Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best
of the registrant's knowledge, in the definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment
to
this Form 10-KSB. ¨
At
December 31, 2006, the Registrant had 168,229,868 shares of common stock
outstanding.
Issuer's
revenues for its most recent fiscal year: $0.
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer.
|
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
Non-accelerated
filer x
|
TABLE
OF CONTENTS
|
Item
|
Description
|
Page
|
||
|
PART
I
|
||||
|
ITEM
1.
|
|
|||
|
ITEM
2.
|
|
|||
|
ITEM
3.
|
|
|||
|
ITEM
4.
|
|
|||
|
PART
II
|
||||
|
ITEM
5.
|
|
|||
|
ITEM
6.
|
|
|||
|
ITEM
7.
|
|
|||
|
ITEM
8.
|
|
|||
|
ITEM
8.A
|
|
|||
|
ITEM
8.B
|
|
|||
|
PART
III
|
||||
|
ITEM
9.
|
|
|||
|
ITEM
10.
|
|
|||
|
ITEM
11.
|
|
|||
|
ITEM
12.
|
|
|||
|
ITEM
13.
|
|
|||
|
ITEM
14.
|
|
PART
I
ITEM
1. DESCRIPTION OF BUSINESS
Some
of
the statements contained in this Form 10-KSB of Calypso wireless, Inc.
(hereinafter the "Company", "We" or the "Registrant") for its year ended
December 31, 2006 discuss future expectations, contain projections of results
of
operations or financial condition or state other forward-looking information.
These statements are subject to known and unknown risks, uncertainties, and
other factors that could cause the actual results to differ materially from
those contemplated by the statements. The forward-looking information is
based
on various factors and is derived using numerous assumptions. Important factors
that may cause actual results to differ from projections include, for
example:
|
-
|
the
success or failure of management's efforts to implement their business
strategies;
|
|
-
|
the
ability of the Company to raise sufficient capital to meet operating
requirements;
|
|
-
|
the
ability of the Company to hire and retain quality
management;
|
|
-
|
the
ability of the Company to compete with other established companies
that
operate in the same markets and
segments;
|
|
-
|
the
effect of changing economic conditions impacting
operations;
|
Business
Development
Calypso
Wireless, Inc. (the "Company", "we", "Calypso" or Calypso Wireless), formerly
Kleer-Vu Industries, Inc. (Kleer-Vu), was incorporated in the State of Delaware
on March 22, 1983. The Company operates as a holding company with three
subsidiaries, Industria de Telecomunicaciones Americanas ATEL, S.A. (American
Telecom Industries ATEL, S.A.), which was incorporated in 1997 under the
Laws of
the Republic of Costa Rica; Sleipner, S. A. which was incorporated in
2003 under the laws of Switzerland and doing business in Milan, Italy; and
Calypso Technology Holdings, Inc which was incorporated in 2006 in the State
of
Florida.
The
Company is a result of a business combination on October 4, 2002, between
Kleer-Vu Industries, Inc., a public shell company, and Calypso Wireless,
Inc., a
privately held development stage company incorporated in the State of Florida
in
1998. Kleer-Vu acquired all of the outstanding capital stock of Calypso
Wireless, Inc. by issuing 90,000,000 shares of its restricted common stock.
For
accounting purposes, the acquisition has been treated as the recapitalization
of
Calypso Wireless, Inc., with Calypso Wireless, Inc. being deemed the acquirer
of
Kleer-Vu in a reverse merger. At the conclusion of the merger, Calypso Wireless,
Inc. stockholders held 99.8% of the combined company. The Company is
a development stage company. The company has been in the development stage
since
inception of its wholly owned subsidiary; Industria de Telecomunicaciones
Americanas ATEL, S.A. (American Telecom Industries ATEL, S.A.) which was
incorporated in 1997 under the Laws of the Republic of Costa Rica. American
Telecom Industries ATEL, S.A. began its research and development activities
in
1997. In July, 2005, Calypso Wireless acquired a 16.8% interest in RV Technology
Ltd. (RV Technology). RV Technology is a limited company under the laws of
Hong
Kong. The company is privately held. In October, 2005 Calypso
acquired Sleipner S. A. to obtain software to complement ASNAP. In
September, 2006 the board of Directors authorized the creation of a wholly
owned
subsidiary Calypso Technology Holding, Inc. which was incorporated in Florida
to
explore a proposed contract with VoipTel to propose on a contract in Argentina
that would have Calypso providing a dual mode device operating on GSM and
Wi-Fi
in 802.11a standard (5Ghz). Calypso Technology Holdings received
$10,000 from Buenos Aires VoipTel, the prime bidder, to travel to Argentina
and
assist in the proposal to the Argentina government officials. VoipTel
has not received the frequencies required to proceed with any
work. There was no other activity in Calypso Technology
Holdings.
