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**UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549**___________________**FORM 10-KSB**________________________________

**ý                                           ANNUAL REPORT PURSUANT TO SECTION 13OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

  

For the fiscal year ended December 31, 2005

  

** ̈                             TRANSITION REPORTPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

  

For the transition period from         to

  

Commission file number 1-8497  

**CALYPSO WIRELESS,INC.**(Exact Name Of Registrant As SpecifiedIn Its Charter)
| Delaware                                 | 13-5671924                           |
|------------------------------------------|--------------------------------------|
| (State of Incorporation)                 | (I.R.S. Employer Identification No.) |
|                                          |                                      |
| 5753    N.W. 158 Street, Miami, Florida  | 33014                                |
| (Address of Principal Executive Offices) | (ZIP Code)                           |

 Issuer'sTelephone Number, Including Area Code: (305) 828-1483

**SecuritiesRegistered Pursuant to Section 12(g) of The Act: Common Stock, $0.001**

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or forsuch shorter period that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days. Yes ̈ NOxIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K is not contained herein, and will not be contained, to the best of theregistrant's knowledge, in the definitive proxy or information statements incorporated byreference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. Yesx NO ̈

Issuer's revenues for its most recent fiscal year: $0

As of March 31, 2006, the Issuer had 138,749,638 sharesof common stock issued and outstanding. As of March 31, 2006, the aggregate market valueof the voting and non-voting common equity held by non-affiliates computed by reference tothe price at which the common equity was sold, or the average bid and asked price of suchstock, was $40,756,576. 

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**TABLE OF CONTENTS**
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       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|      **PART I**  
ITEM 1.
            
  DESCRIPTION    OF BUSINESS
        3  
ITEM 2.
            
  DESCRIPTION    OF PROPERTY
        7   
ITEM 3.
            
  LEGAL    PROCEEDINGS
        7   
ITEM 4.
            
  SUBMISSION OF    MATTERS TO A VOTE OF SECURITY HOLDERS
        8   
  **PART II**   

ITEM 5.
            
  MARKET    FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
        9  
ITEM 6.
            
  MANAGEMENT'S    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
        9   
ITEM 7.
            
  FINANCIAL    STATEMENTS
        13   
ITEM 8.
            
  CHANGES    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
        14   
ITEM 8.A
            
  CONTROLS    AND PROCEDURES
        14   
  **PART III**   

ITEM 9.
            
  DIRECTORS    AND EXECUTIVE OFFICERS OF THE REGISTRANT, COMPLIANCE WITH SECTION 16(A)
        15  
ITEM 10.
            
  EXECUTIVE COMPENSATION
        16   
ITEM 11.
            
  SECURITY    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
        16   
ITEM 12.
            
  CERTAIN    RELATIONSHIPS AND RELATED TRANSACTIONS
        17   
ITEM 13.
            
  EXHIBITS AND REPORTS    ON FORM 8-K
        17   
ITEM 14.
            
  PRINCIPAL    ACCOUNTING FEES AND SERVICES
        17   ****
**PART I**

**ITEM 1. DESCRIPTION OF BUSINESS**Back toTable of Contents

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 aholding company with two subsidiaries, Industria de Telecomunicaciones Americanas ATEL,S.A. (American Telecom Industries ATEL, S.A.), which was incorporated in 1997 under theLaws of the Republic of Costa Rica; and Sleipner, S. A. which was incorporated in 2003under the laws of Switzerland and doing business in Milan, Italy.

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., aprivately 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. byissuing 90,000,000 shares of its restricted common stock. For accounting purposes, theacquisition has been treated as the recapitalization of Calypso Wireless, Inc., withCalypso Wireless, Inc. being deemed the acquirer of Kleer-Vu in a reverse merger. At theconclusion of the merger, Calypso Wireless, Inc. stockholders held 99.8% of the combinedcompany.

The Company is a development stage company. The company has been in thedevelopment stage since inception of its wholly owned subsidiary; Industria deTelecomunicaciones Americanas ATEL, S.A. (American Telecom Industries ATEL, S.A.) wasincorporated in 1997 under the Laws of the Republic of Costa Rica. American TelecomIndustries ATEL, S.A. began its research and development activities in 1997. 

Calypso Wireless’ technology allows you to switch and connect fromeither a cellular network or a Wireless Local Area Network Access Point (WLAN), seamlesslywithout the user noticing the change. This means uninterrupted connectivity as you travelin and out of the range of WLAN access points. The use of ASNAPTM (Automatic Switchingof Network Access Points) also increases the amount of available wireless bandwidth fromthe current state of technology of 9.6 kbps to 11 Mbps.

The Company has revised its business model such that it will selllicensing agreements with OEMs and businesses that cater to enterprise companies tolicense the technology based on our patented ASNAPTM technology (U.S. Patent Number:6,680,923) and or license the patent rather than become a supplier of cellular and otherdevices. Calypso Wireless’ mission is to conduct research and develop products whichcan be licensed to manufacturers, carriers and enterprise companies in the global wirelesscommunications industry. We believe our commercial success depends on identifyingbroad-based technology solutions for our customers, and ultimately the end user. Ourcompany is distinctive in its focus on creating products which minimize the technologicalbarriers to change and accelerate the communication industry’s operating efficiency. 

On October 4, 2005, Calypso acquired Sleipner SA, a leader in advancedwireless telecommunications technology. Sleipner’s COMOB software enables smartphones and wireless PDA (personal digital assistants)/Pocket PCs to switch between GSM orCDMA cellular towers and WiFi (Wireless Fidelity) access points (hot spots). The Sleipnersoftware enhanced and helped implement the Calypso patented ASNAPTM technology thatallows the seamless switching between cell towers and various access points. Theacquisition was made to expedite the delivery to market of the Calypso ASNAPTMpatented technology on the C1250i WiFi-GSM-GPRS (Global System for MobileCommunications/General Packet Radio Service) VoIP ("Voice Over InternetProtocol") smart cellular phone and so that Calypso Wireless can now provide VoIP andIP solutions and application for the enterprise and vertical markets.

On July 22, 2005, Calypso Wireless acquired a 16.8% interest in RVTechnology Ltd. (RV Technology). RV Technology is a limited company under the laws of HongKong. The company is privately held and Calypso wireless is the third largest shareholder.RV Technology develops and designs WiFi wireless handheld devices such as smart phones andwireless PDA/Pocket PCs for the consumer market.

**The Company's Products and Services**

Calypso Wireless developed the solution that allows any mobile deviceto seamlessly roam between cellular networks and wireless local area networks. On January20, 2004 Calypso received a patent entitled "Communication System and Method."This solution is known by the trademarked acronym ASNAPTM which stands for AutomaticSwitching of Network Access Points. It is the only technology that spans voice, video anddata session transparency across macro-cellular networks and wireless local area networks.The ASNAPTM technology enables seamless session transparency of all sessions,voice/video/data across antennae on dual mode cell phones, WiFi and macro-cellular, aswell as across devices-residential, enterprise to macro networks (cellular phones, WiFienabled PCs/TVs/Stereos, Satellite devices, and wireline devices). Additionally theASNAPTM patent covers Revenue Settlements with in-building networks to macro-networkcarriers.

Fixed-mobile convergence (FMC) is a term that has traditionally beenused by the telecom industry when discussing the physical integration of wireline andwireless technologies. However, physical integration of networks typically requiresexpensive carrier network overhauls and replacement of business equipment (i.e. legacyPBXs (Private Branch Exchange) replaced with SIP-based IP PBXs, etc.) Before the networksare to be replaced it must be determined how converged technologies, trends and driverscan be leveraged by the industry to deliver on users needs. Four distinct categorizationsof convergence exist- applications convergence, terminal convergence, network convergence,and service-provider convergence. Calypso Wireless has the keys to solving the seamlessmobility and WiFi convergence puzzle. 

*Convergence is multi-dimensional.*

Communications services and multiple media will be coming together inthe communications and media industries, largely enabled by open applications, ubiquitousand competitive broadband access, IP-based (Internet Protocol based) protocols andInformation Technology (IT). These services will be used because they are convenient, costeffective or just compelling. ASNAPTM technology allows for seamless integration tothe existing core networks, existing cellular/landline devices, without requiring acarrier forklift to an elusive unified core network. Being able to seamlessly tie togetherassets from the mobile and fixed networks to reduce costs and enable better applicationshas been too cost prohibitive for large scale deployments, until recently with CalypsoWireless ASNAPTM technology. Calypso Wireless offers controlled seamless sessiontransparency.

*Calypso’s products and services include the Calypso WirelessASNAPTM PATENT.*

The ASNAPTM system implements the Calypso patented ASNAPTMtechnology that allows the seamless switching between PSTN and VoIP, through theASNAPTM seamless session control. In addition, the Calypso-Sleipner ASNAPTMMediaGateway/Media Server which is a comprehensive and flexible development environmentfor business and carrier-grade critical Next Generation Network( NGN) solutions. It is ascript driven telephony and VoIP application server. As such, it has its own scriptinglanguage built by class extensions from the ASNAPTM Script Interpreter. While theserver scripting language can support the creation of complete telephony and VoIPapplications, it was designed to be a specific programming language made for the NGN.Further, the IDE/Script Editor an easy to use Integrated Development Environment forWindows. This Editor is specifically designed for ASNAPTM Script and has features forbeginners and professional developers.

