**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

----

**FORM      10-Q**

| **x** | QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 |
|-------|--------------------------------------------------------------------------------------------------------------------------------------|

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

**AVAX      TECHNOLOGIES, INC.**

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

| **2000                Hamilton Street, Suite 204, Philadelphia,                Pennsylvania** | **19130**                 |
|-----------------------------------------------------------------------------------------------|---------------------------|
| (Address                of principal executive offices)                                       | (Zip                Code) |

**(215)      241-9760**

| Large                Accelerated filer o                                                           | Accelerated                filer o         |
|----------------------------------------------------------------------------------------------------|--------------------------------------------|
| Non-accelerated                filer o(do                not check if a smaller reporting company) | Smaller                reporting company x |

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**AVAX      TECHNOLOGIES, INC.**

**Table      of Contents**

|                                              |                                                                                                                                                                                                                                                                                                           | **Page** |
|---------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|                                              |
| **PART                I - FINANCIAL INFORMATION** |
|                                              |
| Item                1.                            | Financial                Statements                                                                                                                                                                                                                                                                            | 3        |
|                                              |                                                                                                                                                                                                                                                                                                           |     |
|                                              | Consolidated                Balance Sheet - As of September 30, 2008 (Unaudited) and December                31,                2007                                                                                                                                                                           | 3        |
|                                              |                                                                                                                                                                                                                                                                                                           |     |
|                                              | Consolidated                Statements of Operations and Comprehensive Loss (Unaudited) For the                Three                Months and Nine Months Ended September 30, 2008 and 2007 and for                the                Period from January 12, 1990 (Incorporation) to September 30, 2008 | 4        |
|                                              |                                                                                                                                                                                                                                                                                                           |     |
|                                              | Consolidated                Statements of Cash Flows (Unaudited) For the Nine Months Ended September                30, 2008 and 2007 and for the Period from January 12, 1990                (Incorporation) to September 30, 2008                                                                       | 5        |
|                                              |                                                                                                                                                                                                                                                                                                           |     |
|                                              | Notes                to Consolidated Financial Statements                                                                                                                                                                                                                                                      | 7        |
|                                              |                                                                                                                                                                                                                                                                                                           |     |
| Item              2.                         | Management’s                Discussion and Analysis of Financial Condition and Results of                Operations                                                                                                                                                                                      | 13       |
|                                              |                                                                                                                                                                                                                                                                                                           |     |
| Item              3.                         | Quantitative                and Qualitative Disclosures about Market Risk                                                                                                                                                                                                                                      | 17       |
|                                              |                                                                                                                                                                                                                                                                                                           |     |
| Item              4T.                        | Controls                and Procedures                                                                                                                                                                                                                                                                         | 18       |
|                                              |                                                                                                                                                                                                                                                                                                           |     |
| **PART                II - OTHER INFORMATION**    |
|                                              |
| Item                1.                            | Legal                Proceedings                                                                                                                                                                                                                                                                               | 19       |
|                                              |                                                                                                                                                                                                                                                                                                           |     |
| Item                1A.                           | Risk                Factors                                                                                                                                                                                                                                                                                    | 19       |
|                                              |                                                                                                                                                                                                                                                                                                           |     |
| Item                2.                            | Unregistered                Sales of Equity Securities and Use of Proceeds                                                                                                                                                                                                                                     | 19       |
|                                              |                                                                                                                                                                                                                                                                                                           |     |
| Item                3.                            | Defaults                Upon Senior Securities                                                                                                                                                                                                                                                                 | 19       |
|                                              |                                                                                                                                                                                                                                                                                                           |     |
| Item                4.                            | Submission                of Matters to a Vote of Security Holders                                                                                                                                                                                                                                             | 19       |
|                                              |                                                                                                                                                                                                                                                                                                           |     |
| Item                5.                            | Other                Information                                                                                                                                                                                                                                                                               | 19       |
|                                              |                                                                                                                                                                                                                                                                                                           |     |
| Item                6.                            | Exhibits                                                                                                                                                                                                                                                                                                       | 19       |
|                                              |                                                                                                                                                                                                                                                                                                           |     |
| Signatures                                        | 20                                                                                                                                                                                                                                                                                                             |

