SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                             ----------------------

                                   FORM 10-QSB

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

                For the quarterly period ended September 30, 1997

                                       or

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

           For the transition period from _____________ to ___________
                       Commission file number ____________

                       -----------------------------------

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

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

       4520 Main Street, Suite 930
          Kansas City, Missouri                                 64111
(Address of principal executive offices)                      (Zip Code)

       Registrants's telephone number, including area code: (816) 960-1333

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

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

                     Common Stock, par value $.004 per share

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

As of November 6, 1997, 4,367,087 shares of the Registrant's common stock, par
value $.004 per share, were outstanding.

Documents incorporated by reference:  None.

Transitional Small Business Disclosure Format: [_] Yes        [X] No

<PAGE>

                             AVAX TECHNOLOGIES, INC.

                                Table of Contents

                                                                            Page

PART I - FINANCIAL INFORMATION

      Item 1.  Financial Statements
                BALANCE SHEETS -- As of December 31, 1996
                 and September 30, 1997 (unaudited) ....................  Page 3
                STATEMENTS OF OPERATIONS (unaudited) -- For the
                 Three Months Ended September 30, 1996 and
                 September 30, 1997, For the Nine Months Ended
                 September 30, 1996 and September 30, 1997 and
                 the Period from January 12, 1990
                 (Incorporation) through September 30, 1997 ............. Page 4
                STATEMENTS OF CASH FLOWS (unaudited) -- For the
                 Nine Months Ended September 30, 1996 and
                 September 30, 1997 and the Period from January 12,
                 1990 (Incorporation) through September 30, 1997 .......  Page 5

                Notes to Financial Statements ..........................  Page 6

      Item 2.  Management's Discussion and Analysis of Financial 
                 Condition and Results of Operations ...................  Page 8

PART II - OTHER INFORMATION

      Item 1.  Legal Proceedings. ...................................... Page 10
      Item 2.  Change in Securities. ................................... Page 10
      Item 3.  Defaults Upon Senior Securities. ........................ Page 10
      Item 4.  Submission of Matters to a Vote of Security Holders. .... Page 10
      Item 5.  Other Information. ...................................... Page 10
      Item 6.  Exhibits and Reports on Form 8-K. ....................... Page 10

Signatures ............................................................. Page 11


                                     Page 2

<PAGE>

PART I - FINANCIAL INFORMATION
Item 1.  Financial Statements

                     AVAX Technologies, Inc.
              (formerly Walden Laboratories, Inc.)
                  (a development stage company)
                         Balance Sheets

<TABLE>
<CAPTION>
                                                              December 31,   September 30,
                                                                  1996            1997
                                                             -----------------------------
ASSETS                                                         (See Note)       (Unaudited)
<S>                                                          <C>              <C>         
Current assets:
   Cash and cash equivalents                                 $ 13,832,179     $  7,951,213
   Marketable securities                                        6,134,853        9,074,708
   Common stock receivable from a related party                 2,249,459        1,173,601
   Prepaid expenses and other current assets                       61,285          116,259
                                                             -----------------------------
Total current assets                                           22,277,776       18,315,781

Furniture and equipment, at cost                                   45,777          278,626
   Less accumulated depreciation                                    2,007           11,085
                                                             -----------------------------
Net furniture and equipment                                        43,770          267,541
                                                             -----------------------------
Total assets                                                 $ 22,321,546     $ 18,583,322
                                                             =============================
LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities:
   Accounts payable and accrued liabilities                  $    277,677     $    349,567
   Amount payable to preferred stockholders                     2,156,106        1,124,896
   Amount payable to Former Officer                                93,353           48,705
                                                             -----------------------------
Total current liabilities                                       2,527,136        1,523,168

Commitments and contingencies
Stockholders' equity:
   Preferred Stock, $.01 par value:
     Authorized shares - 5,000,000, including
     Series B - 300,000 shares 
     Series B convertible preferred stock:
       Issued and outstanding shares - 259,198 and
       219,575 at December 31, 1996 and September 30,
       1997, respectively (liquidation preference
       $34,991,730 and $29,642,625 at December 31,
       1996 and September 30, 1997, respectively)                   2,592            2,196
   Common stock, $.004 par value:
     Authorized shares - 50,000,000
     Issued and outstanding shares - 3,111,158 and
       4,180,152 at December 31, 1996 and September 30,
       1997, respectively                                          12,445           16,720
   Additional paid-in capital                                  24,002,882       23,998,927
   Subscription receivable                                         (4,026)          (2,280)
   Deferred Compensation                                         (963,424)        (761,599)
   Unrealized loss on marketable securities                        (2,037)              --
   Deficit accumulated during the development stage            (3,254,022)      (6,193,810)
                                                             -----------------------------
Total stockholders' equity                                     19,794,410       17,060,154
                                                             -----------------------------
Total liabilities and stockholder's equity                   $ 22,321,546     $ 18,583,322
                                                             =============================
</TABLE>

Note: The balance sheet at December 31, 1996 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.