The supported PSTN Hardware/Protocols are: Multi-ISDN protocol support.T-1 ISDN protocols supported- NI-2, 4ESS, 5ESS, DMS100, DMS250, INS1500, and Q.sig. theE-1 ISDN protocols supported- NET5 and Q.sig. There are many supported IPHardware/Protocols/Codecs.

ASNAPTM is also able to process or to integrate with externallibraries the way traditional languages do and has support for high density applications.Our products have substantial monitoring features.

ASNAPTM comes complete with a library of sample applications oninstall. VoIP development can be simplified because ASNAPTM provides the tools andsolutions that let our customers make the most of VoIP by using the script developmenttool to build IP telephony applications such as IP-based conferencing, VoIP interactivevoice response applications, debit and prepaid calling card applications, or hardware-lesstelephony based on Host Media Processing technology.

Our PBX Integration allows our customers to connect their legacy PBXsystem with the Internet world through IP gateways.

Calypso Wireless Professional Services not only designs custominteractive voice response and computer telephony systems, we can assist with implementingour customers own design solution. Our consulting services range from specialized trainingservices, to one-on-one support with our developers to assist our customers in the design,development, and implementation of their custom system.

**Industry Background**

Calypso Wireless stays in touch with the changes among the varioussegments of the industry around the world. Seamless switching between cellular andwireless IP networks will allow carriers to free up a broad area of cellular spectrum fordata and voice, increasing the availability of bandwidth for other users. ASNAPTMsaves money because its application increases efficiency, and accelerates the developmentof handsets, carrier deployment strategies and the role of VoIP for the ISP providers.This cross-spectrum impact requires an understanding of the industry.

Carriers form the backbone of the wireless industry. Wireless carriersare the most capital vested segment of the industry, having built the first twogenerations of wireless infrastructure around the world. The carriers have investedheavily in building wide area networks, as well as managing the billing and backendservices needed to sell wireless service to mobile phone users. Network operators acrossthe world are currently dealing with a variety of issues including the slowdown of realgrowth of wireless subscribers, the transition to next-generation wireless voice and dataservice, the move to generate more revenue from data (ARPU- average revenue per user), andthe introduction of more data-centric wireless devices like smart phones and wirelessPDA’s. All these category trends, coupled with 20% or higher user churn rates in theU.S. and the introduction of streaming video or other data-rich applications, make thetransitions that carriers are willing to embrace sensitive strategies. 

The largest wireless carriers in the U.S. include Verizon Wireless,Sprint/Nextel Communications, T-Mobile and Cingular/AT&T. Europe’s main wirelesscarriers include Vodafone, Orange, KPN, Telefonica Espana and T-Mobile. In Asia, NTTDoCoMo, J-Phone, and KDDI dominate Japan; China Mobile and China Unicom dominate China;Telstra dominates Australia and New Zealand; and SK Telecom and KTF control the SouthKorean market; and finally, America Movil is in the process of consolidating most of thecellular operations in Latin America.

Wide area networks are essentially the cellular networks maintained bymajor carriers introduced above. Wireless Internet access over wide-area networks is stillslow and conducted mostly through what are currently known as 2G or 2.5G wirelessnetworks. Data speeds are slow (averages run between 20 and 60 Kbps), but coverage isnearly ubiquitous. 3G, or the next generation of wireless wide-area networks promisegreater data speeds (up to 384 Kbps) with the same level of nearly flawless coverage ascurrent wireless networks. 

In the enterprise segment, WiFi infrastructure is growing rapidly, withcentralized WiFi switches the fastest growing segment. WiFi switches by companies such asAirespace (acquired by Cisco), Aruba Wireless, Meru Networks, Trapeze Networks and Symbolprovide a better infrastructure for Voice over IP by reducing latency, a users roam acrosssubnets so voice quality is maintained. Centralized WiFi networks are also more scalablewhich further supports mobile VoIP adoption.

With more than 400 VoIP service providers in North America includingsmall companies as TelVita, pioneers such as Vonage, and large public companies such asTime Warner, there is clearly an oversupply of service providers to subscribers.Innovators like Vonage, BroadVoice and Net2Phone are offering Voice over WiFi (VoWiFi)handsets as a way to differentiate their offerings and encourage more subscriber loyalty.Major advantages of VoWiFi phones are that subscribers can use their phone at home andtake it with them to use in any WiFi network, hotspot or hot zone. Business travelersbenefit by being able to make low cost Internet calls wherever they go to anywhere in theworld and not have to pay for roaming. While many cell phones do not work internationally,business travelers will be able to use their VoWiFi handsets in airports, hotel lobbies,train stations and cafes in all major cities worldwide. There are only a handful ofODM/OEMs today including Net2Phone, Pulver and UTStarcom that have announced VoWiFihandsets. 

The next generation of wireless networks is being called 3G or thirdgeneration—analog was first, 2G/PCS digital was second. Data will be transmittedfaster on 3G (up to 384 Kbps) which will enhance streaming video and other sophisticatedrequirements. 3G will work on wireless interfaces using UMTS, EDGE, WCDMA and CDMAtechnologies. The rollout of 3G is proving to be slower, more complicated and more costlythan expected, especially in the U.S. While 3G is fairly common in Japan and South Korea,3G is available on a very minimal basis in select parts of Western Europe and less in theUnited States. Most wireless carriers are completing the upgrades of their networks in theU.S. to 2.5G, adding packet data service. This GPRS technology has been added to GSMnetworks making this upgrade another step forward for the industry.

Dual mode devices are beginning to emerge at a rate faster than thedeployment of 3G around the world, especially in the U.S. Nearly all major networkoperators worldwide are deploying WiFi based hotspots and a large number of them such asAT&T (now Cingular), British Telecom, NTT DoCoMo, SBC, Sprint and Verizon are alsooffering VoIP. Therefore, the ideal mobile device for the established operators will becapable of dual mode voice operation (cellular and VoWiFi). This device will roamseamlessly between cell to cell, and WLAN to WLAN and from cell to WLAN.

**Competitors**

Calypso's products are based on patented technology (U.S. PatentNumber: 6,680,923). Based on this patented technology and our knowledge of wirelessproducts and technology, we are in a favorable position to begin licensing the use of ourpatented ASNAPTM technology to other original equipment manufacturers (OEM's) thatmanufacture 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 companiesthat currently market products and services that provide communication with wirelesscommunication devices. While we believe that our patented ASNAPTM technology providesnumerous 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 communicationdevices to seamlessly roam between existing cellular systems (i.e., WAN's- Wide AreaNetwork's, GSM/GPRS - Global System for Mobile Communications/General Packet RadioService, or CDMA - Code Division Multiple Access) and Internet broadband accessthrough WLAN (Wireless Local Area Networks), there can be no assurance that these benefitswill be realized or utilized, or that other companies will not suitably improve theseparameters through the use of other technology.

**Patents and Proprietary Rights**

Calypso Wireless received a patent for its technology (U.S. PatentNumber: 6,680,923) on January 20, 2004. Our patent covers a communication and systemmethod for establishing communication with any one of a variety or different wirelesscommunication devices. This technology enables users of cellular phones, PCMCIA (PersonalComputer Media Interface Card Accessory) cards and other wireless devices to seamlesslyroam between existing cellular WAN (Wide Area Network's) GSM/GPRS (Global System forMobile Communications/General Packet Radio Service) or CDMA (Code Division MultipleAccess) and WLAN (Wireless Local Area Networks) utilizing the 802.11 Wi-Fi standard(Wireless Fidelity).

The Company pursues patent protection for its technology and productsas soon as such technology and products are developed. To this end, we have filed UnitedStates patent applications and related technology international patent applications. TheCompany has filed foreign patent applications on some of its technology and products incountries where business considerations warrant such fillings. Such countries includeAustralia, Japan, Canada, China, Brazil, and Mexico, countries of the European EconomicCommunity 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 itsemployees, directors, consultants, members of the Advisory Board, outside engineers andother advisors to execute confidentiality agreements upon the commencement of employment,consulting or other contractual relationships with the Company. These agreements providethat all confidential information developed or made known to the individual during thecourse of the relationship is to be kept confidential and not disclosed to third partiesexcept in specific circumstances. In the case of employees, the agreements provide thatall inventions conceived by the individual shall be the exclusive property of the Company.There can be no assurance, however, that these agreements will provide meaningfulprotection for our trade secrets, know-how or other proprietary information in the eventof any unauthorized use, misappropriation or disclosure of such trade secrets, know-how orother proprietary information.

We believe that our intellectual property gives us an advantage overpotential competitors in that it will allow us to offer products that bring substantialsavings to both the end users and the mobile service providers (cellular operators).

The company has filed for patent protection covering an extension ofits technology to allow users of mobile devices such as cellular phones, PDA's, satelliteradios and portable music players, to receive satellite broadcasts on those devices fromeither satellite transmitters or wireless LAN access points, such as Wi-Fi. Calypso builtupon its patented technology to create a new solution that allows satellite radio signalsfrom carriers such as XM Satellite Radio and Sirius Satellite Radio to be readily receivedby various types of wireless devices.

