Calypso Wireless Inc. (CLYW.PK)

WARNING:  This is a highly speculative stock play

One of my members, Bill P., sent me an email last week about Calypso Wireless Inc. (CLYW.PK).  He said that it could be a huge payday for the right investor.  Having heard such pronouncements from many emailers over the years, I was highly skeptical.  I did my research and I am less skeptical.  However, this is a highly speculative play and should be viewed as such.

Here is what Bill wrote:

Calypso Wireless has significant patents for switching from towers to wifi on the fly.  They presently have a lawsuit against a major shareholder which will probably be settled by a mediator.  It would be more beneficial to go to trial, but they need to organize and go after T Mobile which has infringed on its patents.  Apple, htc, sprint, and motorola have all infringed on the patents.

T Mobile will be the first and are scheduled for court today.  They must submit their side of the argument today.  This will then go to December for court or for T Mobile to come up with a settlement which should be hundreds of millions of dollars.  Next would be the other companies that would follow suit.

Huge paydays are ahead for Calypso Wireless.  This was a $6.00 stock 6 years ago.  It could very easily be there before the end of next year, maybe sooner.  It should be moving forward from the .02 to .03 trading range. Most in the know investors look for this to be at least .50 cents by December.  Not a bad return.  This will happen.  Calypso will clean up their internal problems in the next 90 days and as a united board of directors, they will take down the big guys and receive huge royalties. Could be a HUGE pop.

(emphasis added)

Bill is an individual investor who runs a business.  My conversations with him lead me to believe that he is a serious investor….so I looked deeper into this stock and found that he may be on to something.

Calypso Wireless, the company - According to CLYW’s website, they are the company behind the ASNAP™ technology for which it was granted U.S. Patent #6,680,923 titled “Communication system and method” www.uspto.gov search U.S. patent number 6,680,923), which covers the seamless roaming of voice, video and data between Wide Area Network access points, such as cellular towers (GSM/GPRS/EDGE, CDMA, WCMDA etc.) and short-range Internet access points (such as Wi-Fi, Bluetooth, etc.).

According to what I have read, the entire mobile backbone around the globe is built on this technology.  The ability to switch access points is crucial to our current ability to “roam” and receive date and voice seamlessly.  Again, the story is that CLYW was in such bad financial shape that many cell carriers just used the technology because it appeared that the company would be going out of business.

The court cases - CLYW has a case against a former officer and shareholder, Drago Daic and his ex-wife Cathy.  According to what I have read, Drago was brought into the company to help “perfect” the patents.  Instead, he made a power grab and has laid claim to the patents themselves.  The case has been submitted to arbitration and the hope (from Bill and message board types) is that arbitration will pass on issuing a judgement and then the company can proceed with a court case to defeat Drago and his claims to the patents.

The second case (and most important) is the case that has been filed against T-Mobile.  This is the first of a number of suits expected to be filed against other cellular carriers.  This suit is expected to set precedent that T-Mobile infringed on Calypso’s patents and, by default, the rest of the cellular industry.  The financial ramifications could be in the hundreds of millions for CLYW.

The decline and fall of CLYW