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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-QSB

|/x/                                          |  | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934       
|-------------------------------------------- |  | ----------------------------------------------------------------------------------------
|For the quarterly period ended June 30, 2001
|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 333-09349

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

Delaware(State or other jurisdiction of incorporation or organization)
13-3575874(I.R.S. Employer Identification No.)4520 Main Street, Suite 930
Kansas City, Missouri(Address of principal executive offices)
64111(Zip Code)


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

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 July 31, 2001, 16,541,621 shares of the Registrant's common stock par value $.004 per share, were outstanding.

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AVAX TECHNOLOGIES, INC.

Table of Contents

|                             |            |  |                                                                                                                                                                                                             |  | Page   
|---------------------------- | ---------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------
|PART IFINANCIAL INFORMATION
|                             | Item 1.    |  | Financial Statements                                                                                                                                                                                        |  |        
|                             |            |  | CONSOLIDATED BALANCE SHEETSAs of December 31, 2000 and June 30, 2001 (Unaudited)                                                                                                                           |  | Page 3 
|                             |            |  | CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)For the Three months and Six Months Ended June 30, 2000 and June 30, 2001 and for the Period from January 12, 1990 (Incorporation) through June 30,
 2001 |  | Page 4 
|                             |            |  | CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)For the Six Months Ended June 30, 2000 and June 30, 2001and for the Period from January 12, 1990 (Incorporation) through June 30, 2001                    |  | Page 5 
|                             |            |  | Notes to Consolidated Financial Statements                                                                                                                                                                  |  | Page 6 
|                             | Item 2.    |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                                                                                                                       |  | Page 7 
|PART IIOTHER INFORMATION   
|                             | Item 4.    |  | Submission of Matters to a Vote of Security Holders                                                                                                                                                         |  | Page 9 
|                             | Item 6.    |  | Exhibits and Reports on Form 8-K                                                                                                                                                                            |  | Page 10
|                             | Signatures |  | Page 11                                                                                                                                                                                                    