**Employees**

In conjunction with its direction towards licensing its technology, theCompany has reduced its operating costs by reducing the number of employees toapproximately 15 employees. We have not experienced any work stoppages and consider ourrelations with our employees to be good.

**ITEM 2. DESCRIPTION OF PROPERTIES**

The Company's corporate office and its research and developmentdepartment are located in a leased facility in Miami Lakes, Floridan and Akron, Ohio. Atthis location, the Company leases approximately 4,450 square feet of office space. Thecompany's current annual rent under this lease is approximately $64,000. The lease for thefacility in Akron Ohio is in the process of being terminated. 

**ITEM 3. LEGAL PROCEEDING**

On March 1, 2005, the Company successfully completed litigation againstvarious individuals in a thwarted effort to obtain several million shares of thecompany predicated upon consulting agreements approved by a former President. Because noconsulting work was ever done and the agreements were not appropriate, the company wasable to cancel the shares, and conclude the litigation in a manner that benefited thecompany and the shareholders. The agreements had been approved by former president PatrickLannen, the initial president after the reverse merger between Kleer Vu and Calypso.

On April 1, 2005, the Company terminated the services of the lawfirm of Sears & Crawford. They sought arbitration to recover legal fees that werechallenged by Calypso. On January 13, 2006, the case was settled for the amount of $50,000and 450,000 shares of Calypso common stock. The funds were transferred and the stock wasissued a few days after the deadline included in the settlement without the requiredrequest for an extension. As a result, Sears & Crawford obtained a summary judgmentfor an additional $129,000 due to the late payment. Calypso has agreed to pay $60,000 andissue another 250,000 shares to the law firm to satisfy this judgment.  

On April 25, 2005 a lawsuit filed by Calypso consultant Doug Sandershas been amicably settled in a manner that serves the mutual benefit of the companyand Mr. Sanders.

On October 6, 2005, Robert Leon, the Company's former Chief TechnologyOfficer, commenced an action against the Company seeking additional compensation andreimbursement of certain expenses. This matter has been amicably settled in a manner thatserves the mutual benefit of both parties.

On November 5, 2004, Drago Daic d/b/a Tribeca Inc, filed a lawsuitagainst the Company, which is pending in Houston Texas, alleging that the Companydelivered restricted shares rather than registered shares in a stock purchase; that he wasassigned an interest in a lawsuit and the Company refused to acknowledge his interest;that he was hired to assist in obtaining the patent in exchange for 4,500,000 shares andan amount of $10,000,000. The Company disputes the claims; has never issued any shares toMr. Drago, is not pursing litigation against anyone, never signed a contract forassistance with the patent and has used its attorneys Malloy & Malloy to obtain suchpatent. The Company believes that it has fully complied with all of its obligations;however the outcome of this case is uncertain.

On March 3, 2006, Canal Place Ltd. commenced an action against the Company seekingunpaid rent for the term of the lease in Akron, Ohio in the amount of $27,755.56. TheCompany is in the process of attempting to settle this matter.

**ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIESHOLDERS******Back to Table of Contents

During the year ended December 31, 2005, no matters weresubmitted to a vote of our security holders.

**PART II**

**ITEM 5.MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTER**Back toTable of Contents

(a) Market Price InformationThe 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 138,749,638 shares were issued and outstanding as of December31, 2005.
        High    Low  
Year Ended December 31,    2005
                                        
Quarter ended December 31,    2005
              $0.75        $0.30  
Quarter ended September    30, 2005
                1.12          0.77  
Quarter ended June 30,    2005
                1.99          0.94  
Quarter ended March 31,    2005
                1.26          1.05    
Year Ended December 31,    2004
                                        
Quarter ended December 31,    2004
              $1.26        $0.70  
Quarter ended September    30, 2004
                1.84          0.77  
Quarter ended June 30,    2004
                3.99          1.94  
Quarter ended March 31,    2004
                5.26          1.05  
(b) As of December 31, 2005, there were approximately 1,617 holders ofrecord of the Company's common stock. The number of stockholders of record does notnecessarily reflect the number of beneficial owners of the Company's common stock;however, because many beneficial owners may hold shares through nominee holders, such asbrokerage firms which, in turn hold through the nominee of a securities clearingorganization, such as The Depository Trust Company. Thus, a single stockholder of recordmay represent numerous beneficial owners.

(c) The Company has never paid any cash dividends in the past andanticipates that for the foreseeable future all earnings, if any, will be retained tofinance growth and to meet working capital requirements.

**SecuritiesAuthorized for Issuance Under Equity Compensation Plans**

The following tableshows information with respect to equity compensation plans under which our common stockis authorized for issuance as of December 31, 2005.
**Number of    securities****Weighted    average****Number of    securities remaining****to be issued    upon****exercise      price****available    for future issuance****exercise of    outstanding****of    outstanding****under equity    compensation plans (excluding**
**Plan category****options,    warrants and rights****options,    warrants and rights****securities    reflected in column (a)**  **(a)****(b)****(c)**Equity    compensation plansapproved    by security holders000Equity    compensation plans not    approved by security holders90,000N/A0Total90,000N/A0**Warrants

Calypso has agreed to grant approximately 390,000 warrants to D. E.Wine Investments, Inc. pursuant to the investment banking agreement between the Companyand D. E. Wine. The warrant is a seven-year warrant to purchase common stock of theCompany at an exercise price per share equal to the price paid per share for each Securityequaling 10% of the financing total in public or private placements.