----

**PART      I - FINANCIAL INFORMATION**

**Item      1.**
**Financial      Statements.**

***(a      development stage company)***

|                                                                                                                                                                                                                                        |   | **September 30,****2008****(unaudited)** |        | **December 31,****2007** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|-------------|-------------------------------|--------|
| **Assets**                                                                                                                                                                                                                                  |   |                                          |        |                          |   |   |   |
| Current                assets:                                                                                                                                                                                                              |   |                                          |        |                          |   |   |   |
| Cash                                                                                                                                                                                                                                        |   | $                                             | 344,946     |                          | $      | 5,903,207 |   |
| Accounts                receivable                                                                                                                                                                                                          |   |                                          | -           |                          |   | 131,387 |   |
| Inventory                                                                                                                                                                                                                                   |   |                                          | 3,647       |                          |   | 11,520 |   |
| VAT                receivable                                                                                                                                                                                                               |   |                                          | 43,572      |                          |   | 82,896 |   |
| Prepaid                expenses and other current assets                                                                                                                                                                                    |   |                                          | 148,428     |                          |   | 317,105 |   |
| Total                current assets                                                                                                                                                                                                         |   |                                          | 540,593     |                          |   | 6,446,115 |   |
| Property,                plant and equipment, at cost                                                                                                                                                                                       |   |                                          | 4,305,107   |                          |   | 4,247,706 |   |
| Less                accumulated depreciation                                                                                                                                                                                                |   |                                          | 3,666,933   |                          |   | 3,505,051 |   |
| Net                property, plant and equipment                                                                                                                                                                                            |   |                                          | 638,174     |                          |   | 742,655 |   |
| Goodwill                                                                                                                                                                                                                                    |   |                                          | 188,387     |                          |   | 188,387 |   |
| Total                assets                                                                                                                                                                                                                 |   | $                                             | 1,367,154   |                          | $      | 7,377,157 |   |
|                                                                                                                                                                                                                                        |   |                                          |        |                          |   |   |   |
| **Liabilities                and stockholders’ equity (deficit)**                                                                                                                                                                     |   |                                          |        |                          |   |   |   |
| Current                liabilities:                                                                                                                                                                                                         |   |                                          |        |                          |   |   |   |
| Accounts                payable                                                                                                                                                                                                             |   | $                                             | 1,415,825   |                          | $      | 2,091,674 |   |
| Accrued                expenses                                                                                                                                                                                                             |   |                                          | 573,555     |                          |   | 551,777 |   |
| Accrued                wages                                                                                                                                                                                                                |   |                                          | 631,537     |                          |   | 459,488 |   |
| Accrued                and withheld payroll tax liabilities                                                                                                                                                                                 |   |                                          | 192,089     |                          |   | 240,115 |   |
| Deferred                revenue                                                                                                                                                                                                             |   |                                          | 253,384     |                          |   | 250,000 |   |
| ANVAR                advances                                                                                                                                                                                                               |   |                                          | 386,394     |                          |   | 400,691 |   |
| Total                current liabilities                                                                                                                                                                                                    |   |                                          | 3,452,784   |                          |   | 3,993,745 |   |
| Stockholders’                equity*:*                                                                                                                                                                                                |   |                                          |        |                          |   |   |   |
| Preferred                stock, $.01 par value:                                                                                                                                                                                             |   |                                          |        |                          |   |   |   |
| Authorized                shares - 5,000,000, including Series C – 120,000                shares                                                                                                                                 |   |                                          |        |                          |   |   |   |
| Series                C convertible preferred stock:                                                                                                                                                                                   |   |                                          |        |                          |   |   |   |
| Issued                and outstanding shares - 33,500 at September 30, 2008 and December                31,                2007 (liquidation preference - $3,350,000)                                                                       |   |                                          | 335         |                          |   | 335 |   |
| Common                stock, $.004 par value:                                                                                                                                                                                               |   |                                          |        |                          |   |   |   |
| Authorized                shares 500,000,000 at September 30, 2008 and December 31, 2007                Issued                and outstanding shares -141,574,997 at September 30, 2008 and December                31,                2007 |   |                                          | 566,300     |                          |   | 566,300 |   |
| Additional                paid-in capital                                                                                                                                                                                                   |   |                                          | 86,976,416  |                          |   | 86,657,058 |   |
| Subscription                receivable                                                                                                                                                                                                      |   |                                          | (422        | )                             |   | (422 | ) |
| Accumulated                other comprehensive income                                                                                                                                                                                       |   |                                          | 304,583     |                          |   | 414,971 |   |
| Deficit                accumulated during the development stage                                                                                                                                                                             |   |                                          | (89,932,842 | )                             |   | (84,254,830 | ) |
| Total                stockholders’ equity (deficit)                                                                                                                                                                                   |   |                                          | (2,085,630  | )                             |   | 3,383,412 |   |
| Total                liabilities and stockholders’ equity (deficit)                                                                                                                                                                   |   | $                                             | 1,367,154   |                          | $      | 7,377,157 |   |

