Edgar Filing: CEL SCI CORP

PROSPECTUS 424(b)(3)
File #333-59798

CEL-SCI CORPORATION

Common Stock

This prospectus may be used only in connection with sales of the common
stock of CEL-SCI Corporation by Paul Revere Capital Partners, Ltd. Paul Revere
Capital Partners will sell shares of common stock purchased from CEL-SCI under
an equity line of credit agreement and up to 200,800 shares of common stock
which may be issued upon the exercise of warrants. The warrants were issued to
Paul Revere Capital Partners upon the signing of the equity line of credit
agreement.

CEL-SCI will not receive any proceeds from the sale of the common stock by
the selling stockholders. CEL-SCI will pay for the expenses of this offering.

The following provides information concerning the first drawdown requested
by Cel-Sci.

Date of Shares Average Sale Net Proceeds
Sale Sold Price Per Share to Cel-Sci
------- ------ --------------- ------------

11/09/01 277,684 $1.08 $299,000

CEL-SCI's common stock is quoted on the American Stock Exchange under the
symbol "CVM." On November 8, 2001 the closing price for one share of the
CEL-SCI's common stock was $1.14.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.

These securities are speculative and involve a high degree of risk. For a
description of certain important factors that should be considered by
prospective investors, see "Risk Factors" beginning on page 5 of this Prospectus

The date of this prospectus is November 9, 2001

PROSPECTUS SUMMARY

THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION
APPEARING ELSEWHERE IN THIS PROSPECTUS.

CEL-SCI

CEL-SCI Corporation was formed as a Colorado corporation in 1983. CEL-SCI
is involved in the research and development of certain drugs and vaccines.
CEL-SCI manufactures MULTIKINE, its first, and main product, using CEL-SCI's
proprietary cell culture technologies, which involve a combination, or
"cocktail", of natural human interleukin-2 and certain lymphokines and
cytokines. CEL-SCI is testing MULTIKINE to determine if it is effective in
creating an anti-cancer immune response in head and neck cancer patients, and in
HIV-infected women with Human Papilloma Virus induced cervical dysplasia, the
precursor stage before the development of cervical cancer.

Another technology CEL-SCI is developing, Ligand Epitope Antigen
Presentation System (LEAPS), is a T-cell modulation technology which CEL-SCI is
testing to determine if it is effective in developing potential treatments
and/or vaccines against various diseases. Present target diseases are AIDS,
herpes simplex, malaria, prostate cancer and breast cancer.

Before human testing can begin with respect to a drug or biological
product, preclinical studies are conducted in laboratory animals to evaluate the
potential efficacy and the safety of a product. Human clinical studies generally
involve a three-phase process. The initial clinical evaluation, Phase I,
consists of administering the product and testing for safe and tolerable dosage
levels. Phase II trials continue the evaluation of safety and determine the
appropriate dosage for the product, identify possible side effects and risks in
a larger group of subjects, and provide preliminary indications of efficacy.
Phase III trials consist of testing for actual clinical efficacy within an
expanded group of patients at geographically dispersed test sites.

CEL-SCI has funded the costs associated with the clinical trials relating
to CEL-SCI's technologies, research expenditures and CEL-SCI's administrative
expenses with the public and private sales of shares of CEL-SCI's common stock
and borrowings from third parties, including affiliates of CEL-SCI.

CEL-SCI does not expect to develop commercial products for several years,
if at all. CEL-SCI has had operating losses since its inception, had an
accumulated deficit of approximately $(69,000,000) at June 30, 2001, and expects
to incur substantial losses for the foreseeable future.

CEL-SCI's executive offices are located at 8229 Boone Blvd., #802, Vienna,
Virginia 22182, and its telephone number is (703) 506-9460.

The Offering

In order to provide a possible source of funding for CEL-SCI's current
activities and for the development of its current and planned products, CEL-SCI
has entered into an equity line of credit agreement with Paul Revere Capital
Partners.

Under the equity line of credit agreement, Paul Revere Capital Partners
has agreed to provide CEL-SCI with up to $10,000,000 of funding prior to June
22, 2003. During this period, CEL-SCI may request a drawdown under the equity
line of credit by selling shares of its common stock to Paul Revere Capital
Partners, and Paul Revere Capital Partners will be obligated to purchase the
shares. The minimum amount CEL-SCI can draw down at any one time is $100,000,
and the maximum amount CEL-SCI can draw down at any one time will be determined
at the time of the drawdown request using a formula contained in the equity line
of credit agreement. CEL-SCI may request a drawdown once every 22 trading days,
although CEL-SCI is under no obligation to request any drawdowns under the
equity line of credit.

During the 22 trading days following a drawdown request, CEL-SCI will
calculate the amount of shares it will sell to Paul Revere Capital Partners and
the purchase price per share. The purchase price per share of common stock will
be based on the daily volume weighted average price of CEL-SCI's common stock
during each of the 22 trading days immediately following the drawdown date, less
a discount of 11%.

For more details on the maximum drawdown amount, the calculation of the
purchase price and the number of shares CEL-SCI will sell, see "Equity Line of
Credit Agreement" beginning on page 37 of this prospectus.

CEL-SCI is registering the shares of common stock issuable to Paul Revere
Capital Partners under the equity line of credit, as well as the 200,800 shares
underlying the warrants that CEL-SCI granted to Paul Revere Capital Partners.
These shares may be offered for sale from time to time by means of this
prospectus by or for the account of Paul Revere Capital Partners. CEL-SCI will
prepare and file amendments and supplements to this prospectus as may be
necessary in order to keep this prospectus effective as long as the selling
shareholders hold shares of CEL-SCI's common stock or until these shares can be
sold under an appropriate exemption from registration. CEL-SCI has agreed to
bear the expenses of registering the shares, including Paul Revere Capital
Partners's legal fees of $35,000, but not the expenses associated with selling
the shares, such as broker discounts and commissions.

As of October 31, 2001, CEL-SCI had 22,331,295 shares of common stock
issued and outstanding. The number of outstanding shares does not give effect to
shares which may be issued pursuant to the equity-line of credit or upon the
exercise and/or conversion of options, warrants or convertible notes. See
"Comparative Share Data".

CEL-SCI will not receive any proceeds from the sale of the shares by Paul
Revere Capital Partners. However, CEL-SCI will receive proceeds from any sale of
common stock to Paul Revere Capital Partners under the equity line of credit
agreement and upon the exercise of warrants held by Paul Revere Capital
Partners, when, and if, its pays the exercise price in cash. CEL-SCI expects to
use substantially all the net proceeds for general and administrative expenses,
research and clinical trials.

The purchase of the securities offered by this prospectus involves a high
degree of risk. Risk factors include the lack of revenues and history of loss,
and the need for additional capital. See the "Risk Factors" section of this
prospectus for additional Risk Factors.

Summary Financial Data

The financial data presented below should be read in conjunction with the
more detailed financial statements and related notes which are included
elsewhere in this prospectus along with the section entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operation."

Results of Operations:

Year Ended Nine Months Ended
September 30, 2000 June 30, 2001
------------------ -----------------

Investment Income and Other
Revenues: $ 442,551 $ 551,186

Expenses:
Research and Development 4,978,714 6,419,512
Depreciation and Amortization 220,994 153,906
General and Administrative 3,721,240 2,200,355
------------ ------------

Net Loss $(8,478,397) $(8,222,587)
============ ============

Loss per common share
(basic and diluted) $(0.44) $(0.39)

Weighted average common
Shares outstanding 19,259,190 21,274,537

Balance Sheet Data:
September 30, 2000 June 30, 2001

Working Capital $11,725,940 $3,539,393
Total Assets 13,808,882 5,269,506
Long-Term Liabilities 847,423 426,898
Shareholders' Equity 12,961,459 4,842,608

Forward Looking Statements

This prospectus contains various forward-looking statements that are based
on CEL-SCI's beliefs as well as assumptions made by and information currently
available to CEL-SCI. When used in this prospectus, the words "believe",
"expect", "anticipate", "estimate" and similar expressions are intended to
identify forward-looking statements. Such statements may include statements
regarding seeking business opportunities, payment of operating expenses, and the
like, and are subject to certain risks, uncertainties and assumptions which
could cause actual results to differ materially from projections or estimates.
Factors which could cause actual results to differ materially are discussed at
length under the heading "Risk Factors". Should one or more of the enumerated
risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated, estimated
or projected. Investors should not place undue reliance on forward-looking
statements, all of which speak only as of the date made.

RISK FACTORS

Investors should be aware that this offering involves certain risks,
including those described below, which could adversely affect the value of their
holdings of common stock. CEL-SCI does not make, nor has it authorized any other
person to make, any representation about the future market value of CEL-SCI's
common stock. In addition to the other information contained in this prospectus,
the following factors should be considered carefully in evaluating an investment
in the Shares offered by this prospectus.

CEL-SCI Has Earned Only Limited Revenues and Has a History of Losses.
--------------------------------------------------------------------

CEL-SCI has had only limited revenues since it was formed in 1983. Since
the date of its formation and through June 30, 2001 CEL-SCI incurred net losses
of approximately $(69,000,000). During the years ended September 30, 1998, 1999
and 2000 CEL-SCI suffered losses of $(6,442,683), $(7,490,725) and $(8,478,397)
respectively. CEL-SCI has relied principally upon the proceeds of public and
private sales of securities to finance its activities to date. All of CEL-SCI's
potential products are in the early stages of development, and any commercial
sale of these products will be many years away. Accordingly, CEL-SCI expects to
incur substantial losses for the foreseeable future.

There can be no assurance CEL-SCI will be profitable. At the present time,
CEL-SCI intends to use available funds to finance CEL-SCI's operations.
Accordingly, while payment of dividends rests within the discretion of the Board
of Directors, no common stock dividends have been declared or paid by CEL-SCI.
CEL-SCI does not presently intend to pay dividends on its common stock and there
can be no assurance that common stock dividends will ever be paid.

If Cel-Sci cannot obtain additional capital, Cel-Sci may have to delay or
postpone development and research expenditures which may influence Cel-Sci's
ability to produce a timely and competitive product.

Clinical and other studies necessary to obtain approval of a new drug can
be time consuming and costly, especially in the United States, but also in
foreign countries. The different steps necessary to obtain regulatory approval,
especially that of the Food and Drug Administration, involve significant costs
and may require several years to complete. CEL-SCI expects that it will need
additional financing over an extended period of time in order to fund the costs
of future clinical trials, related research, and general and administrative
expenses. Although CEL-SCI's equity line of credit agreement is expected to be a
source of funding, the amounts which CEL-SCI is able to draw from the equity
line during each drawdown period may not satisfy CEL-SCI's capital needs.

If Cost Estimates for Clinical Trials and Research Are Inaccurate, CEL-SCI Will
Require Additional Funding.

CEL-SCI's estimates of the costs associated with future clinical trials
and research may be substantially lower than the actual costs of these
activities. If CEL-SCI's cost estimates are incorrect, CEL-SCI will need
additional funding for its research efforts.

Any failure to obtain or any delay in obtaining required regulatory approvals
may adversely affect the ability of CEL-SCI or potential licensees to
successfully market any products they may develop.