**Recent Sales of Unregistered Securities**

During the past three years, the Company issued unregistered shares asset forth below:
**Date of    Issuance****Name****No. of Shares****Consideration****Exemption**02/05/03Winfried Fields200,000Consulting Services Valued at    $200,000Section 4(2)03/05/03D.E. Wine10,000Brokerage Commission valued at    $10,000Section 4(2)04/05/03Daniel Dror, II100,000Consulting Services Valued at    $100,000Section 4(2)06/01/03Doug Sanders50,000Consulting Services Valued at    $50,000Section 4(2)06/01/03Jukka Tolonen60,000Consulting Services Valued at    $60,000Section 4(2)06/01/03Medridian Advisors Inc.90,000Consulting Services Valued at    $90,000Section 4(2)06/01/03Merrill-Zurich, Inc.30,000Consulting Services Valued at    $30,000Section 4(2)06/01/03Tribeca200,000Consulting Services Valued at    $200,000Section 4(2)07/01/03Luis E. Pallais450,000Consulting Services Valued at    $517,500Section 4(2)07/01/03Javier E. Sarria Abaunza475,000Consulting Services Valued at    $546,500Section 4(2)07/01/03Feeling Productions100,000Consulting Services Valued at    $115,000Section 4(2)07/03/03Ricardo Esquivel50,000Consulting Services Valued at    $62,000Section 4(2)07/21/03Ricardo Esquivel150,000Consulting Services Valued at    $277,500Section 4(2)07/23/03Strategic Financial Investments200,000Consulting Services Valued at    $300,000Section 4(2)07/25/03Ricardo Gaspar140,000Consulting Services Valued at    $193,200Section 4(2)08/21/03Ricardo Esquivel150,000Consulting Services Valued at    $207,000Section 4(2)10/30/03Marker Venture, Inc.2,394,820Conversion of $981,877 debt into    equitySection 4(2)11/06/03Ugam Holdings Ltd.498,753Private Placement valued at    $290,000Section 4(2)11/07/03Ugam Holdings Ltd.611,111Private Placement valued at    $250,000Section 4(2)11/18/03Clyde Stephan Byed/Marietta L.    Dar10,000Private Placement valued at    $5,000Section 4(2)11/18/03Hilt & Associates10,000Private Placement valued at    $5,000Section 4(2)11/18/03Jerry L. Kordula30,000Private Placement valued at    $15,000Section 4(2)11/18/03Kathrina C. Decas40,000Private Placement valued at    $20,000Section 4(2)
11/18/03
L. Scott Frazier/Alice W.    Frazier 30,000 
Private    Placement valued at $15,000 
Section 4(2)
11/18/03
S.J. Alianell Family LP 
60,000 
Private    Placement valued at $30,000 Section 4(2)
11/20/03
Ugam Holdings Ltd. 
488,889 
Private Placement valued at    $110,000 Section 4(2)
11/21/03
Boris L. Payan 
100,000 
Private Placement valued at    $52,000 Section 4(2)
11/21/03
David S. Holland SR
100,000 
Private Placement valued at    $50,000 Section 4(2)
11/21/03
McShane Family LP 
10,000 
Private Placement valued at    $5,000 Section 4(2)
11/21/03
McShane Family LP 
50,000 
Private Placement valued at    $25,000 Section 4(2)
11/21/03
San Augustine Clinic    Integrated 
20,000 
Private Placement valued at    $10,000 Section 4(2)
11/21/03
Trent Lonie 
146,000 
Private Placement valued at    $73,000 Section 4(2)
11/24/03
Craig A. Muhl 
20,000 
Private Placement valued at    $10,000 Section 4(2)
11/24/03
John E. Madden 
30,000 
Private Placement valued at    $15,000 Section 4(2)
11/24/03
Lynne A. Simpson
40,000 
Private Placement valued at    $20,000 Section 4(2)
11/24/03
Thomas A. Sprung
20,000 
Private Placement valued at    $10,000 Section 4(2)
11/25/03
David C. Namkung 
40,000 
Private Placement valued at    $20,000 Section 4(2)
11/25/03
Ray Smith 
20,000 
Private Placement valued at    $10,000 Section 4(2)
11/25/03
Shah Enginerring Inc. Pension    Plan
100,000 
Private Placement valued at    $50,000 Section 4(2)
11/26/03
BLF Partners, LTD 
25,000 
Private Placement valued at    $12,500 Section 4(2)
11/26/03
Robert Kelly Boze 
20,000 
Private Placement valued at    $10,000 Section 4(2)
12/02/03
Ecal Patners, LTD 
20,000 
Private Placement valued at    $10,000 Section 4(2)
12/02/03
Engene Cloud 
40,000 
Private Placement valued at    $20,000 Section 4(2)
12/02/03
Jack W. Kraiger 
28,000 
Private Placement valued at    $14,000 Section 4(2)
12/02/03
Jack W. Kraiger 
12,000 
Private Placement valued at    $6,000 Section 4(2)
12/02/03
Keith James Morrison
71,660 
Private Placement valued at    $35,830 Section 4(2)
12/02/03
Mark A. Frevert 
200,000 
Private Placement valued at    $100,000 Section 4(2)
12/03/03
John J. Vandeberghe 
200,000 
Private Placement valued at    $100,000 Section 4(2)
12/03/03
John L. Vandeberghe 
200,000 
Private Placement valued at    $100,000 Section 4(2)
12/04/03
Bailey Campbell 
70,000 
Private Placement valued at    $35,000 Section 4(2)
12/05/03
Arthur G. Smith
10,000 
Private Placement valued at    $5,000 Section 4(2)
12/08/03
Don E. Vogler 
10,000 
Private Placement valued at    $5,000 Section 4(2)
12/10/03
Jefrey J. Paul 
40,000 
Private Placement valued at    $20,000 Section 4(2)
12/10/03
Roscoe Lee/Tuie G. L. 
20,000 
Private Placement valued at    $10,000 Section 4(2)
12/10/03
The Hawkers/Ligerman Pierce 
30,000 
Private Placement valued at    $15,000 Section 4(2)
12/18/03
John Vandeberghe 
100,000 
Private Placement valued at    $50,000 Section 4(2)
12/18/03
John Vandeberghe 
50,000 
Private Placement valued at    $25,000 Section 4(2)
12/18/03
Cacovisa 
625,440 
Private Placement valued at    $312,720 Section 4(2)
01/21/04
Osvaldo Halpen 
10,000 
Private Placement valued at    $5,000 Section 4(2)
01/21/04
Steven Muhl 
10,000 
Private Placement valued at    $5,000 Section 4(2)
01/23/04
Kevin Owalley 
40,000 
Private Placement valued at    $20,000 Section 4(2)
01/27/04
Larry Ahlhorn 
10,000 
Private Placement valued at    $5,000 Section 4(2)
01/27/04
Osvaldo Halpen 
10,000 
Private Placement valued at    $5,000 Section 4(2)
01/27/04
William Lipsky 
10,000 
Private Placement valued at    $5,000 Section 4(2)
01/28/04
Jorge Alvarez 
40,000 
Private Placement valued at    $20,000 Section 4(2)
01/30/04
Keith Henderson 
13,000 
Private Placement valued at    $6,500 Section 4(2)
01/31/04
D. E. Wine Investments
2,097 
Brokerage Commission Valued at    $2,097Section 4(2)
02/13/04
Payan Zuzette & Boris    Payan
26,000 
Private Placement valued at    $13,000 Section 4(2)
02/18/04
Osvaldo Halpen 
40,000 
Private Placement valued at    $20,000 Section 4(2)
02/18/04
Kim Eun Sook
20,000 
Private Placement valued at    $10,000 Section 4(2)
02/20/04
Kim Sung
80,000 
Private Placement valued at    $40,000 Section 4(2)
02/25/04
William Eilers 
20,000 
Private Placement valued at    $10,000 Section 4(2)
02/25/04
Kim Deborah
200,000 
Private Placement valued at    $100,000 Section 4(2)
02/26/04
Kim Eun Sook
40,000 
Private Placement valued at    $20,000 Section 4(2)
02/27/04
Boze Kelly
20,000 
Private Placement valued at    $10,000 Section 4(2)
02/27/04
Robert Cooper 
25,000 
Private Placement valued at    $12,500 Section 4(2)
02/27/04
Dimitrios Mantzoros
10,000 
Private Placement valued at    $5,000 Section 4(2)
02/27/04
Moshane Family LP
25,000 
Private Placement valued at    $12,500 Section 4(2)
02/27/04
BLF Partnership 
70,000 
Private Placement valued at    $35,000 Section 4(2)
02/29/04
D. E. Wine Investments
8,145 
Brokerage Commission Valued at    $9.660 Section 4(2)
03/01/04
A H Investments
30,000 
Private Placement valued at    $15,000 Section 4(2)
03/01/04
Susan Namkung / Robert Torch
20,000 
Private Placement valued at    $10,000 Section 4(2)
03/01/04
Neil J. Kinch 
120,000 
Private Placement valued at    $60,000 Section 4(2)
03/01/04
David Orr 
20,000 
Private Placement valued at    $10,000 Section 4(2)
03/02/04
Jorge Alvarez 
20,000 
Private Placement valued at    $10,000 Section 4(2)
03/02/04
Browing Williams
10,000 
Private Placement valued at    $5,000 Section 4(2)
03/02/04
Clyde Byrd 
30,000 
Private Placement valued at    $15,000 Section 4(2)
03/02/04
William Eilers 
10,000 
Private Placement valued at    $5,000 Section 4(2)
03/02/04
Frank/ Judie Kiovenski 
10,000 
Private Placement valued at    $5,000 Section 4(2)
03/02/04
Namkung Yen
10,000 
Private Placement valued at    $5,000 Section 4(2)
03/02/04
Jerry Schultea 
20,000 
Private Placement valued at    $10,000 Section 4(2)
03/02/04
Philip R. Walters 
40,000 
Private Placement valued at    $20,000 Section 4(2)
03/03/04
21st Century Management
24,000 
Brokerage Commissions Valued    at $20,870Section 4(2)
03/03/04
Frazier L.Scott
160,000 
Private Placement valued at    $80,000 Section 4(2)
03/03/04
Kim Eun Sook
40,000 
Private Placement valued at    $20,000 Section 4(2)
03/03/04
Kim Young J.
300,000 
Private Placement valued at    $150,000 Section 4(2)
03/03/04
Namkung Pamona
20,000 
Private Placement valued at    $10,000 Section 4(2)
03/03/04
Mark Schluter 
40,000 
Private Placement valued at    $20,000 Section 4(2)
03/04/04
Deborah Kim 
120,000 
Private Placement valued at    $60,000 Section 4(2)
03/04/04
Ricky Moshane 
10,000 
Private Placement valued at    $5,000 Section 4(2)
03/05/04
Philip J. Kochman 
20,000 
Private Placement valued at    $10,000 Section 4(2)
03/05/04
Namkung Yen
30,000 
Private Placement valued at    $15,000 Section 4(2)
03/05/04
Stephenson Dennis Brian
10,000 
Private Placement valued at    $5,000 Section 4(2)
03/11/04
Ugam Holdings
500,000 
Private Placement valued at    $500,000 Section 4(2)
03/12/04
Jonathan E. Parker 
20,000 
Private Placement valued at    $10,000 Section 4(2)
03/23/04
21st Century Management
25,000 
Brokerage Commissions Valued    at $28,750Section 4(2)
03/24/04
Robert & Helen Fry 
30,000 
Private Placement valued at    $15,000 Section 4(2)
03/31/04
D. E. Wine Investments
17,100 
Brokerage Commissions Valued    at $14,870Section 4(2)04/15/04Angel Higueras5,000Consulting Services Valued at    $17,500Section 4(2)
06/03/04
Ugam Holdings
588,235 
Private Placement valued at    $500,000 Section 4(2)
12/31/04
Fernando Salvador
20,000
Consulting Services Valued at    $23,000Section 4(2)
12/31/04
Fernando Salvador
15,000
Consulting Services Valued at    $17,250Section 4(2)12/31/0421st Century Management125,000Brokerage Commissions Valued at    $143,759Section 4(2)12/31/0421st Century Management123,619Brokerage Commissions Valued at    $142,162Section 4(2)12/31/04Ana Karina Baldizon100,000Consulting Services Valued at    $115,000Section 4(2)12/31/04Mario Delgado35,000Consulting Services Valued at    $40,250Section 4(2)12/31/04Fast Automotive System Technology100,000Consulting Services Valued at    $115,000Section 4(2)12/31/04Alavesa Holding100,000Consulting Services Valued at    $115,000Section 4(2)12/31/04Polo Melendez100,000Consulting Services Valued at    $115,000Section 4(2)12/31/04Joseph Moncada100,000Consulting Services Valued at    $115,000Section 4(2)12/31/04Antonio Roca100,000Consulting Services Valued at    $115,000Section 4(2)12/31/04Oscar Rosales5,000Consulting Services Valued at    $5,750Section 4(2)12/31/04Fernando Salvador10,000Consulting Services Valued at    $11,500Section 4(2)12/31/04Alfredo Sarrazin75,000Consulting Services Valued at    $86,250Section 4(2)12/31/04George Schilling100,000Officer Services Valued at    $115,000Section 4(2)12/31/04Daniel Sequiera75,000Officer Services Valued at    $86,250Section 4(2)12/31/04Marco D. Sujo75,000Officer Services Valued at    $86,250Section 4(2)
12/03/04
D.E. Wine Investments
57,684 
Brokerage Commission Valued at    $50,185Section 4(2)
12/30/04
Patrica Falcome
50,000 
Private Placement valued at    $20,000 Section 4(2)12/31/04World Trading Development Corp.857,142Debt Conversion of $300,000 Section 4(2)12/31/04Lissette Mendoza30,000Employee Services Valued at    $34,500Section 4(2)12/31/04Donald Osomo15,000Employee Services Valued at    $17,250Section 4(2)12/31/04Alicia Arguello15,000Consulting Services Valued at    $17,250Section 4(2)12/31/04Mario Delgado60,000Consulting Services Valued at    $52,180Section 4(2)12/31/04Alexander Lizano Villegas25,000Employee Services Valued at    $28,750Section 4(2)12/31/04Mario Delgade200,000Consulting Services Valued at    $115,000Section 4(2)12/31/04Winfred Fields30,000Consulting Services Valued at    $34,500Section 4(2)12/31/04Fernando Salvador20,000Consulting Services Valued at    $23,000Section 4(2)12/31/04David Davila60,000Officer Services Valued at    $69,000Section 4(2)01/05/05Chandra Shekar M. Lodha139,359Brokerage Commission Valued at    122,636Section 4(2)01/10/05Andreas C. Wegener100,000Private Placement Cash $40,000Section 4(2)01/24/05Ugam Holdings Ltd.2,500,000Private Placement Cash $500,000Section 4(2)01/31/05Young Kim150,000Private Placement Cash $52,500Section 4(2)02/07/05Deborah Kim150,000Private Placement Cash $52,500Section 4(2)02/14/05Antonio Valdes Roca225,000Legal Services Valued at $198,000Section 4(2)03/21/05George Schilling50,000Officer Compensation Valued at    $49,500Section 4(2)03/31/05Chandra Shekar M. Lodha125,000Brokerage Commission Valued at    $116,250Section 4(2)04/15/05Mario Delgado50,000Consulting Services Valued at    $50,000Section 4(2)04/19/05Ugam Holdings Ltd.2,500,000Privatge Placement Cash $500,000Section 4(2)05/05/05David Davila60,000Officer Compensation Valued at    $78,000Section 4(2)05/05/05Mario Delgado110,000Consulting Services Valued at    $143,000Section 4(2)05/05/05Fernando Salvador40,000Consulting Services Valued at    $52,000Section 4(2)05/10/05Doug Sanders50,000Private Placement Cash $25,000Section 4(2)05/27/05Fernando Salvador15.000Consulting Services Valued at    $18,300Section 4(2)07/10/05Tourism Investments Holdings Inc.2,000,000Private Placement Cash $400,000Section 4(2)07/21/05Ricardo Esquivel100,000Consulting Services Valued at    $185,000Section 4(2)08/10/05Logistic Special Investments2,500,000Private Placement Cash $500,000Section 4(2)08/10/05World Assets Development Corp.2,500,000Private Placement Cash $500,000Section 4(2)08/12/051010 Limited140,351Acquisition RV Technology Valued    at $133,333Section 4(2)08/12/05Argo II LP35,773Acquisition RV Technology Valued    at $33,984Section 4(2)08/12/05Argo IV LP224Acquisition RV Technology Valued    at $213Section 4(2)08/12/05Argo V LP132Acquisition RV Technology Valued    at $125Section 4(2)08/12/05Henry Huntly Haight99,997Acquisition RV Technology Valued    at $94,997Section 4(2)08/12/05Desmond Ting Han Hsiung64,647Acquisition RV Technology Valued    at $61,415Section 4(2)08/12/05Ming Yan Leung188,180Acquisition RV Technology at    $178,711Section 4(2)08/12/05Raymond Lo Shui Ling176Acquisition RV Technology at $167Section 4(2)08/12/05Shuyi Mo99,997Acquisition RV Technology at    $94,997Section 4(2)08/12/05Sik Tuen Pong340,548Acquisition RV Technology at    $323,521Section 4(2)08/12/05Daniel Mak Tsun Wah29,975Acquisition RV Technology at    $28,476Section 4(2)08/12/05Link Systems Group3,250,000Private Placement Cash $650,000Section 4(2)09/01/05Fernando Salvador90,000Consulting Services Valued at    $66,600Section 4(2)09/01/05Alfredo J. Sarrazin300,000Employee Compensation Valued at    $222,000Section 4(2)09/01/05March D. Sujo300,000Employee Compensation Valued at    $222,000Section 4(2)09/02/05David Davila90,000Officer Compensation Valued at    $70,200Section 4(2)09/05/05Alavesa Holdings115,000Consulting Services Valued at    $89,700Section 4(2)09/05/05Julieta Moran50,000Director Compensation Valued at    $39,000Section 4(2)09/10/05Cristian C. Turrini30,000Employee Compensation Valued at    $22,500Section 4(2)09/14/05Akshay Sharma200,000Employee Compensation Valued at    $150,000Section 4(2)11/01/05Marco D. Sujo75,000Employee Compensation Valued at    $54,750Section 4(2)11/01/05Nancy Saldarriaga Coronel40,000Grant to Widow Valued at $29,200Section 4(2)12/01/05Massimo Plateo675,000Acquisition of Sleipner Valued at    $526,500Section 4(2)12/09/05Alessandro Valenti675,000Acquisition of Sleipner Valued at    $526,500Section 4(2)12/09/05Francesco Cafiero75,000Acquisition of Sleipner Valued at    $58,500Section 4(2)12/09/05Bruno Motta75,000Acquisition of Sleipner Valued at    $58,500Section 4(2)12/09/05Tourism Investments Holdings Inc.3,500,000Private Placement Cash $700,000Section 4(2)
The issuances of the restricted stock in connection with the Company'sacquisitions of RV Technology and Sleipner were made in reliance upon Section 4(2) of theAct. The issuances of shares as compensation for consulting, employee, officer anddirector 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 considerationin connection with private placements were made in reliance upon Section4(2) of the Act. No advertising or general solicitation was employed in connection withprivate placement.

