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PART
I - FINANCIAL INFORMATION
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PART
II - OTHER INFORMATION
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Calypso Wireless, Inc - Recent Material EventPART
I - FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
The
preparation of financial statements in conformity with generally accepted
accounting principles require the appropriate application of certain accounting
policies, many of which require us to make estimates and assumptions about
future events and their impact on amounts reported in the financial statements,
and related notes. Since future events and their impact cannot be determined
with certainty, the actual results will inevitably differ from our estimates.
Such differences could be material to the financial statements.
We
believe application of accounting policies, and the estimates inherently
required by the policies, are reasonable. These accounting policies and
estimates are periodically reevaluated, and adjustments are made when the
facts
and circumstances dictate a change. Our accounting policies are more fully
described in note 1 to the notes to consolidated financial statements,
contained in this Form 10-QSB.
The
company’s financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities
in the
normal course of business. The company is in the development stage and
has
primarily been involved in research and development and capital raising
activities; as such the company has incurred losses from operations in
2006 and
year to date 2007. As a result the company has a need for capital to continue
its operations, and it will need to raise additional funds to implement
its
business plan. Management believes that actions presently being taken to
obtain
additional debt and/or equity financing will provide the opportunity to
continue
as a going concern. Our Auditor’s opinion letter for the year ended December 31,
2006 included a modification related to our ability to continue as a going
concern.
The
Registrant's financial statements for the three and six month periods ended
June
30, 2007 and 2006, are attached to this quarterly report.
Consolidated
Financial Statements
ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATION
Forward-Looking
Statements; Market Data
As
used in this Quarterly Report, the terms "we", "us", "our" "CLYW" and the
"Company" means Calypso Wireless, Inc., a Delaware corporation, and its
subsidiaries, Industria de Telecomunicaciones Americanas ATEL, S.A. To
the
extent that we make any forward-looking statements in the "Management's
Discussion and Analysis of Financial Condition or Plan of Operations" in
this
Quarterly Report, we emphasize that forward-looking statements involve
risks and
uncertainties and our actual results may differ materially from those expressed
or implied by our forward-looking statements. Important factors to consider
in
evaluating such forward-looking statements include (i) changes in external
factors or in our internal budgeting process which might impact trends
in our
results of operations; (ii) unanticipated working capital or other cash
requirements; (iii) changes in our business strategy or an inability to
execute
our strategy due to unanticipated changes in the industries in which we
operate;
and (iv) various competitive market factors that may prevent us from competing
successfully in the marketplace. Our forward-looking statements in this
Quarterly Report reflect our current views about future events and are
based on
assumptions and are subject to risks and uncertainties. Generally,
forward-looking statements include phrases with words such as "expect",
"anticipate", "intend", "plan", "believe", "seek", "estimate" and similar
expressions to identify forward-looking statements. Company
History
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, 2006, 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, 2006 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 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
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. Facilities
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. This new lease reduces operating costs.
Results
of Operations
Three
Months and Six Months Ended June 30, 2007 Compared to Three and Six Months
Ended
June 30, 2006
The
second quarter of 2007 was devoted to pursuing contracts for licensing
and
continued product development.
Revenues:
During the three month and six month period ended June 30, 2007 and 2006,
the
Company did not generate any revenues related to the sale of its
products.
Operating
expenses: Operating expenses incurred for the three and six month periods
ended June 30, 2007, were $623,730 and $815,610 compared to $1,140,376
and
$2,688,776 for the three and six months ended June 30, 2006. Operating
expenses,
for the three and six month periods ended June 30, 2007, have been substantially
reduced and consist primarily of depreciation and amortization - non-cash
expenditures. Cash operating expenses were primarily for significantly
reduced
staff and rent.
