<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                  FORM 10-QSB/A

                                   (Mark One)

           (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended: June 30, 2003

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

             For the transition period from __________ to __________

                        Commission File Number: 33-63474

                         CALLISTO PHARMACEUTICALS, INC.
                         ------------------------------

             (Exact name of Registrant as specified in its charter)


         Delaware                                              13-3894575
-------------------------------                            -------------------
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                             Identification No.)

420 Lexington Avenue, Suite 2500, New York, New York             10170
----------------------------------------------------             -----
(Address of principal executive offices)                       (Zip Code)

                                 (212) 297-0010
                                 --------------
                         (Registrant's telephone number)

                                Webtronics, Inc.
                         420 Lexington Avenue, Suite 601
                            New York, New York 10170
                            ------------------------
      (Former Name, Former Address and Former Fiscal Year, if changed since
                                  last report)

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

    State the number of shares outstanding of each of the issuer's classes of
                common equity, as of the latest practicable date:


         Class                                  Outstanding at August 15, 2003
-------------------------------                 ------------------------------
Common Stock, par value $0.0001                 23,204,851 shares


    Transitional Small Business Disclosure Format (check one): Yes |_| No |X|
<PAGE>

                                Explanatory Note

This Amendment No. 1 to our Quarterly Report on Form 10QSB for the quarter ended
June 30, 2003 is being filed to reflect certain changes on the Condensed
Consolidated Balance Sheet as of June 30, 2003, the Condensed Consolidated
Statements of Operations for the three and six months ending June 30, 2003 and
2002 and for the period June 5, 1996 (inception) to June 30, 2003, and the
Condensed Consolidated Statement of Cash Flows for the six months ended June 30,
2003 and 2002 and June 5, 1996 (inception) to June 30, 2003. The restatements
(i) correct errors in calculating stock based compensation expense, (ii)
reclassify on the Condensed Consolidated Balance Sheet as of June 30, 2003
certain amounts in prepaid other to rent deposit, (iii) correct errors in
classification of general and administrative expenses and research and
development expenses, (iv) expense the $400,000 costs associated with the
Webtronics, Inc. acquisition as general and administrative expense in June 2002
previously charged to additional-paid-in capital on the Condensed Consolidated
Balance Sheet as of June 30, 2003, (v) add disclosure regarding the amount of
non-Plan options to Note 7 of the Notes to June 30, 2003 Condensed Consolidated
Financial Statements and (vi) add a description of Callisto's license agreement
with AnorMED, Inc. to Note 10 of the Notes to June 30, 2003 Condensed
Consolidated Financial Statements. In addition, a section describing our
significant accounting policies has been added to Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations. This
Amendment No.1 amends and restates only those sections of the previously filed
Form 10QSB that have been affected by the corrections and clarifications
discussed above.

<PAGE>

                         CALLISTO PHARMACEUTICALS, INC.
                                  FORM 10-QSB/A
                                    CONTENTS

PART I  -- FINANCIAL INFORMATION                                           Page
                                                                           ----

      Item 1.  Financial Statements

               Unaudited Condensed Consolidated Balance Sheet as of
               June 30, 2003                                                2

               Unaudited Condensed Consolidated Statements of
               Operations for the Three and Six Months Ended
               June 30, 2003 and 2002 and the period June 5,
               1996 (Inception) to June 30, 2003                            3

               Unaudited Condensed Consolidated Statements of
               Cash Flows for the Six Months Ended June 30,
               2003 and 2002 and for the period June 5, 1996
               (Inception) to June 30, 2003                                 4

               Notes to Unaudited Condensed Consolidated Financial
               Statements                                                   5

      Item 2.  Management's Discussion and Analysis of Financial           10
               Condition and Results of Operations
                                                                           13
      Item 3.  Controls and Procedures

PART II  -- OTHER INFORMATION

      Item 2.  Changes in Securities and Use of Proceeds                   13

      Item 6.  Exhibits and Reports on Form 8-K                            13

               Signatures                                                  14


<PAGE>


                                INTRODUCTORY NOTE

This report on Form 10QSB may contain forward looking statements. You can
identify these statements by forward-looking words such as "may," "will,"
"expect," "intend," "anticipate," "believe," "estimate" and "continue" or
similar words. Forward-looking statements include information concerning
possible or assumed future business success or financial results. You should
read statements that contain these words carefully because they discuss future
expectations and plans, which contain projections of future results of
operations or financial condition or state other forward-looking information. We
believe that it is important to communicate future expectations to investors.
However, there may be events in the future that we are not able to accurately
predict or control. Accordingly, we do not undertake any obligation to update
any forward-looking statements for any reason, even if new information becomes
available or other events occur in the future.

The forward-looking statements included herein are based on current expectations
that involve a number of risks and uncertainties set forth under "Risk Factors"
in our Report on Form 8-K and other periodic reports filed with the SEC.
Accordingly, to the extent that this Report contains forward-looking statements
regarding the acquisitions, financial condition, operating results, business
prospects or any other aspect of the Company, please be advised that the
Company's actual financial condition, operating results and business performance
may differ materially from that projected or estimated by the Company in
forward-looking statements.



