<PAGE>



                       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, 1998

                                       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)

       Registrant'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 October 26, 1998, 9,633,208 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
<TABLE>
<CAPTION>

                                                                                                                       Page
<S>                                                                                                                   <C>
PART I - FINANCIAL INFORMATION
------------------------------

         Item 1.  Financial Statements
                   BALANCE SHEETS -- As of December 31, 1997
                      and September 30, 1998 (Unaudited) .......................................................       Page 3
                   STATEMENTS OF OPERATIONS  (Unaudited)  -- For the Three Months Ended  September 30,
                      1997 and  September 30, 1998;  for the Nine Months Ended  September 30, 1997 and
                      September  30, 1998;  and for the Period from  January 12, 1990  (Incorporation)
                      through September 30, 1998 ...............................................................       Page 4
                   STATEMENTS  OF CASH FLOWS  (Unaudited)  -- For the Nine Months Ended  September 30,
                      1997  and  September  30,  1998  and  for  the  Period  from  January  12,  1990
                      (Incorporation) through September 30, 1998 ...............................................       Page 5
                   Notes to Financial Statements ...............................................................       Page 7

         Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations ........       Page 9


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

         Item 1.  Legal Proceedings ............................................................................      Page 12
         Item 2.  Change in Securities .........................................................................      Page 12
         Item 6.  Exhibits and Reports on Form 8-K .............................................................      Page 13

         Signatures ............................................................................................      Page 14

</TABLE>
                                     Page 2

<PAGE>


PART I - FINANCIAL INFORMATION
Item 1.  Financial Statements

                             AVAX Technologies, Inc.
                          (a development stage company)
                                 Balance Sheets
<TABLE>
<CAPTION>


                                                                                        December 31,         September 30,
                                                                                            1997                 1998
                                                                                    -------------------------------------------
Assets                                                                                                        (Unaudited)
<S>                                                                                       <C>                    <C>
Current assets:
   Cash and cash equivalents                                                              $  6,820,884           $  323,842
   Marketable securities                                                                     9,102,028           11,366,215
   Common stock receivable from a related party                                              1,200,000                  -
   Prepaid expenses and other current assets                                                   154,929              199,444
                                                                                    -------------------------------------------
Total current assets                                                                        17,277,841           11,889,501
Furniture and equipment, at cost                                                                91,959              118,477
   Less accumulated depreciation                                                                14,967               29,962
                                                                                    -------------------------------------------
Net furniture and equipment                                                                     76,992               88,515
                                                                                    -------------------------------------------
Total assets                                                                               $17,354,833          $11,978,016
                                                                                    -------------------------------------------

Liabilities and stockholders' equity Current liabilities:
   Accounts payable and accrued liabilities                                              $     353,726        $     350,840
   Amount payable to preferred stockholders                                                  1,150,200                  -
   Amount payable to Former Officer                                                             49,800                  -
                                                                                    -------------------------------------------
Total current liabilities                                                                    1,553,726              350,840
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 - 204,159 and 130,488 at December 31, 1997
         and September 30, 1998, respectively (liquidation preference -
         $27,561,465 and $17,615,880 at December 31, 1997 and September 30,
         1998, respectively)
                                                                                                 2,041                1,305
   Common stock, $.004 par value:
     Authorized shares - 50,000,000 and 30,000,000 at December 31, 1997 and
         September 30, 1998, respectively
     Issued and outstanding shares - 4,582,305 and 9,540,616 at December 31, 1997
        and September 30, 1998,  respectively                                                   18,329               38,161
   Additional paid-in capital                                                               23,995,640           24,001,544
   Subscription receivable                                                                        (432)                (422)
   Deferred compensation                                                                      (694,324)            (492,499)
   Deficit accumulated during the development stage                                         (7,520,147)         (11,920,913)
                                                                                    -------------------------------------------
Total stockholders' equity                                                                  15,801,107           11,627,176
                                                                                    -------------------------------------------
Total liabilities and stockholders' equity                                                 $17,354,833          $11,978,016
                                                                                    -------------------------------------------
</TABLE>

See accompanying notes.