Page 2

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PART IFINANCIAL INFORMATION

Item 1.  Financial Statements

AVAX Technologies, Inc.(a development stage company)Consolidated Balance Sheets

|                                                     |                                                  | December 31,
2000                                                                          |                                                                                                                 | June 30,
2001 |       
|---------------------------------------------------- | ------------------------------------------------ | ------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------- | ------------- | ------
|
|Assets                                               |                                                  |                                                                                            |                                                                                                                 |               |       
|Current assets:                                      |                                                  |                                                                                            |                                                                                                                 |               |       
|                                                     | Cash and cash equivalents                        |                                                                                            | $                                                                                                               | 3,694,424     |       
|                                                     | Marketable securities                            |                                                                                            |                                                                                                                 | 19,239,189    |       
|                                                     | Accounts receivable                              |                                                                                            |                                                                                                                 | 133,140       |       
|                                                     | Inventory                                        |                                                                                            |                                                                                                                 | 55,187        |       
|                                                     | Prepaid expenses and other current assets        |                                                                                            |                                                                                                                 | 1,019,400     |       
|                                                     |                                                  |                                                                                            |                                                                                                                 |               |       
|Total current assets                                 |                                                  |                                                                                            | 24,141,340                                                                                                      |               |       
|Property, plant and equipment at cost                |                                                  |                                                                                            | 3,133,204                                                                                                       |               |       
|                                                     | Less accumulated depreciation                    |                                                                                            |                                                                                                                 | 704,397       |       
|                                                     |                                                  |                                                                                            |                                                                                                                 |               |       
|Net furniture and equipment                          |                                                  |                                                                                            | 2,428,807                                                                                                       |               |       
|Equity investment in joint venture                   |                                                  |                                                                                            | 47,753                                                                                                          |               |       
|Acquired intellectual property and other intangibles |                                                  |                                                                                            | 4,081,726                                                                                                       |               |       
|                                                     |                                                  |                                                                                            |                                                                                                                 |               |       
|Total assets                                         |                                                  | $                                                                                          | 30,699,626                                                                                                      |               | $     
|                                                     |                                                  |                                                                                            |                                                                                                                 |               |       
|Liabilities and stockholders' equity                 |                                                  |                                                                                            |                                                                                                                 |               |       
|Current liabilities:                                 |                                                  |                                                                                            |                                                                                                                 |               |       
|                                                     | Accounts payable and accrued liabilities         |                                                                                            | $                                                                                                               | 2,296,641     |       
|                                                     | Deferred revenue                                 |                                                                                            |                                                                                                                 | 64,614        |       
|                                                     |                                                  |                                                                                            |                                                                                                                 |               |       
|Total current liabilities                            |                                                  |                                                                                            | 2,361,255                                                                                                       |               |       
|Long-term debt                                       |                                                  |                                                                                            | 247,752                                                                                                         |               |       
|Commitments and contingencies                        |                                                  |                                                                                            |                                                                                                                 |               |       
|Stockholders' equity:                                |                                                  |                                                                                            |                                                                                                                 |               |       
|                                                     | Preferred stock, $.01 par value:                 |                                                                                            |                                                                                                                 |               |       
|                                                     |                                                  | Authorized shares5,000,000, including Series B300,000 shares and Series C120,000 shares |                                                                                                                 |               |       
|                                                     |                                                  | Series B convertible preferred stock:                                                      |                                                                                                                 |               |       
|                                                     |                                                  |                                                                                            | Issued and outstanding shares0                                                                                 |               |       
|                                                     |                                                  | Series C convertible preferred stock:                                                      |                                                                                                                 |               |       
|                                                     |                                                  |                                                                                            | Issued and outstanding shares86,750 (liquidation preference$8,675,000 at December 31, 2000 and June 30, 2001) |               |       
|                                                     | Common stock, $.004 par value:                   |                                                                                            |                                                                                                                 |               |       
|                                                     |                                                  | Authorized shares30,000,000 Issued and outstanding shares16,541,621                      |                                                                                                                 |               | 66,167
|                                                     | Additional paid-in capital                       |                                                                                            |                                                                                                                 | 65,446,587    |       
|                                                     | Subscription receivable                          |                                                                                            |                                                                                                                 | (422          | )     
|                                                     | Accumulated other comprehensive income           |                                                                                            |                                                                                                                 | 80,009        |       
|                                                     | Deficit accumulated during the development stage |                                                                                            |                                                                                                                 | (37,502,589   | )     
|                                                     |                                                  |                                                                                            |                                                                                                                 |               |       
|Total stockholders' equity                           |                                                  |                                                                                            | 28,090,619                                                                                                      |               |       
|                                                     |                                                  |                                                                                            |                                                                                                                 |               |       
|Total liabilities and stockholders' equity           |                                                  | $                                                                                          | 30,699,626                                                                                                      |               | $     
|                                                     |                                                  |                                                                                            |                                                                                                                 |               |       

See accompanying notes.

Page 3

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AVAX Technologies, Inc.(a development stage company)Consolidated Statements of Operations(Unaudited)