                                       1
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                         CALLISTO PHARMACEUTICALS, INC.
                          (A Development Stage Company)

            CONDENSED CONSOLIDATED BALANCE SHEET as of JUNE 30, 2003
                                   (Unaudited)

                                     ASSETS


Current assets:
     Cash and cash equivalents                                     $  1,269,257

     Prepaid insurance ($146,614) and other current assets              217,150
                                                                   ------------
                                                                      1,486,407
                                                                   ------------
Fixed assets, net of accumulated
  depreciation of $18,244                                                66,393
                                                                   ------------

Other assets:

     Rent deposit                                                        47,246
                                                                   ------------
                                                                         47,246
                                                                   ------------
                                                                   $  1,600,046
                                                                   ============



                      LIABILITIES AND SHAREHOLDERS' EQUITY


Accounts payable, accruals and other current liabilities           $    810,650
                                                                   ------------

Shareholders' equity:
     Common stock $.0001 par value, 60,000,000 authorized
       shares and issued and outstanding
       23,217,578                                                         2,319
     Additional paid-in-capital                                      27,524,642
       Unamortized deferred stock based compensation                 (6,707,470)
     Accumulated deficit during the development stage               (20,030,095)
                                                                   ------------
                                                                        789,396
                                                                   ------------
                                                                   $  1,600,046
                                                                   ============



         The accompanying notes are an integral part of these condensed
                       consolidated financial statements

                                       2
<PAGE>


                         CALLISTO PHARMACEUTICALS, INC.
                          (A Development Stage Company)

                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                           Six Months Ended                       Three Months Ended                June 5, 1996
                                               June 30,                                June 30,                   (Inception) to
                                       2003                 2002               2003                2002            June 30, 2003
                                  ---------------     ---------------     ---------------     ---------------     ---------------
<S>                               <C>                 <C>                 <C>                 <C>                 <C>
Revenues                          $            --     $            --     $            --     $            --     $            --
                                  ---------------     ---------------     ---------------     ---------------     ---------------
Costs and expenses:
Research and development                  308,986             298,527             231,532             115,735           3,838,477
General and administrative                490,563             618,831             403,166             559,408           4,887,999
Purchased in process R&D                6,833,454                  --           6,833,454                  --           6,833,454
Stock based compensation                3,306,550             167,954           2,429,987              83,977           4,470,165
                                  ---------------     ---------------     ---------------     ---------------     ---------------

Net loss                          $   (10,939,552)    $    (1,085,312)    $    (9,898,139)    $      (759,120)    $   (20,030,095)
                                  ---------------     ===============     ===============     ===============     ===============
Weighted average shares
  outstanding:
       basic and diluted               19,306,915          17,318,944          21,272,990          17,318,944                  --
Net loss per common share:
       basic and diluted          $         (0.57)    $         (0.06)    $         (0.47)    $         (0.04)                 --
</TABLE>



         The accompanying notes are an integral part of these condensed
                       consolidated financial statements

                                       3
<PAGE>


                         CALLISTO PHARMACEUTICALS, INC.
                          (A Development Stage Company)

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                            For the Six         For the Six        June 5, 1996
                                                                            Months Ended       Months Ended       (Inception) to
                                                                           June 30, 2003       June 30, 2002       June 30, 2003
                                                                          ---------------     ---------------     ---------------
<S>                                                                       <C>                 <C>                 <C>
Cash flows from operating activities:
Net loss                                                                  $   (10,939,552)    $    (1,085,312)    $   (20,030,095)
Adjustments to reconcile net loss to
Net cash used in operating activities:
         Purchased in process research and development                          6,833,454                  --           6,833,454
         Stock based compensation                                               3,306,550             167,954           4,470,165
         Depreciation and amortization                                              7,810               6,027              18,204
         Unrealized loss on investment                                                 --                  --              30,986
         Common and preferred stock issued for services                                --                  --              91,667
         Cancellation of note receivable                                               --                  --              91,770
         Increase in note receivable                                                   --                  --             (91,770)

Changes in operating assets and liabilities

         Increase in prepaid insurance
                    and other current assets                                     (179,253)            (24,533)           (217,150)
         Increase in accounts payable, accruals and other liabilities              23,992              41,543             704,244
                                                                          ---------------     ---------------     ---------------
         Total adjustments                                                      9,992,553             190,991          11,931,570
                                                                          ---------------     ---------------     ---------------
     Net cash used in operating activities                                       (946,999)           (894,321)         (8,098,525)
                                                                          ---------------     ---------------     ---------------


Cash flows from investing activities:

         Acquisition of furniture & equipment                                     (54,452)            (11,485)            (84,627)

         Rent deposit                                                              47,246                  --              47,246

         Proceeds (loss) on sale of marketable securities                              --                  --             (30,986)
                                                                          ---------------     ---------------     ---------------

         Net cash used in investing activities                                     (7,206)            (11,485)            (68,367)
                                                                          ---------------     ---------------     ---------------

Cash flows from financing activities:

         Issuance of common and preferred stock (net of repurchases)                   --                  --           9,436,149
                                                                          ---------------     ---------------     ---------------

     Net cash provided by financing activities                                         --                  --           9,436,149
                                                                          ---------------     ---------------     ---------------

