, 2003 was negative $567,000, compared to negative $3,380,000 for the prior fiscal year, a $2,813,000 or 83% improvement. A significant portion of the negative gross profit from product sales is due to the write-downs of inventory. Without the inventory write-downs, the decrease was attributed to the lack of sales of the Synapse Adapter, partially offset by sales of Synapse Enabler products. In addition, product sales for fiscal 2003 included approximately $103,000 for the sale of certain third party products purchased on behalf of a client and sold at cost to such client. GROSS MARGIN Total gross margin for the year ended June 30, 2003, increased to 27.7% from (89.4)%. This increase was attributed to the reduction in the write-down of inventory as well as by the greater percentage of total revenue attributable to monthly fees due to the growth in active sites. Gross margin from services was 47.0% for the year ended June 30, 2003 compared to 57.8% for the prior fiscal year. Gross margin from product sales was (176.6)% for the year ended June 30, 2003, compared to (593.0)% for the prior fiscal year. NET LOSS/EBITDA For the year ended June 30, 2003, net loss totaled $8.6 million or $0.52 per share as compared to a net loss of $25.6 million or $1.92 per share for the prior fiscal year. EBITDA is presented because it is a widely accepted indicator of funds available to service debt, although it is not a measure of liquidity or of financial performance under accounting principles generally accepted in the United States of America. USWD uses EBITDA as an internal measure of operating performance, which is net loss excluding net interest, taxes, depreciation and amortization. The company believes that EBITDA, while providing useful information, should not be considered in isolation or as an alternative to net income or cash flows as determined under GAAP. The EBITDA loss for the year ended June 30, 2003 was $7.4 million as compared to the prior fiscal years loss of $21.4 million. This improvement in EBITDA loss of $14.0 million or approximately 66% is primarily attributed to the increase in revenues and a reduction of cost of revenues and operating expenses as discussed