U.S. Wireless Data Inc., which recently introduced a cellular-telephone terminal for credit card and check authorizations, announced an agreement that averts a proxy battle initiated by Donald Walford.
Mr. Walford was one of the underwriters of U.S. Wireless initial public offering last year, and is one of the Boulder, Colo., company's largest shareholders.
Mr. Walford, who had been threatening to replace the U.S. Wireless board at the Oct. 28 annual meeting, said of the settlement, "Nearly all of my goals in entering the proxy contest are now accomplished."
Under the settlement, a board nominee designated by Mr. Walford, Patrick Bromley, will be included among five directors to be recommended in a new set of proxy materials.
Mr. Walford has assigned voting rights to his U.S. Wireless common shares back to the company, and the company agreed to reimburse his expenses associated with the proxy campaign.
"We look forward to growing our business without the time-consuming and costly hindrance of the proxy contest," said Leonard Trout, chairman of U.S. Wireless.
Mr. Trout added, "As we build the company's marketing and sales operations, we expect to benefit from the considerable investment banking expertise of Patrick Bromley," a venture capitalist and former managing director of Donaldson, Lufkin & Jenrette Securities.
U.S. Wireless and Mr. Walford's firm, Walford & Co., have been named in a class-action complaint from shareholders alleging violations of securities law in the initial stock offering. U.S. Wireless has denied any violations. A spokesman said the suit was filed by owners of 18,000 of the company's 3.7 million outstanding shares.
The stock price, which had a 52-week high of $9, rose 31.25 cents, to $3.125, on Oct. 4, the day the proxy settlement was announced.
U.S. Wireless, building on its base as a cellular communications marketer, has been moving quickly to make its mark in the mobile niche of the point of sale authorization business.
At the American Bankers Association bank card conference in September, the company demonstrated the POS-50, which it called "the first portable, fully integrated wireless mobile terminal for credit card and check authorization." The technologically powerful, 6.5-pound device is suited for any type of mobile business, from taxis to home repair to couriers to takeout food, U.S. Wireless said.
On Sept. 30, U.S. Wireless announced it completed its acquisition of Direct Data Inc., Hartland, Wis. That company provides point of sale services through banks and independent sales organizations, which are viewed as potential sales channels for the POS-50.
An international product development and marketing alliance between Direct Data and NBS Technologies of Canada remains in force, and U.S. Wireless said it will pursue additional marketing and distribution agreements in Western Europe, Latin America, and the Asia/Pacific region.
U.S. Wireless has entered agreements since March with four cellular telephone companies to market the POS-50: Sprint Cellular, Ameritech Cellular Services, CommNet Cellular, and Vanguard Cellular Systems. Vanguard, just added last week, markets under the Cellularone name, has 169,000 customers in five states and 247 sales representatives.
The point of sale company also recently announced the appointment of Alan B. Roberts as president and chief executive officer. Mr. Roberts was a vice president at Direct Data and from 1986 to 1994 worked at Verifone Inc., the leading manufacturer and distributor of POS transaction products. His last position at Verifone was director of U.S. operations.
For what it called its start-up fiscal year, which ended June 30, U.S. Wireless reported $230,700 of revenue, compared with only $8,400 the prior year.
Production shipments of the POS-50 began in March, and $200,600 of the revenues were registered in the year's final quarter.
The company reported a net loss for the year of $2.7 million, or 95 cents a share, compared with a net loss of $830,100, or 50 cents a share, the previous fiscal year.
Mr. Roberts said the company has a three-pronged strategy for 1994: "First, we are taking advantage of sales channels with processing banks and independent sales organizations already established by Direct Data: second, we are broadening our product offerings; and third, we expect to build international sales through marketing and distribution agreements."