Net (decrease) increase in cash and cash equivalents                             (954,205)           (905,806)          1,269,257
Cash and cash equivalents at beginning of period                                2,223,462           3,627,479                  --
                                                                          ---------------     ---------------     ---------------
Cash and cash equivalent at end of period                                 $     1,269,257     $     2,721,673     $     1,269,257
                                                                          ===============     ===============     ===============


Supplementary disclosures of cash flows information:
      Cash paid for taxes                                                 $        28,858     $            --     $        48,152
                                                                          ===============     ===============     ===============
</TABLE>


         The accompanying notes are an integral part of these condensed
                       consolidated financial statements

                                       4
<PAGE>


NOTES TO JUNE 30, 2003 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of presentation:

The accompanying unaudited condensed consolidated financial statements of
Callisto Pharmaceuticals, Inc., and its wholly owned subsidiary Synergy
Pharmaceuticals Inc. ("Synergy") acquired April 30, 2003 (collectively the
"Company" or "Callisto", a development stage company), have been prepared in
accordance with accounting principles generally accepted in the United States
("GAAP") for interim financial information and the rules of the Securities and
Exchange Commission (the "SEC") for quarterly reports on Form 10-QSB and do not
include all of the information and footnote disclosures required by GAAP for
complete financial statements. Certain prior year expenses in our unaudited
Condensed Consolidated Statement of Operations have been reclassified to conform
to our current year results. These statements should be read in conjunction with
the Callisto's audited financial statements and notes thereto for the year ended
December 31, 2002, included in Form 8-K filed with the SEC on May 15, 2003.

This Amendment No. 1 to our Quarterly Report on Form 10QSB for the quarter ended
June 30, 2003 is being filed to reflect certain changes on the Condensed
Consolidated Balance Sheet as of June 30, 2003, the Condensed Consolidated
Statements of Operations for the three and six months ending June 30, 2003 and
2002 and for the period June 5, 1996 (inception) to June 30, 2003, and the
Condensed Consolidated Statement of Cash Flows for the six months ended June 30,
2003 and 2002 and June 5, 1996 (inception) to June 30, 2003. The restatements
(i) correct errors in calculating stock based compensation expense, (ii)
reclassify on the Condensed Consolidated Balance Sheet as of June 30, 2003
certain amounts in prepaid other to rent deposit, (iii) correct errors in
classification of general and administrative expenses and research and
development expenses, (iv) expense the $400,000 costs associated with the
Webtronics, Inc. acquisition as general and administrative expense in June 2002
previously charged to additional-paid-in capital on the Condensed Consolidated
Balance Sheet as of June 30, 2003, (v) add disclosure regarding the amount of
non-Plan options to Note 7 of the Notes to June 30, 2003 Condensed Consolidated
Financial Statements and (vi) add a description of Callisto's license agreement
with AnorMED, Inc. to Note 10 of the Notes to June 30, 2003 Condensed
Consolidated Financial Statements. In addition, a section describing our
significant accounting policies has been added to Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations. This
Amendment No.1 amends and restates only those sections of the previously filed
Form 10QSB that have been affected by the corrections and clarifications
discussed above.

In the opinion of management, the accompanying unaudited consolidated financial
statements include all adjustments, primarily consisting of normal adjustments,
necessary for the fair presentation of the balance sheet and results of
operations for the interim periods. The results of operations for the three and
six months ended June 30, 2003 are not necessarily indicative of the results of
operations to be expected for the full year ending December 31, 2003.

The accompanying unaudited condensed consolidated financial statements have been
prepared assuming that Callisto will continue as a going concern. Management
believes that current resources will be sufficient to support its planned
operations though the fourth quarter 2003. Callisto does not have commercial
biopharmaceutical products, and does not expect to have such for several years,
if at all. In addition, Callisto merged with Synergy Pharmaceuticals Inc.
("Synergy") in April 2003, which will require additional cash to integrate the
combined companies. Callisto believes that it will need additional funds to
complete the development of its biomedical products. These circumstances raise
substantial doubt about Callisto's ability to continue as a going concern beyond
December 31, 2003. Management's plans with regard to these matters include
continued development of its products as well as seeking additional research
support funds and financial arrangements. Although management continues to
pursue these plans, there is no assurance that Callisto will be successful in
obtaining sufficient financing on terms acceptable to Callisto. In the event
that the Callisto is unable to raise additional funds, planned operations will
need to be scaled back or discontinued. The financial statements do not include
any adjustments that might result from the outcome of these uncertainties.

2. Significant Accounting Policies

Business Combinations

The Company accounts for business combinations in accordance with the provisions
of Statement of Financial Accounting Standards No. 141 "Business Combinations"
("SFAS 141"). SFAS 141 requires business combinations completed after June 30,
2001 to be accounted for using the purchase method of accounting. It also
specifies the types of acquired intangible assets required to be recognized and
reported separately from goodwill.

Long-lived assets

The Company accounts for long-lived assets in accordance with the provisions of
Statement of Financial Accounting Standards No. 144 "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144 requires
that long-lived assets be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of the asset may not be
recoverable. The Company compares the carrying amount of the asset to the
estimated undiscounted future cash flows expected to result from the use of the
asset. If the carrying amount of the asset exceeds estimated expected
undiscounted future cash flows, the Company records an impairment charge for the
difference between the carrying amount of the asset and its fair value. Changes
in events or circumstances impacting long-lived assets include, but are not
limited to, cancellations or terminations of research contracts or pending
government research grants.

