SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                       -----------------------------------


                                   FORM 10-QSB


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

                  For the quarterly period ended March 31, 2004

                                       or

|_|  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 0-29222


                             AVAX TECHNOLOGIES, INC.
        (Exact name of small business issuer as specified in its charter)

            DELAWARE                                              13-3575874
(State or other jurisdiction of                                (I.R.S. Employer
 incorporation or organization)                              Identification No.)

  9200 INDIAN CREEK PARKWAY, SUITE 200
           OVERLAND PARK, KS                                        66210
(Address of principal executive offices)                         (Zip Code)


       Registrant's telephone number, including area code: (913) 693-8491

       Securities registered under Section 12(b) of the Exchange Act: NONE

         Securities registered under Section 12(g) of the Exchange Act:

                     COMMON STOCK, PAR VALUE $.004 PER SHARE

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  |X| Yes   |_| No

As of May 9, 2004, 18,418,471 shares of the Registrant's common stock, par value
$.004 per share, were outstanding.

Documents incorporated by reference:  None.

Transitional Small Business Disclosure Format:  |_| Yes  |X| No


                                     Page 1
<PAGE>


                             AVAX TECHNOLOGIES, INC.

                                TABLE OF CONTENTS

                                                                           PAGE
                                                                           ----
PART I - FINANCIAL INFORMATION
------------------------------

   Item 1.  Financial Statements
            Consolidated BALANCE SHEETS -- As of December 31, 2003
            and March 31, 2004 (Unaudited)................................Page 3
            Consolidated STATEMENTS OF OPERATIONS AND COMPREHENSIVE
              LOSS (Unaudited) -- For the Three Months Ended
              March 31, 2004 and 2003 and for the Period from
              January 12, 1990 (Incorporation) through
              March 31, 2004..............................................Page 4
            Consolidated STATEMENTS OF CASH FLOWS (Unaudited) --
              For the Three Months Ended March 31, 2004 and 2003
              and for the Period from January 12, 1990
              (Incorporation) through March 31, 2004......................Page 5
            Notes to Consolidated Financial Statements....................Page 7

   Item 2.  Management's Discussion and Analysis of Financial
            Condition and Plan of Operations.............................Page 11

   Item 3.  Controls and Procedures......................................Page 15


PART II - OTHER INFORMATION
---------------------------

   Item 2.  Changes in Securities and Use of Proceeds....................Page 16

   Item 4.  Submission of Matters to a Vote of Security Holders..........Page 16

   Item 6.  Exhibits and Reports on Form 8-K.............................Page 16

   Signatures............................................................Page 17





                                     Page 2
<PAGE>


PART I - FINANCIAL INFORMATION
------------------------------

ITEM 1. FINANCIAL STATEMENTS
        --------------------

                    AVAX Technologies, Inc. and Subsidiaries
                          (A DEVELOPMENT STAGE COMPANY)
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                   DECEMBER 31,      MARCH 31,
                                                                      2003             2004
                                                                  -----------------------------
                                                                                    (UNAUDITED)
<S>                                                               <C>              <C>
ASSETS
Current assets:
   Cash and cash equivalents                                      $  1,125,960     $    658,874
   Marketable securities                                               262,744          262,424
   Accounts receivable                                                  52,542           58,289
   Inventory                                                            48,777           10,355
   Prepaid expenses and other current assets                           270,565          270,704
                                                                  -----------------------------
Total current assets                                                 1,760,588        1,260,646
Property and equipment, at cost                                      3,373,703        3,456,254
   Less accumulated depreciation                                     2,047,907        2,135,544
                                                                  -----------------------------
Net property and equipment                                           1,325,796        1,320,710
Research and development tax credit receivable                         345,426          336,141
Goodwill                                                               188,387          188,387
                                                                  -----------------------------
Total assets                                                      $  3,620,197     $  3,105,884
                                                                  =============================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
   Accounts payable and accrued liabilities                       $  1,699,398     $  1,981,147
   Deferred revenue                                                         --          178,251
   Loans payable - Convertible notes (Face amount $950,000)            837,355          911,635
   Loans payable - ANVAR grant payable                                 345,672          337,302
                                                                  -----------------------------
Total current liabilities                                            2,882,425        3,408,335
Stockholders' equity (deficit):
   Preferred stock, $.01 par value:
     Authorized shares - 5,000,000, including
       Series B - 300,000 shares and Series C - 120,000 shares
     Series B convertible preferred stock:
       Issued and outstanding shares - 0                                    --               --
     Series C convertible preferred stock:
       Issued and outstanding shares - 36,750 (liquidation
         preference - $3,675,000)                                          367              367
   Common stock, $.004 par value:
     Authorized  shares - 50,000,000 at December 31, 2003
       and 150,000,000 at March 31, 2004
     Issued and outstanding shares -18,080,071 at
        December 31, 2003 and 18,418,471 at March 31, 2004              72,320           73,674
   Additional paid-in capital                                       65,583,434       65,630,471
   Subscription receivable                                                (422)            (422)
   Accumulated other comprehensive income                              406,079          399,065
   Deficit accumulated during the development stage                (65,324,006)     (66,405,606)
                                                                  -----------------------------
Total stockholders' equity (deficit)                                   737,772         (302,451)
                                                                  -----------------------------
Total liabilities and stockholders' equity (deficit)              $  3,620,197     $  3,105,884
                                                                  =============================
</TABLE>

SEE ACCOMPANYING NOTES.