See accompanying notes.


                                     Page 3

<PAGE>

                             AVAX Technologies, Inc.
                      (formerly Walden Laboratories, Inc.)
                          (a development stage company)
                            Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                      Period from
                                                                                                   January 12, 1990
                                                                                                    (Incorporation)
                                       Three months ended                 Nine months ended             Through
                                          September 30,                     September 30,            September 30,
                                      1996             1997             1996             1997             1997
                                  -------------------------------------------------------------------------------
<S>                               <C>              <C>              <C>              <C>              <C>        
Gain from sale of the Product     $        --      $        --      $        --      $        --      $ 1,951,000

Costs and expenses:
   Research and development           217,026          508,298          394,404        1,478,080        3,830,389
   Marketing and selling                   --               --               --               --          543,646
   General and administrative         439,317          562,826          722,198        2,154,704        4,992,840
                                  -------------------------------------------------------------------------------
Total operating loss                 (656,343)      (1,071,124)      (1,116,602)      (3,632,784)      (7,415,875)
Other income (expense):
   Interest income                    329,588          272,602          500,826          817,199        1,696,192
   Interest expense                   (78,819)         (42,965)        (285,041)        (124,203)        (619,895)
   Other, net                             (44)              --           (9,878)              --          145,768
                                  -------------------------------------------------------------------------------
Total other income (expense)         (250,725)         229,637          205,907          692,996        1,222,065
                                  -------------------------------------------------------------------------------
Net loss                             (405,618)        (841,487)        (910,695)      (2,939,788)      (6,193,810)
Amount payable for
   liquidation preference                  --               --       (1,131,744)              --       (1,870,033)
                                  -------------------------------------------------------------------------------
Net loss attributable to
   common stockholders            $  (405,618)     $  (841,487)     $(2,042,439)     $(2,939,788)     $(8,063,843)
                                  ===============================================================================

Net loss per common share         $      (.12)     $      (.22)     $      (.66)     $      (.83)
                                  ==============================================================
Weighted average number of
   shares outstanding               3,371,542        3,834,985        3,116,293        3,551,884
                                  ==============================================================
</TABLE>

See accompanying notes.


                                     Page 4

<PAGE>

                             AVAX Technologies, Inc.
                      (formerly Walden Laboratories, Inc.)
                          (a development stage company)
                            Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                                     Period from
                                                                       Nine months ended          January 12, 1990
                                                                         September 30,            (Incorporation) To
                                                                    1996              1997        September 30, 1997
                                                                ------------------------------------------------------
<S>                                                             <C>               <C>               <C>          
OPERATING ACTIVITIES
Net loss                                                        $   (910,695)     $ (2,939,788)     $ (6,193,810)
Adjustments to reconcile net loss to net
   cash used in operating activities:
     Depreciation and amortization                                    94,106           210,903           441,164
     Gain from sale of the Product                                        --                --        (1,951,000)
     Gain on sale of intellectual property                                --                --              (787)
     Accretion of interest on common stock receivable               (229,633)         (124,142)         (422,601)
     Accretion of  interest on amount payable
       to preferred stockholders and Former Officer                  229,633           124,142           422,601
     Loss on sale or abandonment of furniture and equipment            8,156                --            37,387
     Issuance of common stock for services                           100,000                --           147,000
     Changes in operating assets and liabilities:
         Prepaid expenses and other current assets                    (9,628)          (54,974)         (116,259)
         Accounts payable and accrued liabilities                    (21,355)           71,890           349,567
         Amount payable to Former Officer                                 --                --            80,522
                                                                ------------------------------------------------
Net cash used in operations                                         (739,416)       (2,711,969)       (7,206,216)
INVESTING ACTIVITIES
Purchase of marketable securities and
  short-term investments                                                  --        (4,895,990)      (12,012,462)
Proceeds from sale of short-term investments                              --         1,958,172         2,937,754
Purchases of furniture and equipment                                 (46,831)         (232,849)         (344,560)
Proceeds from sale of furniture and equipment                             --                --             4,600
Organization costs incurred                                               --                --            (1,358)
                                                                ------------------------------------------------
Net cash used in investing activities                                (46,831)       (3,170,667)       (9,416,026)
FINANCING ACTIVITIES
Proceeds from issuance of notes payable to related party                  --                --           957,557
Principal payments on notes payable to related party                (207,000)               --          (797,000)
Proceeds from loans payable                                          400,000                --         1,389,000
Principal payments on loans payable                               (1,050,000)               --        (1,389,000)
Payments for fractional shares from reverse splits
  and stock conversions
                                                                          --               (76)              (76)
Financing costs incurred                                             (36,000)               --           (90,000)
Payments received on subscription receivable                             208             1,746             4,517
Proceeds received from exercise of stock warrants                      6,250                --             6,250
Net proceeds received from issuance of preferred
  and common stock                                                22,243,329                --        24,492,207
                                                                ------------------------------------------------
Net cash provided by financing activities                         21,356,787             1,670        24,573,457
                                                                ------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS              20,570,540        (5,880,966)        7,951,213
Cash and cash equivalents at beginning of period                         503        13,832,179                --
                                                                ------------------------------------------------
Cash and cash equivalents at end of period                      $ 20,571,043      $  7,951,213      $  7,951,213
                                                                ================================================
Supplemental Disclosure of Cash Flow Information:
 Interest Paid                                                  $    157,721      $         --      $    197,072
                                                                ================================================
</TABLE>

