SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to ___________
Commission file number ____________
-----------------------------------
AVAX TECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 13-3575874
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4520 Main Street, Suite 930
Kansas City, Missouri 64111
(Address of principal executive offices) (Zip Code)
Registrants's telephone number, including area code: (816) 960-1333
Securities registered under Section 12 (b) of the Exchange Act: None
Securities registered under Section 12 (g) of the Exchange Act:
Common Stock, par value $.004 per share
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [_] No
As of November 6, 1997, 4,367,087 shares of the Registrant's common stock, par
value $.004 per share, were outstanding.
Documents incorporated by reference: None.
Transitional Small Business Disclosure Format: [_] Yes [X] No
<PAGE>
AVAX TECHNOLOGIES, INC.
Table of Contents
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
BALANCE SHEETS -- As of December 31, 1996
and September 30, 1997 (unaudited) .................... Page 3
STATEMENTS OF OPERATIONS (unaudited) -- For the
Three Months Ended September 30, 1996 and
September 30, 1997, For the Nine Months Ended
September 30, 1996 and September 30, 1997 and
the Period from January 12, 1990
(Incorporation) through September 30, 1997 ............. Page 4
STATEMENTS OF CASH FLOWS (unaudited) -- For the
Nine Months Ended September 30, 1996 and
September 30, 1997 and the Period from January 12,
1990 (Incorporation) through September 30, 1997 ....... Page 5
Notes to Financial Statements .......................... Page 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ................... Page 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. ...................................... Page 10
Item 2. Change in Securities. ................................... Page 10
Item 3. Defaults Upon Senior Securities. ........................ Page 10
Item 4. Submission of Matters to a Vote of Security Holders. .... Page 10
Item 5. Other Information. ...................................... Page 10
Item 6. Exhibits and Reports on Form 8-K. ....................... Page 10
Signatures ............................................................. Page 11
Page 2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
AVAX Technologies, Inc.
(formerly Walden Laboratories, Inc.)
(a development stage company)
Balance Sheets
<TABLE>
<CAPTION>
December 31, September 30,
1996 1997
-----------------------------
ASSETS (See Note) (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 13,832,179 $ 7,951,213
Marketable securities 6,134,853 9,074,708
Common stock receivable from a related party 2,249,459 1,173,601
Prepaid expenses and other current assets 61,285 116,259
-----------------------------
Total current assets 22,277,776 18,315,781
Furniture and equipment, at cost 45,777 278,626
Less accumulated depreciation 2,007 11,085
-----------------------------
Net furniture and equipment 43,770 267,541
-----------------------------
Total assets $ 22,321,546 $ 18,583,322
=============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 277,677 $ 349,567
Amount payable to preferred stockholders 2,156,106 1,124,896
Amount payable to Former Officer 93,353 48,705
-----------------------------
Total current liabilities 2,527,136 1,523,168
Commitments and contingencies
Stockholders' equity:
Preferred Stock, $.01 par value:
Authorized shares - 5,000,000, including
Series B - 300,000 shares
Series B convertible preferred stock:
Issued and outstanding shares - 259,198 and
219,575 at December 31, 1996 and September 30,
1997, respectively (liquidation preference
$34,991,730 and $29,642,625 at December 31,
1996 and September 30, 1997, respectively) 2,592 2,196
Common stock, $.004 par value:
Authorized shares - 50,000,000
Issued and outstanding shares - 3,111,158 and
4,180,152 at December 31, 1996 and September 30,
1997, respectively 12,445 16,720
Additional paid-in capital 24,002,882 23,998,927
Subscription receivable (4,026) (2,280)
Deferred Compensation (963,424) (761,599)
Unrealized loss on marketable securities (2,037) --
Deficit accumulated during the development stage (3,254,022) (6,193,810)
-----------------------------
Total stockholders' equity 19,794,410 17,060,154
-----------------------------
Total liabilities and stockholder's equity $ 22,321,546 $ 18,583,322
=============================
</TABLE>
Note: The balance sheet at December 31, 1996 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See accompanying notes.
Page 3
<PAGE>
AVAX Technologies, Inc.
(formerly Walden Laboratories, Inc.)