|                                                     |                                                      |   |            |           |   |            |           |   |            | Period From
January 12, 1990
(Incorporation)
Through June 30,
2001 |  
|---------------------------------------------------- | ---------------------------------------------------- | - | ---------- | --------- | - | ---------- | --------- | - | ---------- | ------------------------------------------------------------------ | -
|
|
|Revenue:                                             |                                                      |   |            |           |   |            |           |   |            |                                                                    |  
|                                                     | Gain from sale of the Product                        |   | $          |          |   | $          |          |   | $          |                                                                   |  
|                                                     | Grant revenue                                        |   |            |          |   |            | 10,658    |   |            |                                                                   |  
|                                                     | Product and contract service revenue                 |   |            |          |   |            | 23,037    |   |            |                                                                   |  
|                                                     |                                                      |   |            |           |   |            |           |   |            |                                                                    |  
|Total revenue                                        |                                                      |   |           |           |   | 33,695     |           |   |           |                                                                    |  
|Costs and expenses:                                  |                                                      |   |            |           |   |            |           |   |            |                                                                    |  
|                                                     | Manufacturing, research and development              |   |            | 1,740,343 |   |            | 1,805,610 |   |            | 3,240,838                                                          |  
|                                                     | Amortization of acquired intangibles                 |   |            |          |   |            | 119,312   |   |            |                                                                   |  
|                                                     | Selling, general and administrative                  |   |            | 1,274,196 |   |            | 785,308   |   |            | 2,322,080                                                          |  
|                                                     |                                                      |   |            |           |   |            |           |   |            |                                                                    |  
|Total operating loss                                 |                                                      |   | (3,014,539 | )         |   | (2,676,535 | )         |   | (5,562,918 | )                                                                  |  
|Other income (expense):                              |                                                      |   |            |           |   |            |           |   |            |                                                                    |  
|                                                     | Interest income                                      |   |            | 517,625   |   |            | 184,654   |   |            | 750,116                                                            |  
|                                                     | Interest expense                                     |   |            |          |   |            |          |   |            |                                                                   |  
|                                                     | Minority interest in loss of consolidated subsidiary |   |            | 109,946   |   |            |          |   |            | 158,983                                                            |  
|                                                     | Amortization of deferred gain on joint venture       |   |            |          |   |            | 225,725   |   |            |                                                                   |  
|                                                     | Equity in net loss of joint venture                  |   |            |          |   |            | (271,858  | ) |            |                                                                   |  
|                                                     | Other, net                                           |   |            |          |   |            |          |   |            |                                                                   |  
|                                                     |                                                      |   |            |           |   |            |           |   |            |                                                                    |  
|Total other income (expense)                         |                                                      |   | 627,571    |           |   | 138,521    |           |   | 909,099    |                                                                    |  
|Net loss                                             |                                                      |   | (2,386,968 | )         |   | (2,538,014 | )         |   | (4,653,819 | )                                                                  |  
|Amount payable for liquidation preference            |                                                      |   |           |           |   |           |           |   |           |                                                                    |  
|                                                     |                                                      |   |            |           |   |            |           |   |            |                                                                    |  
|Net loss attributable to common stockholders         |                                                      | $ | (2,386,968 | )         | $ | (2,538,014 | )         | $ | (4,653,819 | )                                                                  | $
|                                                     |                                                      |   |            |           |   |            |           |   |            |                                                                    |  
|Net loss per common share                            |                                                      | $ | (.15       | )         | $ | (.15       | )         | $ | (.32       | )                                                                  | $
|                                                     |                                                      |   |            |           |   |            |           |   |            |                                                                    |  
|Weighted average number of common shares outstanding |                                                      |   | 15,517,089 |           |   | 16,541,621 |           |   | 14,408,136 |                                                                    |  
|                                                     |                                                      |   |            |           |   |            |           |   |            |                                                                    |  

See accompanying notes.