Therapeutic agents, drugs and diagnostic products are subject to approval,
prior to general marketing, by the FDA in the United States and by comparable
agencies in most foreign countries. The process of obtaining FDA and
corresponding foreign approvals is costly and time consuming, particularly for
pharmaceutical products such as those which might ultimately be developed by
CEL-SCI, VTI or its licensees, and there can be no assurance that such approvals
will be granted. Also, the extent of adverse government regulations which might
arise from future legislative or administrative action cannot be predicted.

CEL-SCI has, at the present time, only one source of multikine and if this
source could not, for any reason, supply CEL-SCI with Multikine, CEL-SCI
estimates that it would take approximately six to ten months to obtain supplies
of Multikine under an alternative manufacturing arrangement.

CEL-SCI has an agreement with an unrelated corporation for the production,
until 2006, of Multikine. CEL-SCI does not know what cost it would incur to
obtain an alternative source of supply.

There can be no assurance that CEL-SCI will achieve or maintain a competitive
position or that other technological developments will not cause CEL-SCI's
proprietary technologies to become uneconomical or obsolete.

The biomedical field in which CEL-SCI is involved is undergoing rapid and
significant technological change. The successful development of therapeutic
agents from CEL-SCI's compounds, compositions and processes through
CEL-SCI-financed research or as a result of possible licensing arrangements with
pharmaceutical or other companies, will depend on its ability to be in the
technological forefront of this field.

Many pharmaceutical and biotechnology companies are developing products
for the prevention or treatment of cancer and infectious diseases. Many of these
companies have substantial financial, research and development, and marketing
resources and are capable of providing significant long-term competition either
by establishing in-house research groups or by forming collaborative ventures
with other entities. In addition, both smaller companies and non-profit
institutions are active in research relating to cancer and infectious diseases
and are expected to become more active in the future.

CEL-SCI's Patents Might Not Protect CEL-SCI's Technology from Competitors.

Certain aspects of CEL-SCI's technologies are covered by U.S. and foreign
patents. In addition, CEL-SCI has a number of patent applications pending. There
is no assurance that the applications still pending or which may be filed in the
future will result in the issuance of any patents. Furthermore, there is no
assurance as to the breadth and degree of protection any issued patents might
afford CEL-SCI. Disputes may arise between CEL-SCI and others as to the scope
and validity of these or other patents. Any defense of the patents could prove
costly and time consuming and there can be no assurance that CEL-SCI will be in
a position, or will deem it advisable, to carry on such a defense. Other private
and public concerns, including universities, may have filed applications for, or
may have been issued, patents and are expected to obtain additional patents and
other proprietary rights to technology potentially useful or necessary to
CEL-SCI. The scope and validity of such patents, if any, the extent to which
CEL-SCI may wish or need to acquire the rights to such patents, and the cost and
availability of such rights are presently unknown. Also, as far as CEL-SCI
relies upon unpatented proprietary technology, there is no assurance that others
may not acquire or independently develop the same or similar technology.
CEL-SCI's first MULTIKINE patent expired in 2000. Since CEL-SCI does not know if
it will ever be able to sell MULTIKINE on a commercial basis, CEL-SCI cannot
predict what effect the expiration of this patent will have on CEL-SCI.
Notwithstanding the above, CEL-SCI believes that trade secrets and later issued
patents will protect the technology associated with Multikine.

CEL-SCI's Product Liability Insurance May Not Be Adequate to Protect CEL-SCI
from Possible Losses.

Although CEL-SCI has product liability insurance for Multikine and its
HGP-30 vaccine, the successful prosecution of a product liability case against
CEL-SCI could have a materially adverse effect upon its business if the amount
of any judgment exceeds CEL-SCI's insurance coverage.

The Loss of Management and Scientific Personnel Could Adversely Affect CEL-SCI.
-------------------------------------------------------------------------------

CEL-SCI is dependent for its success on the continued availability of its
executive officers. The loss of the services of any of CEL-SCI's executive
officers could have an adverse effect on CEL-SCI's business. CEL-SCI does not
carry key man life insurance on any of its officers. CEL-SCI's future success
will also depend upon its ability to attract and retain qualified scientific
personnel. There can be no assurance that CEL-SCI will be able to hire and
retain such necessary personnel.

Shares Issuable Upon the Conversion of Options, Warrants and Convertible
Securities or in Connection with the Equity Line of Credit May Depress the Price
of CEL-SCI's Common stock.

CEL-SCI has issued options to its officers, directors, employees and
consultants which allow the holders to acquire additional shares of CEL-SCI's
common stock. In some cases CEL-SCI has agreed that, at its expense, it will
make appropriate filings with the Securities and Exchange Commission so that the
securities issuable upon the exercise of the options will be available for
public sale. Such filings could result in substantial expense to CEL-SCI and
could hinder future financings by CEL-SCI.

Until the options expire, the holders will have an opportunity to profit
from any increase in the market price of CEL-SCI's common stock without assuming
the risks of ownership. Holders of the options may exercise them at a time when
CEL-SCI could obtain additional capital on terms more favorable than those
provided by the options. The exercise of the options will dilute the voting
interest of the owners of presently outstanding shares of CEL-SCI's common stock
and may adversely affect the ability of CEL-SCI to obtain additional capital in
the future. The sale of the shares of common stock issuable upon the exercise of
the options could adversely affect the market price of CEL-SCI's stock.

In December 1999 and January 2000, CEL-SCI sold 1,148,592 shares of its
common stock, plus Series A and Series B warrants, to three private investors.
The Series A warrants permitted the holders of the warrants to purchase 402,007
shares of CEL-SCI's common stock at a price of $2.925 per share at any time
prior to December 8, 2002. The Series B warrants allowed the holders to acquire
additional shares of CEL-SCI's common stock at a nominal price in the event the
price of CEL-SCI's common stock fell below $2.4375 per share prior to certain
fixed vesting dates, the first of which in December 2000. On the first fixed
vesting date the price of CEL-SCI's common stock was $1.54. Pursuant to the
terms of the Series B warrants, which have since expired, the holders of the
warrants, in December 2000, received 274,309 additional shares of CEL-SCI's
common stock. The share of common stock sold by CEL-SCI in the December 1999 and
January 2000 private offerings have since been resold by the investors, and as a
result no additional shares are issuable by the terms of the Series B warrants.

In March 2000, CEL-SCI sold an additional 1,026,666 shares of its common
stock, plus Series C and Series D warrants, to the same three private investors.
The Series C warrants permitted the holders of the warrants to purchase 413,344
shares of CEL-SCI's common stock at a price of $8.50 per share at any time prior
to March 21, 2003. The Series D warrants originally allowed the holders, to the
extent they held any shares purchased in the March 2000 offering, to acquire
additional shares of CEL-SCI's common stock at a nominal price in the event the

price of CEL-SCI's common stock fell below $7.50 per share prior to certain
fixed vesting dates, the first of which was in March 2001. On the first fixed
vesting date the price of CEL-SCI's common stock was $1.47 and on the second,
and final vesting date, the price of CEL-SCI's common stock was $1.08. As a
result, and in accordance with the terms of the Series D warrants, the private
investors were entitled to receive 5,734,155 additional shares of CEL-SCI's
common stock of which 3,520,123 shares had been issued and 959,340 shares had
been sold as of August 15, 2001.

On August 16, 2001 the three private investors exchanged the shares of
CEL-SCI's common stock which they owned, plus their unexercised Series D
Warrants, for 6,288 shares of CEL-SCI's Series E Preferred stock. Each Series E
Preferred share is convertible into shares of CEL-SCI's common stock on the
basis of one Series E Preferred share for shares of common stock equal in number
to the amount determined by dividing $1,000 by the lesser of $5 or 93% of the
average closing bid prices (the "Conversion Price") of CEL-SCI's common stock on
the American Stock Exchange for the five days prior to the date of each
conversion notice.

As part of this transaction the three private investors also exchanged
their Series A and Series C warrants for new Series E warrants. The Series E
warrants collectively allow the holders to purchase up to 815,351 additional
shares of CEL-SCI's common stock at a price of $1.19 per share at any time prior
to August 16, 2004.

The shares of common stock issued or issuable upon the conversion of the
Series E preferred shares, and the shares of common stock issuable upon the
exercise of the Series E warrants are being offered for public sale by means of
a separate registration statement. The sale of common stock issued or issuable
upon the exercise of the Series E warrants, or the conversion of the Series E
Preferred stock, or the perception that such sales could occur, could adversely
affect the market price of CEL-SCI's common stock.

An unknown number of shares of common stock, which may be sold by means of
this prospectus, are issuable under the equity line of credit arrangement to
Paul Revere Capital Partners. As CEL-SCI sells shares of its common stock to
Paul Revere Capital Partners under the equity line of credit, and Paul Revere
Capital Partners sells the common stock to third parties, the price of CEL-SCI's
common stock may decrease due to the additional shares in the market. If CEL-SCI
decides to draw down on the equity line of credit as the price of its common
stock decreases, CEL-SCI will be required to issue more shares of its common
stock for any given dollar amount invested by Paul Revere Capital Partners,
subject to the minimum selling price specified by CEL-SCI. The more shares that
are issued under the equity line of credit, the more CEL-SCI's then outstanding
shares will be diluted and the more CEL-SCI's stock price may decrease. Although
Paul Revere Capital Partners has agreed not to engage in any short selling
during the term of the equity line of credit, any decline in the price of
CEL-SCI's common stock may encourage short sales by others, which could place
further downward pressure on the price of CEL-SCI's common stock. Short selling
is a practice of selling shares which are not owned by a seller with the
expectation that the market price of the shares will decline in value after the
sale. See "Comparative Share Data" for more information concerning this equity
line.

The Market Price for CEL-SCI's Common Stock is Volatile.
---------------------------------------------------------

The market price of CEL-SCI's common stock, as well as the securities of
other biopharmaceutical and biotechnology companies, have historically been
highly volatile, and the market has from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of
particular companies. Factors such as fluctuations in CEL-SCI's operating
results, announcements of technological innovations or new therapeutic products
by CEL-SCI or its competitors, governmental regulation, developments in patent
or other proprietary rights, public concern as to the safety of products
developed by CEL-SCI or other biotechnology and pharmaceutical companies, and
general market conditions may have a significant effect on the market price of
CEL-SCI's common stock.

COMPARATIVE SHARE DATA

Number of Note
Shares Reference

Shares outstanding as of October 31, 2001 22,331,295

Shares to be sold in this Offering:

Shares issuable pursuant to equity
line of credit: Unknown A

Shares issuable upon exercise of warrants issued
in connection with equity line of credit 200,800 A

The number of shares outstanding as of October 31, 2001 excludes shares
which may be issued in connection with CEL-SCI's line of credit or upon the
exercise of other options or warrants previously issued by CEL-SCI. See table
below.