*See      accompanying notes.*

----

***(a      development stage company)***

*(Unaudited)*

|                                                                                                 |   | **Three months ended ****September 30,** |        | **Nine months ended ****September 30,** |   | **Period from ****January 12, 1990 ****(Incorporation) to ****September 30,** |   |
|------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|-------------|-------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                 |   | **2008**                                                     |        | **2007**                                                    |   | **2008**                                                                                                              |   | **2007** |   | **2008** |   |
| Revenue:                                                                                             |   |                                                         |        |                                                        |   |                                                                                                                  |   |   |   |   |   |   |   |   |   |   |
| Gain                  from sale of the Product                                                       |   | $                                                            | –     |                                                        | $      | –                                                                                                               |   | $ | – |   | $ | – |   | $ | 1,951,000 |   |
| Product                  and contract service revenue                                                |   |                                                         | 195,471     |                                                        |   | 95,877                                                                                                                |   |   | 402,246 |   |   | 299,193 |   |   | 7,218,340 |   |
| Grant                  revenue                                                                       |   |                                                         | 4,334       |                                                        |   | –                                                                                                               |   |   | 14,107 |   |   | – |   |   | 220,219 |   |
| Total                  revenue                                                                       |   |                                                         | 199,805     |                                                        |   | 95,877                                                                                                                |   |   | 416,353 |   |   | 299,193 |   |   | 9,389,559 |   |
| Costs                  and expenses:                                                                 |   |                                                         |        |                                                        |   |                                                                                                                  |   |   |   |   |   |   |   |   |   |   |
| Research                  and development                                                            |   |                                                         | 1,034,206   |                                                        |   | 1,350,907                                                                                                             |   |   | 3,394,444 |   |   | 3,402,404 |   |   | 55,642,184 |   |
| 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                                                 |   |                                                         | 1,043,666   |                                                        |   | 719,286                                                                                                               |   |   | 2,761,739 |   |   | 1,813,479 |   |   | 40,721,120 |   |
| Total                  operating loss                                                                |   |                                                         | (1,878,067  | )                                                           |   | (1,974,316                                                                                                            | )      |   | (5,739,830 | ) |   | (4,916,690 | ) |   | (95,526,532 | ) |
| Other                  income (expense):                                                             |   |                                                         |        |                                                        |   |                                                                                                                  |   |   |   |   |   |   |   |   |   |   |
| Interest                  income                                                                     |   |                                                         | 6,850       |                                                        |   | 108,085                                                                                                               |   |   | 59,699 |   |   | 202,963 |   |   | 6,264,290 |   |
| Interest                  expense                                                                    |   |                                                         | –     |                                                        |   | –                                                                                                               |   |   | – |   |   | – |   |   | (812,067 | ) |
| Other,                  net                                                                          |   |                                                         | (160        | )                                                           |   | –                                                                                                               |   |   | 2,119 |   |   | – |   |   | 145,312 |   |
| Total                  other income , net                                                            |   |                                                         | 6,690       |                                                        |   | 108,085                                                                                                               |   |   | 61,818 |   |   | 202,963 |   |   | 5,597,535 |   |
| Loss                  before income taxes                                                            |   |                                                         | (1,871,377  | )                                                           |   | (1,866,231                                                                                                            | )      |   | (5,678,012 | ) |   | (4,713,727 | ) |   | (89,928,997 | ) |
| Income                  taxes                                                                        |   |                                                         | –     |                                                        |   | –                                                                                                               |   |   | – |   |   | – |   |   | – |   |
| Loss                  from continuing operations                                                     |   |                                                         | (1,871,377  | )                                                           |   | (1,866,231                                                                                                            | )      |   | (5,678,012 | ) |   | (4,713,727 | ) |   | (89,928,997 | ) |
| Loss                  from discontinued operations                                                   |   |                                                         | –     |                                                        |   | –                                                                                                               |   |   | – |   |   | – |   |   | (3,845 | ) |
| Net                  loss                                                                            |   |                                                         | (1,871,377  | )                                                           |   | (1,866,231                                                                                                            | )      |   | (5,678,012 | ) |   | (4,713,727 | ) |   | (89,932,842 | ) |
| Amount                  payable for liquidation preference                                           |   |                                                         | –     |                                                        |   | –                                                                                                               |   |   | – |   |   | – |   |   | (1,870,033 | ) |
| Net                  loss attributable to common stockholders                                        |   | $                                                            | (1,871,377  | )                                                           | $      | (1,866,231                                                                                                            | )      | $ | (5,678,012 | ) | $ | (4,713,727 | ) | $ | (91,802,875 | ) |
| Loss                  per common share – basic and diluted                                     |   |                                                         |        |                                                        |   |                                                                                                                  |   |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations                                                     |   | $                                                            | (0.01       | )                                                           | $      | (0.01                                                                                                                 | )      | $ | (0.04 | ) | $ | (0.04 | ) |   |   |   |
| Loss                  from discontinued operations                                                   |   |                                                         | –     |                                                        |   | –                                                                                                               |   |   | – |   |   | – |   |   |   |   |
| Net                  loss                                                                            |   | $                                                            | (0.01       | )                                                           | $      | (0.01                                                                                                                 | )      | $ | (0.04 | ) | $ | (0.04 | ) |   |   |   |
| Weighted-average                  number of common shares outstanding                                |   |                                                         | 141,555,545 |                                                        |   | 141,496,737                                                                                                           |   |   | 141,574,997 |   |   | 111,276,536 |   |   |   |   |
| Net                  loss                                                                            |   | $                                                            | (1,871,377  | )                                                           | $      | (1,866,231                                                                                                            | )      | $ | (5,678,012 | ) | $ | (4,713,727 | ) |   |   |   |
| Foreign                  currency translation adjustment                                             |   |                                                         | (31,511     | )                                                           |   | (5,963                                                                                                                | )      |   | (110,388 | ) |   | (44,333 | ) |   |   |   |
| Comprehensive                  loss                                                                  |   | $                                                            | (1,902,888  | )                                                           | $      | (1,872,194                                                                                                            | )      | $ | (5,788,400 | ) | $ | (4,758,060 | ) |   |   |   |

