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 March 31, 1998
or
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to ___________
Commission file number ____________
AVAX TECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 13-3575874
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4520 Main Street, Suite 930 64111
Kansas City, Missouri (Zip Code)
(Address of principal executive offices)
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 April 5, 1998, 4,923,570 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, 1997
and March 31, 1998 (unaudited) ......................... Page 3
STATEMENTS OF OPERATIONS (unaudited) -- For the
Three Months Ended March 31, 1997 and March 31, 1998;
and for the Period from January 12, 1990
(Incorporation) through March 31, 1998 .................. Page 4
STATEMENTS OF CASH FLOWS (unaudited) -- For the
Three Months Ended March 31, 1997 and March 31, 1998
and for the Period from January 12, 1990
(Incorporation) through March 31, 1998 .................. Page 5
Notes to Financial Statements ............................. Page 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations .................... Page 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. ....................................... Page 11
Item 2. Change in Securities. .................................... Page 11
Item 3. Defaults Upon Senior Securities. ......................... Page 11
Item 4. Submission of Matters to a Vote of Security Holders. ..... Page 11
Item 5. Other Information. ....................................... Page 11
Item 6. Exhibits and Reports on Form 8-K. ........................ Page 11
Signatures ........................................................ Page 12
Page 2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
AVAX Technologies, Inc.
(a development stage company)
Balance Sheets
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
----------------------------
Assets (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 6,820,884 $ 3,388,303
Marketable securities 9,102,028 11,264,405
Common stock receivable from a related party 1,200,000 --
Prepaid expenses and other current assets 154,929 111,308
----------------------------
Total current assets 17,277,841 14,764,016
Furniture and equipment, at cost 91,959 103,739
Less accumulated depreciation 14,967 19,582
----------------------------
Net furniture and equipment 76,992 84,157
----------------------------
Total assets $ 17,354,833 $ 14,848,173
----------------------------
Liabilities and stockholders' equity Current liabilities:
Accounts payable and accrued liabilities $ 353,726 $ 380,096
Amount payable to preferred stockholders 1,150,200 --
Amount payable to Former Officer 49,800 --
----------------------------
Total current liabilities 1,553,726 380,096
Commitments and contingencies
Stockholders' equity :
Preferred stock, $.01 par value:
Authorized shares - 5,000,000, including
Series B - 300,000 shares
Series B convertible preferred stock:
Issued and outstanding shares - 204,159 and 193,202 at
December 31, 1997 and March 31, 1998, respectively
(liquidation preference - $27,561,465 and $26,082,270 at
December 31, 1997 and March 31, 1998, respectively) 2,041 1,932
Common stock, $.004 par value:
Authorized shares - 50,000,000
Issued and outstanding shares - 4,582,305 and 4,868,137 at
December 31, 1997 and March 31, 1998, respectively 18,329 19,472
Additional paid-in capital 23,995,640 23,994,606
Subscription receivable (432) (432)
Deferred compensation (694,324) (627,048)
Deficit accumulated during the development stage (7,520,147) (8,920,453)
----------------------------
Total stockholders' equity 15,801,107 14,468,077
----------------------------
Total liabilities and stockholders' equity $ 17,354,833 $ 14,848,173
----------------------------
</TABLE>
See accompanying notes.
Page 3
<PAGE>
AVAX Technologies, Inc.
(a development stage company)
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Period from
January 12,
1990
(Incorporation)
Three months ended to
March 31, March 31,
1997 1998 1998
--------------------------------------------
<S> <C> <C> <C>
Gain from sale of the Product $ -- $ -- $ 1,951,000
Costs and expenses:
Research and development 379,769 957,364 5,758,649
Marketing and selling -- -- 543,646
General and administrative 822,513 650,652 6,212,796
--------------------------------------------
Total operating loss (1,202,282) (1,608,016) (10,564,091)
Other income (expense):
Interest income 279,965 207,710 2,144,163
Interest expense (39,848) -- (646,293)
Other, net -- -- 145,768
--------------------------------------------
Total other income, net 240,117 207,710 1,643,638
--------------------------------------------
Net loss (962,165) (1,400,306) (8,920,453)
Amount payable for liquidation preference
-- -- (1,870,033)
--------------------------------------------
Net loss attributable to common
stockholders $ (962,165) $ (1,400,306) $(10,790,486)
============================================
Net loss per common share - basic $ (.28) $ (.30)
=============================
Weighted average number of common shares
outstanding 3,379,450 4,725,221
=============================
</TABLE>
See accompanying notes.