Other Shares Which May Be Issued:
--------------------------------

The following table lists additional shares of CEL-SCI's common stock
which may be issued pursuant to the equity line of credit agreement and as the
result of the exercise of other outstanding options or warrants issued by
CEL-SCI:

Number of Note
Shares Reference

Shares issuable upon conversion of Series E Unknown B
preferred stock

Shares issuable upon exercise of Series E 815,351 B
warrants

Shares issuable upon exercise of warrants 1,100,000 C
sold to investors in December 1997 private
offering

Shares issuable upon exercise of options 275,000 D
granted to investor relations consultants

Shares issuable upon exercise of options and 4,915,122 E
warrants granted to CEL-SCI's officers,
directors, employees, consultants, and third
parties

A. Under the equity line of credit agreement, Paul Revere Capital Partners has
agreed to provide CEL-SCI with up to $10,000,000 of funding prior to June 22,
2003. During this twenty-four month period, CEL-SCI may request a drawdown under
the equity line of credit by selling shares of its common stock to Paul Revere
Capital Partners and Paul Revere Capital Partners will be obligated to purchase
the shares. CEL-SCI may request a drawdown once every 22 trading days, although
CEL-SCI is under no obligation to request any drawdowns under the equity line of
credit.

CEL-SCI may request a drawdown by faxing a drawdown notice to Paul Revere
Capital Partners, Ltd., stating the amount of the drawdown and the lowest daily
volume weighted average price, if any, at which CEL-SCI is willing to sell the
shares. The lowest volume weighted average price will be set by CEL-SCI's Chief
Executive Officer in his sole and absolute discretion.

If CEL-SCI sets a minimum price which is too high and CEL-SCI's stock
price does not consistently meet that level during the 22 trading days after its
drawdown request, the amount CEL-SCI can draw and the number of shares CEL-SCI
will sell to Paul Revere Capital Partners will be reduced. On the other hand, if
CEL-SCI sets a minimum price which is too low and its stock price falls
significantly but stays above the minimum price, CEL-SCI will have to issue a
greater number of shares to Paul Revere Capital Partners based on the reduced
market price.

The following provides information concerning the first drawdown requested
by Cel-Sci.

Date of Shares Average Sale Net Proceeds
Sale Sold Price Per Share to Cel-Sci
------- ------ --------------- ------------

11/09/01 277,684 $1.08 $299,000

Depending on the number and amount of the additional drawdowns requested
by CEL-SCI, an unknown additional number of shares of common stock may be issued
under the equity line of credit agreement between CEL-SCI and Paul Revere
Capital Partners.

As consideration for extending the equity line of credit, CEL-SCI granted
Paul Revere Capital Partners warrants to purchase 200,800 shares of common stock
at a price of $1.64 per share at any time prior to April 11, 2004.

B. In December 1999 and January 2000, CEL-SCI sold 1,148,592 shares of its
common stock, plus Series A and Series B warrants, to Advantage Fund II, Koch
Investment Group Limited and Mooring Capital Fund LLC for $2,800,000. The Series
A warrants allowed the holders to purchase up to 402,007 shares of CEL-SCI's
common stock at a price of $2.925 per share at any time prior to December 8,
2002. CEL-SCI issued 274,309 shares of common stock upon the exercise of the
Series B warrants, which have since expired.

In March 2000, CEL-SCI sold 1,026,666 shares of its common stock, plus
Series C and Series D warrants, to the same private investors referred to above
for $7,700,000. The Series C warrants allowed the holders to purchase up to
413,344 shares of CEL-SCI's common stock at a price of $8.50 per share at any
time prior to March 21, 2003. The Series D warrants allowed the holders, to the
extent they held any shares purchased in the March 2000 offering, to acquire
additional shares of CEL-SCI's common stock at a nominal price in the event the
price of CEL-SCI's common stock fell below $7.50 per share prior to certain
fixed vesting dates. On the first fixed vesting date the price of CEL-SCI's
common stock was $1.47 and on the second, and final vesting date, the price of
CEL-SCI's common stock was $1.08. As a result, and in accordance with the terms
of the Series D warrants, the private investors were entitled to receive
5,734,155 additional shares of CEL-SCI's common stock, of which 3,520,123 shares
had been issued and 959,340 shares had been sold as of August 15, 2001.

On August 16, 2001 CEL-SCI, Advantage Fund II and Koch Investment Group
agreed to restructure the terms of the Series A, C and D warrants in the
following manner:

Advantage Fund II, Koch Investment Group Limited and Mooring Capital Fund
LLC exchanged the 3,588,564 shares of CEL-SCI's common stock which they owned,
plus their unexercised Series D Warrants, for 6,288 shares of CEL-SCI's Series E
Preferred stock. At the holder's option, each Series E Preferred share is
convertible into shares of CEL-SCI's common stock on the basis of one Series E
Preferred share for shares of common stock equal in number to the amount
determined by dividing $1,000 by the lesser of $5 or 93% of the average closing
bid prices (the "Conversion Price") of CEL-SCI's common stock on the American
Stock Exchange for the five days prior to the date of each conversion notice.

Notwithstanding the above, the maximum number of common shares issuable
upon the conversion of each Series E Preferred share prior to August 16, 2003
will be the greater of 923 shares or the number of common shares determined by
dividing $1,000 by the price per share of common stock (if up to $2,000,000 is
raised by CEL-SCI in a single Capital Raising Transaction) or the average
weighted price per share of common stock (if up to $2,000,000 is raised by
CEL-SCI in a series of Capital Raising Transactions) sold by CEL-SCI prior to
November 14, 2001. The term Capital Raising Transaction means, at any time prior
to November 14, 2001, a transaction or series of transactions by which (i)
CEL-SCI receives up to $2,000,000 in connection with the Company's issuance of
its common stock and (ii) CEL-SCI is required to register for resale any
securities which were sold or agreed to be sold.

Each Series E Preferred share can be redeemed by CEL-SCI at a price of
$1,200 per share, plus accrued dividends, at any time prior to July 18, 2003. At
any time on or after July 18, 2003 and prior to the close of business on August
16, 2003 CEL-SCI may redeem any outstanding Series E Preferred shares at a price
of $1,000 per share.

Preferred shares that have not been redeemed or converted by August 16,
2003 will automatically convert to twice the number of shares of common stock
which such shares would otherwise convert into based upon the Conversion Price
on such date. On August 16, 2003 CEL-SCI will also be required to issue the
holders of any Series E Preferred shares which are then outstanding Series E
warrants which will allow the holders of the warrants to purchase shares of
CEL-SCI's common stock equal in number to 33% of the common shares which were
issued upon the conversion of the remaining Series E Preferred shares. These
warrants, if issued, will be exercisable at any time prior to August 17, 2006 at
a price equal to 110% of the volume weighted average price of CEL-SCI's common
stock for the five days prior to August 16, 2003.

Each Series E Preferred share is entitled to a quarterly dividend of $60
per share, payable in cash. Dividends not declared will accumulate. Except as
otherwise provided by law the Series E Preferred shares do not have any voting
rights. The Series E Preferred shares have a liquidation preference over
CEL-SCI's common stock.

As part of this transaction the three investors exchanged their Series A
and Series C warrants for new Series E warrants. The Series E warrants
collectively allow the holders to purchase up to 815,351 additional shares of
CEL-SCI's common stock at a price of $1.19 per share at any time prior to August
16, 2004.

With respect to the shares issuable upon the conversion of the Series E
Preferred shares, or the exercise of the Series E warrants, Advantage II and
Koch have agreed that until October 22, 2001, they will limit their respective
weekly sales of CEL-SCI's common stock to 7% of the average of the four prior
weeks trading volume in CEL-SCI's common stock as listed by Bloomberg Financial
Services. Mooring Financial has agreed to limit its weekly sales of CEL-SCI's
common stock to 1.67% of the average of the four prior weeks trading volume as
listed by Bloomberg. Thereafter, each of Advantage II and Koch will limit their
respective weekly sales of CEL-SCI's common stock to 9% of the average of the
four prior weeks traded volume as listed by Bloomberg, while Mooring Financial
will limit its weekly sales of CEL-SCI's common stock to 2.14% of the average of
the four prior weeks trading volume as listed by Bloomberg. If CEL-SCI's trading
volume reaches 200,000 shares or more on any given day, each of Advantage II and
Koch will be allowed to sell an additional 4.5% of that day's trading volume on
each of that day and the following day, while Mooring Financial will be allowed
to sell an additional 1% of that day's trading volume on each of that day and
the following day.

As of September 30, 2001 425 Series E Preferred shares had been converted
into 348,841 shares of CEL-SCI's common stock. The actual number of shares
issuable upon the conversion of the Series E Preferred shares will vary
depending upon a number of factors, including the price of CEL-SCI's common
stock at certain dates. Accordingly, the number of shares of common stock which
will be issued upon the conversion of the Series E Preferred shares cannot be
determined at this time. However, prior to August 16, 2003, CEL-SCI would not be
required to issue more than 5,803,824 shares of its common stock upon the
conversion of the Series E Preferred shares, subject to any adjustment due to a
Capital Raising Transaction.

C. In December 1997, CEL-SCI sold 10,000 shares of its Series D Preferred Stock,
and 1,100,000 warrants, to ten institutional investors for $10,000,000. All
Series D Preferred shares were subsequently converted into 5,201,400 shares of
CEL-SCI's common stock. Warrants for the purchase of 550,000 shares of common
stock are exercisable at a price of $8.62 at any time prior to December 22,
2001. Warrants for the purchase of 550,000 shares of common stock are
exercisable at a price of $9.31 at any time prior to December 22, 2001. As of
July 31, 2001 none of the warrants had been exercised.

D. CEL-SCI has granted options for the purchase of 275,000 shares of common
stock to certain investor relations consultants in consideration for services
provided to CEL-SCI. The options are exercisable at prices ranging between $1.63
and $5.00 per share and expire between June 2001 and February 2004.

E. The options are exercisable at prices ranging from $1.05 to $11.00 per share.
CEL-SCI may also grant options to purchase additional shares under its Incentive
Stock Option and Non-Qualified Stock Option Plans.

The shares referred to in Notes B through E are being, or will be, offered
for sale by means of separate registration statements which have been filed with
the Securities and Exchange Commission.

MARKET FOR CEL-SCI'S COMMON STOCK

As of October 31, 2001 there were approximately 2,800 record holders of
CEL-SCI's common stock. CEL-SCI's common stock is traded on the American Stock
Exchange. Set forth below are the range of high and low quotations for CEL-SCI's
common stock for the periods indicated as reported the American Stock Exchange.
The market quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commissions and may not necessarily represent actual transactions.

Quarter Ending High Low
-------------- ---- ---
12/31/98 $3.50 $1.50
3/31/99 $2.75 $1.63
6/30/99 $3.38 $1.81
9/30/99 $3.81 $1.88

12/31/99 $3.06 $2.18
3/31/00 $9.87 $2.25
6/30/00 $6.37 $2.75
9/30/00 $3.56 $2.20

12/31/00 $2.54 $1.00
3/31/01 $3.30 $1.30
6/30/01 $1.85 $1.16
9/30/01 $1.94 $1.02

Holders of Common Stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available therefor and,
in the event of liquidation, to share pro rata in any distribution of CEL-SCI's
assets after payment of liabilities. The Board of Directors is not obligated to
declare a dividend. CEL-SCI has not paid any dividends on its common stock and
CEL-SCI does not have any current plans to pay any common stock dividends.