                                     Page 3

<PAGE>


                             AVAX Technologies, 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,
                                        1997                1998                1997                1998                1998
                                 ---------------------------------------------------------------------------------------------------
<S>                              <C>                  <C>                <C>                  <C>                 <C>
Gain from sale of the Product    $              --      $          --       $          --    $            --     $      1,951,000

Costs and expenses:
   Research and development               508,298           1,001,479           1,478,080            3,111,622          7,912,907
   Marketing and selling                       --                  --                  --                  --             543,646
   General and administrative             562,826             614,290           2,154,704            1,842,446          7,404,590
                                 ---------------------------------------------------------------------------------------------------
Total operating loss                   (1,071,124)         (1,615,769)         (3,632,784)          (4,954,068)       (13,910,143)
Other income (expense):
   Interest income                        272,602             174,737             817,199              553,302          2,489,755
   Interest expense                       (42,965)                 --           (124,203)                  --            (646,293)
   Other, net                                  --                  --                 --                   --             145,768
                                 ---------------------------------------------------------------------------------------------------
Total other income (expense)              229,637             174,737             692,996              553,302          1,989,230
                                 ---------------------------------------------------------------------------------------------------
Net loss                                 (841,487)         (1,441,032)         (2,939,788)          (4,400,766)       (11,920,913)
Amount payable for liquidation
   preference                                  --                  --                 --                   --          (1,870,033)
                                 ---------------------------------------------------------------------------------------------------
Net loss attributable to                                                                       
   common stockholders            $      (841,487)      $  (1,441,032)      $ (2,939,788)       $   (4,400,766)     $ (13,790,946)
                                 ===================================================================================================
Net loss per common share         $          (.21)      $        (.20)      $        (.81)      $         (.77)
                                 ===============================================================================
Weighted average number of
   shares outstanding                   4,082,061           7,380,995           3,634,243            5,716,990
                                 ===============================================================================
</TABLE>

See accompanying notes.

                                     Page 4
<PAGE>


                             AVAX Technologies, Inc.
                          (a development stage company)
                            Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                   Period from January
                                                                                                         12, 1990
                                                                                                      (Incorporation)
                                                              Nine months ended September 30,         To September 30,
                                                                  1997                 1998                 1998
                                                        ------------------------------------------------------------------
<S>                                                         <C>                     <C>                <C>
Operating activities
Net loss                                                    $ (2,939,788)           $ (4,400,766)      $ (11,920,913)
Adjustments to reconcile net loss to net cash used
   in operating activities:
     Depreciation and amortization                               210,903                 216,820             729,141
     Compensatory stock issue                                                             25,000              25,000
     Gain from sale of the Product                                     -                       -          (1,951,000)
     Gain on sale of intellectual property                             -                       -                (787)
     Accretion of interest on common stock receivable           (124,142)                      -            (449,000)
     Accretion of interest on amount payable to
       preferred stockholders and Former Officer                 124,142                       -             449,000
     Loss on sale or abandonment of furniture and
       equipment                                                       -                       -              37,387
     Issuance of common stock for services                             -                       -             147,000
     Changes in operating assets and liabilities:
       Prepaid expenses and other current assets                 (54,974)                (44,515)           (199,444)
       Accounts payable and accrued liabilities                   71,890                  (2,886)            350,840
       Amount payable to Former Officer                                -                       -              80,522
                                                        ------------------------------------------------------------------
Net cash used in operating activities                         (2,711,969)             (4,206,347)        (12,702,254)

Investing activities
Purchase of marketable securities and short-term
   investments                                                (4,895,990)             (2,264,187)        (18,482,687)
Proceeds from sale of short-term investments                   1,958,172                       -           7,116,472
Purchases of furniture and equipment                            (232,849)                (26,518)           (184,411)
Proceeds from sale of furniture and equipment                          -                       -               4,600
Organization costs incurred                                            -                       -              (1,358)
                                                        ------------------------------------------------------------------
Net cash used in investing activities                         (3,170,667)             (2,290,705)        (11,547,384)
</TABLE>
                                     Page 5


<PAGE>


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

<TABLE>
<CAPTION>
                                                                                                   Period from January
                                                                                                         12, 1990
                                                                                                      (Incorporation)
                                                              Nine months ended September 30,         To September 30,
                                                                  1997                 1998                 1998
                                                        ------------------------------------------------------------------
<S>                                                         <C>                     <C>                <C>
Financing activities
Proceeds from issuance of notes payable to related
   party                                                      $        -              $        -          $  957,557
Principal payments on notes payable to related party                   -                       -            (797,000)
Proceeds from loans payable                                            -                       -           1,389,000
Principal payments on loans payable                                    -                       -          (1,389,000)
Payments for fractional shares from reverse splits and
   preferred stock conversions                                       (76)                      -                 (76)
Financing costs incurred                                               -                       -             (90,000)
Payments received on subscription receivable                       1,746                      10               4,542
Proceeds received from exercise of stock warrants                      -                       -               6,250
Net proceeds received from issuance of preferred
   and common stock                                                    -                       -          24,492,207
                                                        ------------------------------------------------------------------
Net cash provided by financing activities                          1,670                      10          24,573,480
                                                        ------------------------------------------------------------------