*See      accompanying notes.*

----

***(a      development stage company)***

*(Unaudited)*

|                                                                                                               |   |    **Nine months ended September 30,** |       | **Period from****January 12, 1990 ****(Incorporation) to****September 30,** |   |
|--------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------|--------|
|                                                                                                               |   | **2008**                                                                  |       | **2007**                                                                                                  |   | **2008** |   |
| **Operating                activities**                                                                            |   |                                                                      |       |                                                                                                      |   |   |   |   |   |   |
| Net                loss                                                                                            |   | $                                                                         | (5,678,012 | )                                                                                                         | $      | (4,713,727 | ) | $ | (89,932,842 | ) |
| Adjustments                to reconcile net loss to net cash used in operating                activities:          |   |                                                                      |       |                                                                                                      |   |   |   |   |   |   |
| Depreciation                and amortization                                                                       |   |                                                                      | 208,212    |                                                                                                      |   | 222,593 |   |   | 5,292,939 |   |
| Amortization                of discount on convertible notes payable                                               |   |                                                                      | –    |                                                                                                      |   | – |   |   | 142,500 |   |
| Extraordinary                gain related to negative goodwill on consolidated                subsidiary           |   |                                                                      | –    |                                                                                                      |   | – |   |   | (902,900 | ) |
| Cumulative                effect of change in accounting                                                           |   |                                                                      | –    |                                                                                                      |   | – |   |   | (186,295 | ) |
| Amortization                of deferred gain on joint venture                                                      |   |                                                                      | –    |                                                                                                      |   | – |   |   | (1,805,800 | ) |
| Equity                in net loss of joint venture                                                                 |   |                                                                      | –    |                                                                                                      |   | – |   |   | 1,703,763 |   |
| Employee                Stock Option Expense                                                                       |   |                                                                      | 319,358    |                                                                                                      |   | 144,511 |   |   | 667,054 |   |
| 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 |   |
| Compensatory                stock issue                                                                            |   |                                                                      | –    |                                                                                                      |   | – |   |   | 25,000 |   |
| Gain                on 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                on sale of furniture and equipment                                                             |   |                                                                      | –    |                                                                                                      |   | – |   |   | 246,254 |   |
| Issuance                of common stock or warrants for services                                                   |   |                                                                      | –    |                                                                                                      |   | – |   |   | 423,289 |   |
| Changes                in operating assets and liabilities:                                                        |   |                                                                      |       |                                                                                                      |   |   |   |   |   |   |
| Accounts                receivable                                                                                 |   |                                                                      | 131,387    |                                                                                                      |   | 154,881 |   |   | 148,615 |   |
| Inventory                                                                                                          |   |                                                                      | 7,738      |                                                                                                      |   | (2,947 | ) |   | 38,502 |   |
| Prepaid                expenses and other current assets                                                           |   |                                                                      | 203,356    |                                                                                                      |   | 56,094 |   |   | 47,325 |   |
| Research                and development tax credit receivable                                                      |   |                                                                      | –    |                                                                                                      |   | – |   |   | 320,488 |   |
| Accounts                payable and accrued liabilities                                                            |   |                                                                      | (515,002   | )                                                                                                         |   | 881,576 |   |   | 1,688,065 |   |
| Deferred                revenue                                                                                    |   |                                                                      | 3,509      |                                                                                                      |   | 287,835 |   |   | 213,801 |   |
| Amount                payable to Former Officer                                                                    |   |                                                                      | –    |                                                                                                      |   | – |   |   | 80,522 |   |
| Net                cash used in operating activities                                                               |   | $                                                                         | (5,319,454 | )                                                                                                         | $      | (2,969,184 | ) | $ | (75,985,019 | ) |
|                                                                                                               |   |                                                                      |       |                                                                                                      |   |   |   |   |   |   |
| **Investing                activities**                                                                            |   |                                                                      |       |                                                                                                      |   |   |   |   |   |   |
| Purchases                of marketable securities                                                                  |   |                                                                      | –    |                                                                                                      |   | – |   |   | (351,973,210 | ) |
| Proceeds                from sale of marketable securities                                                         |   |                                                                      | –    |                                                                                                      |   | – |   |   | 344,856,738 |   |
| Proceeds                from sale of short-term investments                                                        |   |                                                                      | –    |                                                                                                      |   | – |   |   | 7,116,472 |   |
| Purchases                of furniture and equipment                                                                |   |                                                                      | (114,548   | )                                                                                                         |   | (123,706 | ) |   | (3,844,613 | ) |
| Proceeds                from sale of furniture and equipment                                                       |   |                                                                      | –    |                                                                                                      |   | – |   |   | 51,119 |   |
| Cash                acquired in acquisition of control of joint venture                                            |   |                                                                      | –    |                                                                                                      |   | – |   |   | 991,634 |   |
| Organization                costs incurred                                                                         |   |                                                                      | –    |                                                                                                      |   | – |   |   | (622,755 | ) |
| Net                cash used in investing activities                                                               |   | $                                                                         | (114,548   | )                                                                                                         | $      | (123,706 | ) | $ | (3,424,615 | ) |