**ITEM 6.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION**Backto Table of Contents

**Introduction**

The following discussion of our financial condition and results of ouroperations should be read in conjunction with the Financial Statements and Notes thereto.Our fiscal year ends December 31. This document contains certain forward-lookingstatements including, among others, anticipated trends in our financial condition andresults of operations and our business strategy. (See "Factors Which May AffectFuture Results"). These forward-looking statements are based largely on our currentexpectations and are subject to a number of risks and uncertainties. Actual results coulddiffer materially from these forward-looking statements. Important factors to consider inevaluating such forward-looking statements include (i) changes in external factors or inour internal budgeting process which might impact trends in our results of operations;(ii) unanticipated working capital or other cash requirements; (iii) changes in ourbusiness strategy or an inability to execute our strategy due to unanticipated changes inthe industries in which we operate; and (iv) various competitive market factors that mayprevent us from competing successfully in the marketplace.

**Plan of Operation**

As noted above, the Company has spent millions researching anddeveloping a now patented technology. Calypso Wireless’ technology allows you toswitch and connect from either a cellular network or a Wireless Local Area Network AccessPoint (WLAN), seamlessly without the user noticing the change. This means uninterruptedconnectivity as you travel in and out of the range of WLAN access points. The use ofASNAPTM (Automatic Switching of Network Access Points) also increases the amount ofavailable wireless bandwidth from the current state of technology of 9.6 kbps to 11 Mbps.

A part of its original business model was to manufacture and become asupplier of cellular devices. To that end, it expended funds to purchase equipment to beused in the manufacturing of the phones and entered into the beginnings of the designphase with RV Technology. During 2006, the Management of Calypso, began an in-depth reviewof the business model and decided to redirect our focus from becoming a supplier ofcellular broadband real time video phones, and other wireless devices because we facedsubstantial competition in the wireless device market from a variety of companies andtechnologies, some of which are larger, have longer operating histories, havesubstantially greater financial, technical and marketing resources, larger customer bases,greater name recognition and more established relationships in the industry than we have.Consequently, these competitors can devote greater resources to the development,promotion, sale and support of their products. The cost to achieve the quality of thistype of product desired would have been a continuing drain on company resources andprobably too late for the advantage we would have had with the market.

The Company has revised its business model such that it will selllicensing agreements with OEMs and businesses that cater to enterprise companies tolicense the technology based on our patented ASNAPTM technology (U.S. Patent Number:6,680,923) and or license the patent rather than become a supplier of cellular and otherdevices. Calypso Wireless’ mission is to conduct research and develop products whichcan be licensed to manufacturers, carriers and enterprise companies in the global wirelesscommunications industry. We believe our commercial success depends on identifyingbroad-based technology solutions for our customers, and ultimately the end user. 