Page 4
<PAGE>
AVAX Technologies, Inc.
(a development stage company)
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Period from
January 12,
1990
(Incorporation)
Three months ended to
March 31, March 31,
1997 1998 1998
--------------------------------------------
<S> <C> <C> <C>
Operating activities
Net loss $ (962,165) $ (1,400,306) $ (8,920,453)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 69,678 71,891 584,212
Gain from sale of the Product -- -- (1,951,000)
Gain on sale of intellectual property -- -- (787)
Accretion of interest on common stock
receivable (39,848) -- (449,000)
Accretion of interest on amount
payable to preferred stockholders
and Former Officer 39,848 -- 449,000
Loss on sale or abandonment of
furniture and equipment -- -- 37,387
Issuance of common stock for services -- -- 147,000
Changes in operating assets and
liabilities:
Prepaid expenses and other
current assets (24,519) 43,621 (111,308)
Accounts payable and accrued
liabilities 41,234 26,370 380,096
Amount payable to Former Officer -- -- 80,522
--------------------------------------------
Net cash used in operating activities (875,772) (1,258,424) (9,754,331)
Investing activities
Purchase of marketable securities and
short-term investments (2,055,372) (2,162,377) (18,380,877)
Proceeds from sale of short-term investments -- -- 7,116,472
Purchases of furniture and equipment (13,828) (11,780) (169,673)
Proceeds from sale of furniture and equipment
-- -- 4,600
Organization costs incurred -- -- (1,358)
--------------------------------------------
Net cash used in investing activities (2,069,200) (2,174,157) (11,430,836)
</TABLE>
Page 5
<PAGE>
AVAX Technologies, Inc.
(a development stage company)
Statements of Cash Flows (continued)
(Unaudited)
<TABLE>
<CAPTION>
Period from
January 12,
1990
(Incorporation)
Three months ended to
March 31, March 31,
1997 1998 1998
--------------------------------------------
<S> <C> <C> <C>
Financing activities
Proceeds from issuance of notes payable to
related party $ -- $ -- $ 957,557
Principal payments on notes payable to
related party -- -- (797,000)
Proceeds from loans payable -- -- 1,389,000
Principal payments on loans payable -- -- (1,389,000)
Payments for fractional shares from reverse
splits and preferred stock conversions -- -- (76)
Financing costs incurred -- -- (90,000)
Payments received on subscription receivable -- -- 4,532
Proceeds received from exercise of stock
warrants -- -- 6,250
Net proceeds received from issuance of
preferred and common stock -- -- 24,492,207
--------------------------------------------
Net cash provided by financing activities -- -- 24,573,470
--------------------------------------------
Net increase (decrease) in cash and cash
equivalents (2,944,972) (3,432,581) 3,388,303
Cash and cash equivalents at beginning
of period 13,832,179 6,820,884 --
--------------------------------------------
Cash and cash equivalents at end of period $ 10,887,207 $ 3,388,303 $ 3,388,303
============================================
Supplemental disclosure of cash flow
information
Interest paid $ -- $ -- $ 197,072
============================================
</TABLE>
See accompanying notes.
Page 6
<PAGE>
AVAX Technologies, Inc.
(formerly Walden Laboratories, Inc.)
(a development stage company)
Notes to Financial Statements (Unaudited)
For the Three Months ended March 31, 1997 and 1998
1. Description of Business
AVAX(TM) Technologies, Inc. (the Company) is a development stage
biopharmaceutical company.
In November 1995, the Company sold its leading product under development, an
over-the-counter nutritional, dietary, medicinal and/or elixorative food
supplement or drug and all of the related patents and other intellectual
property (the Product).
Also in November 1995, the Company entered into a license agreement with the
Thomas Jefferson University (TJU) to develop, commercially manufacture and sell
products embodying immunotherapeutic vaccines for the treatment of malignant
melanoma and other cancers (the Invention).
In December 1996, the Company entered into a license agreement with Rutgers, The
State University of New Jersey and the University of Medicine and Dentistry
(collectively, Rutgers) to develop, commercially manufacture and sell products
embodying a series of compounds for the treatment of cancer and infectious
diseases (the Rutgers Compounds).
In February 1997, the Company entered into a license agreement with The Texas
A&M University System (Texas A&M) to develop, commercially manufacture and sell
products embodying a series of compounds for the treatment of cancer (the Texas
A&M Compounds).