Calypso
Wireless received a patent for its technology (U.S. Patent Number: 6,680,923)
on
January 20, 2004. Our patent covers a communication and system method
for establishing communication with any one of a variety or different wireless
communication devices. The ASNAP™ technology enables seamless session
transparency of all sessions, voice/video/data across antennae on dual mode
cell
phones, WiFi and macro-cellular, as well as across devices-residential,
enterprise to macro networks (cellular phones, WiFi enabled PCs/TVs/Stereos,
Satellite devices, and wireline devices). Additionally the ASNAP™ patent covers
Revenue Settlements with in-building networks to macro-network
carriers.
Overview
of Business
Calypso
Wireless’ has developed and patented technology that spans voice, video and data
session transparency across macro-cellular networks and wireless local area
networks. During 2007, Calypso began the development of a test
unit with a large US based network company. in Boca Raton,
Florida. Upon completion of the test unit, using the Calypso ASNAP
technology, the companies expect to conduct a field trial with a large GSM
wireless carrier. Further, the Company has been in
discussion with companies regarding licensing. It is now shifting
from pure research and development to beginning to work with companies regarding
licenses. This was previously reported as the new business model for
Calypso.
Fixed-mobile
convergence (FMC) technology allows individuals to unite their mobile and
business or home communications under a single phone number and voicemail
system
by using a combination of software, hardware and wireless services to register
multiple handsets with a system. Proponents of FMC include mobile OEMs such
as
Motorola, Nokia and Sony Ericsson along with carriers such as AT&T Wireless,
Cingular Wireless and T-Mobile all of which are supporting a mobile-centric
model. Unlicensed Mobile Access (UMA) would allow cellular GSM (Global System
for Mobile Communications) and GPRS (General Packet Radio Service) transmissions
to travel over broadband networks operating in unlicensed radio bands. Dual-mode
handsets would be able to seek out public and private wireless broadband
internet networks (Wi-Fi and potentially WiMAX) and switch transmissions
over to
those networks to improve coverage or reduce airtime costs.
The
Company's Products and Services
Calypso
Wireless developed the solution that allows any mobile device to seamlessly
roam
between cellular networks and wireless local area networks. On January 20,
2004
Calypso received U.S. Patent No. U.S. 6,680,923 B1 titled: “Communication System
and Method”. This solution is known by the trademarked acronym,
ASNAP™, which stands for: Automatic Switching of Network Access
Points.
Calypso
incorporated it’s ASNAP™ technology in the world's first mobile
video phone, the C1250i that works seamlessly on both traditional
cellular/digital frequencies and the exciting new Wi-Fi frequency. Using
broadband, it offers a fast Internet connection that allows users to video
conference with movie-like quality, to send and receive video clips with
audio,
movies-on-demand, and many other high speed services.
In
2006
Calypso abandoned development of the its pioneering dual mode cellphone,
for
development of Software-based Seamless Mobility solutions, which can be licensed
by 3rd-party partners.
Calypso
Wireless is a pre-production R&D company with key IPR assets. The
company has successfully demonstrated prototype applications of Seamless
Session
continuity of Voice, Video, and data. The company objectives include
productization of the ASNAP technology with licensing to OEM partners. Several
opportunities have been identified as possible OEM partnerships, carrier
customers, as well as Enterprise customers.