Net increase (decrease) in cash and cash equivalents          (5,880,966)             (6,497,042)            323,842

Cash and cash equivalents at beginning of period              13,832,179               6,820,884                   -

                                                        ==================================================================
Cash and cash equivalents at end of period                    $7,951,213              $  323,842          $  323,842
                                                        ==================================================================

Supplemental disclosure of cash flow information
Interest paid                                                  $       -              $        -          $  197,072
                                                        ==================================================================
</TABLE>

See accompanying notes.

                                     Page 6

<PAGE>


                             AVAX Technologies, Inc.
                          (a development stage company)
                    Notes to Financial Statements (Unaudited)
         For the Three and Nine Months ended September 30, 1997 and 1998


1.  Description of Business

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

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

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

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

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

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.


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 month periods ended September 30, 1997 and 1998 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, 1998.

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, 1997 and 1996 included in the Company's Registration Statement on
Form S-3, Registration No. 333-09349.

                                     Page 7

<PAGE>


3. Net Loss per Common Share

In 1997, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share." SFAS No.
128 replaced the calculation of primary and fully diluted earnings per share
with basic and diluted earnings per share. Unlike primary earnings per share,
basic earnings per share exclude any dilutive effects of options, warrants and
convertible securities. Diluted earnings per share is very similar to the
previously required fully diluted earnings per share. All earnings per share
amounts for all periods have been presented, and where appropriate, restated to
conform to the SFAS No. 128 requirements.

Net loss per share is based on net loss divided by weighted average number of
shares of common stock outstanding during the respective periods, adjusted to
reflect the reverse stock splits. The weighted average number of common shares
outstanding has 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. For purposes of calculating the net loss
per share, the private placement of Series B convertible preferred stock,
completed in June 1996, has been considered to be the equivalent of an initial
filing of a registration statement relating to 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. Those shares of common stock, warrants and options, considered as cheap
stock in accordance with SAB 83, were considered outstanding for all periods,
prior to July 10, 1997, at which time the Company's registration statement on
Form SB-2 to register the shares sold in the private placement was declared
effective.

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.

4. Additional Issuance of Shares

In consideration of the agreement with the Company of certain holders of Series
B Convertible Preferred Stock, par value $.01 per share ("Series B Preferred
Stock"), to extend the lock-up period with respect to their shares of Common
Stock issuable upon conversion of their respective shares of Series B Preferred
Stock, such holders became subject to an additional "Reset Event", such that the
Company became obligated to issue additional shares of Common Stock to such
holders in the event that the average closing bid price of the Common Stock for
the 30 consecutive trading days immediately preceding July 10, 1998 was less
than $5.175 per share (135% of the then applicable conversion price).

The average closing bid price of the Common Stock for the 30 consecutive trading
days immediately preceding July 10, 1998 was, in fact, approximately $3.15.
Accordingly, each such holder became entitled to receive approximately 16.7
additional shares of Common Stock for each share of Series B Preferred Stock
that they owned as of July 10, 1998. As a result of the Reset Event, the Company
issued an aggregate of 3,027,164 shares of Common Stock in July for no
additional consideration.


                                     Page 8
<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. The Company anticipates that during the next 12 months it
will conduct substantial research and development of the AC Vaccine technology,
including, without limitation, multi-center pivotal registration 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 also treating
post-surgical stage 3 patients in its Phase I/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 and has shown a positive immune response to
haptenized tumor cells in the first nine of nine patients treated, and has also
shown a positive immune response to unhaptenized tumor cells in the first eight
of nine patients treated, both as measured by a delayed type hypersensitivity
(DTH) test. Recently, the Company has received agreement from the NCI to sponsor
a Phase I/II trial in ovarian cancer which the Company intends to begin later
this year. The Company also plans to evaluate the AC Vaccine in other cancers
and to initiate similar Phase I/II clinical trials where appropriate. 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 facilities for the manufacture of its products.