Income taxes

Income taxes are accounted for under the asset and liability method prescribed
by Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes." Deferred income taxes are recorded for temporary differences between
financial statement carrying amounts and the tax basis of assets and
liabilities. Deferred tax assets and liabilities reflect the tax rates expected
to be in effect for the years in which the differences are expected to reverse.
A valuation allowance is provided if it is more likely than not that some or all
of the deferred tax asset will not be realized.



                                       5
<PAGE>

Accounting for stock based compensation

The Company has adopted Statement of Financial Accounting Standard No. 123,
"Accounting for Stock-Based Compensation" ("SFAS 123"). As provided for by SFAS
123, the Company has elected to continue to account for its stock-based
compensation programs according to the provisions of Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees ("APB 25")."
Accordingly, compensation expense has been recognized to the extent of employee
or director services rendered based on the intrinsic value of compensatory
options or shares granted under the plans. The Company has adopted the
disclosure provisions required by SFAS 123, as amended by SFAS 148, "Accounting
for Stock-Based Compensation - Transition and Disclosure, an amendment to FASB
Statement No. 123."

Had compensation cost for stock options granted to employees been determined
based upon the fair value at the grant date for awards, consistent with the
methodology prescribed under SFAS 123, the Company's net loss and net loss per
share would have been as follows:

<TABLE>
<CAPTION>
                                                               Six Months Ended                       Three Months Ended
                                                                    June 30,                                June 30,
                                                           2003                2002                2003                2002
                                                      ---------------     ---------------     ---------------     ---------------
<S>                                                   <C>                 <C>                 <C>                 <C>
Net loss, as reported                                 $   (10,939,552)    $    (1,085,312)    $    (9,898,139)    $      (759,120)

Add: Stock-based employee
compensation expense recorded
under APB 25                                                1,185,015              19,500           1,175,265               9,750
Deduct: Total stock-based compensation
expense determined under fair value
based method for employee options                          (1,385,973)            (23,281)         (1,374,332)            (11,641)
                                                      ---------------     ---------------     ---------------     ---------------
Pro forma net loss                                    $   (11,140,510)    $    (1,089,093)    $   (10,097,207)    $      (761,010)
                                                      ===============     ===============     ===============     ===============

Net loss per share:
Basic and diluted -as reported                        $         (0.57)    $         (0.06)    $         (0.47)    $         (0.04)
                                                      ===============     ===============     ===============     ===============
Basic and diluted -pro forma                          $         (0.58)    $         (0.06)    $         (0.47)    $         (0.04)
                                                      ===============     ===============     ===============     ===============
</TABLE>


The fair value of the options granted to employees during 2003 and 2002 ranged
from $1.26 to $5.53 on the date of the respective grant using the Black-Scholes
option-pricing model. The following weighted average assumptions were used for
2003 and 2002: no dividend yield, expected volatility of 0% to April 30, 2003
and 100% since Callisto's common stock began to trade publicly on June 16, 2003,
risk free interest rates of 2.87%-4.50% and an expected term of 7 to 10 years.

3. Merger and consolidation:

On April 30, 2003 Webtronics, Inc. entered into a merger agreement with Callisto
Research Labs, LLC (" Callisto Research", formerly known as Callisto
Pharmaceuticals, Inc.) and Synergy Pharmaceuticals Inc.,("Synergy") an
unaffiliated company also in the development stage, under which agreement
Callisto Research and Synergy agreed to merge in a stock for stock transaction
and each become subsidiaries of Webtronics, Inc. Webtronics subsequently changed
its name to Callisto Pharmaceuticals, Inc. Pursuant to the merger agreement
17,318,994 shares of Webtronics common stock were issued to holders of Callisto
Research common stock and 4,395,684 shares to holders of Synergy common stock in
exchange for outstanding Callisto Research and Synergy common stock.

The 4,395,684 shares issued to the former shareholders of Synergy were valued at
$6,593,526. The purchase price in excess of the tangible net worth acquired was
allocated in full to the Synergy research and development projects which had not
yet reached technological possibility and had no alternative use.


                                       6
<PAGE>

Net assumed liabilities in excess of Synergy assets acquired in the merger at
April 30, 2003 were as follows:



Cash                                                            $         9,501
Accounts receivable                                                     258,928
Rent deposit                                                             44,746
Fixed assets                                                             38,343
                                                                ---------------

Total assets acquired                                                   351,518

Accounts payable and other liabilities assumed                          591,446
                                                                ---------------

Net liabilities assumed in excess of assets acquired            $       239,928
                                                                ===============



The merged companies are considered to be in the development stage. No revenues
have been realized and all activities have been concentrated in research and
development of biopharmaceutical products yet to be approved by the Food and
Drug Administration. The value of the shares issued to former Synergy
shareholders in the merger plus the net liabilities assumed in excess of assets
acquired totaling $6,833,454 was charged to expense during the quarter ended
June 30, 2003. The results of operations of Synergy for the period May 1, 2003
through June 30, 2003 are included in the consolidated statement of operations
for the quarter and six months ended June 30, 2003, as well as the consolidated
balance sheet as of June 30, 2003.

