USWE - US Wireless Data (formerly USWDA) Message Board

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Microcap & Penny Stocks : USWE - US Wireless Data (formerly USWDA)

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To: OHL who wrote (56)	9/16/1997 11:24:00 PM
From: Rob S.	of 370

The conference call confirmed what I had learned and provided some interesting new information. I think that the stock will move up considerably over the next several weeks and particularly over the next 2-6 weeks. They have received an acqisition offer from a major company and another strategic placement offer. So far they have turned down the offers for being acquired in favor of securing agreements with the major wireless carriers. If they were to consider selling the company they would not do that until the stock price is considerably higher than it is now and the major agreements are in place. They are currently talking with instituional investors about securing $3 to $3.5 million in additional finacing to carry them through next year at least to the point of generating positive cash flows. The agreement is expected to take place within about a month. The roll-out with GTE has already started. The agreement called out for a slow roll-out starting in two key geographic regions and spanning out over the next several months. GTE has asked the company to accelerate the roll-out to two months because the initial reaction of the sales force is extremely positive. Another major wireless carrier's (not mentioned by name during the conference call) reaction to their trial program is extremely favorable. Whereas GTE has set a goal of having each of their 500 sales reps place 3 units per month on average, the other major carrier says that it expects each sales person to place around 50 units per month. An agreement has been prepared and sent to the company after USWDA received a verbal agreement on the terms and program go-ahead. The signing and receipt of this agreement should take place within the next three weeks and posibly as early as next week. A key executive at a BIG wireless telecom (can't mention name here) called last week and asked "how can we get the on board with this? What do we need to do to make it happen?" A written agreement has not yet been sent but is expected within the next few weeks. The CEO said that he expects just about every major wireless carrier to eventually sign with USWD and for two major carriers to have signed within a month. The company said that it has three main products at this time; 1] Tranz Enablers. 2] POS 500 which work as portable stand-alone terminals, and 3] New hand-held CDPD POS terminals. USWD is in talks with several "major multi-nationals" for placement of large initial orders of the hand-held unit and is near to reaching an agreement with one large company for a strategic product placement that will probably include enabling financial commitments. The biz plan calls for them to become cash flow positive by the end of next summer. This projection is on the basis of the GTE agreement for the Trans Enabler and does not take into account the other pending agreements for the Trans Enabler or the probable major agreements for the hand-held POS units. The company's technology allows the fastest transit times of any POS technology on the market today. Since time is literally translatable into money in most reatil transaction environments, they think that they have a proprietary advantage that cannot be easily duplicated. They have intiated discussions with a patent law firm about the posibility for securing patents for the methods they use. They do not know if a patent is posible but it looks like there is a good posibility that one will be applied for. In my estimation, a patent(s) applied for claim is often much more useful than received patents. Once patents are received and published it is often easier to figure out how to get around them without violating them. With the "Patent Applied For" status, the competition doesn't know what claims eventually might be granted. Patent protection will be a minor issue once the agreements are in place with three or four of the major CDPD carriers. At that point USWD will become a "defacto" standard of the industry that will be difficult for competitors to compete against directly. There is no apparent barriers to prevent USWD to implement their products using PCS or other wireless technology in addition to their CDPD offerings and it may be very posible to roll agreements with wireless carriers from CDPD into including these other technologies IMO. My summary opinion about USWD is that the stock is likely to move up substantialy from here when they sign agreements with two or more wireless carriers or one wireless and a major player for the wireless hand-held terminals. Just signing a single additional wireless carrier may be enough to shoot the stock up to double the current price. Evin Kelly, CEO, said in conjuntion with a conversation about securing additional finacing that he expects the price to reach at least $7 soon, indicating that he wants to leverage the public valuation and additional agreements in securing favorable terms. I would encourage purchasing now in anticipation of a few week run up. When the additional agreements come into place, the stock gains full big board listing and the magnitude of the business opportunity and USWD's market position become apparent to the investment community the price will move up way past the current level. I have some information on the company's projections that were taken from their business plan. These are projections based on the market conditions and the GTE agreement and the opportunity for growth should expand as the new agreements are put in place. Based on these projections, which can now be argued are very conservative, and on "normal" multiples for stock price/sales, the valuation of USWD could jump several times the current valuation within the next few months. As new agreements come into place and as analysts become aware and start modeling the business, these valuations are likely to start being reached. I will keep in touch with the company and the IR group to check how the progress they are making in meeting the expected stages of business development and will report what I find. I think I will wait for at least one more agreement to be announced before discussing the business plan projections. At that time they will probably seem to be a "no brainer" for acheivement.

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