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 9
<PAGE>


The Company's research and development expenses have increased significantly
from $508,298 in the three months ended September 30, 1997 to $1,001,479 in the
three months ended September 30, 1998. The increase relates primarily to costs
incurred related to commencement of the pivotal registration trial of M-Vax(TM)
for which enrollment began during the third quarter. Research and development
costs have also increased due to the licensing of the topoisomerase inhibitor
compounds from Rutgers and the licensing of the anti-estrogen compounds from
Texas A&M, as well as costs associated with the Company's ongoing scale up and
testing. The Company's general and administrative expenses have increased from
$562,826 in the three months ended September 30, 1997 to $614,290 in the three
months ended September 30, 1998 due primarily to an increase in compensation
expense related to the hiring of additional personnel. The Company anticipates
that, over the next 12 months, expenses will continue to increase, particularly
as development proceeds with the AC Vaccine and the Rutgers and Texas A&M
Compounds and as the Company's GMP manufacturing facility is brought on line for
clinical production.

Also, during the past 12 months, the Company hired six new employees and it
anticipates that over the next 12 months it may hire additional new employees,
particularly in connection with the establishment of facilities for the
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 currently cannot be predicted with any certainty, however, the Company
currently estimates that the establishment of its GMP manufacturing facility in
Philadelphia will necessitate approximately $2,000,000 to $2,500,000 in funding,
and take approximately six to nine months to complete. The initial $150,000 in
funding for such facility is expected to come from a mortgage loan from the
Philadelphia Economic Development Corporation referred to below. The balance of
such funding is expected to come from the Company's existing working capital and
other potential debt financings that the Company may pursue, although there can
be no assurance that the Company will be able to procure the necessary financing
on acceptable terms.

Liquidity and Capital Resources

The Company currently anticipates that its current resources should be
sufficient to fund operations for approximately the next 15-21 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. The Company has received authorization from the Philadelphia
Economic Development Corporation for a $150,000 Economic Stimulus Mortgage Loan,
at a fixed interest rate of 3 percent, to assist the Company in establishing its
GMP manufacturing facility in Philadelphia. The loan is subject to negotiation
and execution of definitive documentation. There can be no assurance, however,
that the Company will be able to obtain additional funds it will require for its
projects 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 than
might otherwise be available.

Year 2000 Compliance

The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. As a result, those
computer programs having date-sensitive software would recognize a date with the
year "00" as the year 1900 rather than the year 2000. Systems that calculate,
compare or sort using the incorrect date may malfunction.


                                    Page 10
<PAGE>

The Company's only date-sensitive information technology is its accounting
software applications, which the Company intends to upgrade to be Year 2000
compliant by June 30, 1999. To the degree the software is found to be
non-compliant, the Company has alternative methods in place to ensure the
functions performed by the software will be completed. Because the Company has
already planned to replace its software in 1999, the Company does not
contemplate any software replacement costs due to Year 2000 issues.

The Company has made inquiries of suppliers and parties with whom it has
significant business relationships regarding compliance with Year 2000 issues.
These include a clinical processing site at Thomas Jefferson University ("TJU"),
various other clinical sites and certain financial institutions such as
commercial banks. The Company has been informed by TJU that TJU will be Year
2000 compliant insofar as the Company is concerned. Specifically, clinical trial
information that is maintained at TJU is on a standalone computer system. TJU
has indicated that the software used to monitor clinical trial information will
be upgraded to a Year 2000 compliant version during 1999.

To date, the Company is not aware of any financial institution or other third
party with a Year 2000 issue that would materially impact the Company's results
of operations, liquidity or capital resources. The Company has also been advised
by its financial institutions that it will receive certifications confirming
that the computer systems of these institutions are Year 2000 compliant.

Generally, the Company intends to develop contingency plans to address any other
Year 2000 compliance-risks that are uncovered by its continuing evaluation
efforts. Although the Company has no means of ensuring that its suppliers and
financial institutions will be Year 2000 ready, it will continue to monitor, to
the extent practicable, their compliance with the Year 2000 problem. There can
be no assurance, however, that such problems will not arise.


                                    Page 11
<PAGE>


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

Item 1.  Legal Proceedings
         -----------------

Previously, the Company disclosed that a party has opposed the Company's
application for a federal trademark registration for the name AVAX. Through the
current period there has been no material events or changes in the status of
this matter. The Company does not believe that an adverse outcome in this
proceeding will materially affect its business.

Except for the trademark matter discussed above, the Company is not aware of any
material pending or threatened legal proceedings.