Additional
markets can occur with licensing of Calypso Wireless's IPR (bluetooth
applications, patent-pending technologies) in the area of Satellite
Communications as well as licensing the existing FMC patent for areas
other than voice applications, such as video, music and data session
continuity.
Industry
Background
Service
Convergence focuses on end-user requirements and the service
experience. The primary goal of service convergence is the optimal
delivery of all media types — voice, data, and video— to an easy-to-use user
experience, with access, location, presence and device awareness. A goal
of
Calypso Wireless is to partner with Tier 2/3 carriers, MVNO/MVNE’s, OEM
manufacturers, and Enterprise solutions providers that can license the Calypso
Wireless technology, to enable Seamless Mobile Enterprise
solutions.
Market
Size
According
to the July 2006 issue of PC Today. Cellular hardware vendors are pursuing
FMC
aggressively. ABI Research predicts the market for fixed mobile handsets
will
reach 100 million annually by 2009. And, traditional telephone companies
customer base is dropping. Market research firm Research And Markets predicts
wireline usage in the US will drop 8.5% by 2009. These companies need to
offer a
new value proposition. A principal analyst at Gartner is convinced that
convergence is coming to stay. He says in the future, everyone will have
a
single mobile terminal for all their telephony needs. They will be reached
under
a single number anytime and anywhere. Also, a 2005 survey by Boston research
and
consulting firm Chadwick Martin Bailey found that 23% of IT managers have
already allocated budget for FMC.
Calypso
Wireless with partners: offers subscribers greater flexibility, simplicity
and
economy:
|
|
§
|
Unified
fixed and mobile service with one phone, one number and one
bill
|
|
|
§
|
Seamless
roaming between cellular, Wi-Fi, WiMAX and wireline devices, for
Voice/Video/Data sessions - No gaps, No dropped
calls
|
|
|
§
|
More
reliable mobile service with wider coverage at lower
cost
|
|
|
§
|
Closer
integration between public and enterprise phone
networks
|
|
|
§
|
Targeted
Ads - based on user
location
|
|
|
§
|
Location-aware
services – based on GPS, Cellular base station cellid, WiFi MAC
Address/SSID
|
|
|
§
|
Presence-aware
services
|
|
|
§
|
Newer
Bluetooth applications – Skype, VoIP, XM/Sirius/Worldspace Satellite
Music
|
|
|
§
|
Friendly
user interfaces that make it easy to make and manage
calls
|
|
|
§
|
Least
Cost Routing:
|
|
|
§
|
Better
in-building coverage and the prospect of being able to make FREE
local
calls while at home – or at least minimize on cellular airtime
charges
|
|
|
§
|
Users
minimize cellular termination fees from landline callers, by terminating
most calls to WiFi SIP, or landline numbers, instead of cellular
numbers.
|
The
new
market for seamless WiFi- session continuity which are potential revenue
sources
for Calypso include:
|
|
§
|
OEM
Cellphone Vendor licensing Calypso Wireless ASNAP patent, (i.e.
Dual Mode
phone WiFi GSM phones, WiFi/3G, CDMA EVDO/WiMAX, 4G UMB/LTE
)
|
|
|
§
|
OEM
PBX Server Vendor licensing Calypso Wireless patent for Seamless
Voice
FMC, Skype, VoIP turning legacy PBXs into IP FMC PBXs (i.e. Cisco,
Avaya,
Mitel, MSFT Live Communications Server,
etc.)
|
|
|
§
|
OEM
Large Switch Vendor licensing Calypso Wireless ASNAP patent, for
Seamless
Voice FMC, for UMA/IMS (i.e. Lucent, Nortel, Siemens, MSFT
Connected Services Framework, etc.)
|
|
|
§
|
OEM
Multimedia Vendor licensing Calypso
Wireless ASNAP patent, for Seamless Video FMC, (i.e. SONY, Microsoft
IPTV,
Siemens Myrio, Lucent IMS, etc.)
|
|
|
§
|
OEM
Chip Vendor licensing Calypso Wireless ASNAP patent, for
session continuity – data, video, Skype, VoIP, Seamless Roaming with WiFi
(i.e. AMD, Mosaid, Intel, Freescale, TI,
etc.)
|
|
|
§
|
OEM
Vendor licensing Calypso Wireless patent, for other projects – Location
data session contuity – GPS, Cellular EOTD, RFID, WiFi MAC Address / SSID,
etc. (i.e. Google Earth with People Search, Location-based services
in CRM
tools, etc.)
|
|
|
§
|
Carriers
with WiFi partner initiatives with Seamless Roaming, Revenue Peering
(i.e.