(a development stage company)
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Period from
January 12, 1990
(Incorporation)
Three months ended Nine months ended Through
September 30, September 30, September 30,
1996 1997 1996 1997 1997
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gain from sale of the Product $ -- $ -- $ -- $ -- $ 1,951,000
Costs and expenses:
Research and development 217,026 508,298 394,404 1,478,080 3,830,389
Marketing and selling -- -- -- -- 543,646
General and administrative 439,317 562,826 722,198 2,154,704 4,992,840
-------------------------------------------------------------------------------
Total operating loss (656,343) (1,071,124) (1,116,602) (3,632,784) (7,415,875)
Other income (expense):
Interest income 329,588 272,602 500,826 817,199 1,696,192
Interest expense (78,819) (42,965) (285,041) (124,203) (619,895)
Other, net (44) -- (9,878) -- 145,768
-------------------------------------------------------------------------------
Total other income (expense) (250,725) 229,637 205,907 692,996 1,222,065
-------------------------------------------------------------------------------
Net loss (405,618) (841,487) (910,695) (2,939,788) (6,193,810)
Amount payable for
liquidation preference -- -- (1,131,744) -- (1,870,033)
-------------------------------------------------------------------------------
Net loss attributable to
common stockholders $ (405,618) $ (841,487) $(2,042,439) $(2,939,788) $(8,063,843)
===============================================================================
Net loss per common share $ (.12) $ (.22) $ (.66) $ (.83)
==============================================================
Weighted average number of
shares outstanding 3,371,542 3,834,985 3,116,293 3,551,884
==============================================================
</TABLE>
See accompanying notes.
Page 4
<PAGE>
AVAX Technologies, Inc.
(formerly Walden Laboratories, Inc.)
(a development stage company)
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Period from
Nine months ended January 12, 1990
September 30, (Incorporation) To
1996 1997 September 30, 1997
------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss $ (910,695) $ (2,939,788) $ (6,193,810)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 94,106 210,903 441,164
Gain from sale of the Product -- -- (1,951,000)
Gain on sale of intellectual property -- -- (787)
Accretion of interest on common stock receivable (229,633) (124,142) (422,601)
Accretion of interest on amount payable
to preferred stockholders and Former Officer 229,633 124,142 422,601
Loss on sale or abandonment of furniture and equipment 8,156 -- 37,387
Issuance of common stock for services 100,000 -- 147,000
Changes in operating assets and liabilities:
Prepaid expenses and other current assets (9,628) (54,974) (116,259)
Accounts payable and accrued liabilities (21,355) 71,890 349,567
Amount payable to Former Officer -- -- 80,522
------------------------------------------------
Net cash used in operations (739,416) (2,711,969) (7,206,216)
INVESTING ACTIVITIES
Purchase of marketable securities and
short-term investments -- (4,895,990) (12,012,462)
Proceeds from sale of short-term investments -- 1,958,172 2,937,754
Purchases of furniture and equipment (46,831) (232,849) (344,560)
Proceeds from sale of furniture and equipment -- -- 4,600
Organization costs incurred -- -- (1,358)
------------------------------------------------
Net cash used in investing activities (46,831) (3,170,667) (9,416,026)
FINANCING ACTIVITIES
Proceeds from issuance of notes payable to related party -- -- 957,557
Principal payments on notes payable to related party (207,000) -- (797,000)
Proceeds from loans payable 400,000 -- 1,389,000
Principal payments on loans payable (1,050,000) -- (1,389,000)
Payments for fractional shares from reverse splits
and stock conversions
-- (76) (76)
Financing costs incurred (36,000) -- (90,000)
Payments received on subscription receivable 208 1,746 4,517
Proceeds received from exercise of stock warrants 6,250 -- 6,250
Net proceeds received from issuance of preferred
and common stock 22,243,329 -- 24,492,207
------------------------------------------------
Net cash provided by financing activities 21,356,787 1,670 24,573,457
------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 20,570,540 (5,880,966) 7,951,213
Cash and cash equivalents at beginning of period 503 13,832,179 --
------------------------------------------------
Cash and cash equivalents at end of period $ 20,571,043 $ 7,951,213 $ 7,951,213
================================================
Supplemental Disclosure of Cash Flow Information:
Interest Paid $ 157,721 $ -- $ 197,072
================================================
</TABLE>
See accompanying notes.
Page 5
<PAGE>
AVAX Technologies, Inc.
(formerly Walden Laboratories, Inc.)