The Company's business is subject to significant risks consistent with
biotechnology companies that are developing products for human therapeutic use.
These risks include, but are not limited to, uncertainties regarding research
and development, access to capital, obtaining and enforcing patents, receiving
regulatory approval, and competition with other biotechnology and pharmaceutical
companies. The Company plans to continue to finance its operations with a
combination of equity and debt financing and, in the longer term, revenues from
product sales, if any. However, there can be no assurance that it will
successfully develop any product or, if it does, that the product will generate
any or sufficient revenues.
2. Basis of Presentation
The accompanying financial statements have been prepared by the Company without
audit, in accordance with GAAP for interim financial information and with the
rules and regulations of the Securities and Exchange Commission (the
"Commission"). Certain information and footnote disclosure normally included in
the Company's audited annual financial statements has been condensed or omitted
in the Company's interim financial statements. In the opinion of the Company,
these financial statements contain all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation. The results of
operations for the three month periods ended March 31, 1997 and 1998 may not
necessarily be indicative of the results of operations expected for the full
year, except that the Company expects to incur a significant loss for the year
ended December 31, 1998.
The accompanying financial statements and the related notes should be read in
conjunction with the Company's audited financial statements for the years ended
December 31, 1997 and 1996 included in the Company's Registration Statement on
Form SB-2, Registration No. 333-09349.
Page 7
<PAGE>
3. Net Loss per Common Share
In 1997, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share." SFAS No.
128 replaced the calculation of primary and fully diluted earnings per share
with basic and diluted earnings per share. Unlike primary earnings per share,
basic earnings per share exclude any dilutive effects of options, warrants and
convertible securities. Diluted earnings per share is very similar to the
previously required fully diluted earnings per share. All earnings per share
amounts for all periods have been presented, and where appropriate, restated to
conform to the SFAS No. 128 requirements.
Net loss per share is based on net loss divided by weighted average number of
shares of common stock outstanding during the respective periods, adjusted to
reflect the reverse stock splits. The weighted average number of common shares
outstanding has been calculated in accordance with Staff Accounting Bulletin 83
(SAB 83) of the Securities and Exchange Commission. SAB 83 requires that shares
of common stock, warrants and options issued one year prior to the initial
filing of a registration statement relating to an initial public offering at
amounts below the public offering price be considered outstanding for all
periods presented in the Company's registration statement. For purposes of
calculating the net loss per share, the private placement of Series B
convertible preferred stock, completed in June 1996, has been considered to be
the equivalent of an initial filing of a registration statement relating to an
initial public offering, and the initial public offering price was determined to
be $3.92 per share by assuming that the preferred stock issued was immediately
converted into common stock. Those shares of common stock, warrants and options,
considered as cheap stock in accordance with SAB 83, were considered outstanding
for all periods, prior to July 10, 1997, at which time the Company's
registration statement on Form SB-2 to register the shares sold in the private
placement was declared effective.
Prior to the first closing of a private placement on May 15, 1996, the Company
effected a 1-for-2 reverse stock split of the Company's common stock. Pursuant
to an amendment to the Company's Certificate of Incorporation dated May 7, 1997,
a second 1-for-2 reverse split of the Company's common stock was effected as of
the close of business on May 13, 1997. All outstanding share and per share
amounts included in the accompanying financial statements have been adjusted to
reflect both 1-for-2 reverse stock splits.
Page 8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
PLAN OF OPERATION
Statements in this Form 10-QSB that are not descriptions of historical facts are
forward-looking statements, within the meaning of the Private Securities
Litigation Reform Act of 1995, that are subject to risks and uncertainties.
Actual results could differ materially from those currently anticipated due to a
number of factors, including those set forth in the Company's filings under the
Securities Act of 1933 and under the Securities Exchange Act of 1934, including
under the headings "Risk Factors" and elsewhere, including, without limitation,
risks relating to the early stage of the Company and its products under
development, government regulation, dependence on third parties, patent risks,
lack of manufacturing facilities and competition. The Company undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new events, future information or otherwise.