Our technology was further advanced through the acquisition of SleipnerS. A. Sleipner builds advanced IP-based communications systems and software platformsenabling comprehensive network-telephony solutions and innovative data converged servicesfor enterprise and consumer customers. Sleipner's VoIP and IP solutions and applicationsare designed on CoMEDIA, the first complete family of SIP-based solutions offered to themarket. Service providers and enterprises can build their own SIP applications usingSleipner technology to fit their unique voice needs and compared with circuit-baseddeployments, VoIP implementations are completed faster with fewer difficulties. Sleipner'sCOMOB software enables smart phones and wireless PDA/Pocket PCs to switch between GSM orCDMA cellular towers and Wi-Fi access points known as hotspots. The European mobile markethas a base of over 342 million subscribers and is continuing to grow rapidly. The Companybelieves that with its patented ASNAPTM technology, European mobile carriers should beable to expand their customer base, reduce costs of additional frequency spectrum andinfrastructure, and increase revenues by offloading capacity to the Wireless Local AreaNetworks and IP Networks with new services featuring our WiFi-GSM-GPRS VoIP cellularphone.

Our company is distinctive in its focus on creating products whichminimize the technological barriers to change and accelerate the communicationindustry’s operating efficiency. Calypso’s products and services include theCalypso Wireless ASNAPTM PATENT. The ASNAPTM system implements the Calypsopatented ASNAPTM technology that allows the seamless switching between PSTN and VoIP,through the ASNAPTM seamless session control. In addition, the Calypso-SleipnerASNAPTM MediaGateway/Media Server which is a comprehensive and flexible developmentenvironment for business and carrier-grade critical Next Generation Network( NGN)solutions. It is a script driven telephony and VoIP application server. As such, it hasits own scripting language built by class extensions from the ASNAPTM ScriptInterpreter. While the server scripting language can support the creation of completetelephony and VoIP applications, it was designed to be a specific programming languagemade for the NGN. Further, the IDE/Script Editor an easy to use Integrated DevelopmentEnvironment for Windows. This Editor is specifically designed for ASNAPTM Script andhas features for beginners and professional developers. 

**Our current products and services are more fully describedabove under Products and Services.**

Calypso Wireless will continue research and development for futuregrowth. 3GPP IMS IP Multimedia Subsystem Service Convergence is a new way to communicateand access communications and content. It is presence based, location and visualcommunications with push-to-talk, -view, -share, and –access relevant media. Thisprovides enriched communication between users and applications- take your office with you,mobilizing the enterprise, have your media at hand, be always best connected and havebroadband everywhere. 3GPP IMS is based on SIP (session initiation protocol). The SIPprotocol was originally defined by the IETF and then adopted for mobile networks by 3GPPand 3GPP2. SIP is typically used for VoIP (Voice over Internet Protocol) Session controland would be the basis for VoIP networks; however 3GPP IMS-based architectures suffer fromrequiring a carrier network to upgrade to newer equipment. Calypso Wireless ASNAPTMtechnology allows for seamless integration to the existing core networks, the existingcellular/landline devices, without requiring a carrier forklift to an elusive unified corenetwork.

Examples of future converged applications that can arise from theCalypso Wireless ASNAPTM patented technologies, using technologies from Calypsowireless and potential OEMs include:

- Presence and Location-based Applications- Seamless video Session Continuity- Seamless Music Session continuity- Seamless Video Gaming Session Continuity- Federated Identity Management

MVNE/MVNO Revenue Settlements and Convergence with Seamless SessionContinuity

In conjunction with its direction towards licensing its technology, theCompany has reduced its operating costs by reducing the number of employees toapproximately 10 employees. We have not experienced any work stoppages and consider ourrelations with our employees to be good.

**Liquidity and Capital Resources**

At December 31, 2005, we had a working capital deficit of $716, 527compared to a working capital deficit of $2,505,166 at December 31, 2004. The Company'snegative working capital is partially due the cash used to purchase RV Technology. In2004, the working capital deficit was greater due to the restatement related to accruingliabilities for the issuance of stock to non-employees for non-cash compensation. TheCompany issued stock as compensation to preserve its cash. During 2005, the Company raised$3,920,000 in private placement offerings. 

The Company requires approximately $5 million to fund its annualoperating budget for 2006. These funds will be used for development of additionalproducts, marketing the products, obtaining additional patents and normal businessoperations.

We have historically sustained our operations and funded our capitalrequirements with the funds received from the sale of our common stock. To date, theCompany's has received over $15.5 million from its financing activities and has issuedshares valued at approximately $11.5 million for services provided to the Company.

The Company is currently negotiating a Private Placement Memorandum toraise additional funds. Further, the Board of Directors has given its consent to a groupof investors that are planning to acquire a majority interest in Calypso shares throughprivate transactions. These private transactions, if consummated, would result in a changein control with a new Board of Directors and new management. These investors are planningto invest additional working capital resources in the Company. However, there can be noassurance that these individual purchase transactions will be finalized. In such an event,this may have a materially adverse effect on our business, operating results and financialcondition.

We have not included continued operational funding for Sleipner in ourcash requirements. The share Purchase Agreement makes reference to a CollaborationAgreement which was signed with Drs. Massimo Plateo, Alessandro Valenti, FrancescoCafiero, Bruno Motta (the Collaborators). Pursuant to the Collaboration Agreement, theCollaborators were required to devote their time, attention, energy and skills to thefaithful and diligent performance of their duties, including, without limitation,traveling as reasonably requested by Calypso and consistent with past practice. Except asotherwise agreed between Calypso and Collaborators, from time to time Collaborators agreedto devote all of their business time, attention, skill, and efforts to the performance oftheir services and responsibilities on behalf of Calypso. Under the CollaborationAgreement, Calypso agreed to fund the operations of the Company for the duration of thetwo year initial term in an amount of US$77,000,00 (seventy-seven thousand) per month tocover costs relating to ordinary administration of Sleipner S.A. in a manner consistentwith past practice with certain other requirements and reductions for commission. Calypso,funded the operations fund for two months. Because appropriate accounting records for theexpenditures from this fund were not provided to Calypso’s Chief Financial Officerand funding was discontinued. Calypso is continuing to review whether the Collaboratorsmet the terms of the service description in the Collaboration Agreement. During 2006,Calypso Wireless has merged most of the operations of Sleipner into Calypso and Mr.Alessandro Valenti has joined Calypso as the Vice President of Research and Development. 

We have not included funding for future purchases of RV Technologystock to increase our equity interest in our capital requirements. Our Board has decidedagainst further investment in RV Technology at this time and we are not pursuing furtherdesign and production activities.

**Results of Operations - Year Ended December 31, 2005 comparedto Year Ended December 31, 2004**

*Revenues*

The Company did not generate any revenue related to the sale of itsproducts during the years 2005 and 2004. The Company received two purchase orders for theC1250i dual mode cellular phone, from Inversion CCS and Serinova during 2005. Deliveryagainst these purchase orders will not be made in light of the Company’s change inbusiness model which does not include production or deliver of phones. In addition, thesepurchase orders required lines of credit which neither company was able to obtain.

*Operating Expenses*

During 2005, the Company incurred operating expenses of $10,715,246compared to $10,950,630, as restated, during 2004. Our operating expenses decreased by$467,271. This decrease is the result of a net reduction of impairment expense, anincrease in expense for research and development, a deduction in expense for stock-basedcompensation and an increase in salaries. The 2004 impairment expense of $3,446,411 wasdue to the write-down of equipment. In 2005, the impairment expense of $1,949,999 was dueto the write-down of the value of the RV Technology investment. RV Technology's unauditedfinancial statements have substantial negative retained earnings which has increased dueto losses in the first quarter of 2006. The Company has not obtained audited informationfrom RV Technology and has recorded an impairment charge.

*Net Loss and Loss Per Share*

The Company had a net loss of $10,715,246 for the year ended December31, 2005, compared to a restated net loss of $10,950,630 in 2004. The net loss decreasedby $235,384. the decrease was due to the reasons set forth under Operating Expenses above.The Company's net loss per share for 2005 and 2004, as restated, were $0.09 and $0.10,respectively.

*Off-Balance Sheet Arrangements*

The Company had no off-balance sheet arrangements for the fiscal yearending December 31, 2005.

**ITEM7. FINANCIAL STATEMENTS**Back to Table of Contents
The preparation of financial statements in conformity with generallyaccepted accounting principles require the appropriate application of certain accountingpolicies, many of which require us to make estimates and assumptions about future eventsand their impact on amounts reported in the financial statements, and related notes. Sincefuture events and their impact cannot be determined with certainty, the actual resultswill inevitably differ from our estimates. Such differences could be material to thefinancial statements.

We believe application of accounting policies, and the estimatesinherently required by the policies, are reasonable. These accounting policies andestimates are periodically reevaluated, and adjustments are made when the facts andcircumstances dictate a change.

Our accounting policies are more fully described in note 1 to the notesto consolidated financial statements, contained in this Form 10-KSB. We haveidentified certain critical accounting policies that are described below.