----

***(a      development stage company)***

*(Unaudited)*

|                                                                                                             |   |     **Nine months ended September 30,** |       | **Period from ****January 12, 1990 ****(Incorporation) ****to ****September 30,** |   |
|------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                             |   | **2008**                                                                        |       | **2007**                                                                                                                  |   | **2008** |   |
| **Financing                activities**                                                                          |   |                                                                            |       |                                                                                                                      |   |   |   |   |   |   |
| Proceeds                from issuance of notes payableto 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 | ) |
| Shareholder                capital contribution                                                                  |   |                                                                            | –    |                                                                                                                      |   | – |   |   | 93,637 |   |
| Payments                received on subscription receivable                                                      |   |                                                                            | –    |                                                                                                                      |   | – |   |   | 4,542 |   |
| Proceeds                received from exercise of stock warrants                                                 |   |                                                                            | –    |                                                                                                                      |   | – |   |   | 76,892 |   |
| Elimination                of consolidated accounting treatment for joint venture                                |   |                                                                            | –    |                                                                                                                      |   | – |   |   | (2,511,701 | ) |
| Capital                contribution through sale of interest in consolidated                subsidiary           |   |                                                                            | –    |                                                                                                                      |   | – |   |   | 2,624,000 |   |
| Net                proceeds received from issuance of preferred and common                stock                  |   |                                                                            | –    |                                                                                                                      |   | 9,318,359 |   |   | 78,170,851 |   |
| Net                cash provided by financing activities                                                         |   |                                                                            | –    |                                                                                                                      |   | 9,318,359 |   |   | 79,448,702 |   |
| Effect                of exchange rate changes on cash                                                           |   |                                                                            | (124,259   | )                                                                                                                         |   | (26,468 | ) |   | 305,878 |   |
| Net                increase (decrease) in cash                                                                   |   |                                                                            | (5,558,261 | )                                                                                                                         |   | 6,199,002 |   |   | 344,946 |   |
| Cash                at beginning of period                                                                       |   |                                                                            | 5,903,207  |                                                                                                                      |   | 1,484,570 |   |   | – |   |
| Cash                at end of period                                                                             |   | $                                                                               | 344,946    |                                                                                                                      | $      | 7,683,572 |   | $ | 344,946 |   |
|                                                                                                             |   |                                                                            |       |                                                                                                                      |   |   |   |   |   |   |
| **Supplemental                disclosure of cash flow information**                                              |   |                                                                            |       |                                                                                                                      |   |   |   |   |   |   |
| Interest                Paid                                                                                     |   | $                                                                               | –    |                                                                                                                      | $      | – |   | $ | 197,072 |   |
| Non-cash                activity:                                                                                |   |                                                                            |       |                                                                                                                      |   |   |   |   |   |   |
| Issuance                of restricted stock compensation                                                         |   | $                                                                               | –    |                                                                                                                      | $      | – |   | $ | 25,000 |   |
| Common                stock warrants issued with convertible notes                                               |   | $                                                                               | –    |                                                                                                                      | $      | – |   | $ | 142,500 |   |
| Conversion                of bridge loan into common stock                                                       |   | $                                                                               | –    |                                                                                                                      | $      | – |   | $ | 950,000 |   |
| Payment                of interest with common stock                                                             |   | $                                                                               | –    |                                                                                                                      | $      | – |   | $ | 23,275 |   |