The Company is currently engaged in the development and commercialization of
biotechnology and pharmaceutical products and technologies. In November 1995,
the Company acquired the rights to the AC Vaccine(TM) technology pursuant to the
TJU License. The Company initially intends to be engaged primarily in the
development and commercialization of the AC Vaccine technology, as well as the
potential anti-cancer and anti-infective technology licensed pursuant to the
Rutgers License and the potential anti-cancer technology licensed pursuant to
the Texas A&M License. The Company anticipates that during the next 12 months it
will conduct substantial research and development of the AC Vaccine technology,
including, without limitation, 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 treating post-surgical
stage 3 patients in its Phase I/II clinical trial of O-Vax(TM), its AC Vaccine
for ovarian cancer. This trial is being conducted at TJU under the direction of
Dr. David Berd. The Company also plans to initiate a similar Phase I/II clinical
trial of C-Vax(TM), its AC Vaccine for colorectal cancer, within the next 12
months. 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.
In connection with the Company's strategy to acquire, develop and commercialize
other potential biotechnology products and technologies, in December 1996, the
Company acquired the exclusive worldwide rights to a series of compounds for the
potential treatment of cancer and other infectious diseases from Rutgers.
Additionally, in February 1997, the Company acquired the exclusive worldwide
rights to another series of compounds for the potential treatment of cancer from
Texas A&M. Pursuant to the Rutgers License, the Texas A&M License, and the
related sponsored research agreements with each of Rutgers and Texas A&M, the
Company intends to expend substantial resources on the research and development
of these compounds.
While there can be no assurance, the Company may acquire additional products and
technologies during the next 12 months, which may or may not be in the cancer
immunotherapy field. Should the Company acquire such additional products or
technologies, it is anticipated that such additional products or technologies
will require substantial resources for research, development and clinical
evaluation. However, there can be no assurance that the Company will be able to
obtain the additional financing necessary to acquire and develop such additional
products and technologies. In addition, there can be no assurance, that changes
in the Company's research and development plans or other changes which would or
could alter the Company's operating expenses will not require the Company to
reallocate funds among its planned activities and curtail certain planned
expenditures. In such event, the Company may need additional financing. There
can be no assurance as to the availability or the terms of any required
additional financing, when and if needed. In the event that the Company fails to
raise any funds it requires, it may be necessary for the Company to
significantly curtail its activities or cease operations.
Page 9
<PAGE>
The Company's Research and Development expenses have increased significantly
from $378,000 in the three months ended March 31, 1997 to $957,000 in the three
months ended March 31, 1998. The increase relates primarily to the progress made
in preparing the AC Vaccine technology for phase III clinical trials in
melanoma, commencement of a proof-of-concept study in ovarian cancer with the
same technology and completion of a Class 10,000 "clean room" laboratory for
clinical manufacturing of the vaccine and ongoing expenses related to that
facility. Research and development costs have also increased due to the
licensing of the topoisomerase inhibitor compounds from Rutgers and the
licensing of the anti-estrogen compounds from Texas A&M and costs of their
ongoing development. General and administrative expenses have decreased from
$823,000 in the three months ended March 31, 1997 to $651,000 in the three
months ended March 31, 1998 due primarily to the completion of the registration
of the shares issued in the Company's 1996 private placement and the listing of
such shares on the Nasdaq Small Cap Market in early 1997 and the non-recurrence
of these costs in 1998. The Company anticipates that, over the next 12 months,
expenses will continue to increase, particularly as development proceeds with
the AC Vaccine and the Rutgers and Texas A&M Compounds.
Also, 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,
particularly in connection with the establishment of 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 currently cannot be predicted with any certainty, however,
the Company currently estimates that the establishment of its GMP manufacturing
facility in Philadelphia will necessitate approximately $1,500,000 to $2,500,000
in funding, and take approximately six-to-twelve months to complete. The initial
$150,000 in funding for such facility is expected to come from a mortgage loan
from the Philadelphia Economic Development Corporation referred to below. The
balance of such funding is expected to come from the Company's existing working
capital.
