Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events

Subsequent Events

14. Subsequent Events

On October 15, 2012, Synergy entered into Amendment No. 1 to the Agreement and Plan of Merger, dated July 20, 2012 with Callisto Pharmaceuticals, Inc., a Delaware corporation.  Pursuant to the Amendment, the parties have agreed to, among other things, (i) increase the exchange ratio from .17 to .1799 and (ii) change the lock-up provision such that each share of Company common stock received in connection with the merger shall be subject to a lock-up beginning on the effective date of the merger and ending on the earlier of(i) twenty-four (24) months after such date, (ii) a Change in Control (as defined in the Merger Agreement), or (iii) written consent of the Company, at the Company’s sole discretion, provided the Company’s consent shall apply to all shares of the Company’s common stock issued pursuant to the merger.

As Callisto does not meet the definition of a business under ASC 805, the merger will not be accounted for as a business combination.  The merger is expected to be accounted for as a recapitalization of Synergy, affected through exchange of Callisto shares for Synergy shares, and the cancellation of Synergy shares held by Callisto. The excess of Synergy shares issued to Callisto shareholders over the Synergy shares held by Callisto is the result of a discount associated with the restricted nature of the Synergy shares to be received by Callisto shareholders.  Therefore, considering this discount, the share exchange has been determined to be equal from a fair value stand point.  Upon the effective date of the Merger, Synergy will account for the merger by assuming Callisto’s net liabilities.  Synergy’s financial statements will reflect the operations of Callisto prospectively and will not be restated retroactively to reflect the historical financial position or results of operations of Callisto.

On June 21, 2012, Synergy entered into a controlled equity sales agreement with a placement agent (“Agent”) and agreed that Synergy may issue and sell through the Agent, up to $30,000,000 of common stock of the Company. From October 8, 2012 through October 26, 2012, Synergy sold 299,911 shares of common stock with gross proceeds of $1,423,491, at an average selling price of $4.74 per share. Selling agent fees totalled $42,705 on these sales.