Net
Loss and Loss Per Share: The Company's net loss for the three and six
months ended June 30, 2007, were $623,730 and $815,610 compared to
$1,140,376 and $2,688,776 for the three and six month periods ended June
30, 2006. For the three and six months ended June 30, 2007, the net loss
per
share was $0.00 and $0.00 compared to ($0.01) and ($0.02) for the three
and six
months ended June 30, 2006. The net loss for the six months ended June
30, 2007
includes $511,642 in stock-based compensation.
Off-Balance
Sheet Arrangements: The Company had no off-balance sheet arrangements for
the three month period ended June 30, 2007 Liquidity
and Capital Resources
At
June 30, 2007, we had a working capital deficit of $1,008,986 compared
to a
negative working capital of $1,090,835 at December 31, 2006. The Company's
cash position at June 30, 2007 was $13,562 compared to $4,609 at December
31,
2006. Calypso did not generate any revenue in this quarter from operations.
Through June 30, 2007, the Company has raised $160,000 in private placement
offerings for working capital purposes and received loans of
$200,000.
ITEM
3. CONTROLS AND PROCEDURES
Evaluation
of disclosure controls and procedures. As of June 30, 2007, the Company's
chief executive officer and chief financial officer conducted an evaluation
regarding the effectiveness of the Company's disclosure controls and procedures
(as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Based
upon the evaluation of these controls and procedures, our chief executive
officer and chief financial officer concluded that our disclosure controls
and
procedures were not effective as of the end of the period covered by this
report.
Changes
in internal controls. During the quarterly period covered by this report,
no changes occurred in our internal control over financial reporting that
materially affected, or is reasonably likely to materially affect, our
internal
control over financial reporting.
PART
II - OTHER INFORMATION
ITEM
1. 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 attorneys felt
that
the Company had not adequately presented information in its defense due
to new
evidence becoming available. 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. The trial originally set
for
August 27, 2007 has been postponed to November 7, 2007. The Company
believes that this new trial will reverse the judgment; however the outcome
of
this case is uncertain.
On
October 6, 2006, 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 $70,000 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. ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
During
the second quarter of 2007, the Company incurred the obligation to issue
unregistered shares as set forth below:
The
issuances of shares as compensation for consulting, employee, officer and
director services as for broker commissions were also made in reliance
upon
Section 4(2) of the Act. The offering and sale of shares to accredited
investors
for cash consideration in connection with private placements were made
in
reliance upon Section 4(2) of the Act. The Company believes that the above
issuances of restricted shares were exempt from registration pursuant to
Section
4(2) of the Act as privately negotiated, isolated, non-recurring transactions
not involving any public solicitation. The recipients in each case represented
their intention to acquire the securities for investment only and not with
a
view to the distribution thereof. Appropriate restrictive legends are affixed
to
the stock certificates issued in such transactions.
On
February 16, 2007, Cristian Turrini entered into four Performance Bonus
Agreements. Mr. Turrini has satisfied the terms of the agreement
which grants 750,000 R-144 shares and 750,000 S-8 shares upon signing a
Field
Trial Agreement with a large US based network company or a large US based
carrier for testing the Calypso ASNAP patented technology. These
shares have been accrued in the financial statements.
ITEM
3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
None.
ITEM
5. OTHER INFORMATION
Effective
August 21, 2007, Cheryl L. Dotson was reappointed by the Board as chief
financial officer. ITEM
6. EXHIBITS
(a)
The following documents are filed as exhibits to this report on Form 10-QSB
or
incorporated by reference herein. Any document incorporated by reference
is
identified by a parenthetical reference to the SEC filing that included
such
document.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report
has been
signed below by the following persons on behalf of the registrant and in
the
capacities and on the date indicated.
By:
/s/ Cristian Turrini
CEO
and President
Dated:
August 28, 2007
By:
/s/ Cheryl L. Dotson
Chief
Financial Officer
Dated:
August 28, 2007 Financial
Statements
CALYPSO
WIRELESS, INC. AND SUBSIDIARIES
(A
Development Stage Company)
Consolidated
Balance Sheets
June
30,
2007 and December 31, 2006
(Unaudited)
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