                                     Page 3
<PAGE>


                    AVAX Technologies, Inc. and Subsidiaries
                          (A DEVELOPMENT STAGE COMPANY)
          Consolidated Statements of Operations and Comprehensive Loss
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                 PERIOD FROM
                                                                                              JANUARY 12, 1990
                                                                                               (INCORPORATION)
                                                                                                   THROUGH
                                                              THREE MONTHS ENDED MARCH 31,        MARCH 31,
                                                                  2003             2004             2004
                                                             -------------------------------------------------
<S>                                                          <C>              <C>              <C>
Revenue:
    Gain from sale of the Product                            $         --     $         --     $  1,951,000
    Product and contract service revenue                          228,615          347,703        2,702,987
                                                             -------------------------------------------------
Total revenue                                                     228,615          347,703        4,653,987


Costs and expenses:
  Manufacturing, research and development                         786,555          849,299       41,168,813
   Acquired in process research and development                        --               --        4,420,824
   Write down of acquired intellectual property and other
     intangibles                                                       --               --        3,416,091
   Amortization of acquired intangibles                                --               --          715,872
  Selling, general and administrative                             556,563          495,336       26,338,865
                                                             -------------------------------------------------
Total operating loss                                           (1,114,503)        (996,932)     (71,406,478)
Other income (expense):
   Interest income                                                  4,413            1,324        5,628,589
   Interest expense                                                    --          (85,992)        (767,065)
   Other, net                                                       5,600               --          143,193
                                                             -------------------------------------------------
Total other income (expense)                                       10,013          (84,668)       5,004,717
                                                             -------------------------------------------------
Loss from continuing operations                                (1,104,490)      (1,081,600)     (66,401,761)
Loss from discontinued operations                                      --               --           (3,845)
                                                             -------------------------------------------------
Net loss                                                       (1,104,490)      (1,081,600)     (66,405,606)
Amount payable for liquidation preference                              --               --       (1,870,033)
                                                             -------------------------------------------------

Net loss attributable to common stockholders                 $ (1,104,490)    $ (1,081,600)    $(68,275,639)
                                                             =================================================

Loss per common share - basic and diluted                    $      (0.07)    $      (0.06)
                                                             =============================

Weighted average number of common shares outstanding           16,541,621       18,249,271
                                                             =============================

Net loss                                                     $ (1,104,490)    $ (1,081,600)    $(66,405,606)
Foreign currency translation gain (loss)                           32,242           (7,014)         399,065
                                                             -------------------------------------------------
Net comprehensive loss                                       $ (1,072,248)    $ (1,088,614)    $(66,006,541)
                                                             =================================================
</TABLE>

SEE ACCOMPANYING NOTES.




                                     Page 4
<PAGE>


                    AVAX Technologies, Inc. and Subsidiaries
                          (A DEVELOPMENT STAGE COMPANY)
                      Consolidated Statements of Cash Flows
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                     PERIOD FROM
                                                                                                   JANUARY 12, 1990
                                                                                                    (INCORPORATION)
                                                                    THREE MONTHS ENDED MARCH 31,   THROUGH MARCH 31,
                                                                      2003              2004            2004
                                                                 ---------------------------------------------------
<S>                                                              <C>               <C>               <C>
OPERATING ACTIVITIES
Net loss                                                         $  (1,104,490)    $  (1,081,600)    $ (66,405,606)
Adjustments to reconcile net loss to net cash used in
   operating activities:
     Depreciation and amortization                                     125,322           101,942         3,885,073
     Amortization of discount on convertible notes payable                  --            74,280           104,135
     Amortization of deferred gain on joint venture                         --                --        (1,805,800)
     Equity in net loss of joint venture                                    --                --         1,703,763
     Extraordinary gain related to negative goodwill on
       consolidated subsidiary                                              --                --          (186,295)
     Cumulative effect of change in accounting                              --                --          (902,900)
     Compensatory stock issue                                               --                --            25,000
     Minority interest in net loss of consolidated subsidiary               --                --           (80,427)
     Acquired in-process research and development charge                    --                --         4,420,824
     Write down of acquired intellectual property and other
       intangibles                                                          --                --         3,416,091
     Gain from sale of the Product                                          --                --        (1,951,000)
     Gain on sale of intellectual property                                  --                --              (787)
     Accretion of interest on common stock receivable                       --                --          (449,000)
     Accretion of interest on amount payable to preferred
       stockholders and former officer                                      --                --           449,000
     Loss (gain) on sale or abandonment of furniture and
       equipment                                                        (5,600)               --           246,254
     Issuance of common stock or warrants for services                      --                --           423,289
     Changes in operating assets and liabilities:
       Accounts receivable                                              65,016            (7,193)           59,826
       Inventory                                                        (5,697)           38,165            30,379
       Research and development tax credit receivable                  (19,769)              944           (30,065)
       Prepaid expenses and other current assets                        55,146            (3,644)          (55,569)
       Accounts payable and accrued liabilities                     (1,333,176)          291,876           886,753
       Deferred revenue                                                (63,966)          182,622           182,622
       Amount payable to former officer                                     --                --            80,522
                                                                 ---------------------------------------------------
Net cash used in operating activities                               (2,287,214)         (402,608)      (55,953,918)