(a development stage company)
Notes to Financial Statements (Unaudited)
For the Three and Nine Months ended September 30, 1997
1. Description of Business
AVAX(TM) Technologies, Inc. (formerly Walden Laboratories, Inc.) (the Company)
is a development stage biopharmaceutical company. The Company changed its name
to AVAX Technologies, Inc. effective March 26, 1996.
In November 1995, the Company sold its leading product under development, an
over-the-counter nutritional, dietary, medicinal and/or elixorative food
supplement or drug and all of the related patents and other intellectual
property. Also in November 1995, the Company entered into a license agreement
with Thomas Jefferson University ("TJU") to develop, commercially manufacture
and sell products embodying immunotherapeutic vaccines for the treatment of
malignant melanoma and other carcinomas.
In December 1996, the Company entered into a license agreement with Rutgers, The
State University of New Jersey ("Rutgers") to develop, commercially manufacture
and sell products embodying a series of compounds for the treatment of cancer
and infectious diseases. In February 1997, the Company entered into a license
agreement with The Texas A&M University System to develop, commercially
manufacture and sell products embodying a series of compounds for the treatment
of cancer.
The Company's business is subject to significant risks consistent with
biotechnology companies that are developing products for human therapeutic use.
These risks include, but are not limited to, uncertainties regarding research
and development, access to capital, obtaining and enforcing patents, receiving
regulatory approval, and competition with other biotechnology and pharmaceutical
companies. The Company plans to continue to finance its operations with a
combination of equity and debt financing and, in the longer term, revenues from
product sales, if any. However, there can be no assurance that it will
successfully develop any product or, if it does, that the product will generate
any or sufficient revenues.
Page 6
<PAGE>
2. Basis of Presentation
The accompanying financial statements have been prepared by the Company without
audit, in accordance with GAAP for interim financial information and with the
rules and regulations of the Securities and Exchange Commission (the
"Commission"). Certain information and footnote disclosure normally included in
the Company's audited annual financial statements has been condensed or omitted
in the Company's interim financial statements. In the opinion of the Company,
these financial statements contain all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation. The results of
operations for the three and nine month periods ended September 30, 1997 may not
necessarily be indicative of the results of operations expected for the full
year, except that the Company expects to incur a significant loss for the year
ended December 31, 1997.
The accompanying financial statements and the related notes should be read in
conjunction with the Company's audited financial statements for the years ended
December 31, 1996 and 1995 included in the Company's Registration Statement on
Form SB-2, Registration No. 333-09349.
3. Net Loss per Common Share
Net loss per share is based on net loss divided by the weighted average number
of shares of common stock outstanding during the respective periods,
retroactively adjusted to reflect the reverse stock splits described below. The
weighted average number of common shares outstanding have been calculated in
accordance with Staff Accounting Bulletin 83 ("SAB 83") of the Commission. SAB
83 requires that shares of common stock, warrants and options issued one-year
prior to the initial filing of a registration statement relating to an initial
public offering at amounts below the public offering price be considered
outstanding for all periods presented in the Company's registration statement
prior to the effective date thereof. For purposes of calculating the loss per
share, the private placement of Series B convertible preferred stock has been
considered to be the equivalent of an initial public offering, and the initial
public offering price was determined to be $3.92 per share by assuming that the
preferred stock issued was immediately converted into common stock. Series A
Convertible Preferred Stock, actually converted in June 1996, was included in
the calculation of the weighted average number of shares for the year ended
December 31, 1995, as if converted.
Prior to the first closing of a private placement on May 15, 1996, the Company
effected a 1-for-2 reverse stock split of the Company's common stock. Pursuant
to an amendment to the Company's Certificate of Incorporation dated May 7, 1997,
a second 1-for-2 reverse split of the Company's common stock was effected as of
the close of business on May 13, 1997. All outstanding share and per share
amounts included in the accompanying financial statements have been adjusted to
reflect both 1-for-2 reverse stock splits.
Page 7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
PLAN OF OPERATION
Statements in this Form 10-QSB that are not descriptions of historical facts are
forward-looking statements, within the meaning of the Private Securities
Litigation Reform Act of 1995, that are subject to risks and uncertainties.