Software development costs represent capitalized costs incurred in thedevelopment of the cellular phones and telecommunications infrastructure software. TheCompany began capitalizing these costs once technological feasibility had been establishedduring the first quarter of 1999. All costs incurred prior to establishment oftechnological feasibility were expensed as research and development expenses. The Companyestablished a policy to amortize the capitalized software and development costs over athree-year period beginning January 2004 and filed restated financial statements toreflect this change. The 2004 amortization amounted to $1,552,698. Effective January 1,2005, all costs associated with the development of the phones, which were completed inearly 2005, were expensed as incurred. Management concluded that the Company's annualreport for the year ended December 31, 2004 and the quarterly report for the period endedMarch 31, 2005 should be restated. Such restatements were subsequently made and amendedreports were filed.

Certain stock had been issued in 2005, which related to consultingagreements previously entered into by the Company. The Company entered into variousconsulting agreements with individuals for services to be provided and with considerationto be paid in shares of common stock of the Company. Pursuant to EITF 96-18,"Accounting for Equity Instruments that Are Issued to Other than Employees forAcquiring, or in Conjunction with Selling Goods or Services", the value of the shareconsideration should have been recorded as of the date the service agreements were enteredinto because the shares were fully vested and nonforfeitable. Management of the Companyconcluded on April 17, 2005 that the Company's consolidated financial statements containedin the Company's Form 10-KSB's for the years ended 2004 and 2003 would requirerestatement. On September 7, 2005, management was able to determine the proper treatmentfor recording these particular transactions as costs at the date at which a commitment forperformance by the counterparty to earn the equity instruments was reached and thevaluation of the liability would be based on the stock price on dates of said contracts.The cost has been amortized over the life of the contracts. All other stock-basedtransactions were fully expensed for all prior financial reporting periods. Managementconcluded that the Company's annual reports on Form 10-KSB for the years ended December31, 2004 and 2003, and the Company's quarterly report for the period ended March 31, 2005should be restated and the financial statements and the amended consolidated financialstatements for the aforementioned periods were subsequently filed. The Company has beennotified of an SEC investigation relating to the consulting agreements. We are providingthe requested information and will continue to fully comply with all future requests. TheCompany believes the failure to initially report these consulting agreements and theresulting restatement was caused by a misunderstanding and misinterpretation of theaccounting requirements and as a result of deficiencies in disclosure controls. In anattempt to correct this deficiency, the Company has hired a new CFO and has retained anaccounting consultants, both of whom are certified public accountants.

**New Accounting Pronouncements**

In May 2005, the Financial Accounting Standards Board("FASB") issued Statement of Financial Accounting Standard ("SFAS")No. 154, Accounting Changes and Error Corrections. SFAS No. 154 replaces AccountingPrinciples Board Opinion No. 20, Accounting Changes, and SFAS No. 3, Reporting AccountingChanges in Internal Financial Statements, and changes the requirements for the accountingfor and reporting of a change in accounting principle. SFAS No. 154 requires retrospectiveapplication of changes in accounting principle to prior periods’ financialstatements, unless it is impracticable to determine either the period-specific effects orthe cumulative effect of the change. SFAS No. 154 is effective for accounting changes andcorrections of errors made in fiscal years beginning after December 15, 2005. We willadopt SFAS No. 154 on January 1, 2006. Any impact on the Company's consolidated results ofoperations and earnings (loss) per share will be dependent on the amount of any accountingchanges or corrections of errors whenever recognized.

In December 2004, the Financial Accounting Standards Board issuedStatement of Financial Accounting Standards No. 153. This statement addresses themeasurement of exchanges of nonmonetary assets. The guidance in APB Opinion No. 29,"Accounting for Nonmonetary Transactions," is based on the principle thatexchanges of nonmonetary assets should be measured based on the fair value of the assetsexchanged.

The guidance in that opinion; however, included certain exceptions tothat principle. This statement amends Opinion 29 to eliminate the exception fornonmonetary exchanges of similar productive assets and replaces it with a generalexception for exchanges of nonmonetary assets that do not have commercial substance. Anonmonetary exchange has commercial substance if the future cash flows of the entity areexpected to change significantly as a result of the exchange. This statement is effectivefor financial statements for fiscal years beginning after June 15, 2005. Earlierapplication is permitted for nonmonetary asset exchanges incurred during fiscal yearsbeginning after the date of this statement is issued. Management believes the adoption ofthis statement will have no impact on the financial statements of the Company.

In December 2004, the Financial Accounting Standards Board issuedStatement of Financial Accounting Standards No. 152, which amends FASB statement No. 66,"Accounting for Sales of Real Estate," to reference the financial accounting andreporting guidance for real estate time-sharing transactions that is provided in AICPAStatement of Position (SOP) 04-2, "Accounting for Real Estate Time-SharingTransactions." This statement also amends FASB Statement No. 67, "Accounting forCosts and Initial Rental Operations of Real Estate Projects," to state that theguidance for (a) incidental operations and (b) costs incurred to sell real estate projectsdoes not apply to real estate time-sharing transactions. The accounting for thoseoperations and costs is subject to the guidance in SOP 04-2. This statement is effectivefor financial statements for fiscal years beginning after June 15, 2005. Managementbelieves the adoption of this statement will have no impact on the financial statements ofthe Company.

In November 2004, the Financial Accounting Standards Board (FASB)issued Statement of Financial Accounting Standards No. 151, "Inventory Costs-- anamendment of ARB No. 43, Chapter 4." This statement amends the guidance in ARB No.43, Chapter 4, "Inventory Pricing," to clarify the accounting for abnormalamounts of idle facility expense, freight, handling costs, and wasted material (spoilage).Paragraph 5 of ARB 43, Chapter 4, previously stated that "under some circumstances,items such as idle facility expense, excessive spoilage, double freight, and rehandlingcosts may be so abnormal as to require treatment as current period charges." Thisstatement requires that those items be recognized as current-period charges regardless ofwhether they meet the criterion of "so abnormal." In addition, this statementrequires that allocation of fixed production overheads to the costs of conversion be basedon the normal capacity of the production facilities. This statement is effective forinventory costs incurred during fiscal years beginning after June 15, 2005. Managementdoes not believe the adoption of this statement will have any immediate material impact onthe Company.

**Purchase Business Combinations**

The Company acquired the 16.8% interest in RV Tech by paying $1,000,000in cash ($666,666 in working capital to RV Tech and $333,334 to the shareholders of RVTech) and issuing 1,000,000 shares of the Company's restricted common stock. Thisacquisition is being accounted for under the cost method. Calypso Wireless acquired theoutstanding shares of Sleipner S. A. for 1,500,000 shares of restricted common stock. Theshares were issued to the Sleipner shareholders in December, 2005. Its financialinformation is included in the consolidated financial statements for Calypso Wireless,Inc.

The Registrant's audited financial statements for the fiscal yearsended December 31, 2005 and 2004 are attached to this annual report on Form 10-KSB.

Consolidated Financial Statements for the Fiscal Yearended December 31, 2005 and 2004

**ITEM8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURE**Back to Table of Contents

Reference is made to the Company's Form 8-K filed onSeptember 21, 2005 with disclosure under Item 4.01.

**ITEM 8A. CONTROLS AND PROCEDURES**Back toTable of Contents

Evaluation of disclosure controls and procedures. 

The Company's chief executive officer and chief financial officerconducted an evaluation regarding the effectiveness of the Company's disclosure controlsand procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Basedupon this evaluation of the Registrant’s controls and procedures, the chief executiveofficer and chief financial officer concluded that our disclosure controls and procedureswere not effective as of December 31, 2005.

The Company’s Chief Executive Officer and Chief Financial Officer,who joined the Company in August and September 2005, respectively, have begun carrying outan evaluation of the effectiveness of the Company's disclosure controls and procedurespursuant to Rule 13a-14 under the Securities Exchange Act of 1934, as amended. Based uponthe steps outlined in the preceding paragraph, our new Chief Executive Officer and newChief Financial Officer have concluded that the Company's disclosure controls andprocedures were not effective as of December 31, 2005 and the restatements to thefinancial statements for the 2003 and 2004 fiscal years are reflected in this filing.Further, as new procedures and controls are implemented, with the intent of improving ourdisclosure of material information relating to us and our consolidated subsidiary, suchdisclosure will be made known in a timely manner as required to include such informationin the Company's periodic filings with the Securities and Exchange Commission. 

Internal controls over financial reporting. 

During the period covered by this report, the Company adopted newpolicies and disclosure controls and procedures in compliance to improve transparency andaccountability no changes occurred in our internal control over financial reporting thatmaterially affected, or is reasonably likely to materially affect, our internal controlover financial reporting. However, the Company’s internal control over financialreporting was not compliant with the procedures as defined in Rules 13a-15(f) or 15d-15(f)under the Exchange Act.

The Company is taking actions to improve, and plans to continue toevaluate corporate governance procedures and certain disclosure controls and procedures.As part of this commitment, our new Chief Financial Officer, working with the new ChiefExecutive Officer are initiating a number of steps, including those in response to theSarbanes-Oxley Act of 2002 and corresponding SEC requirements for presentation to theBoard of Directors. Specific action taken or planned by us includes the following: (i) Weare conducting a comprehensive review of the adequacy of our policies and procedures withrespect to the administration of our equity compensation plans (including stock grants,stock option and warrant plans) and purchases and sales of our securities; (ii) We areimplementing a Section 16 reporting program for officers, directors and 10% beneficialowners to advise those persons of their reporting responsibilities and to makearrangements for filing timely reports in the event a reportable transaction occurs.