INVESTING ACTIVITIES
Purchase of marketable securities                                     (348,152)         (525,268)     (351,552,865)
Proceeds from sale of marketable securities                            347,452           525,588       344,173,969
Proceeds from sale of short-term investments                                --                --         7,116,472
Purchases of furniture and equipment                                   (28,465)         (103,664)       (3,154,860)
Proceeds from sale of furniture and equipment                            5,600                --            51,119
Organization costs incurred                                                 --                --          (622,755)
Cash acquired in acquisition of control of joint venture                    --                --           991,634
                                                                 ---------------------------------------------------
Net cash used in investing activities                                  (23,565)         (103,344)       (2,997,286)
</TABLE>


                                     Page 5
<PAGE>


                    AVAX Technologies, Inc. and Subsidiaries
                          (A DEVELOPMENT STAGE COMPANY)
                Consolidated Statements of Cash Flows (continued)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                              PERIOD FROM
                                                                                            JANUARY 12, 1990
                                                                                             (INCORPORATION)
                                                           THREE MONTHS ENDED MARCH 31,     THROUGH MARCH 31,
                                                              2003             2004              2004
                                                           -------------------------------------------------
<S>                                                        <C>              <C>              <C>
FINANCING ACTIVITIES
Proceeds from issuance of notes payable to related
   party                                                   $         --     $         --     $    957,557
Principal payments on notes payable to related party                 --               --         (802,000)
Proceeds from loans payable and the related issuance of
   warrants                                                          --               --        2,314,000
Principal payments on loans payable                                  --               --       (1,389,000)
Payments for fractional shares from reverse splits and
   preferred stock conversions                                       --               --              (76)
Financing costs incurred                                             --               --          (90,000)
Payments received on subscription receivable                         --               --            4,542
Shareholder capital contribution                                     --               --           93,637
Proceeds received from exercise of stock warrants                    --           48,391           76,892
Elimination of the consolidated accounting
   treatment for joint venture                                       --               --       (2,511,701)
Capital contribution through sale of interest in
   consolidated subsidiaries                                         --               --        2,624,000
Net proceeds received from issuance of preferred
   and common stock                                                  --               --       57,972,641
                                                           -------------------------------------------------
Net cash provided by financing activities                            --           48,391       59,250,492
                                                           -------------------------------------------------

Effect of exchange rate changes on cash                          32,242           (9,525)         359,586
                                                           -------------------------------------------------

Net increase (decrease) in cash and cash equivalents         (2,278,537)        (467,086)         658,874

Cash and cash equivalents at beginning of period              3,840,406        1,125,960               --

                                                           -------------------------------------------------
Cash and cash equivalents at end of period                 $  1,561,869     $    658,874     $    658,874
                                                           =================================================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid                                              $         --     $         --     $    197,072
                                                           =================================================
Non-cash activity (1 & 2)                                  $         --     $         --     $    167,500
                                                           =================================================

(1) Conversion of accounts payable into notes
    payable                                                $         --     $         --     $     25,000
                                                           =================================================
(2) Common stock warrants issued in
    conjunction with convertible notes payable             $         --     $         --     $    142,500
                                                           =================================================
</TABLE>

SEE ACCOMPANYING NOTES.


                                     Page 6
<PAGE>


                    AVAX TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
             Notes to Consolidated Financial Statements (UNAUDITED)
               For the Three Months ended March 31, 2004 and 2003


1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

AVAX Technologies, Inc. (the Company) is a development stage biopharmaceutical
company.

In November 1995, the Company sold its leading product under development, an
over-the-counter nutritional, dietary, medicinal and/or elixorative food
supplement or drug and all of the related patents and other intellectual
property (the Product).

Also in November 1995, the Company entered into a license agreement with Thomas
Jefferson University (TJU) to develop, commercially manufacture and sell
products embodying immunotherapeutic vaccines for the treatment of malignant
melanoma and other cancers (the Invention).

In December 1996, the Company entered into a license agreement with Rutgers
University (Rutgers) to develop, commercially manufacture and sell products
embodying a series of compounds for the treatment of cancer and infectious
diseases (the Compounds).

In February 1997, the Company entered into a license agreement with Texas A&M to
develop, commercially manufacture and sell products embodying a series of
compounds for the treatment of cancer (the Texas A&M Compounds).

In November 1999, the Company entered into a definitive joint venture agreement
with Australia Vaccine Technologies ("AVT") (formerly Neptunus International
Holdings Limited), a pharmaceutical group in Australia, under the subsidiary
name, AVAX Holdings Australia Pty Limited ("AVAX Holdings"). Under the joint
venture agreement, AVAX Holdings, through its affiliated entities AVAX Australia
Pty Limited and AVAX Australia Manufacturing Pty Limited ("the Joint Venture
Companies"), was organized for the purpose of manufacturing and marketing M-Vax,
an immunotherapy for the post-surgical treatment of Stage 3 and 4 melanoma, in
Australia and New Zealand. In January 2002, the Joint Venture Companies
repurchased 90% of AVT's interest in the two joint venture companies resulting
in AVAX owning a 95% interest in the net equity of both joint venture companies.
The Company was seeking but was unable to obtain a timely governmental
reimbursement for the costs of treatment with the AC Vaccine in Australia, and
decided to discontinue operations in Australia in order to focus the cash
resources of the Company on its U.S. and European operations. In September 2002,
the Company announced that it would be discontinuing its operations in Australia
and in December 2002 the Company completed the liquidation of its Australian
subsidiary.

In August 2000, the Company completed its acquisition of GPH, S.A. ("Holdings")
and Genopoietic S.A. ("Genopoietic") each a French societe anonyme based in
Paris, France. Holdings and Genopoietic were organized in 1993 to develop gene
therapy applications and market gene therapy treatments for cancer. The Company
currently performs contract manufacturing and research activities at its
facilities located in Lyon.