4. Cash and cash equivalents:

For purposes of the statements of cash flows, the Company considers all highly
liquid debt instruments with an original maturity of three months or less to be
cash equivalents.

5. Proforma results of operations:

The following (unaudited) combined proforma results of operations for the six
months ended June 30, 2003 and 2002 have been prepared as if the merger of the
companies had occurred at January 1, 2003, and 2002

                                                 2003                 2002
                                            ---------------     ---------------

Revenues                                    $          --       $          --
Net loss                                        (11,366,548)         (1,677,982)
Net loss per common share
  (23,217,578 common shares)                           (.49)               (.07)


6. Research and development:

The Company is engaged in various pharmaceutical patent and research and
development projects under arrangements with various research facilities and
universities whereby certain minimum annual fees and royalty payments are
required to be paid. Research and development costs are expensed as incurred and
include mainly expenditures made to research facilities and universities, as
well as legal and professional fees associated with filing and maintaining
Callisto's patent and license rights to its proposed products.


                                       7
<PAGE>


7. Stock option plan:

In 1996, the Company adopted an incentive and non-qualified stock option plan
(the"Plan") for employees, consultants and outside directors to purchase up to
2,000,000 shares of common stock. The Plan was amended in December 2002 to
increase the number of shares authorized under the Plan to 10,000,000. The
option term for options granted under the Plan is ten years from date of grant.

The following represent options outstanding for the six months ended June 30,
2003 and for the years ended December 31, 2002 and 2001 generally to
non-employees:


                                                                     Total
                                                                ---------------
Balance, January 1, 2001                                              1,931,505

       Year 2001:
       Granted                                                          400,000
       Exercised                                                             --
                                                                ---------------

Balance, December 31, 2001                                            2,331,505

       Year 2002:
       Granted                                                          330,000
       Cancelled
       Exercised                                                             --
                                                                ---------------

Balance, December 31, 2002                                            2,661,505

Six month ended June 30, 2003:

       Granted                                                        3,286,055
       Exercised                                                             --
       Cancelled                                                       (917,333)
                                                                ---------------

Balance, June 30, 2003                                                5,030,227
                                                                ===============



Included in the above balance at June 30, 2003 were 2,386,338 non-Plan options.
Options are exercisable at various prices as follows at June 30, 2003:


                                           Exercise
                      Price                  Total
                      -----            ---------------
                      $0.75                    615,839
                       1.10                    500,000
                       1.25                    400,000
                       1.30                    383,055
                       1.50                  1,523,000
                       1.75                     27,500
                       1.95                    266,667
                       2.25                     90,000
                       2.85                    262,500
                       4.90                    125,000
                       6.75                     36,666
                       2.50                    800,000 (A)
                                       ---------------
                                             5,030,227
                                       ===============



(A) Vesting subject to achievement of certain future drug development
milestones.


                                       8
<PAGE>

8. Income taxes:

At December 31, 2002, the Company had available net operating tax loss carry
forwards of approximately $8,000,000 for income tax purposes expiring through
2022 to offset future taxable income. The net deferred tax asset has been fully
offset by a valuation allowance due to uncertainties regarding realization of
benefits from these future tax deductions. As a result of the change in control
provisions of Internal Revenue Code Section 382, a significant portion of these
net operating loss carry forwards may be subject to limitation on future
utilization.

9. Loss per share:

The assumed exercise of all the Company's outstanding options was excluded from
the computation of net loss per share due to their anti-dilutive effect as a
result of the net losses reported for the three and six months ended June 30,
2003 and 2002.
..

10. Contractual Obligations:

On August 28, 2002, Callisto's wholly-owned subsidiary, Synergy Pharmaceuticals
Inc. entered into a license agreement with AnorMED Inc. to license Atiprimod
from AnorMED. The license agreement provides for milestone payments and
royalties on net sales. Commencing on January 1, 2004 and on January 1 of each
subsequent year Synergy is obligated to pay AnorMED a maintenance fee of
$200,000.

On June 13, 2003, the Company entered into employment agreements with Gary S.
Jacob, Ph.D., our Chief Executive Officer and Chief Scientific Officer and
Kunwar Shailubhai, Ph.D., our Executive Vice President and Head of Research and
Development. Each of their employment agreements is for a term of 18 months
beginning June 13, 2003 and is automatically renewable for successive one year
periods at the end of the term. Dr. Jacob's salary is $225,000 per year and he
is eligible to receive a cash bonus of up to 15% of his salary per year. Dr.
Jacob received a grant of 500,000 stock options which vest over a three year
period and are exercisable at $1.50 per share. Dr. Shailubhai's salary is
$170,000 per year and he is eligible to receive a cash bonus of up to 15% of his
salary per year. Dr. Shailubhai received a grant of 25,000 stock options which
are fully vested and have an exercise price of $1.50 per share. Dr. Shailubhai
also received a grant of 325,000 stock options which vest over a three year
period and are exercisable at $1.50 per share.




                                       9
<PAGE>


ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The following discussion should be read in conjunction with our financial
statements and notes to those statements and other financial information
appearing elsewhere in this Quarterly Report. In addition to historical
information, the following discussion and other parts of this Quarterly Report
contain forward-looking information that involves risks and uncertainties.