See accompanying notes.


                                     Page 5

<PAGE>

                             AVAX Technologies, Inc.
                      (formerly Walden Laboratories, Inc.)
                          (a development stage company)
                    Notes to Financial Statements (Unaudited)
             For the Three and Nine Months ended September 30, 1997

1.  Description of Business

AVAX(TM) Technologies, Inc. (formerly Walden Laboratories, Inc.) (the Company)
is a development stage biopharmaceutical company. The Company changed its name
to AVAX Technologies, Inc. effective March 26, 1996.

In November 1995, the Company sold its leading product under development, an
over-the-counter nutritional, dietary, medicinal and/or elixorative food
supplement or drug and all of the related patents and other intellectual
property. Also in November 1995, the Company entered into a license agreement
with Thomas Jefferson University ("TJU") to develop, commercially manufacture
and sell products embodying immunotherapeutic vaccines for the treatment of
malignant melanoma and other carcinomas.

In December 1996, the Company entered into a license agreement with Rutgers, The
State University of New Jersey ("Rutgers") to develop, commercially manufacture
and sell products embodying a series of compounds for the treatment of cancer
and infectious diseases. In February 1997, the Company entered into a license
agreement with The Texas A&M University System to develop, commercially
manufacture and sell products embodying a series of compounds for the treatment
of cancer.

The Company's business is subject to significant risks consistent with
biotechnology companies that are developing products for human therapeutic use.
These risks include, but are not limited to, uncertainties regarding research
and development, access to capital, obtaining and enforcing patents, receiving
regulatory approval, and competition with other biotechnology and pharmaceutical
companies. The Company plans to continue to finance its operations with a
combination of equity and debt financing and, in the longer term, revenues from
product sales, if any. However, there can be no assurance that it will
successfully develop any product or, if it does, that the product will generate
any or sufficient revenues.


                                     Page 6

<PAGE>

2.  Basis of Presentation

The accompanying financial statements have been prepared by the Company without
audit, in accordance with GAAP for interim financial information and with the
rules and regulations of the Securities and Exchange Commission (the
"Commission"). Certain information and footnote disclosure normally included in
the Company's audited annual financial statements has been condensed or omitted
in the Company's interim financial statements. In the opinion of the Company,
these financial statements contain all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation. The results of
operations for the three and nine month periods ended September 30, 1997 may not
necessarily be indicative of the results of operations expected for the full
year, except that the Company expects to incur a significant loss for the year
ended December 31, 1997.

The accompanying financial statements and the related notes should be read in
conjunction with the Company's audited financial statements for the years ended
December 31, 1996 and 1995 included in the Company's Registration Statement on
Form SB-2, Registration No. 333-09349.