In February 2004, the Company, through its wholly owned subsidiary Genopoietic,
entered into a joint manufacturing alliance agreement with OPISODIA SAS ("OPI")
for the joint manufacture of each company's products and for the provision of
contract manufacturing services to other companies. Pursuant to the contract
Genopoietic manages the activities of the joint manufacturing alliance. See
Note 3.

BASIS OF PRESENTATION

The financial information as of March 31, 2004 and for the three-month periods
ended March 31, 2004 and 2003 contained herein is unaudited. The Company
believes this information has been prepared in accordance with accounting
principles generally accepted in the United States for interim financial
information and Article 10 of Regulation S-X. The Company also believes this
information includes all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows for the periods then ended. The results of operations
for the three-month periods ended March 31, 2004 and 2003 are not necessarily
indicative of the results of operations that may be expected for the entire
year.

The accompanying financial statements and the related notes should be read in
conjunction with the Company's audited financial statements for the years ended
December 31, 2003 and 2002 included in the Company's annual report on Form
10-KSB.


                                     Page 7
<PAGE>


                    AVAX TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)


The Company expects that it will need to raise capital immediately to fund
planned operations and product development. Although the Company has announced
definitive agreements for the sale of its common stock on May 19, 2004 (see
note 7), after receipt of these funds, the Company's operations will continue to
require additional funding to continue fully its development plans for its
technologies. There can be no assurance that the Company will be able to raise
sufficient capital to fund these activities. The inability to secure additional
funding could have a material adverse effect on the Company, including the
possibility that the Company could have to curtail its operations significantly
or cease operations altogether.

The Company's business is subject to significant risks consistent with
biotechnology companies that are developing novel products for human therapeutic
use. These risks include, but are not limited to, uncertainties associated with
research and development of novel drug and biotechnology products, ensuring
access to capital, obtaining and enforcing patents, receiving regulatory
approval from competent governmental authorities in the markets of interest, and
competing with other biotechnology and pharmaceutical companies. However, there
can be no assurance that it will successfully develop any product or, if it
does, that the product will generate any or sufficient revenues.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of AVAX
Technologies, Inc., and its subsidiaries. All significant intercompany balances
and transactions have been eliminated.

In 1999, the Joint Venture Companies were included in the consolidated financial
statements of the Company. Due to additional investment by AVT in the Joint
Venture Companies in 2000, whereby AVT acquired a 50% ownership interest, and
AVT's substantial and active involvement in the operations of the Joint Venture
Companies late in 2000, the Company no longer exercised control over the Joint
Venture Companies. As such, the Joint Venture Companies accounts were not
included in the consolidated financial statements of the Company for the years
ended December 31, 2001 and 2000. During January 2002, the Joint Venture
Companies repurchased 90% of AVT's interest in each company in exchange for cash
consideration of approximately $1,860,000 AUD (approximately $970,000 US). This
resulted in AVAX Holdings owning a 95% interest in the Joint Venture Companies
as of the date of the transaction, giving AVAX Holdings control of the companies
and requires that the results of AVAX Holdings and its majority owned
subsidiaries be consolidated into the Company's consolidated results.

REVENUE

The Company's revenues are related to the provision of contract services and
through the sale of its product, the AC Vaccine Technology for the treatment of
melanoma. Contract service revenue is recognized in installments based upon the
contractual agreement entered into with clients. Product revenues represent fees
received or payable to the Company related to the manufacture and sale of the
vaccine.

CONVERSION OF WARRANTS

In the first quarter of 2004, holders of warrants to purchase 338,400 shares of
common stock, which were issued in connection with the December 2003 bridge
financing, elected to exercise these warrants. Upon exercise of the warrants,
the Company issued 338,400 in exchange for cash in the amount of $48,391.


2. JOINT VENTURE AGREEMENT

In November 1999, the Company's subsidiary AVAX Australia Holdings, Pty Limited
entered into a joint venture agreement with AVT related to commercialization and
sale of the AC Vaccine Technology in Australia and New Zealand. Pursuant to the
joint venture agreement, the Company created two operating companies, AVAX
Australia Pty Limited and AVAX Australia Manufacturing Pty Limited, and AVT
contributed $4 million Australia Dollars giving them a 20% equity interest in
the joint venture.

During 2000, AVT, through a subsidiary, contributed an additional $6 million
Australian Dollars, raising AVT's total ownership percentage in the joint
venture to 50%. Due to the ownership percentage maintained by AVT and their
substantial and active involvement in the management and decision making
processes of the joint venture, the Company determined that it no longer
maintained a controlling interest in the operations of the joint venture.
Accordingly, the Company began to account for its investment in the joint
venture using the equity method of accounting in late 2000.


                                     Page 8
<PAGE>


                    AVAX TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)


At the time of the change from the consolidation method to the equity method,
there existed a difference between the Company's cost of its 50% investment in
the joint venture and the net book value of the underlying assets. This
difference, which amounted to approximately $2.7 million, resulted from the
Company's contribution of technology and related licensing rights, which had
little recorded value, and AVT's cash investments of $10 million Australian
Dollars. The resulting deferred gain was being amortized to income over three
years.

During January 2002, Joint Venture Companies repurchased 90% of AVT's
outstanding shares for cash consideration of approximately $1.8 million
Australia Dollars. After closing the transaction AVAX Holdings owns a 95% equity
interest in the Joint Venture Companies.