The provisions in CEL-SCI's Articles of Incorporation relating to
CEL-SCI's Preferred Stock would allow CEL-SCI's directors to issue Preferred
Stock with rights to multiple votes per share and dividend rights which would
have priority over any dividends paid with respect to CEL-SCI's Common Stock.
The issuance of Preferred Stock with such rights may make more difficult the
removal of management even if such removal would be considered beneficial to
shareholders generally, and will have the effect of limiting shareholder
participation in certain transactions such as mergers or tender offers if such
transactions are not favored by incumbent management.

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following selected financial data should be read in conjunction with
the more detailed financial statements, related notes and other financial
information included in this prospectus.

For the Years Ended September 30,
--------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----

Investment Income and
Other Revenues: $442,551 $469,518 $792,994 $ 438,145 $ 322,370

Expenses:
Research and
Development 4,978,714 4,461,051 3,833,854 6,011,670 3,471,477
Depreciation and
Amortization 220,994 268,210 295,331 313,547 290,829
General and
Administrative 3,721,240 3,230,982 3,106,492 2,302,386 2,882,958
Equity in loss of
joint venture -- -- -- -- 3,772
-------------------------------------------------------
Net Loss $(8,478,397)$(7,490,725)$(6,442,683)$(8,189,458)$(6,326,666)
===========================================================

For the Years Ended September 30,
-------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Loss per common share
(basic and diluted) $(0.44) $(0.52) $(0.74) $(1.00) $(1.16)

Weighted average common
Shares outstanding 19,259,190 14,484,352 11,379,437 9,329,419 6,425,316

Nine Months Ended
June 30,
-----------------------
2001 2000
---- ----

Investment Income and Other
Revenues: $ 551,186 $ 299,623

Expenses:
Research and Development 6,419,512 3,866,572
Depreciation and Amortization 153,906 174,326
General and Administrative 2,200,355 2,986,080
------------ -----------
Net Loss $(8,222,587) $(6,727,355)
============ ============
Loss per common share
(basic and diluted) $(0.39) $(0.36)

Weighted average common
shares outstanding 21,274,537 18,857,493

Balance Sheet Data:
------------------

September 30,
--------------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----

Working Capital $11,725,940 $6,152,715 $12,926,014 $4,581,247 $10,266,104
Total Assets 13,808,882 7,559,772 14,431,813 6,334,397 11,878,370
Total Liabilities 847,423 461,586 456,529 508,617 294,048
Shareholders'
Equity 12,961,459 7,098,186 13,975,284 5,825,780 11,584,322

June 30, 2001

Working Capital $3,539,393
Total Assets 5,269,506
Long-Term Liabilities 426,898
Shareholders' Equity 4,842,608

No dividends have been declared on CEL-SCI's common stock.

Results of Operations

Nine Months Ended June 30, 2001

Interest income during the nine months ending June 30, 2001 was higher
than it was during the same quarter in 2000 as a result of CEL-SCI's larger cash
position. Other income was higher due to the receipt of grant money. Research
and development expenses were significantly higher because of the expenses
incurred in the validation of the new manufacturing facilities at Cambrex
Bioscience. CEL-SCI's cash expenditure and expenses have decreased significantly
in the third quarter since the work at Cambrex has been completed and are
expected to be even lower in the fourth quarter.

Fiscal 2000

Interest income during the year ended September 30, 2000 reflects interest
received and accrued on investments. Research and development expense in 2000 is
higher than in 1999 because CEL-SCI is running more and larger clinical trials.
General and administrative expenses have increased due to the lawsuit brought by
former directors which was settled in May of 2000.

Fiscal 1999

Interest income during the year ending September 30, 1999 reflects interest
received and accrued on investments. Interest income decreased as CEL-SCI used
the proceeds of the sale of the Series D Preferred Stock. Research and
development expense in 1999 was higher than in 1998 because CEL-SCI is running
more and larger clinical trials. General and administrative expenses have
increased due to the addition of more employees needed for the increased
activity level.

Fiscal 1998

Interest income during the year ending September 30, 1998 reflects
interest accrued on investments. Interest income increased from fiscal 1997 due
to the investment of the proceeds of the sale of the Series D Preferred Stock.
Research and development expenses in 1998 are substantially less then the prior
period since the costs of acquiring the MULTIKINE license and the L.E.A.P.S.
technology were expensed in fiscal 1997. General and administrative expenses
increased due to additional employees needed for CEL-SCI's increased activity
level and charges ($587,377) for options granted to persons other than employees
with exercise prices equal to prevailing market prices at the time of grant.

Liquidity and Capital Resources

CEL-SCI has had only limited revenues from operations since its inception
in March l983. CEL-SCI has relied upon proceeds realized from the public and
private sale of its Common Stock to meet its funding requirements. Funds raised
by CEL-SCI have been expended primarily in connection with the acquisition of an
exclusive worldwide license to certain patented and unpatented proprietary
technology and know-how relating to the human immunological defense system,
patent applications, the repayment of debt, the continuation of
Company-sponsored research and development, administrative costs and

construction of laboratory facilities. Inasmuch as CEL-SCI does not anticipate
realizing revenues until such time as it enters into licensing arrangements
regarding the technology and know-how licensed to it (which could take a number
of years), CEL-SCI is mostly dependent upon the proceeds from the sale of its
securities to meet all of its liquidity and capital resource requirements.

During fiscal 2002, CEL-SCI expects that it will spend approximately
$4,500,000 on research, development, and clinical trials. CEL-SCI plans to use
its existing financial resources as well as the proceeds from the sale of its
common stock under the equity line of credit agreement with Paul Revere Capital
Partners to fund its capital requirements during this period.

Other than funding its research and development program, CEL-SCI does not
have any material capital commitments.

It should be noted that substantial additional funds will be needed for
more extensive clinical trials which will be necessary before CEL-SCI will be
able to apply to the FDA for approval to sell any products which may be
developed on a commercial basis throughout the United States. In the absence of
revenues, CEL-SCI will be required to raise additional funds through the sale of
securities, debt financing or other arrangements in order to continue with its
research efforts. However, there can be no assurance that such financing will be
available or be available on favorable terms.

CEL-SCI's cash flow and earnings are subject to fluctuations due to
changes in interest rates in its investment portfolio of debt securities, to the
fair value of equity instruments held, and, to an immaterial extent, to foreign
currency exchange rates. CEL-SCI maintains an investment portfolio of various
issuers, types and maturities. These securities are generally classified as
available-for-sale and, consequently, are recorded on the balance sheet at fair
value with unrealized gains or losses reported as a separate component of
stockholder's equity. Other-than-temporary losses are recorded against earnings
in the same period the loss was deemed to have occurred. CEL-SCI does not
currently hedge this exposure and there can be no assurance that
other-than-temporary losses will not have a material adverse impact on CEL-SCI's
results of operations in the future.

BUSINESS

CEL-SCI Corporation was formed as a Colorado corporation in 1983. CEL-SCI
is involved in the research and development of the drugs and vaccines described
below.

MULTIKINE

CEL-SCI's first, and main, product, MULTIKINE(TM), manufactured using
CEL-SCI's proprietary cell culture technologies, is a combination, or
"cocktail", of natural human interleukin-2 ("IL-2") and certain lymphokines and
cytokines. MULTIKINE is being tested to determine if it is effective in
improving the immune response of cancer patients.

MULTIKINE has been tested in over 160 patients in the past few years in
clinical trials conducted in the U.S., Canada, Europe and Israel. Most of these
patients were head and neck cancer patients, but some studies were also
conducted in prostate cancer patients and HIV-infected patients. The safety
profile was found to be very good and CEL-SCI believes that the tumor response

data suggests that further studies are warranted. CEL-SCI is currently
conducting several additional head and neck cancer studies to determine the best
regimen for treating the patients.

At the present time CEL-SCI's primary focus for the development of MULTIKINE
is to prove its usefulness in the treatment of HIV-infected women with Human
Papilloma Virus induced cervical dysplasia, the precursor stage before the
development of cervical cancer.

Although CEL-SCI has the approval to start a 20 patient breast cancer study
in Israel, given the current problems in that region, CEL-SCI will not pursue
this study at the present time.

The function of the immunological system is to protect the body against
infectious agents, including viruses, bacteria, parasites and malignant (cancer)
cells. An individual's ability to respond to infectious agents and to other
substances (antigens) recognized as foreign by the body's immune system is
critical to health and survival. When the immune response is adequate, infection
is usually combated effectively and recovery follows. Severe infection can occur
when the immune response is inadequate. Such immune deficiency can be present
from birth but, in adult life, it is frequently acquired as a result of intense
sickness or as a result of the administration of chemotherapeutic drugs and/or
radiation. It is also recognized that, as people reach middle age and
thereafter, the immune system grows weaker.

Two classes of white blood cells, macrophages and lymphocytes, are believed
to be primarily responsible for immunity. Macrophages are large cells whose
principal immune activity is to digest and destroy infectious agents.
Lymphocytes are divided into two sub-classes. One sub-class of lymphocytes,
B-cells, produces antibodies in response to antigens. Antibodies have unique
combining sites (specificities) that recognize the shape of particular antigens
and bind with them. The combination of an antibody with an antigen sets in
motion a chain of events which may neutralize the effects of the foreign
substance. The other sub-class of lymphocytes, T-cells, regulates immune
responses. T-cells, for example, amplify or suppress antibody formation by
B-cells, and can also directly destroy "foreign" cells by activating "killer
cells."

It is generally recognized that the interplay among T-cells, B-cells and
the macrophages determines the strength and breadth of the body's response to
infection. It is believed that the activities of T-cells, B-cells and
macrophages are controlled, to a large extent, by a specific group of hormones
called cytokines. Cytokines regulate and modify the various functions of both
T-cells and B-cells. There are many cytokines, each of which is thought to have
distinctive chemical and functional properties. IL-2 is but one of these
cytokines and it is on IL-2 and its synergy with other cytokines that CEL-SCI
has focused its attention. Scientific and medical investigation has established
that IL-2 enhances immune responses by causing activated T-cells to proliferate.
Without such proliferation no immune response can be mounted. Other cytokines
support T-cell and B-cell proliferation. However, IL-2 is the only known
cytokine which causes the proliferation of T-cells. IL-2 is also known to
activate B-cells in the absence of B-cell growth factors.

Although IL-2 is one of the best characterized cytokines with anticancer
potential, CEL-SCI is of the opinion that to have optimum therapeutic value,
IL-2 should be administered not as a single substance but rather as a mixture of
IL-2 and certain cytokines, i.e. as a "cocktail". This approach, which was
pioneered by CEL-SCI, makes use of the synergism between these cytokines. It

should be noted, however, that neither the FDA nor any other agency has
determined that CEL-SCI's MULTIKINE product will be effective against any form
of cancer.

It has been reported by researchers in the field of cytokine research that
IL-2 can increase the number of killer T-cells produced by the body, which
improves the body's capacity to selectively destroy specific tumor cells.
Research and human clinical trials sponsored by CEL-SCI have indicated a
correlation between administration of MULTIKINE to cancer patients and
immunological responses. On the basis of these experimental results, CEL-SCI
believes that MULTIKINE may have application for the treatment of solid tumors
in humans.

In November 1990, the Florida Department of Health and Rehabilitative
Services ("DHRS") gave the physicians at a southern Florida medical institution
approval to start a clinical cancer trial in Florida using CEL-SCI's MULTIKINE
product. The focus of the trial was unresectable head and neck cancer.