**PART III**

**ITEM9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT, COMPLIANCE WITH SECTION 16(A)**Back to Table of Contents

At present, the Company has threeexecutive officers and two directors. Our directors are elected to serve until the nextannual meeting of shareholders and until their respective successors will have beenelected and will have qualified. The following table sets forth the name, age and positionheld with respect to our present directors and executive officers:
**Name****Age****Positions**Antonio Zapata47Chairman of the BoardJulietta Moran60DirectorDavid Davila38Chief Executive Officer and    PresidentCheryl L. Dotson51Chief Financial OfficerAkshay Sharma39Chief Technical Officer
*Antonio Zapata - Director.*Mr. Zapata has been a director ofthe Company since January 2005. He has been a consultant in the chemical and industrialfield. He received a chemical engineering degree from UNI University.

*Julietta J. Moran – Director.* Ms. Moran was appointed tothe board of directors in December 2004. From 2002-2004, Ms. Moran worked for NICACOM atelecommunication company based in Managua, Nicaragua, as a Financial Consultant and LegalAdvisor, responsible for financial management and projects related to the opening ofmultiple company locations. From 2001-2002, Ms. Moran worked as a financial consultant fora project sponsored by Interamerican Development Bank. She also served as a consultant fora governmental agency TELCOR in Managua, Nicaragua, where she was involved in financialrestructuring related to the merger of TELCOR into ENITEL. From 1999-2001, Ms. Moran was aloan officer for Banco La Vivienda in Managua, Nicaragua, were she was a member of thecredit committee responsible for credit approvals and home mortgage application. Ms. Moranhas a Bachelor of Science in Business Administration from the Universidad Centroamericanain Managua, Nicaragua and Dade Community College for Business Administration, Miami. Shealso obtained a Bachelor of Law from the Universidad UNIVAL in Managua, Nicaragua in 2000.1996-2000. 

*David Davila - Chief Executive Officerand President.* Mr. Davila was a Co-Founder of Calypso and joined Calypso Wireless inFebruary 1998. From 1998 to 2000, he served as Engineering Manager. During 2000, Mr.Davila became Vice President of Sales for the Company. From 1993 to 1998, Mr. Davilaserved as a international consultant in the telecommunication arena. Mr. Davila Hereceived a degree in Business Administration from UNICA University. 

*Cheryl L. Dotson - CFO.*Ms. Dotsonhas had a successful career in executive and senior management and management. She hasbeen listed in Who’s Who in Executive Professionals in 2004-2005. She began hercareer began at a "Big 4" public accounting firm. Ms. Dotson has extensiveexperience in operations and financial matters, has served as the national senior managerfor the rollout of a major managed service solution for major consulting firm, and wasinvolved in the negotiations with Microsoft, the technology partner and LexisNexis, the strategic partner, for the national solution. She was Chief of Staff to the Mayor ofthe City of Houston, the 4th largest US city, responsible for oversight of 25 departmentsincluding the information technology and management audit divisions and participated infiscal and accounting issues related to Houston's budget. She has served as a consultantto the District of Columbia, the Metropolitan Transit Authority, and served as the chieffinancial officer for the Harris County-Houston Sports Authority. Prior to joining CalypsoWireless, she was President and CEO of Smart Management Services, Inc., a consulting firm,and Q Healthcare Services, Inc., a health staffing company. Ms. Dotson has a Bachelor ofBusiness Administration with emphasis in Accounting, magna cum laude, University ofHouston, 1972-1976.
*Akshay Sharma - Chief Technical Officer.*Mr.Aksbay was appointed as the Company's Chief Technical Officer in 2005. Mr. Sharma has anextensive background in telecom switching with converged applications, including: wirelessaccess; wireline access with ISDN;  and VoIP access with WiFi, DSL and Packetcablenetworks. Mr. Sharma was the Manager of Networks Engineering at Bell Canada followingwhich he worked for Bell-Northern Research-Nortel with their DMS-100 telephone switchequipment. He also served as the Director-Telecom Applications at Telelogic, managing atead that built and sold GSM applications and protocol stacks. Mr. Sharma directed productstrategies at early VoIP leaders, TollBridge, Cunvergent Networks and CopperCom.Whileworking at Siemens, Mr. Sharma was responsible for solutions for Cingular, which was ajoint venture between SBC Communications and BellSouth. Also while at Siemens Mr. Sharmareceived an award for wodk on Alcatel's Spatial Softswitch. Mr. Sharma worked at ChiefArchitect for Siemens Core UMTS 3G line and was Chief Architect Mobile EnterpirseSolutions. Mr. Sharma has an Engineering B. Eng form Crleton University, Ottawa, Canada,in Systems and Computer Engineering and has completed Master's and PhD level coursework inComputer Engineering with honors.

Other key employees of the Company are: Alessandro Valenti,Vice President of Research and Development, Alfredo Sarrazin, Vice President of Sales andBusiness Development and Cristian C. Turrini, Vice President. 

**Section 16(a) Compliance**

Section 16(a) of the Securities and Exchange Act of 1934 requires the Company'sdirectors and executive officers, and persons who own beneficially more than ten percent(10%) of the company's common stock, to file reports of ownership and changes of ownershipwith the Securities and Exchange Commission. Copies of all filed reports are required tobe furnished to the Company pursuant to Section 16(a). Based solely on the reportsreceived by the Company and on written representations from reporting persons, the Companywas informed that with the exception of Cheryl L. Dotson, CFO, its officers and directorshave not filed reports required under Section 16(a). The Company has not been furnishedwith any reports from Baylis Trade, Inc. owning 18,795,746 shares or 13.6% or HalstonBusiness, Inc. owning 21,161,178 shares or 15.3%.
**Code of Ethics**
The Company has adopted its Code of Ethics and Business Conduct forOfficers, Directors and Employees that applies to all of the officers, directors andemployees of the Company.

**ITEM 10.EXECUTIVE COMPENSATION**Back to Table of Contents

Thefollowing table shows the executive officers of the Company as of the date of this filing.

**Summary Compensation Table**            
**Long    Term**        
**Annual    Compensation**
**Compensation    Awards**                    **Other****Restricted****Securities**            **Annual****Stock****Underlying****All Other**      
**Salary**
**Bonus****Compensation****Award(s)****Options****Compensation**  **Name and    Principal Position**  
**Year**
**($)**
**($)**
**($)**
**($)**
**($)**
**($)**  David Davila, CEO and President2005 90,000--- --- 70,200--- --- 2004 45,500--- --- --- --- --- 2003 74,400--- --- --- --- --- Cheryl L. Dotson, CFO2005 84,00037,500--- --- --- --- Akshay Sharma, CTO2005 108,00018,750--- 10,000--- ---   ****Directors Remuneration**

In 2005 Directors were not paid a fee for serving on the Board.However, Julietta Moran received $39,000 in restricted stock.

**Termination of employment Arrangements**

On December 28, 2004, Mr. Ricardo Alvarez submitted his resignation as President andCEO. The Company agreed to pay Mr. Alvarez $150,000 in a eparation agreement. The terms ofthe eparation agreement include (i) $50,000 payment upon receipt of resignation, (ii)$100,000 payable in 6 monthly installments of $16,666 payable on the last day of eachmonth beginning January 31, 2005, and (iii) 25,000 shares of stock. Effective on February27, 2006, Mr. Michael Pizzi resigned his positions as Executive Vice President and generalcounsel.

**ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**Backto Table of Contents

The following table sets forth as of June 1, 2006, information withrespect to (a) each person (including "group" as that term is used in section13(d)(3) of the Securities Exchange Act of 1934 who is known to the Company to be thebeneficial owner of more than five percent (5%) of the outstanding Common Stock of theCompany and (b) the number and percentage of the Company's Common Stock owned by (i) eachof the directors and the executive officers named on the Summary Compensation Table aboveand (ii) all directors and executive officers of the Company as a group. The Companybelieves that, unless otherwise indicated, each of the shareholders has sole voting andinvestment power with respect to the shares beneficially owned.

**Title of    Class**
**Name and    Address of Beneficial Owner**
**Amount    and Nature of Beneficial Owner**
**Percent    of Class(1)**Common StockAntonio Zapata, Chairman    5753 N.W. 158 Street    Miami, FL 3301400.00%Common StockJulietta Moran, Director    5753 N.W. 158 Street    Miami, FL 3301450,0000.00%Common StockDavid Davila, CEO and President    5753 N.W. 158 Street    Miami, FL 33014150,0000.00%Common StockCheryl L. Dotson, CFO    5753 N.W. 158 Street    Miami, FL 3301450,0000.00%Common StockBaylis Trade, Inc.    41 South Audley, London W1K 2F5    United Kingdom18,795,74613.5%
Common StockHalston Business, Inc.    5979 NW 151st Street, Miami, FL 3301421,161,17815.3%
Common StockAkshay Sharma    5753 N.W. 158 Street    Miami, FL 33014225,0000.00%
Common Stock
****Back to Table of Contents

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