AVAX accounted for its investment in the Australian Joint Venture Companies
using the equity method up through the date of the repurchase of AVT shares. At
the date of that transaction, the Company had recorded on its books an
investment in joint venture (net of unamortized deferred gain) of approximately
$12,282. As a result of the transaction, AVAX's 95% equity in the Joint Venture
Companies had a book value of approximately $1,101,400. Of this difference,
$902,900, which represented the deferred gain as of December 31, 2001, was
recognized as a cumulative effect of change in accounting in the three months
ended March 31, 2002. The remaining difference of $186,295 was recognized as an
extraordinary gain related to negative goodwill in the consolidated subsidiary.
As discussed further below, these amounts are both included in the loss from
discontinued operations in the 2002 consolidated statement of operations.

In September 2002 the Company made the decision to discontinue the operations of
the Joint Venture Companies. With the adoption of Statement of Financial
Accounting Standards (SFAS) No. 144, the Australian operations are required to
be accounted for and presented in the accompanying financial statements as a
discontinued operation.

The Company liquidated, through sale, all of the long-lived assets of the joint
venture companies prior to December 31, 2002. Proceeds received on the sale of
the assets of the Company at the time were $40,919 while the cost basis of the
assets was $247,210, resulting in a net loss on the disposition of the assets of
$206,291, which is included in the loss from discontinued operations.

On December 13, 2002 a liquidator was appointed to oversee the dissolution of
the joint venture companies. The combined assets of the joint venture companies
included in the March 31, 2004 consolidated balance sheet consists of cash of
$53,649 and recorded liabilities of $88,341. Other long-term liabilities related
to leasehold obligations were not recorded as the obligations will not be
required to be met pursuant to the liquidation proceedings.


3. CONTRACTUAL JOINT MANUFACTURING ALLIANCE

In February 2004 we entered into a manufacturing alliance with OPI that will
provide approximately $1,500,000 (US) funding per year from OPI for our combined
facilities for the next two years, which are under the management of
Genopoietic, our French subsidiary. Proceeds received as a result the alliance
from OPI for the three months ended March 31, 2004 were $415,984 and were
recorded as revenue to the extent the proceeds received were equal to the amount
of expenses allocable to OPI, $334,158, pursuant to the contract. The remaining
$81,826 was recorded in deferred revenue in the accompanying consolidated
balance sheet. The allocation of the expenses is based upon the allocation of
effort of the employees of the alliance in the manufacture of each Company's
products.





                                     Page 9
<PAGE>


                    AVAX TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)


4. STOCK BASED COMPENSATION

SFAS No. 123, "Accounting for Stock-Based Compensation," prescribes accounting
and reporting standards for all stock-based compensation plans, including
employee stock options, restricted stock, employee stock purchase plans and
stock appreciation rights. SFAS No. 123 requires compensation expense to be
recorded (i) using the new fair value method or (ii) using existing accounting
rules prescribed by Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," (APB 25) and related interpretations, with pro forma
disclosure of what net income and earnings per share would have been had the
Company adopted the new fair value method.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the option or warrant vesting period. The effects
of applying SFAS No. 123 for pro forma disclosure are not likely to be
representative of the effects on reported net income or losses for future years.
The Company's pro forma information follows:

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED MARCH 31,
                                                             ---------------------------
                                                                2004            2003
                                                             ---------------------------
<S>                                                          <C>             <C>
Net loss as reported                                         $(1,081,600)    $(1,104,490)
Stock based compensation expense as reported                          --              --
Stock based compensation expenses under fair value method        (66,530)       (212,073)
                                                             ---------------------------
Pro forma net loss attributable to common stockholders       $(1,148,130)    $(1,316,563)
                                                             ===========================

Pro forma net loss per share                                 $     (0.06)    $     (0.08)
                                                             ===========================
</TABLE>


5. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In January 2003, the FASB issued Financial Interpretation 46, "Consolidation of
Variable Interest Entities" (FIN 46). The interpretation expands upon and
strengthens existing accounting guidance that addresses when a company should
include in its financial statements the assets, liabilities and activities of
another entity. A variable interest entity is a corporation, partnership, trust
or any other legal structure used for business purposes that either (a) does not
have equity investors with voting rights or (b) has equity investors that do not
provide sufficient financial resources for the entity to support its activities.
The interpretation requires a variable interest entity to be consolidated by a
company if that company is subject to a majority of the risk of loss from the
variable interest entity's activities or is entitled to receive a majority of
the entity's residual returns or both. The consolidation requirements of the
interpretation applied immediately to variable interest entities created after
January 31, 2003. The consolidation requirements applied to other entities in
the first fiscal year or interim period beginning after December 15, 2003. The
Company adopted the provisions of FIN 46 during the first quarter 2004 with no
impact to the consolidated financial statements.


6. LICENSE AND RESEARCH AGREEMENTS

The Company has received correspondence from Rutgers regarding their belief that
the Company is not in compliance with the license agreement and of their
position that the Company's rights pursuant to the license agreement have been
canceled. The Company is in arrears on certain payments pursuant to the research
agreement while awaiting certain correspondence and documentation that the
Company is entitled to pursuant to the agreement. In addition, certain patents
fees, which have been accrued in the consolidated balance sheet, has been
disputed by the Company for which there has been no resolution.

It is the Company's position that it has fully met its obligations under the
license and research agreements and this has been communicated to Rutgers. The
Company will continue to pursue and to protect its rights under these
agreements.