In 1991, four patients with regionally advanced squamous cell cancer of
the head and neck were treated with CEL-SCI's MULTIKINE product. The patients
had previously received radical surgery followed by x-ray therapy but developed
recurrent tumors at multiple sites in the neck and were diagnosed with terminal
cancer. The patients had low levels of lymphocytes and evidence of immune
deficiency (generally a characteristic of this type of cancer).

Significant tumor reduction occurred in three of the four patients as a
result of the treatment with MULTIKINE. Negligible side effects were observed
and the patients were treated as outpatients. Notwithstanding the above, it
should be noted that these trials were only preliminary and were only conducted
on a small number of patients. It remains to be seen if MULTIKINE will be
effective in treating any form of cancer.

These results caused CEL-SCI to embark on a major manufacturing program
for MULTIKINE with the goal of being able to produce a drug that would meet the
stringent regulatory requirements for advanced human studies. This program
included building a pilot scale manufacturing facility.

Since that time, MULTIKINE has been well tolerated in clinical studies
involving more than 160 patients. Some of the more recent clinical data were
presented at the 5th International Congress on Head and Neck Cancer in San
Francisco in August, 2000. The study enrolled advanced primary head and neck
cancer patients who were treated prior to surgery and/or radiation for 2 weeks.
Dr. Dudkevitch from the Department of Otolaryngology at the Rabin Medical
Center, Israel, presented data showing that, of the 12 patients treated, two
patients had a complete tumor response (100% tumor reduction) following the
2-week treatment with the MULTIKINE regimen. He also noted that upon
histopathological examination of the tissue removed during surgery, no tumor
residues were found in those patients. Another 4 patients showed a partial
(greater than 50%) tumor reduction and six patients had tumor reductions of less
than 50%. Two patients refused surgery after treatment with MULTIKINE.

In May 2001 CEL-SCI also started a Phase I clinical trial at the
University of Maryland Biotechnology Institute's (UMBI). The principle
investigator of this study was Dr. Edmund Tramont, who is now the Director of
the Division of AIDS at the National Institute of Allergy and Infectious
Diseases (NIAID), a subdivision of the National Institutes of Health (NIH). The

focus of this study is HIV-infected women with Human Papilloma Virus (HPV)
induced cervical dysplasia, the precursor stage before the development of
cervical cancer. The goal of the study is to obtain safety and preliminary
efficacy data on Multikine as a treatment for pre-cancerous lesions of the
cervix (dysplasia). Most cervical dysplasia and cancer is due to infection with
HPV. The rationale for using MULTIKINE in the treatment of cervical
dysplasia/cancer is that MULTIKINE will help correct this defect and safely
boost the patients' immune systems to a point where their immune systems can
fight and eliminate the virally induced cancer. Cervical cancer is the second
leading cause of cancer death in women worldwide.

The HIV-infected women with HPV-induced cervical dysplasia were chosen as
a study group because of the high morbidity/morality and low success rate of
current surgical therapies. Since HIV infection results in immune suppression,
HPV-induced cervical dysplasia follows a more malignant and aggressive course of
disease in such women. Co-infection with HPV is common in HIV-positive women and
cervical cancer is considered an AIDS defining illness.

HPV infection is also a leading health problem in non HIV-infected
American college age women. A large concern among women who have HPV-induced
cervical dysplasia is that the repeated surgical procedures will lead to a
hysterectomy and the inability to bear children.

The study is designed to enroll up to a total of 15 women at 3 dose
levels. As of October 8, 2001 eight patients have completed the study. All eight
patients treated thus far in the ongoing phase I dose escalating study showed
clinical improvement by colposcopic (stereoscopic, binocular magnification of
the cervix under a focused beam of light) examination. Six out of eight patients
(75%) had no evidence of dysplasia on biopsy seven to eight weeks after the
final injection. One patient's final biopsy was performed at a later date. All
of the patients tolerated the injections well and without any associated serious
adverse reactions. As a result of this study, CEL-SCI has decided that, barring
some unforeseen circumstances, it will give the highest priority to clinical
trials in women with HPV-induced cervical dysplasia. CEL-SCI plans to meet with
the FDA to determine the best way to proceed with future clinical trials. Given
the large unmet medical need in HPV-induced cervical dysplasia, CEL-SCI is
hopeful that its meetings with the FDA will lead to the initiation of a clinical
trial in patients with HPV-induced cervical dysplasia during 2002, potentially
under fast track designation.

In November 2000, CEL-SCI concluded a development, supply and distribution
agreement with Orient Europharma of Taiwan. The agreement gives Orient
Europharma the exclusive marketing rights to Multikine for all cancer
indications in Taiwan, Singapore, Hong Kong and Malaysia. The agreement provides
for Orient Europharma to fund the clinical trials needed to obtain marketing
approvals in the four countries for head and neck cancer, naso pharyngeal cancer
and potentially cervical cancer, which are very prevalent in Far East Asia.
CEL-SCI may use the clinical data generated in these trials to support
applications for marketing approvals for Multikine in other parts of the world.

Under the agreement, CEL-SCI will manufacture Multikine and Orient
Europharma will purchase the product from CEL-SCI for distribution in the
territory. Both parties will share in the revenue from the sale of Multikine.

Proof of efficacy for anti-cancer drugs is a lengthy and complex process. At
this early stage of clinical investigation, it remains to be proven that

MULTIKINE will be effective against any form of cancer. Even if some form of
MULTIKINE is found to be effective in the treatment of cancer, commercial use of
MULTIKINE may be several years away due to extensive safety and effectiveness
tests that would be necessary before required government approvals are obtained.
It should be noted that other companies and research teams are actively involved
in developing treatments and/or cures for cancer, and accordingly, there can be
no assurance that CEL-SCI's research efforts, even if successful from a medical
standpoint, can be completed before those of its competitors.

CEL-SCI uses an unrelated corporation for certain aspects of the production
of MULTIKINE for research and testing purposes. The agreement with this
corporation expires in 2006.

T-CELL MODULATION PROCESS

CEL-SCI's patented T-cell Modulation Process uses "heteroconjugates" to
direct the body to choose a specific immune response. The heteroconjugate
technology, referred to as L.E.A.P.S. (Ligand Epitope Antigen Presentation
System), is intended to selectively stimulate the human immune system to more
effectively fight bacterial, viral and parasitic infections and cancer, when it
cannot do so on its own. Administered like vaccines, L.E.A.P.S. combines T-cell
binding ligands with small, disease associated, peptide antigens and may provide
a new method to treat and prevent certain diseases.

The ability to generate a specific immune response is important because
many diseases are often not combated effectively due to the body's selection of
the "inappropriate" immune response. The capability to specifically reprogram an
immune response may offer a more effective approach than existing vaccines and
drugs in attacking an underlying disease.

CEL-SCI intends to use this technology to develop potential treatments
and/or vaccines against various diseases. Present target diseases are herpes
simplex, AIDS, malaria, tuberculosis, prostate cancer and breast cancer.

As of June 30, 2001 CEL-SCI has announced that it is involved in the
following studies which are designed to determine the effectiveness of the
L.E.A.P.S. technology in preclinical studies.

Cooperative Research and Development Agreement ("CRADA") with the Naval
Medical Research Institute of the U.S. Navy to jointly develop a potential
malaria vaccine using the L.E.A.P.S. technology. While at present the number of
malaria cases is not a major problem in the continental U.S., there are an
increasing number of cases involving Americans bringing the disease home from
overseas travels. Currently, there is no approved malaria vaccine anywhere in
the world.

Development of a herpes simplex virus vaccine based on the L.E.A.P.S.
technology with funding from the National Institute of Allergy and Infectious
Diseases.

Collaborative study for the treatment, and possible prevention, of
autoimmune myorcarditis with researchers at the Department of Pathology, the
Johns Hopkins Medical Institutions, Baltimore, Maryland.

Research collaboration agreement with research scientists at the
Max-Delbruck Center for Molecular Medicine in Berlin, Germany to develop a
therapeutic vaccine for breast and/or colon cancer.

RESEARCH AND DEVELOPMENT

Since 1983, and through September 30, 2000, approximately $32,245,000 has
been expended on CEL-SCI-sponsored research and development, including
approximately $4,982,000, $4,461,000 and $3,834,000, respectively during the
years ended September 30, 2000, 1999 and 1998.

The costs associated with the clinical trials relating to CEL-SCI's
technologies, research expenditures and CEL-SCI's administrative expenses have
been funded with the public and private sales of shares of CEL-SCI's common
stock and borrowings from third parties, including affiliates of CEL-SCI.

CEL-SCI has a Scientific Advisory Board ("SAB") comprised of scientists
distinguished in biomedical research in the field of cytokines and related
areas. From time to time, members of the SAB advise CEL-SCI on its research
activities. Institutions with which members of the SAB are affiliated have in
the past conducted and may in the future conduct Company-sponsored research. The
SAB has in the past and may in the future, at its discretion, invite other
scientists to opine in confidence on the merits of CEL-SCI-sponsored research.
Members of the SAB receive $500 per month from CEL-SCI.

The members of CEL-SCI's SAB are:

Evan M. Hersh, M.D. - Professor of Medicine, Microbiology and Immunology,
Assistant Director of Experimental Therapeutics and Translational Research,
Arizona Cancer Center, Tucson.

Michael J. Mastrangelo, M.D. - Professor of Medicine, Jefferson Medical
College, Philadelphia, Pennsylvania; and Associate Clinical Director, Jefferson
Cancer Center, Philadelphia, Pennsylvania.

Alan B. Morris, Ph.D. - Professor, Department of Biological Sciences,
University of Warwick, Coventry, U.K.

GOVERNMENT REGULATION

The investigational agents and future products of CEL-SCI are regulated in
the United States under the Federal Food, Drug and Cosmetic Act, the Public
Health Service Act, and the laws of certain states. The Federal Food and Drug
Administration (FDA) exercises significant regulatory control over the clinical
investigation, manufacture and marketing of pharmaceutical and biological
products.

Prior to the time a pharmaceutical product can be marketed in the United
States for therapeutic use, approval of the FDA must normally be obtained.
Certain states, however, have passed laws which allow a state agency having

functions similar to the FDA to approve the testing and use of pharmaceutical
products within the state. In the case of either FDA or state regulation,
preclinical testing programs on animals, followed by three phases of clinical
testing on humans, are typically required in order to establish product safety
and efficacy.

The first stage of evaluation, preclinical testing, must be conducted in
animals. After lack of toxicity has been demonstrated, the test results are
submitted to the FDA (or state regulatory agency) along with a request for
clearance to conduct clinical testing, which includes the protocol that will be
followed in the initial human clinical evaluation. If the applicable regulatory
authority does not object to the proposed study, the investigator can proceed
with Phase I trials. Phase I trials consist of pharmacological studies on a
relatively few number of humans under rigidly controlled conditions in order to
establish lack of toxicity and a safe dosage range.