WiFi/WiMAX cities)
|
|
|
§
|
Ebay-Skype
using Calypso Wireless ASNAP for Skype, VoIP projects, targeted
ads for
location services.
|
|
|
§
|
Satellite
Radio – WLAN patent-pending licensing (i.e. XM, Worldspace, Sirius,
Delphi)
|
|
|
§
|
Router
companies Co-branding / Re-selling Calypso Wireless ASNAP Servers,
for
seamless Data session continuity with 3G, WiFi,
etc.
|
The
potential licensees of the Calypso Wireless IPR (software, patent)
include:
|
|
§
|
Chip
companies (e.g. Intel, AMD, as well as specialist companies like
Marvell,
Agere, Mosaid, etc.)
|
|
|
§
|
Software
OS companies (e.g. Microsoft, PalmOS,
etc.)
|
|
|
§
|
Telecom
Equipment companies (e.g. Alcatel-Lucent, Ericsson, Nokia-Siemens,
Nortel,
etc.)
|
|
|
§
|
Cellular
Handset companies (e.g. Sony Ericsson, RIM, Nokia,
etc.)
|
|
|
§
|
Enterprise
IP PBX Server companies (e.g. Avaya, Mitel,
etc.)
|
|
|
§
|
Enterprise
Applications companies (e.g. SAP, Microsoft,
etc.)
|
|
|
§
|
Carrier
Applications companies (e.g. IBM, RIM, BEA-Weblogic,
etc.)
|
|
|
§
|
Virtual
Operators (Disney Cellular, VoIP resellers, MVNOs,
etc.)
|
|
|
§
|
Carriers
(e.g. AT&T-Cingular, Verizon, Sprint-Embarq, Helio,
etc.)
|
|
|
§
|
Specialized
Vertical Applications (e.g. Satellite Media, Music, Video,
etc.)
|
Competitors
Calypso's
products are based on patented technology (U.S. Patent Number: 6,680,923).
Based
on this patented technology and our knowledge of wireless products and
technology, we are in a favorable position to begin licensing the use of
our
patented ASNAP™ technology to other original equipment manufacturers (OEM's)
that manufacture cellular phones, WLAN access points, laptops computers,
personal computers, personal digital assistants (PDA's), network servers,
call-control media gateways, telecommunication equipment, and
microprocessors.
We
believe that our key competition will come from existing companies that
currently market products and services that provide communication with wireless
communication devices. While we believe that our patented ASNAP™ technology
provides numerous benefits to, and is a superior solution for, both end-users
and Mobile Carriers, primarily based upon the fact that our technology enables
users of wireless communication devices to seamlessly roam between existing
cellular systems (i.e., WAN's- Wide Area Network's, GSM/GPRS - Global System
for
Mobile Communications/General Packet Radio Service, or CDMA - Code Division
Multiple Access) and Internet broadband access through WLAN (Wireless Local
Area
Networks), there can be no assurance that these benefits will be realized
or
utilized, or that other companies will not suitably improve these parameters
through the use of other technology.
Patents
and Proprietary Rights
Calypso
Wireless received a patent for its technology (U.S. Patent Number: 6,680,923)
on
January 20, 2004. Our patent covers a communication and system method for
establishing communication with any one of a variety or different wireless
communication devices. This technology enables users of cellular phones,
PCMCIA
(Personal Computer Media Interface Card Accessory) cards and other wireless
devices to seamlessly roam between existing cellular WAN (Wide Area Network's)
GSM/GPRS (Global System for Mobile Communications/General Packet Radio Service)
or CDMA (Code Division Multiple Access) and WLAN (Wireless Local Area Networks)
utilizing the 802.11 Wi-Fi standard (Wireless Fidelity).