Overview

We are a development stage biopharmaceutical company, whose primary focus is on
biopharmaceutical product development. Since inception in June 1996 our efforts
have been principally devoted to research and development, securing patent
protection, obtaining corporate relationships and raising capital. Since
inception through June 30, 2003, we have sustained cumulative net losses of
$20,030,095. Our losses have resulted primarily from expenditures incurred in
connection with the purchase of in-process research and development, stock
compensation expenses, patent filing and maintenance, outside accounting and
legal services and regulatory consulting fees.

From inception through June 30, 2003 we have not generated any revenue from
operations. We expect to incur additional losses to perform further research and
development activities. We do not currently have any commercial
biopharmaceutical products, and do not expect to have such for several years, if
at all. Our lead drug candidate, Atiprimod, is a small molecule, orally
available drug, with antiprolifererative and antiangiogenic activity. Atiprimod
successfully completed Phase I clinical trials in rheumatoid arthritis patients
and we plan to enter Atiprimod in a safety and proof of principle clinical trial
in multiple myeloma patients. The IND application (Investigative New Drug) for
Phase I of these clinical trials is planned to be filed with the FDA during the
third quarter of 2003.

Our product development efforts are thus in their early stages and we cannot
make estimates of the costs or the time it will take to complete. The risk of
completion of any program is high because of the long duration of clinical
testing, extended regulatory approval and review cycles and uncertainty of the
costs. Net cash inflows from any products developed make take several years to
achieve. We could however receive grants, contracts or technology licenses in
the short-term. The amount and timing of these inflows, if any, is not known. We
are also in the process of raising additional capital through a private
placement of common stock which began in July 2003. There can be no assurance we
will be successful in these fund raising efforts.

The accompanying financial statements have been prepared assuming that we will
continue as a going concern. We believe that current resources will be
sufficient to support planned operations through the fourth quarter 2003. These
circumstances raise substantial doubt about our ability to continue as a going
concern. Our plan is to continue product development beyond December 31, 2003
and seek additional research support and investment capital. There is no
assurance that we will be successful in obtaining sufficient financing on terms
acceptable to us. In the event that we are unable to raise additional funds,
planned operations will need to be scaled back or discontinued. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

On April 30, 2003, pursuant to an Agreement and Plan of Merger dated March 10,
2003, as amended April 4, 2003, Synergy Acquisition Corp., our wholly-owned
subsidiary, merged into Synergy Pharmaceuticals Inc. ("Synergy") and Callisto
Pharmaceuticals, Inc., our wholly-owned subsidiary, merged into the predecessor
of Callisto Research Labs, LLC (`Callisto Research"). As a result of the merger
Callisto Research and Synergy are our wholly owned subsidiaries. We issued
17,318,994 shares of our common stock in exchange for all outstanding Callisto
Research, LLC common stock and an additional 4,395,684 shares in exchange for
outstanding Synergy common stock.

Significant Accounting Policies

Financial Reporting Release No. 60 requires all companies to include a
discussion of critical accounting policies or methods used in the preparation of
financial statements. Note 2 of the notes to our condensed consolidated
financial statements includes a summary of all significant accounting policies
and methods used in the preparation of our financial statements, the most
critical of which are:

Accounting for stock based compensation

Callisto has adopted Statement of Financial Accounting Standard No. 123,
"Accounting for Stock-Based Compensation" ("SFAS 123"). As provided for by SFAS
123, Callisto has also elected to continue to account for its stock-based
compensation programs according to the provisions of Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees ("APB 25")."
Accordingly, compensation expense has been recognized to the extent of employee
or director services rendered based on the intrinsic value of compensatory
options or shares granted under the Plan. Callisto has also adopted the
disclosure provisions required by SFAS 123, as amended by SFAS 148, "Accounting
for Stock-Based Compensation - Transition and Disclosure, an amendment to FASB
Statement No. 123."



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<PAGE>

Research and development:

Callisto is engaged in various pharmaceutical patent and research and
development projects under arrangements with various research facilities and
universities whereby certain minimum annual fees and royalty payments are
required to be paid. Research and development costs are expensed as incurred and
include mainly expenditures made to research facilities and universities, as
well as legal and professional fees associated with filing and maintaining
Callisto's patent and license rights to its proposed products.

Results of Operations

Three Months ended June 30, 2003 and June 30, 2002.

We had no revenues during the three months ended June 30, 2003 and 2002 because
we do not have any commercial biopharmaceutical products, and we do not expect
to have such product for several years, if at all.

Research and development expenses increased 100% to $231,532 for the three
months ended June 30, 2003 from $115,735 for the same period in 2002. The
increase was primarily the result of the Synergy merger discussed elsewhere in
this report. The results of operations of Synergy for the period May 1, 2003
through June 30, 2003 are included in the consolidated statement of operations
for the quarter ended June 30, 2003, as well as the consolidated balance sheet
as of June 30, 2003. The increase in research and development expense was
primarily attributable to higher payroll as we retained two key Synergy
executive staff scientists subsequent to the Synergy merger. Travel expenses
also increased in the period as a result of travel associated with administering
and managing the contractors and vendors involved in preparing the IND
(Investigational New Drug) application for Atiprimod.