*See      accompanying notes.*

----

**AVAX      Technologies, Inc. and Subsidiaries**

***(a      development stage company)***

*(Unaudited)*

**1.      Description of Business**

*(see      Note 4*

*(see      Note 4*

----

**2.      Basis of Presentation**

** **

**3.      Significant Accounting Policies**

**Principles      of Consolidation**

**Foreign      Currency Translation**

**Use      of Estimates**

**Revenue      Recognition**

----

**Accounts      Receivable**

**Concentrations      of Credit Risk**

**Fair      Value of Financial Instruments**

**Inventories**

**Accrued      Expenses, Accrued Wages, and Accrued and Withheld Payroll Tax      Liabilities**

**Depreciation**

**Goodwill**

----

**Research      and Development Costs**

**Stock-Based      Compensation**

|                                    |   | **Three and Nine Months Ended ****September 30, 2007** |   |
|-----------------------------------------|--------|-------------------------------------------------------------------------------------------|--------|
| Expected                term (in years) |   |                                                                                      | 4.00   |   |
| Volatility                              |   |                                                                                      | 75.4   | % |
| Risk-free                interest rate  |   |                                                                                      | 3.52   | % |
| Expected                dividends       |   |                                                                                      | 0      |   |

----

**Options      and Warrants Outstanding**

|                                              |   | **Options                and****Warrants** |        | **Weighted-Average****Exercise Price** |   |
|---------------------------------------------------|--------|--------------------------------------------|-------------|---------------------------------------------|--------|
| Outstanding                at beginning of period |   |                                       | 122,331,693 |                                        | $      | 0.19 |   |
| Granted                                           |   |                                       | 850,000     |                                        | $      | 0.11 |   |
| Exercised                                         |   |                                       | —     |                                        |   | — |   |
| Forfeited                                         |   |                                       | 50,000      |                                        | $      | 0.91 |   |
| Outstanding                at end of period       |   |                                       | 123,131,693 |                                        | $      | 0.19 |   |
| Exercisable                at end of period       |   |                                       | 114,497,917 |                                        | $      | 0.19 |   |

|  **Exercise Price Range** |   | **Options & Warrants ****Outstanding** |        | **Weighted-Average ****Remaining Term** |   | **Vested Options & ****Warrants ** |   | **Weighted-Average ****Remaining Term** |        |
|------------------------------------------|--------|-----------------------------------------------------------|-------------|---------------------------------------------------|--------|------------------------------------------------------------|--------|---------------------------------------------------|-------------|
| $0.090                - $0.143           |   |                                                      | 15,988,178  |                                              |   | 3.25                                                       |   |                                              | 8,058,050   |   |   | 0.33 |   |
| $0.150                - $0.190           |   |                                                      | 90,915,400  |                                              |   | 3.67                                                       |   |                                              | 90,434,150  |   |   | 3.66 |   |
| $0.285                - $0.330           |   |                                                      | 2,347,792   |                                              |   | 3.14                                                       |   |                                              | 2,125,394   |   |   | 3.08 |   |
| $0.340                - $0.390           |   |                                                      | 5,682,293   |                                              |   | 1.09                                                       |   |                                              | 5,682,293   |   |   | 1.09 |   |
| $0.410                - $0.470           |   |                                                      | 7,603,030   |                                              |   | 1.51                                                       |   |                                              | 7,603,030   |   |   | 1.51 |   |
| $0.890                - $0.906           |   |                                                      | 230,000     |                                              |   | 0.09                                                       |   |                                              | 230,000     |   |   | 0.09 |   |
| $2.940                                   |   |                                                      | 240,000     |                                              |   | 0.09                                                       |   |                                              | 240,000     |   |   | 0.09 |   |
| $8.240                                   |   |                                                      | 125,000     |                                              |   | 3.08                                                       |   |                                              | 125,000     |   |   | 3.08 |   |
|                                     |   |                                                      | 123,131,693 |                                              |   |                                                       |   |                                              | 114,497,917 |   |   |   |   |