The
Company pursues patent protection for its technology and products as soon
as
such technology and products are developed. To this end, we have filed United
States patent applications and related technology international patent
applications. The Company has filed foreign patent applications on some of
its
technology and products in countries where business considerations warrant
such
fillings. Such countries include Australia, Japan, Canada, China, Brazil,
and
Mexico, countries of the European Economic Community and other European
countries.
We
also
rely on proprietary technology, trade secrets, and know-how, which are not
patented. To protect our rights in these areas, the Company requires its
employees, directors, consultants, members of the Advisory Board, outside
engineers and other advisors to execute confidentiality agreements upon the
commencement of employment, consulting or other contractual relationships
with
the Company. These agreements provide that all confidential information
developed or made known to the individual during the course of the relationship
is to be kept confidential and not disclosed to third parties except in specific
circumstances. In the case of employees, the agreements provide that all
inventions conceived by the individual shall be the exclusive property of
the
Company. There can be no assurance, however, that these agreements will provide
meaningful protection for our trade secrets, know-how or other proprietary
information in the event of any unauthorized use, misappropriation or disclosure
of such trade secrets, know-how or other proprietary information.
We
believe that our intellectual property gives us an advantage over potential
competitors in that it will allow us to offer products that bring substantial
savings to both the end users and the mobile service providers (cellular
operators).
The
company has filed for patent protection covering an extension of its technology
to allow users of mobile devices such as cellular phones, PDA's, satellite
radios and portable music players, to receive satellite broadcasts on those
devices from either satellite transmitters or wireless LAN access points,
such
as Wi-Fi. Calypso built upon its patented technology to create a new solution
that allows satellite radio signals from carriers such as XM Satellite Radio
and
Sirius Satellite Radio to be readily received by various types of wireless
devices.
Research
and Development
We
are in the process of adding personnel to assit in trials and any subsequent
development that might be required for licensing. Other development
expenditures will relate to our new blu-blaster product.
Employees
In
conjunction with its direction towards licensing its technology, the Company
has
reduced its operating costs by reducing the number of employees to approximately
8 employees.
Reports
to Security Holders
Calypso
is not required to deliver an annual report to security and will not undertake
the expense to do so at this time. The Company files 10-QSBs
quarterly with the SEC and 10-KSBs annually. The public may read and
copy any materials we file with the SEC at the SEC’s Public Reference Room at
450 Fifth Street, N. W., Washington, D. C. Information can be
obtained on the operation of the Public Reference Room by calling the SEC
at
1-800-SEC-0330. the SEC maintains an internet site that contains
reports, proxy and information statements, and other information regarding
Calypso and the address of that site is http://www.sec.gov .
ITEM
2. DESCRIPTION OF PROPERTY
Calypso
Wireless has relocated its offices. Effective January 1, 2007 Calypso
entered into a lease to occupy office space at 2500 N. W. 79th Ave.,
Doral, FL 33122, Suite 220. The terms are $3600 per month from
January 1, 2007 to December 31, 2008. More space may be required as
the development staff grows.
ITEM
3. LEGAL PROCEEDINGS
On
November 5, 2004, Drago Daic d/b/a Tribeca Inc, filed a lawsuit against
the Company, Texas, alleging that the Company delivered restricted shares
rather than registered shares in a stock purchase; that he was assigned an
interest in a lawsuit and the Company refused to acknowledge his interest;
that
he was hired to assist in obtaining the grant of a patent in exchange for
4,500,000 shares. Although, the Company disputes the claims; has
never issued any shares to Mr. Drago, is not pursing litigation against anyone,
never signed a contract for assistance with the patent and has used its
attorneys Malloy & Malloy to obtain such patent; on December 8, 2006, the
Court rendered a judgment against Calypso in the amount of
$117,000,000. Our attorney’s felt that the Company had not adequately
presented information in its defense due to certain
limitations. Therefore, after entry of this judgment, Calypso has
filed a lawsuit seeking a “bill of review”, in effect a suit to set aside the
Daic judgment, based on new information. The bill of review was granted
:Calypso Wireless, Inc. v. Drago Daic, Cause No. 2007-22571 in the
151st District Court of Harris County, Texas. Trial date has been set
for November 7, 2007. The Company believes that this new trial will
reverse the judgment; however the outcome of this case is
uncertain.