LIQUIDITY AND CAPITAL RESOURCES
The Company currently anticipates that its current resources should be
sufficient to fund operations for approximately the next 21-33 months based upon
the Company's current operating plan. The Company does not currently expect to
be required to raise additional capital in the next 12 months, although from
time to time, depending upon its anticipated future needs, the Company may avail
itself of opportunities in the capital markets to raise additional capital if
acceptable terms may be obtained. However, since the Company's working capital
requirements will depend upon numerous factors, including, without limitation,
progress of the Company's research and development programs, preclinical and
clinical testing, timing and cost of obtaining regulatory approvals, changes in
levels of resources that the Company devotes to the development of manufacturing
and marketing capabilities, competitive and technological advances, status of
competitors, and the ability of the Company to establish collaborative
arrangements with other organizations, there can be no assurance that the
Company will be able to meets its business objectives under its current
operations plan and/or not need to raise additional capital. Since the Company
has no committed external sources of capital, and expects no product revenues
for the foreseeable future, it will likely require additional financing to fund
future operations. The Company has received authorization from the Philadelphia
Economic Development Corporation for a $150,000 Economic Stimulus Mortgage Loan,
at a fixed interest rate of 3 percent, to assist the Company in establishing its
GMP manufacturing facility in Philadelphia. The loan is subject to negotiation
and execution of definitive documentation. There can be no assurance, however,
that the Company will be able to obtain additional funds it will require for its
projects on acceptable terms, if at all. If adequate funds are not available the
Company may be required to delay, reduce the scope of or eliminate one or more
of its research or development programs; to obtain funds through arrangements
with collaborative partners or others that may require the Company to relinquish
rights to certain technologies, product candidates or products that the Company
would otherwise seek to develop or commercialize itself; or to license the
rights to such products on terms that are less favorable to the Company than
might otherwise be available.
Page 10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Reference is made to the discussion of the trademark matter in Item 5 below.
Except for the trademark matter discussed in Item 5, the Company is not aware of
any other pending or threatened legal proceedings to which the Company is a
party or of which any of its property is the subject.
Item 2. Change in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
The Company's application for a federal trademark registration for the name AVAX
has been opposed by a third party. This opposition proceeding concerns the right
of the Company to obtain a federal trademark registration in the United States
Patent & Trademark Office for the name AVAX. The Company believes there is a
sound basis for denial of the opposition and allowance of its application to
register the name AVAX. The Company does not believe that an adverse outcome in
this proceeding will materially affect its business.
The Company has recently submitted to the United States Patent and Trademark
Office (PTO) an application for reissuance of the patent licensed by the Company
from Thomas Jefferson University for the purpose of strengthening the patent in
light of a prior art reference. The prior art reference relates to the
publication, slightly more than one year prior to the filing of the patent with
the PTO, of an abstract for an oral presentation given by the inventor of the AC
Vaccine technology. The Company believes that there is a sound basis for this
reissue application. In connection with the application for reissuance, the
Company may seek to have the patent's claims modified to reconcile such claims
with the prior art reference. In the absence of an enforceable patent, the
Company may rely upon significant regulatory barriers to competition.
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:
Three reports on Form 8-K were filed by the Company during the three
months ended March 31, 1998. One report was filed on January 28, 1998
relating to a press release dated January 28, 1998, announcing the
submission to the FDA of requested information to further
characterize the Company's initial AC Vaccine. The second report was
filed on February 19, 1998 relating to a press release dated February
18, 1998, announcing the initial results of the Company's potential
ovarian cancer vaccine in inducing an immune response in a small
study of women with advanced ovarian cancer. The third report was
filed on March 11, relating to a press release dated March 10, 1998,
announcing the Company's financial results for the fiscal year ended
December 31, 1997.
Page 11
<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: May 14, 1998
/s/ Jeffrey M. Jonas, M.D.
----------------------------------------
Jeffrey M. Jonas, M.D.