After Phase I testing is completed, one or more Phase II trials are
conducted in a limited number of patients to test the product's ability to treat
or prevent a specific disease, and the results are analyzed for clinical
efficacy and safety. If the results appear to warrant confirmatory studies, the
data is submitted to the applicable regulatory authority along with the protocol
for a Phase III trial. Phase III trials consist of extensive studies in large
populations designed to assess the safety of the product and the most desirable
dosage in the treatment or prevention of a specific disease. The results of the
clinical trials for a new biological drug are submitted to the FDA as part of a
product license application ("PLA"), a New Drug Application ("NDA") or Biologics
License Application ("BLA"), depending on the type or derivation of the product
being studied.

In addition to obtaining FDA approval for a product, a biologics
establishment license application ("ELA") may need to be filed in the case of
biological products derived from blood, or not considered to be sufficiently
well characterized, in order to obtain FDA approval of the testing and
manufacturing facilities in which the product is produced. To the extent all or
a portion of the manufacturing process for a product is handled by an entity
other than CEL-SCI, CEL-SCI must similarly receive FDA approval for the other
entity's participation in the manufacturing process. Domestic manufacturing
establishments are subject to inspections by the FDA and by other Federal, state
and local agencies and must comply with Good Manufacturing Practices ("GMP") as
appropriate for production. In complying with GMP regulations, manufacturers
must continue to expend time, money and effort in the area of production,
quality control and quality assurance to ensure full technical compliance.

The process of drug development and regulatory approval requires
substantial resources and many years. Approval of drugs and biologicals by
regulatory authorities of most foreign countries must also be obtained prior to
initiation of clinical studies and marketing in those countries. The approval
process varies from country to country and the time period required in each
foreign country to obtain approval may be longer or shorter than that required
for regulatory approval in the United States.

There are no assurances that clinical trials conducted under approval from
state authorities or conducted in foreign countries will be accepted by the FDA.
Product licensure in a foreign country does not mean that the product will be
licensed by the FDA and there are no assurances that CEL-SCI will receive any
approval of the FDA or any other governmental entity for the manufacturing

and/or marketing of a product. Consequently, the commencement of the marketing
of any Company product is, in all likelihood, many years away.

There can be no assurance that CEL-SCI will be successful in obtaining
approvals from any regulatory authority to conduct further clinical trials or to
manufacture and sell its products. The lack of regulatory approval for CEL-SCI's
products will prevent CEL-SCI from generally marketing its products. Delays in
obtaining regulatory approval or the failure to obtain regulatory approval in
one or more countries may have a material adverse impact upon CEL-SCI's
operations.

COMPETITION AND MARKETING

Many companies, nonprofit organizations and governmental institutions are
conducting research on cytokines. Competition in the development of therapeutic
agents incorporating cytokines is intense. Large, well-established
pharmaceutical companies are engaged in cytokine research and development and
have considerably greater resources than CEL-SCI has to develop products. The
establishment by these large companies of in-house research groups and of joint
research ventures with other entities is already occurring in these areas and
will probably become even more prevalent. In addition, licensing and other
collaborative arrangements between governmental and other nonprofit institutions
and commercial enterprises, as well as the seeking of patent protection of
inventions by nonprofit institutions and researchers, could result in strong
competition for CEL-SCI. Any new developments made by such organizations may
render CEL-SCI's licensed technology and know-how obsolete.

Several biotechnology companies are producing IL-2-like compounds. CEL-SCI
believes, however, that it is the only producer of a patented IL-2 product using
a patented cell-culture technology with normal human cells. CEL-SCI foresees
that its principle competition will come from producers of
genetically-engineered IL-2-like products. However, it is CEL-SCI's belief,
based upon growing scientific evidence, that its natural IL-2 products have
advantages over the genetically engineered, IL-2-like products. Evidence
indicates that genetically engineered, IL-2-like products, which lack sugar
molecules and typically are not water soluble, may be recognized by the
immunological system as a foreign agent, leading to a measurable antibody
build-up and thereby possibly voiding their therapeutic value. Furthermore,
CEL-SCI's research has established that to have optimum therapeutic value IL-2
should be administered not as a single substance but rather as an IL-2-rich
mixture of certain cytokines and other proteins, i.e. as a "cocktail". If these
differences prove to be of importance, and if the therapeutic value of its
MULTIKINE product is conclusively established, CEL-SCI believes it will be able
to establish a strong competitive position in a future market.

CEL-SCI has not established a definitive plan for marketing nor has it
established a price structure for CEL-SCI's saleable products. However, CEL-SCI
intends, if CEL-SCI is in a position to begin commercialization of its products,
to enter into written marketing agreements with various major pharmaceutical
firms with established sales forces. The sales forces in turn would probably
target CEL-SCI's products to cancer centers, physicians and clinics involved in
immunotherapy.

CEL-SCI may encounter problems, delays and additional expenses in
developing marketing plans with outside firms. In addition, CEL-SCI may

experience other limitations involving the proposed sale of its products, such
as uncertainty of third-party reimbursement. There is no assurance that CEL-SCI
can successfully market any products which they may develop or market them at
competitive prices.

Some of the clinical trials funded to date by CEL-SCI have not been
approved by the FDA, but rather have been conducted pursuant to approvals
obtained from certain states and foreign countries. Conducting clinical studies
in foreign countries is normal industry practice since these studies can often
be completed in less time and are less expensive than studies conducted in the
U.S. Conducting clinical studies in foreign countries is also beneficial since
CEL-SCI will need the approval from a foreign country prior to the time CEL-SCI
can market any of its drugs in the foreign country. However, since the results
of these clinical trials may not be accepted by the FDA, competitors which are
conducting clinical trials approved by the FDA may have an advantage in that the
products of such competitors are further advanced in the regulatory process than
those of CEL-SCI. CEL-SCI is conducting its trials in compliance with
internationally recognized standards. By following these standards, CEL-SCI
anticipates obtaining acceptance from world regulatory bodies, including the
FDA.

PROPERTIES

CEL-SCI leases office space at 8229 Boone Blvd., Suite 802, Vienna,
Virginia at a monthly rental of approximately $7,600. CEL-SCI believes this
arrangement is adequate for the conduct of its present business.

In October 2000, CEL-SCI expanded its fully-equipped laboratory facilities
by 6,200 square feet to 17,900 square feet. This space is leased by CEL-SCI for
approximately $10,450 per month. The laboratory lease expires in 2004, with
extensions available until 2014.

MANAGEMENT

Name Age Position

Maximilian de Clara 71 Director and President
Geert R. Kersten, Esq. 42 Director, Chief Executive Officer, Secretary
and Treasurer
Patricia B. Prichep 49 Senior Vice President of Operations
M. Douglas Winship 52 Senior Vice President of Regulatory Affairs
and Quality Assurance
Dr. Eyal Talor 45 Senior Vice President of Research and
Manufacturing
Dr. Daniel H. Zimmerman 59 Senior Vice President of Research, Cellular
Immunology
Alexander G. Esterhazy 56 Director
Dr. C. Richard Kinsolving 66 Director

The directors of CEL-SCI serve in such capacity until the next annual
meeting of CEL-SCI's shareholders and until their successors have been duly
elected and qualified. The officers of CEL-SCI serve at the discretion of
CEL-SCI's directors.

Mr. Maximilian de Clara, by virtue of his position as an officer and
director of CEL-SCI, may be deemed to be the "parent" and "founder" of CEL-SCI
as those terms are defined under applicable rules and regulations of the
Securities and Exchange Commission.

The principal occupations of CEL-SCI's officers and directors, during the
past several years, are as follows:

Maximilian de Clara. Mr. de Clara has been a Director of CEL-SCI since its
inception in March l983, and has been President of CEL-SCI since July l983.
Prior to his affiliation with CEL-SCI, and since at least l978, Mr. de Clara was
involved in the management of his personal investments and personally funding
research in the fields of biotechnology and biomedicine. Mr. de Clara attended
the medical school of the University of Munich from l949 to l955, but left
before he received a medical degree. During the summers of l954 and l955, he
worked as a research assistant at the University of Istanbul in the field of
cancer research. For his efforts and dedication to research and development in
the fight against cancer and AIDS, Mr. de Clara was awarded the "Pour le Merit"
honorary medal of the Austrian Military Order "Merito Navale" as well as the
honor cross of the Austrian Albert Schweitzer Society.

Geert R. Kersten, Esq. Mr. Kersten was Director of Corporate and Investment
Relations for CEL-SCI between February 1987 and October 1987. In October of
1987, he was appointed Vice President of Operations. In December 1988, Mr.
Kersten was appointed Director of CEL-SCI. Mr. Kersten also became CEL-SCI's
Secretary and Treasurer in 1989. In May 1992, Mr. Kersten was appointed Chief
Operating Officer and in February 1995, Mr. Kersten became CEL-SCI's Chief
Executive Officer. In previous years, Mr. Kersten worked as a financial analyst
with Source Capital, Ltd., an investment advising firm in McLean, Virginia. Mr.
Kersten is a stepson of Maximilian de Clara, who is the President and a Director
of CEL-SCI. Mr. Kersten attended George Washington University in Washington,
D.C. where he earned a B.A. in Accounting and an M.B.A. with emphasis on
International Finance. He also attended law school at American University in
Washington, D.C. where he received a Juris Doctor degree.

Patricia B. Prichep has been CEL-SCI's Senior Vice President of Operations
since March 1994. Between December 1992 and March 1994, Ms. Prichep was
CEL-SCI's Director of Operations. From June 1990 to December 1992, Ms. Prichep
was the Manager of Quality and Productivity for the NASD's Management, Systems
and Support Department. Between 1982 and 1990, Ms. Prichep was Vice President
and Operations Manager for Source Capital, Ltd.

M. Douglas Winship has been CEL-SCI's Senior Vice President of Regulatory
Affairs and Quality Assurance since April 1994. Between 1988 and April 1994, Mr.
Winship held various positions with Curative Technologies, Inc., including Vice
President of Regulatory Affairs and Quality Assurance (1991-1994).

Eyal Talor, Ph.D. has been CEL-SCI's Senior Vice President of Research and
Manufacturing since March 1994. From October 1993 until March 1994, Dr. Talor
was Director of Research, Manufacturing and Quality Control, as well as the
Director of the Clinical Laboratory, for Chesapeake Biological Laboratories,
Inc. From 1991 to 1993, Dr. Talor was a scientist with SRA Technologies, Inc.,
as well as the director of SRA's Flow Cytometry Laboratory (1991-1993) and
Clinical Laboratory (1992-1993). During 1992 and 1993, Dr. Talor was also the
Regulatory Affairs and Safety Officer For SRA. Since 1987, Dr. Talor has held

various positions with the John Hopkins University, including course coordinator
for the School of Continuing Studies (1989-Present), research associate and
lecturer in the Department of Immunology and Infectious Diseases (1987-1991),
and associate professor (1991-Present).

Daniel H. Zimmerman, Ph.D. has been CEL-SCI's Senior Vice President of
Cellular Immunology since January 1996. Dr. Zimmerman founded CELL-MED, Inc. and
was its president from 1987-1995. From 1973 to 1987 Dr. Zimmerman served in
various positions at Electronucleonics, Inc. including Scientist, Senior
Scientist, Technical Director and Program Manager. From 1969-1973 Dr. Zimmerman
was a Senior Staff Fellow at NIH.