7. SUBSEQUENT EVENTS

On May 21, 2004, the Company closed the private placement of 10,000,000 shares
of the Company's common stock plus warrants to purchase 1,500,000 shares of
common stock at $0.35 per share (Series A warrants) and warrants to purchase
1,500,000 shares of common stock at $0.39 per share (Series B warrants). Gross
proceeds from the offering are $3,000,000. Pursuant to the December 2003 bridge
financing, effective May 21, 2004, $950,000 principal amount of bridge notes
plus accrued interest on the notes will be converted into approximately
7,486,000 shares of common stock.


                                    Page 10
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
        -----------------------------------------------------------------------
OPERATIONS
----------

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

In this Report, in other filings with the SEC and in press releases and other
public communications throughout the year, the Company makes, or will make
statements that plan for or anticipate the future. These forward-looking
statements include statements about the future of biotechnology products and the
biopharmaceutical industry, statements about AVAX's future business plans and
strategies, and other statements that are not historical in nature. These
forward-looking statements are based on the Company's current expectations.

Forward-looking statements may be identified by words or phrases such as
"believe," "expect," "anticipate," "should," "planned," "may," "estimated" and
"potential." The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for forward-looking statements. In order to comply with the terms
of the safe harbor, and because forward-looking statements involve future risks
and uncertainties, listed below are a variety of factors that could cause actual
results and experience to differ materially from the anticipated results or
other expectations expressed in the Company's forward-looking statements. These
factors might include:

     o    AVAX's history of operating losses, its continuing cash requirements,
          its continuing need to raise more money, and the uncertainty of the
          Company's future profitability and ability to sustain operations.

     o    Uncertainty relating to AVAX's ability to enter into contract
          manufacturing agreements that can provide sufficient revenue to cover
          all or any substantial part of the operating expenses of the Company.

     o    Uncertainty about whether the Company's products will again begin or
          successfully complete the long, complex and expensive clinical trial
          and regulatory approval process for approval of new drugs in the U.S.

     o    Uncertainty about whether the Company's AC Vaccine technology can be
          developed to produce safe, effective and commercially viable products,
          and if so, whether the Company's AC Vaccine products will be
          commercially accepted and profitable.

     o    The Company's difficulty or inability to compete with other clinical
          trials and treatment regimens for patients and clinical sites for the
          Company's planned clinical trials.

     o    The expenses, delays, uncertainties and complications typically
          encountered by development stage biopharmaceutical businesses, many of
          which are beyond the Company's control.

     o    The Company's financial and development obligations and its
          responsibility to meet requisite research funding levels under its
          license and research agreements in order to protect AVAX's rights to
          its products and technologies.

     o    Each of the other factors discussed in the Company's Annual Report on
          Form 10-KSB for the year ended December 31, 2003, under Item 1 -
          "Description of Business - Risk Factors."





                                    Page 11
<PAGE>


PLAN OF OPERATION

BACKGROUND

     In November 1995, we acquired the rights to the AC Vaccine technology
pursuant to the TJU License. Assuming we can obtain the necessary funding, we
intend to continue to be engaged in the development and commercialization of our
AC Vaccine products and our other products and compounds.

     We experienced events during 2001 that significantly affected our
operations during the year. During 2001 we received notification from the FDA
that both the M-Vax and O-Vax clinical trials were placed on clinical hold by
the FDA. In addition, the FDA conducted reviews of our manufacturing facilities
in Philadelphia that resulted in the FDA issuing a Form 483 and later a formal
Warning Letter concerning inconsistencies and non-compliance of our
manufacturing procedures and processes. From these events a cost minimization
and project prioritization plan was put into place and this continued throughout
2002. During 2002, based upon a negative reaction by authorities in Australia to
an application for product reimbursement for M-Vax, we determined that we would
be unable to support further the operation in Australia and a decision was made
to discontinue and liquidate the joint venture companies. The results of the
Australian operation, which was consolidated in our results beginning in the
first quarter of 2002, are treated as a discontinued operation and its results
are separated from our results from continuing operations.

     In 2002 we achieved a number of milestones related to our development
plans, which resulted in the filing of and acceptance by the FDA of two INDs for
a revised product format for the AC Vaccine for melanoma and ovarian cancer. Our
facilities were validated and cleared to begin processing clinical samples for
administration to patients in clinical trials. Due to a lack of funding, we
decided not to initiate the clinical trials and instituted further cost
minimization steps which resulted in additional management changes. We have also
begun to pursue more aggressively contract manufacturing relationships in France
and more recently in the United States, as noted above.

     In November 2003, we completed a bridge financing of $950,000 (before
expenses of approximately $26,250), which is providing funding for U.S.
operations (and certain of our European costs) through the first half of 2004 at
current spending levels. On May 21, 2004, we closed a private placement of our
common stock for gross proceeds of $3.0 million. In conjunction with the closing
of the private placement, the bridge notes and accrued interest thereon were
converted into shares of common stock, in accordance with the terms of the
bridge notes. We are still in the process of evaluating our plan of operations
discussed below to determine the manner in which we will utilize the net
proceeds of the offering to implement to the fullest extent possible our plan of
operations.