Actual results could differ materially from those currently anticipated due to a
number of factors, including those set forth in the Company's filings under the
Securities Act of 1933 and under the Securities Exchange Act of 1934, including
under the headings "Risk Factors" and elsewhere, including, without limitation,
risks relating to the early stage of the Company and its products under
development, government regulation, dependence on third parties, patent risks,
lack of manufacturing facilities and competition. The Company undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new events, future information or otherwise.
The Company is currently engaged in the development and commercialization of
biotechnology and pharmaceutical products and technologies. In November 1995,
the Company acquired the rights to the AC Vaccine(TM) technology pursuant to the
TJU License. The Company initially intends to be engaged primarily in the
development and commercialization of the AC Vaccine technology, as well as the
potential anti-cancer and anti-infective technology licensed pursuant to the
Rutgers License and the potential anti-cancer technology licensed pursuant to
the Texas A&M License. See "Business." The Company anticipates that during the
next 12 months it will conduct substantial research and development of the AC
Vaccine technology, including, without limitation, Phase III clinical trials on
M-Vax(TM), the Company's lead AC Vaccine technology for metastatic melanoma. The
Company also anticipates that it will expend substantial resources on the
research and development of that same technology for the treatment of other
cancers, which may include ovarian, breast, prostate, lung and colorectal cancer
and acute myelogenous leukemia (AML). For example, the Company is enrolling
patients for its Phase II clinical trial of O-Vax(TM), its AC Vaccine for
ovarian cancer. This trial is being conducted at TJU under the direction of Dr.
David Berd. It is also expected that during the next 12 months, in order to
support these clinical trial efforts, the Company will be required to expend
substantial resources on the establishment of laboratory facilities for the
manufacture of its products. See "Business--Technology Applications and Product
Candidates," "Research and Development" and "Manufacturing and Marketing."
In connection with the Company's strategy to acquire, develop and commercialize
other potential biotechnology products and technologies, in December 1996, the
Company acquired the exclusive worldwide rights to a series of compounds for the
potential treatment of cancer and other infectious diseases from Rutgers.
Additionally, in February 1997, the Company acquired the exclusive worldwide
rights to another series of compounds for the potential treatment of cancer from
Texas A&M. Pursuant to the Rutgers License, the Texas A&M License, and the
related sponsored research agreements with each of Rutgers and Texas A&M, the
Company intends to expend substantial resources on the research and development
of these compounds.
While there can be no assurance, the Company may acquire additional products and
technologies during the next 12 months, which may or may not be in the cancer
immunotherapy field. Should the Company acquire such additional products or
technologies, it is anticipated that such additional products or technologies
will require substantial resources for research, development and clinical
evaluation. However, there can be no assurance that the Company will be able to
obtain the additional financing necessary to acquire and develop such additional
products and technologies. In addition, there can be no assurance, that changes
in the Company's research and development plans or other changes which would or
could alter the Company's operating expenses will not require the Company to
reallocate funds among its planned activities and curtail certain planned
expenditures. In such event, the Company may need additional financing. There
can be no assurance as to the availability or the terms of any required
additional financing, when and if needed. In the event that the Company fails to
raise any funds it requires, it may be necessary for the Company to
significantly curtail its activities or cease operations.
Page 8
<PAGE>
During the past 12 months, the Company hired two new employees and it
anticipates that over the next 12 months it may hire additional new employees,
and may establish facilities for the clinical development and manufacture of the
AC Vaccine products or any other technologies which may have been, or may be,
acquired. The timing and cost of hiring any additional employees or the
establishment of any such facility may vary depending on need and cannot
currently be predicted with any certainty.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, the Company has concentrated its efforts and resources in
the development and commercialization of biotechnology and pharmaceutical
products and technologies. The Company has been unprofitable since its founding
and has incurred a cumulative net loss of approximately $6,193,810 as of
September 30, 1997. The Company expects to incur significantly increasing
operating losses over the next several years, primarily due to the expansion of
its research and development programs, including clinical trials for M-Vax,
O-Vax and other preclinical studies and clinical trials for other products that
may arise from the AC Vaccine technology and from the compounds licensed from
Rutgers and Texas A&M and other products that it may acquire or develop.