Alexander G. Esterhazy has been an independent financial advisor since
November 1997. Between July 1991 and October 1997 Mr. Esterhazy was a senior
partner of Corpofina S.A. Geneva, a firm engaged in mergers, acquisitions and
portfolio management. Between January 1988 and July 1991 Mr. Esterhazy was a
managing director of DG Bank in Switzerland. During this period Mr. Esterhazy
was in charge of the Geneva, Switzerland branch of the DG Bank, founded and
served as vice president of DG Finance (Paris) and was the President and Chief
Executive officer of DG-Bourse, a securities brokerage firm.

C. Richard Kinsolving, Ph.D. has been a Director of the Company since
April, 2001. Since February 1999 Dr. Kinsolving has been the Chief Executive
Officer of BioPharmacon, a pharmaceutical development company. Between December
1992 and February 1999 Dr. Kinsolving was the President of Immuno-Rx, Inc., a
company engaged in immuno-pharmaceutical development. Between December 1991 and
September 1995 Dr. Kinsolving was President of Bestechnology, Inc. a nonmedical
research and development company producing bacterial preparations for industrial
use. Dr. Kinsolving received his Ph.D. in Pharmacology from Emory University
(1970), his Masters degree in Physiology/Chemistry from Vanderbilt University
(1962), and his Bachelor's degree in Chemistry from Tennessee Tech. University
(1957).

All of CEL-SCI's officers devote substantially all of their time to
CEL-SCI's business. Messrs. Esterhazy and Kinsolving, as directors, devote only
a minimal amount of time to CEL-SCI.

CEL-SCI has an audit committee and compensation committee. The members of
the audit committee are Alexander G. Esterhazy and C. Richard Kinsolving. The
members of the compensation committee are Maximilian de Clara, Alexander
Esterhazy and C. Richard Kinsolving.

Executive Compensation

The following table sets forth in summary form the compensation received
by (i) the Chief Executive Officer of CEL-SCI and (ii) by each other executive
officer of CEL-SCI who received in excess of $100,000 during the fiscal year
ended September 30, 2000.

All
Other Other
Annual Restric- Com-
Compen- ted Stock Options pensa-
Name and Princi- Fiscal Salary Bonus sation Awards Granted tion
pal Position Year (1) (2) (3) (4) (5) (6)
--------------- ------ ------ ------- ------ --------- ------- -----

Maximilian de
Clara, 2000 $345,583 -- $72,945 $550,000 60,000 $ 64
President 1999 $335,292 -- $72,945 $435,625 145,000 $ 63
1998 $315,021 -- $81,709 -- 164,000 $ 73

Geert R. Kersten,2000 $303,049 -- $15,349 $10,375 60,000 $4,114
Chief Executive 1999 $268,480 $15,154 $10,000 145,000 $4,113
Officer,
Secretary and 1998 $229,533 -- $15,180 $ 7,500 164,000 $5,310
Treasurer

Patricia B.
Prichep 2000 $114,430 -- $3,000 $6,998 23,000 $ 63
Senior Vice
President 1999 $107,936 -- $3,000 $6,476 79,500 $ 63
of Operations

M. Douglas
Winship, 2000 $154,658 -- $2,400 $9,280 20,000 $ 64
Senior Vice
President 1999 $146,609 -- $2,400 $8,797 27,500 $ 63
of Regulatory
Affairs 1998 $136,918 -- $2,400 $6,240 -- $1,060
and Quality
Assurance

Eyal Talor, Ph.D.2000 $150,334 -- $3,000 $9,020 50,000 $ 63
Senior Vice
President 1999 $139,085 -- $3,000 $8,345 30,000 $ 63
of Research and 1998 $130,845 -- $3,000 $5,769 27,000 $ 958
Manufacturing

Daniel Zimmerman,2000 $124,165 -- $3,000 $7,450 20,000 $ 64
Ph.D., 1999 $114,806 -- $3,000 $6,888 45,000 $ 63
Senior Vice
President 1998 $106,360 -- $3,000 $4,882 39,000 $ 822
of Cellular
Immunology

(1) The dollar value of base salary (cash and non-cash) received.
(2) The dollar value of bonus (cash and non-cash) received.
(3) Any other annual compensation not properly categorized as salary or bonus,
including perquisites and other personal benefits, securities or property.
Amounts in the table represent automobile, parking and other
transportation expenses, plus, in the case of Maximilian de Clara and
Geert Kersten, director's fees of $8,000.
(4) During the periods covered by the table, the value of the shares of
restricted stock issued as compensation for services to the persons listed
in the table. In the case of Mr. de Clara, the shares were issued in
consideration for past services rendered to CEL-SCI. In the case of all
other persons listed in the table, the shares were issued as CEL-SCI's
contribution on behalf of the named officer to CEL-SCI's 401(k) retirement
plan.

As of September 30, 2000, the number of shares of CEL-SCI's common stock,
owned by the officers included in the table above, and the value of such shares
at such date, based upon the market price of CEL-SCI's common stock were:

Name Shares Value

Maximilian de Clara -- --
Geert R. Kersten 137,088 $300,223
Patricia B. Prichep 12,791 $ 28,012
M. Douglas Winship 9,116 $ 19,964
Eyal Talor, Ph.D. 10,182 $ 22,299
Daniel Zimmerman, Ph.D. 27,207 $ 59,583

Dividends may be paid on shares of restricted stock owned by CEL-SCI's
officers and directors, although CEL-SCI has no plans to pay dividends.

(5) The shares of Common Stock to be received upon the exercise of all stock
options granted during the periods covered by the Table. Includes certain
options issued in connection with CEL-SCI's Salary Reduction Plans as well
as certain options purchased from CEL-SCI. See "Options Granted During
Fiscal Year Ending September 30, 2000" below.
(6) All other compensation received that CEL-SCI could not properly report in
any other column of the Table including annual Company contributions or
other allocations to vested and unvested defined contribution plans, and
the dollar value of any insurance premiums paid by, or on behalf of,
CEL-SCI with respect to term life insurance for the benefit of the named
executive officer, and the full dollar value of the remainder of the
premiums paid by, or on behalf of, CEL-SCI. Amounts in the table represent
life insurance premiums.

Long Term Incentive Plans - Awards in Last Fiscal Year

None.

Employee Pension, Profit Sharing or Other Retirement Plans

During 1993 CEL-SCI implemented a defined contribution retirement plan,
qualifying under Section 401(k) of the Internal Revenue Code and covering
substantially all CEL-SCI's employees. Prior to January 1, 1998 CEL-SCI's
contribution was equal to the lesser of 3% of each employee's salary, or 50% of
the employee's contribution. Effective January 1, 1998 the plan was amended such
that CEL-SCI's contribution is now made in shares of CEL-SCI's common stock as
opposed to cash. Each participant's contribution is matched by CEL-SCI with
shares of common stock which have a value equal to 100% of the participant's
contribution, not to exceed the lesser of $1,000 or 6% of the participant's
total compensation. CEL-SCI's contribution of common stock is valued each
quarter based upon the closing price of CEL-SCI's common stock. The fiscal 2000
expenses for this plan were $102,559. Other than the 401(k) Plan, CEL-SCI does
not have a defined benefit, pension plan, profit sharing or other retirement
plan.

Compensation of Directors

Standard Arrangements. CEL-SCI currently pays its directors $2,000 per
quarter, plus expenses. CEL-SCI has no standard arrangement pursuant to which
directors of CEL-SCI are compensated for any services provided as a director or
for committee participation or special assignments.

Other Arrangements. CEL-SCI has from time to time granted options to its
outside directors. See Stock Options below for additional information concerning
options granted to CEL-SCI's directors.

Employment Contracts

Effective April 12, 1999, CEL-SCI entered into a three-year employment
agreement with Mr. de Clara. The employment agreement provides that CEL-SCI will
pay Mr. de Clara an annual salary of $363,000 during the term of the agreement.
In the event that there is a material reduction in Mr. de Clara's authority,
duties or activities, or in the event there is a change in the control of
CEL-SCI, then the agreement allows Mr. de Clara to resign from his position at
CEL-SCI and receive a lump-sum payment from CEL-SCI equal to 18 months salary.
For purposes of the employment agreement, a change in the control of CEL-SCI
means the sale of more than 50% of the outstanding shares of CEL-SCI's Common
Stock, or a change in a majority of CEL-SCI's directors.

Effective August 1, 2000, CEL-SCI entered into a three-year employment
agreement with Mr. Kersten. The employment agreement provides that during the
term of the employment agreement CEL-SCI will pay Mr. Kersten an annual salary
of $336,132, subject to the minimum annual increases of 5% per year. In the
event there is a change in the control of CEL-SCI, the agreement allows Mr.
Kersten to resign from his position at CEL-SCI and receive a lump-sum payment
from CEL-SCI equal to 24 months salary. For purposes of the employment agreement
a change in the control of CEL-SCI means: (1) the merger of CEL-SCI with another
entity if after such merger the shareholders of CEL-SCI do not own at least 50%
of voting capital stock of the surviving corporation; (2) the sale of
substantially all of the assets of CEL-SCI; (3) the acquisition by any person of
more than 50% of CEL-SCI's common stock; or (4) a change in a majority of
CEL-SCI's directors which has not been approved by the incumbent directors.

Compensation Committee Interlocks and Insider Participation

CEL-SCI has a compensation committee comprised of all of CEL-SCI's
directors, with the exception of Mr. Kersten. During the year ended September
30, 2000, Mr. de Clara was the only officer participating in deliberations of
CEL-SCI's compensation committee concerning executive officer compensation.

During the year ended September 30, 2000, no director of CEL-SCI was also
an executive officer of another entity, which had an executive officer of
CEL-SCI serving as a director of such entity or as a member of the compensation
committee of such entity.

Stock Options

The following tables set forth information concerning the options granted
during the fiscal year ended September 30, 2000, to the persons named below, and
the fiscal year-end value of all unexercised options (regardless of when
granted) held by these persons.

Options Granted During Fiscal Year Ending September 30, 2000
------------------------------------------------------------
Individual Grants
-------------------------------------------------

Potential Realizable
% of Total Value at Assumed
Options Annual Rates of Stock
Granted to Exercise Price Appreciation
Options Employees in Price Per Expiration for Option Term (1)
Name Granted (#) Fiscal Year Share Date 5% 10%
------ ----------- ------------ --------- ------------ ----- ------

Maximilian de Clara 60,000 15% $3.06 4/19/10 $115,200 $292,611

Geert R. Kersten 60,000 15% $3.06 4/19/10 $115,200 $292,611

Patricia B. Prichep 23,000 5.8% $4.00 2/02/10 $57,858 $146,510

Eyal Talor, Ph.D. 50,000 12.6% $2.56 11/27/09 $ 80,000 $204,000

M. Douglas Winship 20,000 5% $5.37 4/03/10 $ 67,543 $171,160

Daniel Zimmerman, Ph.D.20,000 5% $4.00 2/02/10 $ 50,300 $127,400

(1) The potential realizable value of the options shown in the table assuming
the market price of CEL-SCI's Common Stock appreciates in value from the date of
the grant to the end of the option term at 5% or 10%.

