Calypso Wireless (fka CLYW)

[Lord Ship]

In the beginning of this year all the directors and executive officers combined owned 2,503,575 shares in Calypso, currently worth about $6m. This is 2.3% of the total company.

Nobody will ever be able to make me believe that all of a sudden the CEO suddenly can afford to and is willing to “invest” the same amount again at this stage only to keep the company afloat!

What about the other big shareholders, why aren’t any of them interested, and who are they by the way? Anybody knows?

Ricardo A. Alvarez 112,564
Baylis Trade, Inc. 20,255,138
Begdorf Holdings, Ltd. 5,937,030
Ferguson, Inc. 5,837,566
Winfred Fields 150,000
Halston Business, Inc. 21,161,178
Robert Leon 2,109,896
Morhead Assets Corp. 5,647,106
Carlos H. Mendoza, Chairman 130,915
Lomme Development Corporation. 5,837,566
Nakano Ventures, Inc. 5,253,810

(All Directors and Executive Officers as a Group (4 persons) 2,503,575)

To clarify a debated point here, if someone now is investing say $5m (approx. 2m shares) in CLYW by either cash injection or conversion of debt to equity this person has not taken any equity away from the other shareholders. The company would technically increase its net worth to the tune of or the cash injection/debt-equity swap so this transaction is shareholder-value-neutral and non-diluting. But perhaps even better, by making the company a little bit stronger financially such transaction should in theory make it more attractive to investors and the share price could increase a little bit.

If however this person lends $5m to the company its financial position and attractiveness to shareholders will depend on the terms and conditions of the loan. I would say such a loan from a private individual at this stage would be highly questionable and would indicate that the management was totally unprofessional.

At any rate I would delay any new investment decision in CLYW until the first quarter 2004 figures are out. Far too much uncertainty is attached to the last SEC filing and the subsequent delay. Furthermore, the recent arrogant emails from George Schilling have been much, much more damaging to CLYD than if no emails had been sent at all. They frankly surprise me. The response reflects a desperate and angry management in an extremely vulnerable and defensive position.

Not a good starting point in a competitive world.