**Earnings      Per Share**

**4.**
**License      and Research Agreements**

*(see      Note 1)*

----

**.      **

** **

**5.      **
**ANVAR      Advances**

**6.      Subsequent Events**

** **
** **

----

**Item      2.**
**Management’s      Discussion and Analysis of Financial Condition and Results of      Operations.**

**Cautionary      Statement Regarding Forward-Looking Statements**

|   | · | Our                history of operating losses, our continuing cash requirements, our                immediate need to raise substantial capital, and the uncertainty                of our                prospects of raising such capital or reaching a meaningful level                of                revenues. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Uncertainty                of attracting and retaining highly skilled personnel to fulfill important                roles in the Company, including a new Chief Medical Officer in the                United                States. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                business uncertainties arising from our decision to conduct all AC                Vaccine                manufacturing activities at our Lyon, France facility and the logistical                issues and risks relating to shipping biologics from the U.S. and                other                countries to France and the vaccine from France to patients in the                U.S.                and other countries. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Uncertainty                about whether our products will successfully complete the long, complex                and expensive clinical trial and regulatory approval process for                approval                of new drugs in the U.S. and certain European countries. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Uncertainty                about whether our AC Vaccine technology can be developed to produce                safe                and effective products and, if so, whether our AC Vaccine products                will be                commercially accepted and                profitable. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Difficulties                arising from our competition with other companies conducting clinical                trials and treatment regimens for patients and clinical sites for                our                clinical trials. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                expenses, delays, uncertainties and complications typically encountered                by                development stage biopharmaceutical businesses, many of which are                beyond                our control. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our                financial and development obligations and our responsibility to meet                requisite research funding levels under our license agreements in                order to                protect our rights to our products and                technologies. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our                financial obligations under our existing contracts and arrangements                and                our ability to meet such                commitments. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Each                of the other factors discussed in our Annual Report on Form 10-K                for the                year ended December 31, 2007, under Item 1A - “Risk                Factors.” |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**GENERAL**

|   | · | the                FDA clinical hold of our AC Vaccine clinical trials in 2001 and the                resultant substantial expenses and delays in resolving the FDA concerns                and refiling new INDs for a revised AC                Vaccine; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | manufacturing                challenges relating to the production of a vaccine from the patient’s own                cancer cells, such as the sterility issues we previously experienced                at                our Philadelphia facility; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our                failure to develop a market for the AC Vaccine in Australia                notwithstanding substantial expenditures of time and money to do                so; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our                past inability to agree with the FDA on an acceptable potency assay                (which                is a biological measure of the drug’s active ingredients) of our product                prior to administration of the vaccine, which was required before                we could                commence our Phase III registration trial for                M-Vax; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our                inability to generate any meaningful revenues from any other products                or                services while we work to develop our lead products and technologies;                and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the                periodic cutbacks in our development plans and programs due to the                limited                cash resources from time to time in recent years and in particular,                currently. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

***Results      of Operations for the Three and Nine Months Ended September 30, 2008 compared      with the comparable periods ended September 30, 2007***

**Revenue      **

**Research      and Development Expenses**

----

|                         |   | **Three Months Ended****September 30,** |      | **Nine Months Ended****September 30,** |   |
|------------------------------|--------|--------------------------------------------------------|-----------|-------------------------------------------------------|--------|
|                         |   | **2008**                                               |      | **2007**                                              |   | **2008** |   | **2007** |   |
| United                States |   | $                                                      | 520,778   |                                                  | $      | 902,386 |   | $ | 1,592,336 |   | $ | 1,954,577 |   |
| France                       |   |                                                   | 513,428   |                                                  |   | 448,521 |   |   | 1,802,108 |   |   | 1,447,827 |   |
|                         |   | $                                                      | 1,034,206 |                                                  | $      | 1,350,907 |   | $ | 3,394,444 |   | $ | 3,402,404 |   |