3. Net Loss per Common Share

Net loss per share is based on net loss divided by the weighted average number
of shares of common stock outstanding during the respective periods,
retroactively adjusted to reflect the reverse stock splits described below. The
weighted average number of common shares outstanding have been calculated in
accordance with Staff Accounting Bulletin 83 ("SAB 83") of the Commission. SAB
83 requires that shares of common stock, warrants and options issued one-year
prior to the initial filing of a registration statement relating to an initial
public offering at amounts below the public offering price be considered
outstanding for all periods presented in the Company's registration statement
prior to the effective date thereof. For purposes of calculating the loss per
share, the private placement of Series B convertible preferred stock has been
considered to be the equivalent of an initial public offering, and the initial
public offering price was determined to be $3.92 per share by assuming that the
preferred stock issued was immediately converted into common stock. Series A
Convertible Preferred Stock, actually converted in June 1996, was included in
the calculation of the weighted average number of shares for the year ended
December 31, 1995, as if converted.

Prior to the first closing of a private placement on May 15, 1996, the Company
effected a 1-for-2 reverse stock split of the Company's common stock. Pursuant
to an amendment to the Company's Certificate of Incorporation dated May 7, 1997,
a second 1-for-2 reverse split of the Company's common stock was effected as of
the close of business on May 13, 1997. All outstanding share and per share
amounts included in the accompanying financial statements have been adjusted to
reflect both 1-for-2 reverse stock splits.


                                     Page 7

<PAGE>

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

PLAN OF OPERATION

Statements in this Form 10-QSB that are not descriptions of historical facts are
forward-looking statements, within the meaning of the Private Securities
Litigation Reform Act of 1995, that are subject to risks and uncertainties.
Actual results could differ materially from those currently anticipated due to a
number of factors, including those set forth in the Company's filings under the
Securities Act of 1933 and under the Securities Exchange Act of 1934, including
under the headings "Risk Factors" and elsewhere, including, without limitation,
risks relating to the early stage of the Company and its products under
development, government regulation, dependence on third parties, patent risks,
lack of manufacturing facilities and competition. The Company undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new events, future information or otherwise.

The Company is currently engaged in the development and commercialization of
biotechnology and pharmaceutical products and technologies. In November 1995,
the Company acquired the rights to the AC Vaccine(TM) technology pursuant to the
TJU License. The Company initially intends to be engaged primarily in the
development and commercialization of the AC Vaccine technology, as well as the
potential anti-cancer and anti-infective technology licensed pursuant to the
Rutgers License and the potential anti-cancer technology licensed pursuant to
the Texas A&M License. See "Business." The Company anticipates that during the
next 12 months it will conduct substantial research and development of the AC
Vaccine technology, including, without limitation, Phase III clinical trials on
M-Vax(TM), the Company's lead AC Vaccine technology for metastatic melanoma. The
Company also anticipates that it will expend substantial resources on the
research and development of that same technology for the treatment of other
cancers, which may include ovarian, breast, prostate, lung and colorectal cancer
and acute myelogenous leukemia (AML). For example, the Company is enrolling
patients for its Phase II clinical trial of O-Vax(TM), its AC Vaccine for
ovarian cancer. This trial is being conducted at TJU under the direction of Dr.
David Berd. It is also expected that during the next 12 months, in order to
support these clinical trial efforts, the Company will be required to expend
substantial resources on the establishment of laboratory facilities for the
manufacture of its products. See "Business--Technology Applications and Product
Candidates," "Research and Development" and "Manufacturing and Marketing."

In connection with the Company's strategy to acquire, develop and commercialize
other potential biotechnology products and technologies, in December 1996, the
Company acquired the exclusive worldwide rights to a series of compounds for the
potential treatment of cancer and other infectious diseases from Rutgers.
Additionally, in February 1997, the Company acquired the exclusive worldwide
rights to another series of compounds for the potential treatment of cancer from
Texas A&M. Pursuant to the Rutgers License, the Texas A&M License, and the
related sponsored research agreements with each of Rutgers and Texas A&M, the
Company intends to expend substantial resources on the research and development
of these compounds.

While there can be no assurance, the Company may acquire additional products and
technologies during the next 12 months, which may or may not be in the cancer
immunotherapy field. Should the Company acquire such additional products or
technologies, it is anticipated that such additional products or technologies
will require substantial resources for research, development and clinical
evaluation. However, there can be no assurance that the Company will be able to
obtain the additional financing necessary to acquire and develop such additional
products and technologies. In addition, there can be no assurance, that changes
in the Company's research and development plans or other changes which would or
could alter the Company's operating expenses will not require the Company to
reallocate funds among its planned activities and curtail certain planned
expenditures. In such event, the Company may need additional financing. There
can be no assurance as to the availability or the terms of any required
additional financing, when and if needed. In the event that the Company fails to
raise any funds it requires, it may be necessary for the Company to
significantly curtail its activities or cease operations.