Page 4

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

|                                                                                   |                                                                                      |                                           |             |          |         | Period From
January 12, 1990
(Incorporation)
To June 30,
2001 |         
|---------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------ | ----------------------------------------- | ----------- | -------- | ------- | ------------------------------------------------------------- | --------
|
|
|Operating activities                                                               |                                                                                      |                                           |             |          |         |                                                               |         
|Net loss                                                                           |                                                                                      | $                                         | (4,653,819  | )        | $       | (5,785,967                                                    | )       
|Adjustments to reconcile net loss to net cash used in operating activities:        |                                                                                      |                                           |             |          |         |                                                               |         
|                                                                                   | Depreciation and amortization                                                        |                                           |             | 301,550  |         |                                                               | 459,293 
|                                                                                   | Amortization of deferred gain on joint venture                                       |                                           |             |         |         |                                                               | (451,450
|                                                                                   | Equity in net loss of joint venture                                                  |                                           |             |         |         |                                                               | 418,017 
|                                                                                   | Acquired in process research and development charges                                 |                                           |             |         |         |                                                               |        
|                                                                                   | Compensatory stock issue                                                             |                                           |             |         |         |                                                               |        
|                                                                                   | Minority interest in net loss                                                        |                                           |             | (158,983 | )       |                                                               |        
|                                                                                   | Gain from sale of the Product                                                        |                                           |             |         |         |                                                               |        
|                                                                                   | Gain on sale of intellectual property                                                |                                           |             |         |         |                                                               |        
|                                                                                   | Accretion of interest on common stock receivable                                     |                                           |             |         |         |                                                               |        
|                                                                                   | Accretion of interest on amount payable to preferred stockholders and Former Officer |                                           |             |         |         |                                                               |        
|                                                                                   | Loss on sale or abandonment of furniture and equipment                               |                                           |             |         |         |                                                               |        
|                                                                                   | Issuance of common stock for services                                                |                                           |             |         |         |                                                               |        
|                                                                                   | Changes in operating assets and liabilities:                                         |                                           |             |          |         |                                                               |         
|                                                                                   |                                                                                      | Accounts receivable                       |             |          |        |                                                               |         
|                                                                                   |                                                                                      | Inventory                                 |             |          |        |                                                               |         
|                                                                                   |                                                                                      | Prepaid expenses and other current assets |             |          | (13,273 | )                                                             |         
|                                                                                   |                                                                                      | Accounts payable and accrued liabilities  |             |          | 397,572 |                                                               |         
|                                                                                   |                                                                                      | Deferred revenue                          |             |          |        |                                                               |         
|                                                                                   |                                                                                      | Amount payable to Former Officer          |             |          |        |                                                               |         
|                                                                                   |                                                                                      |                                           |             |          |         |                                                               |         
|Net cash used in operating activities                                              |                                                                                      |                                           | (4,126,953  | )        |         | (6,098,397                                                    | )       
|Investing activities                                                               |                                                                                      |                                           |             |          |         |                                                               |         
|Purchase of marketable securities and short-term investments                       |                                                                                      |                                           | (61,353,194 | )        |         | (371,423                                                      | )       
|Proceeds from sale of marketable securities                                        |                                                                                      |                                           | 44,985,000  |          |         | 19,239,189                                                    |         
|Proceeds from sale of short-term investments                                       |                                                                                      |                                           |            |          |         |                                                              |         
|Purchases of furniture and equipment                                               |                                                                                      |                                           | (318,163    | )        |         | (100,937                                                      | )       
|Proceeds from sale of furniture and equipment                                      |                                                                                      |                                           |            |          |         |                                                              |         
|Organization costs incurred                                                        |                                                                                      |                                           |            |          |         |                                                              |         
|                                                                                   |                                                                                      |                                           |             |          |         |                                                               |         
|Net cash provided by (used in) investing activities                                |                                                                                      |                                           | (17,136,268 | )        |         | 18,766,829                                                    |         
|Financing activities                                                               |                                                                                      |                                           |             |          |         |                                                               |         
|Proceeds from issuance of notes payable to related party                           |                                                                                      | $                                         |            |          | $       |                                                              |         
|Principal payments on notes payable to related party                               |                                                                                      |                                           |            |          |         |                                                              |         
|Proceeds from loans payable                                                        |                                                                                      |                                           |            |          |         |                                                              |         
|Principal payments on loans payable                                                |                                                                                      |                                           |            |          |         |                                                              |         
|Payments for fractional shares from reverse splits and preferred stock conversions |                                                                                      |                                           |            |          |         |                                                              |         
|Financing costs incurred                                                           |                                                                                      |                                           |            |          |         |                                                              |         
|Payments received on subscription receivable                                       |                                                                                      |                                           |            |          |         |                                                              |         
|Shareholder capital contribution                                                   |                                                                                      |                                           | 93,637      |          |         |                                                              |         
|Proceeds received from exercise of stock warrants                                  |                                                                                      |                                           | 10,461      |          |         |                                                              |         
|Elimination of consolidated accounting treatment for joint venture                 |                                                                                      |                                           |            |          |         |                                                              |         
|Capital contribution through sale of interest in consolidated subsidiaries         |                                                                                      |                                           | 1,821,300   |          |         |                                                              |         
|Net proceeds received from issuance of preferred and common stock                  |                                                                                      |                                           | 24,195,695  |          |         |                                                              |         
|                                                                                   |                                                                                      |                                           |             |          |         |                                                               |         
|Net cash provided by financing activities                                          |                                                                                      |                                           | 26,121,093  |          |         |                                                              |         
|                                                                                   |                                                                                      |                                           |             |          |         |                                                               |         
|Effect of exchange rate changes on cash                                            |                                                                                      |                                           | (252,786    | )        |         | (58,334                                                       | )       
|                                                                                   |                                                                                      |                                           |             |          |         |                                                               |         
|Net increase in cash and cash equivalents                                          |                                                                                      |                                           | 4,605,086   |          |         | 12,610,098                                                    |         
|Cash and cash equivalents at beginning of period                                   |                                                                                      |                                           | 3,426,059   |          |         | 3,694,424                                                     |         
|                                                                                   |                                                                                      |                                           |             |          |         |                                                               |         
|Cash and cash equivalents at end of period                                         |                                                                                      | $                                         | 8,031,145   |          | $       | 16,304,522                                                    |         
|                                                                                   |                                                                                      |                                           |             |          |         |                                                               |         
|Supplemental disclosure of cash flow information                                   |                                                                                      |                                           |             |          |         |                                                               |         
|Interest paid                                                                      |                                                                                      | $                                         |            |          | $       |                                                              |         
|                                                                                   |                                                                                      |                                           |             |          |         |                                                               |         