The Company currently anticipates that its current resources should be
sufficient to fund operations for approximately the next 18-30 months based upon
the Company's current operating plan. The Company does not currently expect to
be required to raise additional capital in the next 12 months, although from
time to time, depending upon its anticipated future needs, the Company may avail
itself of opportunities in the capital markets to raise additional capital if
acceptable terms may be obtained. However, since the Company's working capital
requirements will depend upon numerous factors, including, without limitation,
progress of the Company's research and development programs, preclinical and
clinical testing, timing and cost of obtaining regulatory approvals, changes in
levels of resources that the Company devotes to the development of manufacturing
and marketing capabilities, competitive and technological advances, status of
competitors, and the ability of the Company to establish collaborative
arrangements with other organizations, there can be no assurance that the
Company will be able to meets its business objectives under its current
operations plan and/or not need to raise additional capital. Since the Company
has no committed external sources of capital, and expects no product revenues
for the foreseeable future, it will likely require additional financing to fund
future operations. There can be no assurance, however, that the Company will be
able to obtain the additional funds it will require on acceptable terms, if at
all. If adequate funds are not available the Company may be required to delay,
reduce the scope of or eliminate one or more of its research or development
programs; to obtain funds through arrangements with collaborative partners or
others that may require the Company to relinquish rights to certain
technologies, product candidates or products that the Company would otherwise
seek to develop or commercialize itself; or to license the rights to such
products on terms that are less favorable to the Company that might otherwise be
available.
The Company's ability to achieve profitability depends upon, among other things,
its ability to develop products, obtain regulatory approval for its proposed
products, and enter into agreements for product development, manufacturing and
commercialization. The Company's M-Vax and O-Vax products do not currently
generate revenue and the Company does not expect to achieve revenues from these
or other products for the foreseeable future. Moreover, there can be no
assurance that the Company will ever achieve significant revenues or profitable
operations from the sale of M-Vax, O-Vax or any other products that it may
develop.
Page 9
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Change in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holder.
None
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
11.1 Statement Concerning Computation of Per Share Earnings.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K: None.
Page 10
<PAGE>
Signatures
In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
AVAX Technologies, Inc.
(Registrant)
Date: November 14, 1997
/s/ Jeffrey M. Jonas, M.D.
----------------------------------------
Jeffrey M. Jonas, M.D.
President and Chief Executive Officer
Date: November 14, 1997
/s/ David L. Tousley
----------------------------------------
David L. Tousley
Chief Financial Officer
(Principal Financial and
Accounting Officer)
AVAX Technologies, Inc. Exhibit 11
Computation of Earnings (Loss) Per Share
<TABLE>
<CAPTION>
Nine Nine
Month of Months O/S Weighted Year Year Months Months
Issuance For Number of Each Given Average Ended Ended Ended Ended
F/S Purposes Shares Year Shares 1995 1996 Sept 30, 1996 Sept 30, 1997
------------ ------ ---- ------ ---- ---- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
January '90 582,500 582,500 582,500 582,500 582,500
August '91 230,000 230,000 230,000 230,000 230,000
June '92 287,098 287,098 287,098 287,098 287,098
Series A Preferred:
June '92 259,375 (a) (a) (a)
July '92 59,375
Sept '92 3,125
321,875 321,875
--------
July '93 7,358
November '93 1,359
8,717 8,717 8,717 8,717 8,717
------
July '94 3,750 3,750 3,750 3,750 3,750
April '95 (111,330) 8.5 (78,859) (78,859)
May '95 (196,618) 7.5 (122,886) (122,886)
September '95 402,490 3.5 117,393 (b)
November '95 1,374,728 2.5 286,402 (b)
---------- --------
1,469,270 202,050 1,469,270 1,469,270 1,469,270
---------- --------