President and Chief Executive Officer
Date: May 14, 1998
/s/ David L. Tousley
----------------------------------------
David L. Tousley
Chief Financial Officer
(Principal Financial and
Accounting Officer)
Page 12
AVAX Technologies, Inc. Exhibit 11.1
Computation of Earnings (Loss) Per Share
<TABLE>
<CAPTION>
Three Three
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 1996 1997 31-Mar-97 31-Mar-98
- ------------ --------- ---------- -------- ------- ------- --------- ---------
<S> <C> <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) (a)
July '92 59,375
Sept '92 3,125
---------
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)
May '95 (196,618)
September '95 402,490
November '95 1,374,728
---------
1,469,270 1,469,270 1,469,270 1,469,270 1,469,270
---------
March '96 (77,901) 9.5 (61,672)
May & June '96 321,875 7 187,760
May & June '96 129,099 7 75,308
June '96 500 6.5 271
July '96(c) 46,875 5.5 21,484
--------- ----------
420,448 223,152 223,152 420,448 420,448 420,448
--------- ----------
June '97(f) 371,756 6.5 201,368
July, August & Sept '97 661,901 4.5 248,213
Oct, Nov & Dec '97 402,153 1.5 50,269
--------- ----------
1,435,810 499,850 -- 499,850 -- 1,435,810
--------- ----------
Jan, Feb & March '98 285,832 1.5 -- -- -- 142,916
Cheap Shares:
June '96 9,375
Treasury Shares (96)
---------
9,279 9,279 9,279 9,375 9,375
---------
CheapWarrants(b):
January and February '96
and August '95 120,000
Treasury Shares (1,225)
---------
118,775 118,775 108,775 118,775 100,000
---------
June, July and(e)
September '92 warrants 35,337
Treasury Shares (23,348)
---------
11,989 11,989 11,989 11,989 35,337
---------
Cheap Options(d)
May '96 318,873
Treasury Shares (81,345)
---------
237,528 237,528 118,764 237,528 --
---------
</TABLE>
<PAGE>
AVAX Technologies, Inc. Exhibit 11.1
Computation of Earnings (Loss) Per Share (continued)
<TABLE>
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Weighted Average Shares 3,182,058 3,750,440 3,379,450 4,725,221
==============================================================
Net Income (Loss) Attributable to Common Stockholders (2,668,586) (4,266,125) (962,165) (1,400,306)
Net Income (Loss) Per Share $ (0.84) $ (1.14) $ (0.28) $ (0.30)
</TABLE>
(a) - Not included because it would be anti-dilutive
(b) - 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)
(c) - 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)
(d) - 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
(e) - represents additional warrants, exercised in June '97 in cashless
exercise, issued under anti-dilution provisions within one year of IPO
(f) - 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>
<CAPTION>
Three Three
Year Year Months Months
Ended Ended Ended Ended
1996 1997 31-Mar-97 31-Mar-98
---- ---- --------- ---------
Cheap Stock Effect
----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cheap shares 4,640 -- --
Cheap Warrants
(b) 68,775 8,775 18,775 --
(e) 11,989 5,995 11,989 --
Cheap Options 237,528 118,764 237,528 --
----------------------------------------------------------------------------------------
322,932 133,534 268,292 --
</TABLE>
<PAGE>
AVAX Technologies, Inc. Exhibit 11.1
Computation of Supplementary Earnings (Loss) Per Share
<TABLE>
<CAPTION>
Three Three
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 1996 1997 31-Mar-97 31-Mar-98
- ------------ --------- ---------- -------- ------- ------- --------- ---------
<S> <C> <C> <C>
Net Income (Loss) Attributable to Common Stockholders (4,266,125) (962,165) (1,400,306)
Interest on Debt Repaid -- -- --
Deferred Financing Cost related to Debt Repaid -- -- --
----------------------------------------------
Supplementary Net Income (Loss) (4,266,125) (962,165) (1,400,306)
----------------------------------------------
Weighted Average Shares 3,750,440 3,379,450 4,725,221
Additional Shares:
Conversion of Series A Preferred (f) (f) (f)
Less:Series A Preferred included in primary calculation -- -- --
Common Stock Equivalents sold to retire debt 320,664 320,664 320,664
----------------------------------------------
Supplementary Weighted Average Shares 4,071,104 3,700,114 5,045,885
----------------------------------------------
Supplementary Net Income (Loss) per share $ (1.05) $ (0.26) $ (0.28)
</TABLE>
(f) - Included in weighted average shares for primary calculation
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted fromthe Company's
registration statement on Form SB-2. filed with the commission on April
231, 1998.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-START> JAN-01-1997 JAN-01-1998
<PERIOD-END> DEC-31-1997 MAR-31-1998
<CASH> 6,820,884 3,388,303
<SECURITIES> 9,102,028 11,264,405
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 17,277,841 14,764,016
<PP&E> 91,959 103,739
<DEPRECIATION> 14,967 19,582
<TOTAL-ASSETS> 17,354,833 14,848,173
<CURRENT-LIABILITIES> 1,553,726 380,096
<BONDS> 0 0
0 0
2,041 1,932
<COMMON> 18,329 19,472
<OTHER-SE> 15,801,107 14,468,077
<TOTAL-LIABILITY-AND-EQUITY> 17,354,833 14,848,173
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> (150,602) 0
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (4,266,125)<F1> (1,400,306)
<EPS-PRIMARY> (1.14) (.30)<F1>
<EPS-DILUTED> 0 0
<FN>
(1) EPS-BASIC
</FN>
</TABLE>