PLAN OF OPERATION

     We are currently engaged in contract manufacturing and the development and
commercialization of biotechnology and pharmaceutical products and technologies.
We are seeking to expand our contract manufacturing in the United States and
France for other companies engaged in pharmaceutical and gene therapy product
development programs. In 2002, we entered into a contract manufacturing
engagement at our Lyon, France facility, which was completed in November 2003.
In February 2004 we entered into a manufacturing alliance with OPI that will
provide approximately $1,500,000 (US) funding per year from OPI for our combined
facilities for the next two years, which are under the management of
Genopoietic, our French subsidiary. This funding commitment and certain other
grant revenue, tax refunds and existing cash resources in France, should be
sufficient to fund the manufacturing operations of our French facilities in 2004
but are not sufficient to fund our administrative, research and product
development programs for France outlined below. The operation of our Lyon
facility is, however, dependent upon the timely payment by OPI of its funding
commitments and our ability to collect certain accounts receivable on our books.
We continue to pursue additional contract manufacturing agreements in the U.S.
and France, which would provide us with additional revenue to fund our
operations and the costs of the facilities while we continue to explore other
options to finance our product and technology development programs. We believe
that we have developed significant expertise in producing certain biological
products for clinical and development purposes, and that this expertise can be
marketed by us to other companies and research institutions engaged in clinical
trials and product development programs. In addition, we have invested
significant amounts to establish and maintain Good Manufacturing Practices (GMP)
at our manufacturing facilities in Philadelphia, Pennsylvania and Lyon, France.
We believe that services provided by these facilities may be valuable to other
companies that wish to avoid the significant cash outlays associated with buying
or building their own GMP facilities.

     Our plan of operation is to obtain one or more additional contract
manufacturing agreements that can generate sufficient revenue to allow us to
maintain these two facilities and to cover certain of our other operating
expenses while we continue to explore financing and strategic options to develop
the AC Vaccine technology and our other product candidates. In addition to the
funds anticipated to be received pursuant to the signed security purchase
agreements announced in May 2004, we need to raise more money to continue
research, product development and clinical development in 2004 and beyond and to
pursue the


                                    Page 12
<PAGE>


manufacture and marketing of any products that we may develop.

     With the net proceeds from our private placement of common stock and
warrants closed on May 21, 2004, we intend, with the understanding additional
funding will be necessary, to launch into the following development plan. We
have, throughout 2003 and particularly in the second half of 2003 and the first
quarter of 2004, laid the foundation for a significantly more aggressive
development plan for our key technologies that we have not been able to pursue
during the past three years. The full implementation of this plan is contingent
upon additional funds beyond which we received in the May 2004 private
placement. The steps that have already been taken to implement this plan
include:

          o    Continuing development work on the AC Vaccine, particularly in
               France.

          o    Pre-BLA filing meetings and follow-up contacts with
               representatives of AFSSAPS regarding our planned filing of a BLA
               in France for the AC Vaccine.

          o    Two IND filings in France relating to the AC Vaccine for
               indications other than melanoma.

          o    Alliance with OPI to place management of their French facility
               under Genopoietic management control and to obtain funding of the
               combined facility manufacturing operations from OPI.

          o    Established and maintained at our Lyon, France facility the
               designation Establissment Pharmaceutique under applicable French
               regulations.

          o    Commenced treatment of melanoma patients on a compassionate use
               basis with our AC Vaccine.

     With this foundation, our plan of operation (assuming appropriate funding
levels) includes:

          o    A planned BLA filing in France in the second half of 2004 for the
               marketing of M-Vax in France.

          o    Commence a planned bridging study in France with AC Vaccine for
               melanoma, using the DTH endpoint, to augment the BLA filing.

          o    Commence clinical trials for the AC Vaccine in France in the
               first half of the year in multiple indications.

          o    Continuing to offer M-Vax on a compassionate use basis in Spain,
               France and certain other European countries to broaden the
               acceptance of the therapy within the oncology community.

          o    Prepare to approach the U.S. FDA with clinical data generated
               from our trials in France, plus with the planned BLA French
               submission information, to determine a plan for reinitiating our
               clinical trials in the U.S. for melanoma and ovarian cancers.

          o    Complete preclinical development and IND filings for our two
               small molecules.

         We are still in the process of evaluating our plan of operations
discussed above to determine the manner in which we will utilize the net
proceeds of the private placement to implement to the fullest extent possible
our plan of operations. The full implementation of this plan of operation is
dependent upon obtaining additional funding beyond the net proceeds of the May
2004 private placement. We believe we have the facilities, the facility managers
and technical staff, the scientific staff and consultants in place to implement
this plan. If we were able to obtain additional funding, we would undoubtedly
make a minimal number of additional key employment offers, to re-establish our
executive ranks, and possibly to add a Medical Director to our staff.

RESULTS OF OPERATIONS

Revenues recognized in the first quarter of 2004 were $347,703 versus revenues
of $228,615 for the same quarter in 2003. The increase in revenues in the
current year is due to a higher monthly revenue stream related to the
manufacturing alliance agreement with OPI plus additional revenue recognized
related to sale of the vaccine through the Company's distribution partner.

 For the first quarter of 2004, the Company's manufacturing, research and
development expenses increased 8% to $849,299 from $786,555 for the same quarter
in 2003. Expenses for the periods are broken out by region as follows:


                                    Page 13
<PAGE>


                                 THREE MONTHS ENDED MARCH 31,
                                     2003            2004
                                   ------------------------
              United States        $622,794        $343,842
              France                163,761         505,457
                                   ------------------------
                                   $786,555        $849,299
                                   ========================

In the United States the cost decrease was the result of the decision to reduce
further staff and facilities and not to continue further contract research
agreements with certain universities with which the Company has contract
research agreements. Patent costs decreased over the period due to revisions of
the Company's patent strategy.