In addition we purchased in-process research and development cost as a result of
the Synergy merger valued at $6,833,454. This cost (non-cash) was charged to
expense during the quarter ended June 30, 2003 and there was no such cost during
the quarter ended June 30, 2002. All of our product programs are in the early
stage of development and we can not make estimates of the potential cost for any
program to be completed or the time it will take to complete the project.

General and administrative expenses for the three months ended June 30, 2003
were $403,166, a decrease of approximately 28% from $559,408 for the three
months ended June 30, 2002. During the quarter ended June 30, 2002 we incurred a
charge of $400,000 associated with the purchase of Webtronics, Inc., a public
company with limited operations, where no such expenses were incurred in quarter
ended June 30, 2003. This decrease was partially offset by higher legal,
accounting and professional fees related to various regulatory filings related
to the Synergy merger during the quarter ended June 30, 2003. In addition
facilities and related office overhead increased as we assumed the short term
lease obligation of Synergy on its New Jersey operations. It is anticipated that
Synergy operations will be consolidated into our expanded New York City office
during the third quarter 2003 with no material savings or increase in total
facilities cost, however a rent deposit of $44,746 was incurred and capitalized
during the three months ended June 30, 2003 to secure the additional space.


Net loss for the three months ended June 30, 2003 was $9,898,139 compared to a
net loss of $759,120 incurred for the three months ended June 30, 2002. The
increase in the net loss is the result of higher operating expenses as presented
in more detail above, plus $2,429,987 of stock based compensation expense
compared to $83,977 recorded in the quarter ended June 30, 2002.

Six Months ended June 30, 2003 and June 30, 2002.

We had no revenues during the six months ended June 30, 2003 and 2002 because we
do not have any commercial biopharmaceutical products, and we do not expect to
have such product for several years, if at all.

Research and development expenses increased approximately 4% to $308,986 for the
six months ended June 30, 2003 from $298,527 for the same period in 2002. The
increase in research and development expense was primarily attributable to
expenses associated with administering and managing the contractors and vendors
who will be involved in preparing the IND (Investigational New Drug) application
for Atiprimod during the third quarter of 2003.

In addition we purchased in-process research and development cost as a result of
the Synergy merger valued at $6,833,454. This cost was charged to expense during
the six months ended June 30, 2003 and there was no such cost during the same
period ended June 30, 2002. All of our product programs are in the early stage
of development and we can not make estimates of the potential cost for any
program to be completed or the time it will take to complete the project.


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<PAGE>

General and administrative expenses for the six months ended June 30, 2003 were
$490,563, a decrease of approximately 21% from $618,831 for the six months ended
June 30, 2002. The decrease was primarily due to the $400,000 charge in the
three months ended June 30, 2002 discussed above, partially offset by higher
legal, accounting and professional fees related to various regulatory filings
related to the Synergy merger in 2003. In addition facilities and related office
overhead increased as we assumed the short term lease obligation of Synergy on
its New Jersey operations. A rent deposit of $44,746 was incurred and
capitalized during the six months ended June 30, 2003 to secure the additional
space.

Net loss for the six months ended June 30, 2003 was $10,939,552 compared to a
net loss of $1,085,312 incurred for the six months ended June 30, 2002. The
increase in the net loss is primarily the result of the purchased in process
research and development cost discussed above plus $3,306,550 of stock based
compensation expense recorded during the six months ended June 30, 2003, as
compared to $167,954 recorded during the same period ended June 30, 2002.

Liquidity and Capital Resources

As of June 30, 2003 we had $1,269,257 in cash and cash equivalents, compared to
$2,223,462 as of December 31, 2002. This decrease in cash of $954,205 during the
six months ended June 30, 2003 was principally the result of $946,999 used in
operating activities. Our working capital as of June 30, 2003 totaled $675,757
as compared to $1,808,652 as of December 31, 2002. This decrease of $1,132,895
was primarily due to the cash used in operating activities, plus the assumption
of the net liabilities of Synergy as a result of the merger discussed elsewhere
in this report.

Our working capital requirements will depend upon numerous factors including but
not limited to the nature, cost and timing of: pharmaceutical research and
development programs; pre-clinical and clinical testing; obtaining regulatory
approvals; technological advances and our ability to establish collaborative
arrangements with research organizations and individuals needed to commercialize
our products

Our capital resources will be focused primarily on the clinical development and
regulatory approval of Atiprimod for multiple myeloma and bone resorption
disease, a major complication associated with multiple myeloma disease. We plan
to enter Atiprimod in a safety and proof of principle clinical trial in multiple
myeloma patients. The IND (Investigative New Drug) application for Phase I/IIa
of these trials is planned to be filed with the FDA during the third quarter of
2003.

On August 28, 2002, our wholly-owned subsidiary, Synergy Pharmaceuticals Inc.
entered into a license agreement with AnorMED Inc. to license Atiprimod from
AnorMED. The license agreement provides for milestone payments and royalties on
net sales. Commencing on January 1, 2004 and on January 1 of each subsequent
year we are obligated to pay AnorMED a maintenance fee of $200,000.