See accompanying notes.

Page 5

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AVAX Technologies, Inc.(a development stage company)Notes to Financial Statements(Unaudited)For the Three
Months ended June 30, 2000 and 2001

1.  Organization and Summary of Significant Accounting Policies

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

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

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

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

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

In
November 1999, the Company entered into a definitive joint venture agreement with Australia Vaccine Technologies ("AVT") (formerly Neptunus International Holdings Limited),
a pharmaceutical group in Australia, under the subsidiary name, AVAX Holdings Australia Pty Limited ("AVAX Holdings"). Under the joint venture agreement, AVAX Holdings, through its affiliated
entities, is manufacturing and marketing M-Vax in Australia, and has similar rights in New Zealand.

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

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.

Basis of Presentation

The accompanying financial statements have been prepared by the Company without audit, in accordance with principles generally accepted in the United States
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 six-month periods ending June 30, 2001 and 2000 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 ending December 31, 2001.

Principles of Consolidation

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

Page 6

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Revenue

Grant revenue represents funds received pursuant to research performed related to certain of the Company's research awards. Grant revenue is recognized as
earned when the research is completed and the funds are received. Contract service revenue is recognized in installments based upon the contractual agreement entered into with clients. Product revenue
represents fees received by the Company related to tumor cell
banking. Costs related to contract service revenue and product sales are accrued and matched against revenue in the periods incurred.

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, 2000
and 1999 included in the Company's annual report on Form 10-KSB.

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

Cautionary Statement Regarding Forward-Looking Statements

Statements in this Form 10-QSB that are not descriptions of historical facts are forward-looking statements. Forward-looking statements are
made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements involve
significant risks and uncertainties, and in light of the significant uncertainties inherent in such statements, the inclusion of such information should not be regarded as a representation by the
Company that the objectives and plans of the Company will be achieved. In fact, actual results could differ materially from those contemplated by such forward-looking statements. Many important
factors affect the Company's prospects, including, the results of the current FDA clinical hold for the M-Vax and O-Vax clinical trials and other FDA questions regarding those
products, the results of the FDA's ongoing inspection of the Company's manufacturing facility, the Company's ability to obtain substantial additional funds, to integrate the Genopoietic product
candidates and technologies into the Company's business, to obtain and maintain all necessary patents or licenses, to demonstrate the safety and efficacy of product candidates at each stage of
development, to meet applicable regulatory standards and receive required regulatory approvals, to meet obligations and required milestones under its license agreements, to be capable of producing
drug candidates in commercial quantities at reasonable costs, to compete successfully against other products, and to market products in a profitable manner, as well as other risks detailed from time
to time in AVAX's public disclosure filings with the Securities and Exchange Commission, including, without limitation, the risk factors set forth in the Company's annual report on
Form 10-KSB for the year ended December 31, 2000. The Company does not undertake any obligation to publicly release any revisions to these forward-looking statements or to
reflect the occurrence of unanticipated events.

