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Microcap & Penny Stocks : USWE - US Wireless Data (formerly USWDA) -- Ignore unavailable to you. Want to Upgrade?

To: The Irish Hug who wrote (224)	2/24/1998 12:35:00 PM
From: Rob S.	Read Replies (1) \| Respond to of 370

USWDA has gotten their quarterly report out. Here's an interesting paragraph: "Net sales of $96,385 for the second quarter of fiscal 1998 decreased 77% from net sales of $415,695 generated during the second fiscal quarter of 1997. For the six month period, net sales decreased 56% from $802,913 to $353,857. Unit sales decreased due to the shift from a per-unit sales approach to a recurring revenue model. During the quarter, efforts were focused on establishing a new sales management team and aggressively hiring and training sales personnel to support the nationwide GTE joint marketing and distribution agreement. Training of the corresponding GTE sales representatives by USWD sales personnel was completed on a very aggressive schedule early in the quarter. Product placements of the TRANZ Enabler to merchants through the new distribution program have not developed as rapidly as anticipated, consequently revenue has been minimal at the same time that high expenses have been incurred." They have apparently cleared out any inventory of POS-50s and have an order backlog for 250 units. they do not have firm commitments from GTE to finance the builds of TRANZ Enablers - something that I thought was clearly the case. If they don't have adequate financing for production of units, then the entire business plan is suspect - the plan is basically to leverage the telcos to place lots of TRANZ Enabler units and then become financially healthy on the ensuing cash-flows generated from credit card transactions. Without the financing, USWDA is not in a position to finance the $20-$40 million needed to build units to be able to place them into the market (calculation: 70,000 units X $300-$400/unit). It appears that USWDA will generate $150-$300 gross revenue per month per TRANZ Enabler placed into a high volume retail account. Placement into trade show and other part-time accounts is probably not as lucrative. So, the pay-off is quick but without the financing for manufacturing of tens of thousands of units and without palcement of those units into high revenue generating locations, the operations plan falls apart. I view USWDA as a highly speculative investment at this time. They need to fulfill some of the targets and promises that have been made in the past. New competition from well financed competitors will start to enter the market by the middle of this year. The effects of that entry is not at all certain; it could stimulate the market to grow at a faster pace and encourage acceptance of USWDA products. It could also cause major wireless telcos to abandon efforts with CDPD and move toward totally digital wireless product with bigger name backing. USWDA, IMO, could soar if they begin placing the tens of thousands of units needed to become profitable or they could go banko if they fail to get the tens of millions in mfg. credit they need and/or fail to place units. It can be argued that the groundwork for implementation has now just been put into place, however, execution on the business plan has yet to be demonstrated.