U.S. Wireless Data Reports Fiscal Second Quarter Financial Results

Total operating expenses declined 50% to $1,771,000 for the three months and 42% to $3,556,000 for the six months ended December 31, 2003, while the net loss improved by 56% to ($1,515,000) and 45% to ($2,846,000) for the comparable periods. Net cash used in operating activities declined by $998,000 or 29% for the six month period ending December 31, 2003, as compared to the same six month period of the prior fiscal year. The company also announced that it had entered into two non-binding term sheets - one with MIST (Mist) under which the company intends to sell its Synapse point-of-sale (POS) gateway business to Mist, and the second with Brascan Financial Corporation (Brascan) to amend the previous terms of the $2.75 million Term Loan and Security Agreement (Bridge Loan). The contemplated transaction with Mist envisions that USWD will receive consideration consisting of cash and an agreement to provide the company with a certain amount of payment processing services for its vending initiatives. The parties anticipate the execution of definitive agreements on or about February 27, 2004. Concurrent with the signing of definitive agreements for the contemplated sale of the Synapse POS gateway business to Mist, it is anticipated that an amendment to the Bridge Loan will be executed and Brascan will extend up to an additional $1.1 million less expenses under certain conditions. The cash portion of the proceeds from the contemplated sale of the Synapse POS gateway business will be used to reduce USWDs outstanding balance on the Bridge Loan. As part of the foregoing transactions, Brascan has also agreed to forfeit one-half of its currently outstanding 10,000,000 share Bridge Loan warrant. The Bridge Loan will continue to be secured by a general security interest in all of USWDs assets. The principal amount of the Bridge Loan will be due March 16, 2005. The contemplated transactions remain subject to a number of conditions, including the execution of definitive documentation between USWD, Mist and Brascan. Accordingly, there is no assurance that these proposed transactions will be consummated according to the terms and conditions contemplated by these non-binding term sheets or at all. The Synapse POS gateway business currently generates substantially all of USWDs revenues. The additional amounts to be received upon execution of the amended Bridge Loan are expected to provide USWD with enough capital to support the companys operations for approximately two to three months given the companys anticipated short-term negative cash flow. During this period, USWD will focus on its vending initiatives and will attempt to address the companys capital requirements. Following the receipt of Pepsis trademark authorization, which USWD believes it will receive shortly upon the successful conclusion of its ongoing field and commercial tests, the company plans to embark on a sales campaign in conjunction with Pepsi that will target the Pepsi bottlers, affiliates and licensees. In addition, USWD will continue to pursue other opportunities in the vending industry. The company must, however, secure additional financing in order to continue operations. The company must secure additional financing in order to continue operations. In doing so, the company may secure capital in the form of debt and/or equity financing. Should the company be successful in completing an equity financing, it is likely that such a transaction would require reorganization of its capital structure, which may include the restructuring of the currently issued and outstanding Series C Convertible Preferred Stock and Series C Warrants. It is also anticipated that the terms and provisions of any equity financing, if completed, may have a substantial dilutive effect on the ownership interests of existing stockholders. OPERATING HIGHLIGHTS USWD continues to make progress on