Item 2.  Changes in Securities.
         ----------------------

(a) In consideration of the agreement with the Company of certain holders of
Series B Convertible Preferred Stock, par value $.01 per share ("Series B
Preferred Stock"), to extend the lock-up period with respect to their shares of
Common Stock issuable upon conversion of their respective shares of Series B
Preferred Stock, such holders became subject to an additional "Reset Event",
such that the Company became obligated to issue additional shares of Common
Stock to such holders in the event that the average closing bid price of the
Common Stock for the 30 consecutive trading days immediately preceding July 10,
1998 was less than $5.175 per share (135% of the then applicable conversion
price).

The average closing bid price of the Common Stock for the 30 consecutive trading
days immediately preceding July 10, 1998 was, in fact, approximately $3.15.
Accordingly, each such holder became entitled to receive approximately 16.7
additional shares of Common Stock for each share of Series B Preferred Stock
that they owned as of July 10, 1998. As a result of the Reset Event, the Company
issued an aggregate of 3,027,164 shares of Common Stock in July for no
additional consideration.

(b) In September 1998, the Company issued, under its Amended and Restated 1992
Stock Option Plan, as amended, options to purchase 240,000 shares of Common
Stock at an exercise price of $1.813 per share, exercisable for seven years.
40,000 of such shares will vest in September 1999, while the remaining 200,000
shares will vest upon the completion of various milestones. The issuance of such
options was deemed to be exempt from registration under the Act in reliance on
Section 4(2) thereof because such issuance did not involve a public offering. In
addition, such optionee represented its intention to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof and appropriate legends are required to be affixed to the
stock certificates issued upon exercise of such options. The optionee had
adequate access to information about the Company. Moreover, such optionee
represented to the Company, and the Company believed, that it was sophisticated
and expert in financial matters.

(c) In September 1998, the Company issued to a financial advisor warrants to
purchase 75,000 shares of Common Stock at an exercise price of $1.625 per share.
Such warrants vest on various dates through February 1999 and are exercisable in
whole, or in part, over a five-year period. The issuance of such warrants was
deemed to be exempt from registration under the Act in reliance on Section 4(2)
thereof because such issuance did not involve a public offering. In addition,
such financial advisor represented its intention to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof and appropriate legends are required to be affixed to the
warrant certificates issued in such transactions. Such financial advisor had
adequate access, through its negotiations with the Company, to information about
the Company. Moreover, such financial advisor represented to the Company, and
the Company believed, that it was sophisticated and expert in financial matters.

                                    Page 12
<PAGE>


(d) In August 1998, the Company issued 9,301 shares of common stock to its
President and Chief Executive Officer ("CEO"). The issued shares are subject to
certain restrictions on transfer set forth in a restricted stock grant agreement
between the Company and its CEO. The issuance of these shares was deemed to be
exempt from registration under the Act in reliance on Section 4(2) thereof
because such issuance did not involve a public offering. In addition, the
Company's CEO represented his intention to acquire the securities for investment
only and not with a view to or for sale in connection with any distribution
thereof and appropriate legends are required to be affixed to the warrant
certificates issued in such transactions. The Company's CEO had adequate access
to information about the Company. Moreover, the Chief Executive Officer of the
Company represented to the Company, and the Company believed, that he was
sophisticated and expert in financial matters.


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:

Four reports on Form 8-K were filed by the Company during the three months ended
September 30, 1998:

The first report was filed on July 10, 1998, relating to the Company's issuance
of an aggregate of 3,027,164 shares of Common Stock for no additional
consideration pursuant to the reset terms of March 1997 lock-up agreements
entered into by the Company with certain holders of Series B Preferred Stock.
See Item 2 -- Changes in Securities.

The second report was filed on July 24, 1998, relating to a press release issued
by the Company on July 24, 1998, announcing the Company's financial results for
the second quarter ended June 30, 1998.

The third report was filed on July 27, 1998, relating to a press release issued
on July 27, 1998, announcing the FDA's allowance of the Company to begin a
pivotal trial for registration of M-Vax(TM).

The fourth report was filed on August 24, 1998, relating to a press release
issued August 24, 1998, announcing the completion of a pilot Phase I/II
immunological clinical study of O-Vax(TM), the Company's experimental vaccine of
haptenized autologous ovarian cancer cells.

                                    Page 13


<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 13, 1998
                                               /s/ Jeffrey M. Jonas, M.D.     
                                       -----------------------------------------
                                       Jeffrey M. Jonas, M.D.
                                       President and Chief Executive Officer


Date:    November 13, 1998
                                             /s/ David L. Tousley
                                       -----------------------------------------
                                       David L. Tousley
                                       Chief Financial Officer
                                       (Principal Financial and
                                       Accounting Officer)

                                    Page 14