**Selling,      General and Administrative Expenses**

|                         |   | **Three Months Ended****September 30,** |      | **Nine Months Ended****September 30,** |   |
|------------------------------|--------|--------------------------------------------------------|-----------|-------------------------------------------------------|--------|
|                         |   | **2008**                                               |      | **2007**                                              |   | **2008** |   | **2007** |   |
| United                States |   | $                                                      | 1,020,031 |                                                  | $      | 587,116 |   | $ | 2,636,158 |   | $ | 1,451,891 |   |
| France                       |   |                                                   | 23,635    |                                                  |   | 132,170 |   |   | 125,581 |   |   | 361,588 |   |
|                         |   | $                                                      | 1,043,666 |                                                  | $      | 719,286 |   | $ | 2,761,739 |   | $ | 1,813,479 |   |

***Liquidity      and Capital Resources***

----

|   | · | Enrolling                patients in our Phase III registration trial U.S. for M-Vax for the                treatment of Stage 3 and 4 melanoma patients, which trial will proceed                under the Special Protocol Assessment that we received from the U.S.                FDA                in October 2006. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Continuing                the treatment of melanoma patients outside the U.S. on a compassionate                use                basis with M-Vax. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Initiating                the launch of the O-Vax study with Cancer Treatment Centers of                America. |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | Continuing                our discussions with the European Medical Evaluations Agency and                AFSSAPs,                the FDA equivalent regulatory bodies for the European Union and France,                respectively, regarding the regulatory requirements for the AC Vaccine                and                its continued development in Europe and                France. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Initiating                discussion with Japanese regulatory authorities regarding the regulatory                approval process for autologous products like our AC Vaccines and                the                requirements for making M-Vax available for compassionate use in                Japan. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Item      3.**
**Quantitative      and Qualitative Disclosures About Market Risk.**

----

**Item      4T. Controls and Procedures.**

**Conclusion      Regarding the Effectiveness of Disclosure Controls and      Procedures**

|   | o | Our                lack of sufficient personnel at the U.S. headquarters in the accounting,                treasury and financial reporting functions affected our ability to                have                adequate segregation of duties over financial transactions and adequate                monitoring controls over the annual and quarterly financial close                processes. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | The                lack of segregation of duties often results in the same individual                performing two or more of the following functions: initiation and                authorization of financial transactions, recording of transactions,                and                custody of financial assets. The lack of segregation of duties also                prevented us from satisfying important monitoring control objectives,                such                as authorization, completeness and accuracy, and reconciliation of                accounting transactions and information. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Changes      in Internal Control Over Financial Reporting**

**Limitations      of Effectiveness of Controls**

----

**PART      II - OTHER INFORMATION**

**Item      1. Legal Proceedings. **

**Item      1A. Risk Factors.**

**Item      2. Unregistered Sales of Equity Securities and Use of      Proceeds.**

**Item      3. Defaults Upon Senior Securities.**

**Item      4. Submission of Matters to a Vote of Security Holders.**

**Item      5. Other Information.**

**Item      6.**
**Exhibits.      **

| 4.1    | Form                of Warrant.                                                                                                                                                                                                                                      |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                 |
| 10.1   | Form                of Convertible Note and Warrant Purchase Agreement, by and between                AVAX                Technologies, Inc. and the Purchasers, dated October 24,                2008.                                                              |
|   |                                                                                                                                                                                                                                                                 |
| 10.2   | Form                of Amendment to Convertible Note and Warrant Purchase Agreement,                by and                between AVAX Technologies, Inc. and the Purchasers, dated October                24,                2008.                                  |
|   |                                                                                                                                                                                                                                                                 |
| 10.3   | Form                of Note.                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                 |
| 31.1   | Certification                of Principal Executive Officer and 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   | Certification                of Principal Executive Officer and Principal Financial Officer pursuant                to                18 U.S.C. Section 1350. *                                                                                                 |

----

|                                   | AVAX                Technologies, Inc. |
|----------------------------------------|----------------------------------------|
|                                   |                                   |   |
| Date:                November 19, 2008 |                                   |   |
|                                   |                                   |   |
|                                   | By:                                    | /s/                Francois Martelet |
|                                   |                                   | Francois                Martelet |
|                                   |                                   | President                and Chief Executive Officer |
|                                   |                                   | (Principal                Executive Officer and |
|                                   |                                   | Principal                Financial Officer) |

----