Our product development efforts are thus in their early stages and we cannot
make estimates of the costs or the time it will take to complete. The risk of
completion of any program is high because of the long duration of clinical
testing, extended regulatory approval and review cycles and uncertainty of the
costs. Net cash inflows from any products developed make take several years to
achieve. We could however receive grants, contracts or technology licenses in
the short-term. The amount and timing of these inflows, if any, is not known.

We are also in the process of raising additional capital through a private
placement of common stock which began in July 2003. There can be no assurance we
will be successful in these fund raising efforts.

Recent Developments

In addition to the merger described in Part II, Item 2 of this Report, on May
20, 2003, we effected a name change from Webtronics, Inc. to Callisto
Pharmaceuticals, Inc. and we changed our corporate domicile from Florida to
Delaware.

On June 13, 2003, we entered into employment agreements with Gary S. Jacob,
Ph.D., our Chief Executive Officer and Chief Scientific Officer and Kunwar
Shailubhai, Ph.D., our Executive Vice President and Head of Research and
Development. Each of their employment agreements is for a term of 18 months
beginning June 13, 2003 and is automatically renewable for successive one year
periods at the end of the term. Dr. Jacob's salary is $225,000 per year and he
is eligible to receive a cash bonus of up to 15% of his salary per year. Dr.
Jacob received a grant of 500,000 stock options which vest over a three year
period and are exercisable at $1.50 per share. Dr. Shailubhai's salary is
$170,000 per year and he is eligible to receive a cash bonus of up to 15% of his
salary per year. Dr. Shailubhai received a grant of 25,000 stock options which
are fully vested and have an exercise price of $1.50 per share. Dr. Shailubhai
also received a grant of 325,000 stock options which vest over a three year
period and are exercisable at $1.50 per share.


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<PAGE>

ITEM 3. Controls and Procedures

Our Chief Executive Officer and Principal Financial Officer, based on the
evaluation of our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended)
required by paragraph (b) of Rule 13a-15 or Rule 15d-15, as of the end of the
period covered by this report, have concluded that our disclosure controls and
procedures were effective to ensure the timely collection, evaluation and
disclosure of information relating to our company that would potentially be
subject to disclosure under the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated there under.

There were no significant changes in our internal controls over financial
reporting that could significantly affect internal controls subsequent to June
30, 2003, except that we recently implemented additional controls and procedures
designed to better monitor and record capital transactions including stock based
compensation transactions.

                           PART II. OTHER INFORMATION

Item 2. Changes in Securities and Legal Proceedings.

(c) On April 30, 2003, pursuant to an Agreement and Plan of Merger dated March
10, 2003, as amended April 4, 2003, Synergy Acquisition Corp., our wholly-owned
subsidiary merged into Synergy Pharmaceuticals Inc. and Callisto Acquisition
Corp., our wholly-owned subsidiary merged into the corporate predecessor of
Callisto Research Labs, LLC (the "Merger"). As a result of the Merger, Callisto
Research Labs, LLC and Synergy Pharmaceuticals Inc. are wholly-owned
subsidiaries of our company. In the Merger we issued 17,318,994 shares of our
common stock in exchange for outstanding Callisto Research Labs, LLC common
stock and an additional 4,395,684 shares in exchange for outstanding Synergy
Pharmaceuticals Inc. common stock. The issuance of shares was done in accordance
with Regulation D under the Securities Act of 1933, as amended. In connection
therewith, a filing on Form D with the Securities and Exchange Commission was
made on May 15, 2003.

Item 6. Exhibits and Reports on Form 8-K



   (a)     Exhibits

   10.1    Employment Agreement dated June 13, 2003 by and between Callisto
           Pharmaceuticals, Inc. and Gary S. Jacob *

   10.2    Employment Agreement dated June 13, 2003 by and between Callisto
           Pharmaceuticals, Inc. and Kunwar Shailubhai *

   31.1    Certification of Chief Executive Officer required by Rule
           13a-14(a)/15d-14(a) under the Exchange Act

   31.2    Certification of Principal Financial Officer required by Rule
           13a-14(a)/15d-14(a) under the Exchange Act

   32.1    Certification of Chief Executive Officer pursuant to 18 U.S.C.
           Section 1350, as adopted pursuant to Section 906 of the
           Sarbanes-Oxley Act of 2002.

   32.2    Certification of Principal Financial Officer pursuant to 18 U.S.C.
           Section 1350, as adopted pursuant to Section 906 of the
           Sarbanes-Oxley Act of 2002.

    *      Previously filed

   (b)     Reports on Form 8-K.



On May 15, 2003, we filed a Form 8-K describing a change in control of the
registrant and the acquisition of Synergy Pharmaceuticals, Inc.

On May 28, 2003, we filed a Form 8-K describing a press release announcing our
change of corporate domicile from Florida to Delaware and change of corporate
name from Webtronics, Inc. to Callisto Pharmaceuticals, Inc.



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<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                         CALLISTO PHARMACEUTICALS, INC.
                                  (Registrant)





        Date: December 1, 2003                    /s/ Gary S. Jacob
                                                  -----------------
                                                    Gary S. Jacob
                                           Acting Chief Executive Officer

        Date: December 1, 2003                 /s/ Bernard F. Denoyer
                                               ----------------------
                                                 Bernard F. Denoyer
                                             Principal Financial Officer



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