Plan of Operation

Since its inception, the Company has concentrated its efforts and resources on the development and commercialization of biotechnology and pharmaceutical
products and technologies. The Company has been unprofitable since it's founding and has incurred a cumulative net loss of approximately $43,288,556 as of June 30, 2001. The Company expects to
incur significant operating losses over the next several years, primarily due to the continuation of its research and development programs, including clinical trials for M-Vax and
O-Vax, pre-clinical studies for the Company's other products and compounds, and for the research and development efforts undertaken at the Company's subsidiary in France.

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 technology pursuant to the TJU License. In March 2001, the Company's clinical trials for M-Vax and O-Vax were placed on clinical hold by the
U.S. Food and Drug Administration (FDA). In conjunction with the clinical hold, FDA conducted an inspection of the Company's manufacturing facility located in Philadelphia. The facility inspection was
completed by the FDA on May 25, 2001, and the Company received a Form 483 to which it responded on June 29, 2001.

The
Company is preparing a response to the clinical hold issues received from the FDA and expects to file the response in August. FDA procedures allow the agency 30 days to
review the Company's response and to raise any clarifying comments or questions in that time frame. If the Company does not receive any

Page 7

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additional comments or questions it would anticipate that the clinical hold would be removed and that the clinical trials may proceed.

In
developing its response to the FDA clinical hold letters, the Company has identified and begun to implement a number of product development initiatives related to its AC Vaccine
Technology. As a result, the Company has determined certain product improvements to the vaccine may be instituted that the Company anticipates will make the vaccine more viable from a regulatory and
commercial perspective. The Company is evaluating (1) the prospect of freezing the haptenized cells for distribution to the end user, (2) steps that can be taken to help ensure that
tumors received by the Company are sterile and (3) tests to determine the minimal number of cells necessary for the vaccine to be effective. Based upon the results of these tests the Company
anticipates that it will re-design the current clinical programs to take advantage of these potential product improvements at the time the Company seeks to re-initiate its
M-Vax and O-Vax clinical trials.

In
August 2000, the Company completed its acquisition of GPH, S.A. ("Holdings") and Genopoietic S.A. ("Genopoietic"), each a French societe anonyme based in Paris, France. In
connection with the Genopoietic acquisitions, the Company is required to fund research and development activities of Genopoetic's primary products that include therapies for joint repair, graft versus
host disease (GVHD) and cancer. In addition, the Company acquired Genopoietic's existing manufacturing facility in Lyon, France.

The
Company's gene therapy portfolio, acquired in the Genopoietic transactions, has two components. The first consists of a TK gene technology, which has potential application in the
transplantation setting to prevent Graft Versus Host Disease, or GVHD. This technology has shown promise in animal studies. The Company's clinical evaluation in Leukemia patients undergoing bone
marrow transplantation is expected to commence with a small phase I trial in France targeted for the fourth quarter of 2001, which trial is expected to be funded in large part by European grants.

The
Company is also finalizing its ownership of the rights to what is essentially the first gene therapy cure, namely for Severe Combined Immuno-Deficiency, or SCID. This is also
referred to as "the bubble baby disease" and the condition represents a small market of about 50-75 cases per year worldwide. However, the science has cured 4 of the 5 patients treated in
what previously was an incurable fatal condition. The Company's Genopoietic subsidiary has manufactured the vector for all of these treatments.

For
the six and three months ended June 30, 2001 the Company realized product and contract revenue of $162,910 and $23,037, respectively, and grant revenues of $130,466 and
$10,658, respectively, versus no revenue recognized in the same periods of the prior year. The revenue and grant income relate to the manufacturing and research activities occurring at Genopoietic.
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 manufacturing, research and development expenses have increased 25.3% from $3,240,838 in the six months ended June 30, 2000 to $4,059,980 in the six months ended
June 30, 2001. The increased expenses relate to manufacturing and research activities occurring at Genopoietic (acquired in August of 2000), increased salary costs due primarily to the addition
of new regulatory and clinical personnel in the second half of the prior year, and increased costs associated with patent counsel activities.The
Company's selling, general and administrative expenses have decreased 1.8% from $2,322,080 in the six months ended June 30, 2000 to $2,280,880 in the six months ended June 30, 2001.
Decreases in expenditures related to cost minimization initiatives were offset in the first half of 2001 by increased costs associated with marketing initiatives in the United States as well as
administrative activities at Genopoietic.