March '96 (77,901) 9.5 (61,672) (56,262)
May & June '96 321,875 7 187,760 143,056
May & June '96 129,099 7 75,308 57,377
June '96 500 6.5 271 194
July '96 (d) 46,875 5.5 21,484 13,021
------- -------
420,448 223,152 223,152 420,448
-------- --------
June '97 (g) 371,755 3.5 144,571 144,571
July, August & Sept '97 682,806 1.5 113,801 113,801
Cheap Shares:
September and
November '95 1,777,218
Treasury Shares (1,814)
1,775,404 1,775,404
----------
June '96 9,375
Treasury Shares (96)
9,279 9,279 9,279 9,279 9,279
------
CheapWarrants (c):
January and February '96
and August '95 120,000
Treasury Shares (1,225)
118,775 118,775 118,775 118,775 112,108
--------
June, July and ( f )
September '92 warrants 35,337
Treasury Shares (23,348)
11,989 11,989 11,989 11,989 11,989
-------
Cheap Options (e)
May '96 318,873
Treasury Shares (81,345)
237,528 237,528 237,528 237,528 158,352
--------
</TABLE>
<PAGE>
AVAX Technologies, Inc. Exhibit 11
Computation of Earnings (Loss) Per Share (continued)
<TABLE>
<CAPTION>
Weighted Average Shares 3,385,171 3,182,058 3,116,293 3,551,884
===================================================
<S> <C> <C> <C> <C>
Net Income (Loss) Attributable to Common Stockholders 642,282 (2,668,586) (2,042,439) (2,939,788)
Net Income (Loss) Per Share $ 0.19 $ (0.84) $ (0.66) $ (0.83)
(a) - Not included because it would be anti-dilutive
(b) - see cheap shares
(c) - represents bridge loan warrants (100,000) issued within one year of
IPO, exercised after June '96
Also includes 20,000 bridge placement warrants issued within one year
of IPO, not yet exercised, and excludes 11,250 bridge placement
warrants issued prior to June '95, not yet exercised (20,000 + 11,250
= 31,250 total bridge placement warrants)
(d) - represents the non-cheap portion of the bridge warrants exercised in
July issued prior to June '95 (9,375 + 100,000 + 46,875 = 156,250 total
bridge warrants)
(e) - 252,500 options issued to Officers and an employee in
September not considered cheap options since issued subsequent to IPO and
not included because it would be anti-dilutive
(f) - represents additional warrants, exercised in June '97 in cashless
exercise, issued under anti-dilution provisions within one year of IPO (g) -
includes 14,433 additional warrants, exercised in June '97 in a cashless
exercise, issued under anti-dilution provisions more than one year prior to
IPO
</TABLE>
<PAGE>
AVAX Technologies, Inc. Exhibit 11
Computation of Supplementary Earnings (Loss) Per Share
<TABLE>
<CAPTION>
Nine Nine
Month of Months O/S Weighted Year Year Months Months
Issuance For Number of Each Give Average Ended Ended Ended Ended
F/S Purposes Shares Year Shares 1995 1996 Sept 30, 1996 Sept 30, 1997
------------ ------ ---- ------ ---- ---- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Income (Loss) Attributable to Common Stockholders (2,668,586) (2,042,439) (2,939,788)
Interest on Debt Repaid 55,247 55,247 -
Deferred Financing Cost related to Debt Repaid - - -
Supplementary Net Income (Loss) (2,613,339) (1,987,192) (2,939,788)
Weighted Average Shares 3,182,058 3,116,293 3,551,884
Additional Shares:
Conversion of Series A Preferred (h) 321,875 321,875 (h)
Less:Series A Preferred included in primary calculation (187,760) (143,056) -
Common Stock Equivalents sold to retire debt 320,664 320,664 320,664
Supplementary Weighted Average Shares 3,636,837 3,615,776 3,872,548
Supplementary Net Income (Loss) per share $ (0.72) $ (0.55) $ (0.76)
(h) - included in weighted average shares for primary calculation
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE COMPANY'S REGISTRATION STATEMENT ON FORM SB-2, FILE NO. 333-09349
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> YEAR 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1997
<PERIOD-END> DEC-31-1996 SEP-30-1997
<CASH> 20,968,831 7,951,213
<SECURITIES> 0 9,074,708
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 21,952,624 18,315,781
<PP&E> 0 278,626
<DEPRECIATION> 0 11,085
<TOTAL-ASSETS> 23,084,002 18,583,322
<CURRENT-LIABILITIES> 1,209,231 1,523,168
<BONDS> 0 0
0 0
2,592 2,196
<COMMON> 11,857 16,720
<OTHER-SE> 20,729,249 17,060,154
<TOTAL-LIABILITY-AND-EQUITY> 20,743,698 18,583,322
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 460,259 692,996
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 206,222 (124,203)
<INCOME-PRETAX> (505,077) 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (505,077) (2,939,788)
<EPS-PRIMARY> (0.27) (0.83)
<EPS-DILUTED> 0 0
</TABLE>