                                     Page 8

<PAGE>

During the past 12 months, the Company hired two new employees and it
anticipates that over the next 12 months it may hire additional new employees,
and may establish facilities for the clinical development and manufacture of the
AC Vaccine products or any other technologies which may have been, or may be,
acquired. The timing and cost of hiring any additional employees or the
establishment of any such facility may vary depending on need and cannot
currently be predicted with any certainty.

LIQUIDITY AND CAPITAL RESOURCES

Since its inception, the Company has concentrated its efforts and resources in
the development and commercialization of biotechnology and pharmaceutical
products and technologies. The Company has been unprofitable since its founding
and has incurred a cumulative net loss of approximately $6,193,810 as of
September 30, 1997. The Company expects to incur significantly increasing
operating losses over the next several years, primarily due to the expansion of
its research and development programs, including clinical trials for M-Vax,
O-Vax and other preclinical studies and clinical trials for other products that
may arise from the AC Vaccine technology and from the compounds licensed from
Rutgers and Texas A&M and other products that it may acquire or develop.

The Company currently anticipates that its current resources should be
sufficient to fund operations for approximately the next 18-30 months based upon
the Company's current operating plan. The Company does not currently expect to
be required to raise additional capital in the next 12 months, although from
time to time, depending upon its anticipated future needs, the Company may avail
itself of opportunities in the capital markets to raise additional capital if
acceptable terms may be obtained. However, since the Company's working capital
requirements will depend upon numerous factors, including, without limitation,
progress of the Company's research and development programs, preclinical and
clinical testing, timing and cost of obtaining regulatory approvals, changes in
levels of resources that the Company devotes to the development of manufacturing
and marketing capabilities, competitive and technological advances, status of
competitors, and the ability of the Company to establish collaborative
arrangements with other organizations, there can be no assurance that the
Company will be able to meets its business objectives under its current
operations plan and/or not need to raise additional capital. Since the Company
has no committed external sources of capital, and expects no product revenues
for the foreseeable future, it will likely require additional financing to fund
future operations. There can be no assurance, however, that the Company will be
able to obtain the additional funds it will require on acceptable terms, if at
all. If adequate funds are not available the Company may be required to delay,
reduce the scope of or eliminate one or more of its research or development
programs; to obtain funds through arrangements with collaborative partners or
others that may require the Company to relinquish rights to certain
technologies, product candidates or products that the Company would otherwise
seek to develop or commercialize itself; or to license the rights to such
products on terms that are less favorable to the Company that might otherwise be
available.

The Company's ability to achieve profitability depends upon, among other things,
its ability to develop products, obtain regulatory approval for its proposed
products, and enter into agreements for product development, manufacturing and
commercialization. The Company's M-Vax and O-Vax products do not currently
generate revenue and the Company does not expect to achieve revenues from these
or other products for the foreseeable future. Moreover, there can be no
assurance that the Company will ever achieve significant revenues or profitable
operations from the sale of M-Vax, O-Vax or any other products that it may
develop.


                                     Page 9

<PAGE>

PART II - OTHER INFORMATION

Item 1.    Legal Proceedings.
           None.

Item 2.    Change in Securities.
           None.

Item 3.    Defaults Upon Senior Securities.
           None.

Item 4.    Submission of Matters to a Vote of Security Holder.
           None

Item 5.    Other Information.
           None.

Item 6.    Exhibits and Reports on Form 8-K.
           (a) Exhibits:

                11.1   Statement Concerning Computation of Per Share Earnings.

                27.1   Financial Data Schedule.

           (b) Reports on Form 8-K:  None.


                                    Page 10

<PAGE>

                                   Signatures

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

                                        AVAX Technologies, Inc.
                                                (Registrant)

Date:    November 14, 1997


                                                /s/ Jeffrey M. Jonas, M.D.
                                        ----------------------------------------
                                        Jeffrey M. Jonas, M.D.
                                        President and Chief Executive Officer

Date:    November 14, 1997


                                                 /s/ David L. Tousley
                                        ----------------------------------------
                                        David L. Tousley
                                        Chief Financial Officer
                                        (Principal Financial and
                                        Accounting Officer)