Liquidity and Capital Resources

The Company currently anticipates that its current cash resources should be sufficient to fund operations for approximately the next
16-24 months (from June 30, 2001), including the minimum funding to be provided to Genopoietic. Based upon the current operating plan, the Company expects a cash burn for the
12 months ending June 30, 2002, of approximately $10-11 million. This estimate of cash needs of the Company assumes that the Company will be successful with each of
the development initiatives outlined in its July 17, 2001 investor conference call. The success of each initiative requires more cash (which is included in the estimated cash needs of the
Company), while the abandonment of an initiative will reduce the

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short-term cash needs of the Company. Accordingly, the greater the success of the Company in executing its current business plan with respect to each of its product initiatives, the
greater the cash needs of the Company will be.

The
Company does not currently expect to be required to raise additional capital in the next 12 months, although from time to time, the Company may avail itself of
opportunities in the capital markets to raise additional capital if acceptable terms can be obtained. The Company's working capital requirements will depend upon numerous factors, including the
progress of the Company's research and development programs, pre-clinical 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, and the ability of the Company to establish collaborative arrangements with
other organizations. There can be no assurance that the Company's current cash resources will be sufficient to fund its operations for the next 16-24 months (from June 30,
2001), as changes in any of the factors described in the preceding sentence (or other unforeseen changes in the Company's business) could directly affect the rate at which the cash resources of the
Company are used by the Company. Because the Company has no committed external sources of capital, and expects no significant product revenues for the foreseeable future, it will require additional
financing to fund future operations.
There can be no assurance, however, that the Company will be able to obtain additional funds 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.

A
risk factor in the Company's annual report on Form 10-KSB for the year ended December 31, 2000, stated that the Company expected its then current cash
resources to be sufficient to fund the Company's operations through "summer 2001." This reference to "summer 2001" was a typographical error, and should have been "summer 2002," as was correctly noted
in various other places in the Form 10-KSB. The date reference in that risk factor is superceded by the date references in the preceding two paragraphs.

PART IIOTHER INFORMATION

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

At the annual meeting of the stockholders of the Company, held on July 19, 2001 (the "Annual Meeting"), the following matters were voted on by the
stockholders: (i) the election of six directors, and (ii) the ratification of the adoption of the 2000 Directors' Stock Option Plan. The following tables set forth the total votes on
each of these matters, with the Company's common stock and Series C convertible preferred stock voting as a single class:

Affirmative Votes

Negative Votes

AbstentionsEdson D. de Castro

10,416,483

0

2,368,014James L. Currie

10,417,583

0

2,366,914Andrew W. Dahl, Sc.D.

10,416,533

0

2,367,964John K. A. Prendergast, Ph.D.

10,417,333

0

2,367,164Jean-Loup Salzmann, M.D., Ph.D.

10,479,577

0

2,304,920Carl Spana, Ph.D.

10,417,683

0

2,366,814


Affirmative Votes

Negative Votes

Abstentions

Broker Non-Votes12,171,032

548,116

65,349

0


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

11.1    Statement Concerning Computation of Per Share Earnings

The Company filed one report on Form 8-K during the three months ended June 30, 2001:

A
Form 8-K was filed on April 24, 2001, providing an update on the previously reported FDA hold on clinical activities for both the Company's
M-Vax and O-Vax autologous cancer vaccines, pending further review by the Agency.

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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: August 13, 2001 | /s/DAVID L. TOUSLEYDavid L. Tousley
Chief Operating Officer and Chief Financial Officer
(Principal Executive and Financial Officer)
|Date: August 13, 2001 | /s/RICHARD P. RAINEYRichard P. Rainey
Vice President Finance & Administration
(Principal Accounting Officer)                       

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