In France, the cost increase relates to the addition of headcount and facilities
costs associated with the manufacturing alliance as well as increased costs
related to development efforts for the AC Vaccine in France.

For the first quarter of 2004, the Company's selling, general and administrative
expenses decreased approximately 11%, to $495,336 from $556,563 for the same
quarter in 2003. Expenses for the periods are broken out by region as follows:

                                 THREE MONTHS ENDED MARCH 31,
                                     2003            2004
                                   ------------------------
              United States        $496,371        $380,095
              France                 60,192         115,241
                                   ------------------------
                                   $556,563        $495,336
                                   ========================

In the United States, cost savings realized were based upon headcount reductions
and restrictions of activities due to the limited cash resources of the Company
in the first quarter of 2004.

In France, selling, general and administrative expense increased as a result of
staff increases due to the increased activities related to the joint venture and
the marketing efforts related to the AC Vaccine on a compassionate use basis in
Europe.

Interest expense for the three months ended March 31, 2004 was $85,992 compared
to no expense in the prior year. The current year expense includes interest
accrued on the face amount of the loans plus amortization of the discount on the
bridge loans issued in December 2003.

The Company anticipates that, over the next 12 months, presuming it receives
funding or some other type of capital infusion, manufacturing, research and
development expenses will increase as compared with 2003 due to planned
increases in the development activities related to the AC Vaccine and to
increased expenses incurred related to the OPI manufacturing joint venture
alliance.

LIQUIDITY AND CAPITAL RESOURCES

     We presently anticipate that our current resources plus the net proceeds of
the private placement that we closed on May 21, 2004 should be sufficient to
fund operations through the end of 2004 and possibly into the start of 2005
depending upon how aggressively we implement our development plans discussed
above. That current operating plan includes anticipated expenses relating to (1)
continuing patent costs associated with each of our technologies, (2) continuing
pre-clinical development of the topoisomerase compound, (3) continuing
maintenance costs associated with the Philadelphia facility for utilization in
production or contract manufacturing, and (4) costs associated with the
production requirements pursuant to contract manufacturing agreements in Lyon,
France. We will need to raise additional money or to initiate additional
contract manufacturing relationships on terms favorable to us or enter into a
strategic alliance relationship by the end of 2004 to continue to maintain each
of our manufacturing facilities and continue our operations into 2005. If we are
unable to raise additional money, secure additional contract manufacturing
relationships or enter into strategic alliances, we will have to curtail our
development initiatives in the second half of 2004. The report of independent
auditors on the audit of our consolidated financial statements for the year
ended December 31, 2003 contains an explanatory paragraph about conditions
raising substantial doubt about the Company's ability to continue as a going
concern.


                                    Page 14
<PAGE>


ITEM 3. CONTROLS AND PROCEDURES
        -----------------------

     An evaluation was carried out by the Company's chief executive officer and
chief financial officer of the effectiveness of the design and operations of the
Company's disclosure controls and procedures (as defined in Exchange Act Rule
13a-15(e)). Based upon that evaluation as of the end of the period covered by
this report, the chief executive officer and the chief financial officer
concluded that the Company's disclosure controls and procedures are effective in
timely alerting them to material information relating to the Company (including
its consolidated subsidiaries) required to be included in the Company's periodic
filings with the SEC. There have been no changes in the Company's internal
controls over financial reporting during the quarter ended March 31, 2004, that
have materially affected, or are reasonably likely to materially affect, the
Company's internal controls over financial reporting.































                                    Page 15
<PAGE>


PART II - OTHER INFORMATION
---------------------------


ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

     In the first quarter of 2004, the holder of warrants to purchase 338,400
shares of common stock, which were issued in connection with the December 2003
bridge financing, elected to exercise these warrants. The Company issued 338,400
shares of common stock upon the exercise of the warrants in exchange for cash in
the amount of $48,391 (or $0.143 per share). The Company issued the shares in
reliance upon the exemption from registration in Section 4(2) of the Securities
Act of 1933.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     On January 29, 2004, the stockholders approved an amendment to the
Company's Certificate of Incorporation to increase the number of authorized
shares of common stock from 50,000,000 to 150,000,000. The vote on the proposed
amendment was 12,522,424 shares for the proposed amendment, 612,288 shares
against, and 25,010 shares abstaining at the special meeting.

     The Company did not have an annual meeting of stockholders in 2003 for the
election of directors or other customary matters, due to the cash constraints of
the Company. If the Company is successful in raising additional capital, the
Company anticipates having an annual meeting of stockholders in the summer of
2004.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a)  EXHIBITS:

     3.1         Certificate of Amendment to Certificate of Incorporation of the
                 Company dated and filed May 10, 2004.

     31.1        Certifications of Principal Executive Officer of the Company
                 under Rule 13a-14(a), as adopted pursuant to Section 302 of the
                 Sarbanes-Oxley Act of 2002.

     31.2        Certifications of Principal Financial Officer of the Company
                 under Rule 13a-14(a), as adopted pursuant to Section 302 of the
                 Sarbanes-Oxley Act of 2002.

     32.1        Certifications of Chief Executive Officer and Chief Financial
                 Officer pursuant to 18 U.S.C. Section 1350.

(b)  REPORTS ON FORM 8-K:

     None











                                    Page 16
<PAGE>


                                   Signatures
                                   ----------

In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                     AVAX Technologies, Inc.

Date: May 24, 2004
                                        /s/ Richard P. Rainey
                                     -------------------------------------------
                                     Richard P. Rainey
                                     President
































                                    Page 17