As
a part
of the filings and rulings related to the Daic case, Calypso must notify
the
Court prior to selling the patent or giving substantial rights to a third
party. We have been told that the Court will not deny any agreements
that are related to the normal course of our business. As such, the
Company will continue to pursue licensing agreements as that is in the
normal
course of our business model and work with the Court to protect the interests
of
our shareholders.
On
April
1, 2005, the Company terminated the services of the law firm of Sears &
Crawford. They sought arbitration to recover legal fees that were
challenged by Calypso. The Company has settled this
lawsuit.
On
October 6, 2005, Robert Leon, the Company's former Chief Technology Officer,
commenced an action against the Company seeking additional compensation and
reimbursement of certain expenses. On June 23, 2006, the Company agreed to
a
Stipulated Settlement Agreement, General Release and Proposed Order for the
payment of $60,000 and issuance of 150,000 shares of stock. The
shares have been issued, however payment of the cash portion has not been
made. The amount is accrued in the financial statements as
presented.
On
March
3, 2006, Canal Place Ltd. commenced an action against the Company seeking
unpaid
rent for the term of certain leased property in Akron Ohio in the amount
of
$27,755.56. The Company had moved certain technical employees from Akron
to
Miami and decided to abandon the lease in Akron. This amount is
accrued in the financial statements as presented although no further action
has
been taken by Canal Place, Ltd. to further a lawsuit.
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
During
the year ended December 31, 2006, no matters were submitted to a vote of
our
security holders.
PART
II
ITEM
5. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The
Company's common stock is traded on the Pinksheets under the symbol "CLYW",
The
Company's authorized capital stock consists of 200,000,000 shares of common
stock, $.001 par value, of which 168,229,868 shares were issued and
outstanding as of December 31, 2006. For the periods indicated, the
following table sets forth the high and low bid prices per share of common
stock. The below prices represent inter-dealer quotations without retail
markup,
markdown, or commission and may not necessarily represent actual
transactions.
|
High
|
Low
|
|||||||
|
Year
Ended December 31, 2006
|
$ |
0.49
|
$ |
0.02
|
||||
|
Quarter
ended December 31, 2006
|
0.08
|
0.02
|
||||||
|
Quarter
ended September 30, 2006
|
0.09
|
0.04
|
||||||
|
Quarter
ended June 30, 2006
|
0.22
|
0.07
|
||||||
|
Quarter
ended March 31, 2006
|
0.49
|
0.20
|
||||||
|
Year
Ended December 31, 2005
|
$ |
1.69
|
$ |
0.34
|
||||
|
Quarter
ended December 31, 2005
|
0.90
|
0.34
|
||||||
|
Quarter
ended September 30, 2005
|
1.02
|
0.67
|
||||||
|
Quarter
ended June 30, 2005
|
1.69
|
0.88
|
||||||
|
Quarter
ended March 31, 2005
|
1.68
|
0.68
|
||||||
(b)
As of
December 31, 2006, the company believes there were approximately 1,617 holders
of record of the Company's common stock. The number of stockholders of record
does not necessarily reflect the number of beneficial owners of the Company's
common stock; however, because many beneficial owners may hold shares through
nominee holders, such as brokerage firms which, in turn hold through the
nominee
of a securities clearing organization, such as The Depository Trust Company.
Thus, a single stockholder of record may represent numerous beneficial
owners.
(c)
The
Company has never paid any cash dividends in the past and anticipates that
for
the foreseeable future all earnings, if any, will be retained to finance
growth
and to meet working capital requirements.
Securities
Authorized for Issuance Under Equity Compensation Plans