Option Exercises and Year-End Option Values

Value (in $) of
Unexercised
Number of In-the-Money
Unexercised Options at Fiscal
Shares Options (3) Year-End (4)
------------ -----------------
Acquired On Value Exercisable/ Exercisable/
Name Exercise (1) Realized (2) Unexercisable Unexercisable
---- ------------ ------------ ------------- -----------------

Maximilian de Clara 373,667 $1,436,548 295,000/109,999 25,916/4,333
Geert R. Kersten 50,750 $137,310 1,020,001/109,999 25,916/4,333
Patricia Prichep 23,000 $89,900 190,834/38,666 12,525/1,300
M. Douglas Winship 2,000 $4,510 82,500/30,000 3,775/1,300
Eyal Talor 91,334 $274,626 70,833/18,333 3,366/1,733
Daniel Zimmerman 24,000 $141,120 91,000/35,000 8,150/1,300

(1) The number of shares received upon exercise of options during the fiscal
year ended September 30, 2000.

(2) With respect to options exercised during CEL-SCI's fiscal year ended
September 30, 2000, the dollar value of the difference between the option
exercise price and the market value of the option shares purchased on the
date of the exercise of the options.

(3) The total number of unexercised options held as of September 30, 2000,
separated between those options that were exercisable and those options
that were not exercisable.

(4) For all unexercised options held as of September 30, 2000, the market value
of the stock underlying those options as of September 30, 2000.

Stock Option and Bonus Plans

CEL-SCI has Incentive Stock Option Plans, Non-Qualified Stock Option Plans
and Stock Bonus Plans. A summary description of these Plans follows. In some
cases these Plans are collectively referred to as the "Plans".

Incentive Stock Option Plan. The Incentive Stock Option Plans collectively
authorize the issuance of up to 2,100,000 shares of CEL-SCI's Common Stock to
persons that exercise options granted pursuant to the Plan. Only Company
employees may be granted options pursuant to the Incentive Stock Option Plan.

To be classified as incentive stock options under the Internal Revenue
Code, options granted pursuant to the Plans must be exercised prior to the
following dates:

(a) The expiration of three months after the date on which an option
holder's employment by CEL-SCI is terminated (except if such
termination is due to death or permanent and total disability);

(b) The expiration of 12 months after the date on which an option
holder's employment by CEL-SCI is terminated, if such termination is
due to the Employee's permanent and total disability;

(c) In the event of an option holder's death while in the employ of
CEL-SCI, his executors or administrators may exercise, within three
months following the date of his death, the option as to any of the
shares not previously exercised;

The total fair market value of the shares of Common Stock (determined at
the time of the grant of the option) for which any employee may be granted
options which are first exercisable in any calendar year may not exceed
$100,000.

Options may not be exercised until one year following the date of grant.
Options granted to an employee then owning more than 10% of the Common Stock of
CEL-SCI may not be exercisable by its terms after five years from the date of
grant. Any other option granted pursuant to the Plan may not be exercisable by
its terms after ten years from the date of grant.

The purchase price per share of Common Stock purchasable under an option
is determined by the Committee but cannot be less than the fair market value of

the Common Stock on the date of the grant of the option (or 110% of the fair
market value in the case of a person owning more than 10% of CEL-SCI's
outstanding shares).

Non-Qualified Stock Option Plan. The Non-Qualified Stock Option Plans
collectively authorize the issuance of up to 5,760,000 shares of CEL-SCI's
Common Stock to persons that exercise options granted pursuant to the Plans.
CEL-SCI's employees, directors, officers, consultants and advisors are eligible
to be granted options pursuant to the Plans, provided however that bona fide
services must be rendered by such consultants or advisors and such services must
not be in connection with the offer or sale of securities in a capital-raising
transaction. The option exercise price is determined by the Committee but cannot
be less than the market price of CEL-SCI's Common Stock on the date the option
is granted.

Stock Bonus Plan. Up to 1,040,000 shares of Common Stock may be granted
under the Stock Bonus Plan. Such shares may consist, in whole or in part, of
authorized but unissued shares, or treasury shares. Under the Stock Bonus Plan,
CEL-SCI's employees, directors, officers, consultants and advisors are eligible
to receive a grant of CEL-SCI's shares, provided however that bona fide services
must be rendered by consultants or advisors and such services must not be in
connection with the offer or sale of securities in a capital-raising
transaction.

Other Information Regarding the Plans. The Plans are administered by
CEL-SCI's Compensation Committee ("the Committee"), each member of which is a
director of CEL-SCI. The members of the Committee were selected by CEL-SCI's
Board of Directors and serve for a one-year tenure and until their successors
are elected. A member of the Committee may be removed at any time by action of
the Board of Directors. Any vacancies which may occur on the Committee will be
filled by the Board of Directors. The Committee is vested with the authority to
interpret the provisions of the Plans and supervise the administration of the
Plans. In addition, the Committee is empowered to select those persons to whom
shares or options are to be granted, to determine the number of shares subject
to each grant of a stock bonus or an option and to determine when, and upon what
conditions, shares or options granted under the Plans will vest or otherwise be
subject to forfeiture and cancellation.

In the discretion of the Committee, any option granted pursuant to the
Plans may include installment exercise terms such that the option becomes fully
exercisable in a series of cumulating portions. The Committee may also
accelerate the date upon which any option (or any part of any options) is first
exercisable. Any shares issued pursuant to the Stock Bonus Plan and any options
granted pursuant to the Incentive Stock Option Plan or the Non-Qualified Stock
Option Plan will be forfeited if the "vesting" schedule established by the
Committee administering the Plan at the time of the grant is not met. For this
purpose, vesting means the period during which the employee must remain an
employee of CEL-SCI or the period of time a non-employee must provide services
to CEL-SCI. At the time an employee ceases working for CEL-SCI (or at the time a
non-employee ceases to perform services for CEL-SCI), any shares or options not
fully vested will be forfeited and cancelled. At the discretion of the Committee
payment for the shares of Common Stock underlying options may be paid through
the delivery of shares of CEL-SCI's Common Stock having an aggregate fair market
value equal to the option price, provided such shares have been owned by the
option holder for at least one year prior to such exercise. A combination of
cash and shares of Common Stock may also be permitted at the discretion of the
Committee.

Options are generally non-transferable except upon death of the option
holder. Shares issued pursuant to the Stock Bonus Plan will generally not be

transferable until the person receiving the shares satisfies the vesting
requirements imposed by the Committee when the shares were issued.

The Board of Directors of CEL-SCI may at any time, and from time to time,
amend, terminate, or suspend one or more of the Plans in any manner they deem
appropriate, provided that such amendment, termination or suspension will not
adversely affect rights or obligations with respect to shares or options
previously granted. The Board of Directors may not, without shareholder
approval: make any amendment which would materially modify the eligibility
requirements for the Plans; increase or decrease the total number of shares of
Common Stock which may be issued pursuant to the Plans except in the case of a
reclassification of CEL-SCI's capital stock or a consolidation or merger of
CEL-SCI; reduce the minimum option price per share; extend the period for
granting options; or materially increase in any other way the benefits accruing
to employees who are eligible to participate in the Plans.

Summary. The following sets forth certain information, as of October 31,
2001, concerning the stock options and stock bonuses granted by CEL-SCI. Each
option represents the right to purchase one share of CEL-SCI's Common Stock.

Total Shares
Shares Reserved for Shares Remaining
Reserved Outstanding Issued as Options/Shares
Name of Plan Under Plans Options Stock Bonus Under Plans
------------ ----------- ----------- ----------- --------------

Incentive Stock Option
Plans 2,100,000 1,170,100 N/A 843,315

Non-Qualified Stock Option
Plans 5,760,000 3,397,914 N/A 1,214,625

Stock Bonus Plans 1,040,000 N/A 838,241 201,759

Of the shares issued pursuant to CEL-SCI's Stock Bonus Plans 146,019
shares were issued as part of CEL-SCI's contribution to its 401(k) plan.

During the year ended September 30, 1999 CEL-SCI issued 200,000 shares of
its common stock to Mr. de Clara for past services provided to CEL-SCI. In
January 2000 CEL-SCI issued Mr. de Clara an additional 200,000 shares of common
stock for past services provided to CEL-SCI. In October 2001 CEL-SCI issued Mr.
de Clara an additional 75,071 shares of common stock for past services provided
to CEL-SCI.

PRINCIPAL SHAREHOLDERS

The following table sets forth, as of October 31, 2001, information with
respect to the only persons owning beneficially 5% or more of CEL-SCI's common
stock and the number and percentage of outstanding shares owned by each director
and officer of CEL-SCI and by all the officers and directors as a group. Unless
otherwise indicated, each owner has sole voting and investment powers over his
shares of common stock.

Name and Address Number of Shares (1) Percent of Class (3)
---------------- ----------------- ----------------

Maximilian de Clara 383,333 1.6%
Bergstrasse 79
6078 Lungern,
Obwalden, Switzerland

Geert R. Kersten 1,282,483 5.3%
8229 Boone Blvd., Suite 802
Vienna, VA 22182

Patricia B. Prichep 277,157 1.1%
8229 Boone Blvd., Suite 802
Vienna, VA 22182

M. Douglas Winship 119,707 *
8229 Boone Blvd., Suite 802
Vienna, VA 22182

Eyal Talor, Ph.D. 146,329 *
8229 Boone Blvd., Suite 802
Vienna, VA 22182

Daniel H. Zimmerman, Ph.D. 183,153 *
8229 Boone Blvd., Suite 802
Vienna, VA 22182

Alexander G. Esterhazy 25,000 *
20 Chemin du Pre-Poiset
CH- 1253 Vandoeuvres
Geneve, Switzerland

C. Richard Kinsolving 11,000 --
5414 61st Street East
Bradenton, FL 34203

All Officers and Directors 2,428,162 10%
as a Group (8 persons)
* Less than 1%

(1) Includes shares issuable prior to December 31, 2001 upon the exercise of
options or warrants granted to the following persons:

Options or Warrants Exercisable
Name Prior to December 31, 2001
---- ------------------------------------

Maximilian de Clara 383,333
Geert R. Kersten 1,108,334
Patricia B. Prichep 252,501
M. Douglas Winship 94,167
Eyal Talor, Ph.D. 105,834
Daniel H. Zimmerman, Ph.D. 142,667
Alexander G. Esterhazy 25,000
C. Richard Kinsolving --

(2) Amount includes shares held in trust for the benefit of Mr. Kersten's minor
children. Geert R. Kersten is the stepson of Maximilian de Clara.

(3) Amount includes shares referred to in (1) above but excludes shares which
may be issued upon the exercise or conversion of other options, warrants
and other convertible securities previously issued by CEL-SCI.

EQUITY LINE OF CREDIT AGREEMENT

Overview

On April 11, 2001, CEL-SCI entered into an equity line of credit agreement
with Paul Revere Capital Partners, Ltd. in order to establish a possible source
of funding for the development of CEL-SCI's technologies. The equity line of
credit agreement establishes what is sometimes also referred to as an equity
drawdown facility.

Under the equity line of credit agreement, Paul Revere Capital Partners,
Ltd. has agreed to provide CEL-SCI with up to $10,000,000 of funding during the
twenty-four month period following the date of this prospectus. During this
twenty-four month period, CEL-SCI may request a drawdown under the equity line
of credit by selling shares of its common stock to Paul Revere Capital Partners
and Paul Revere Capital Partners will be obligated to purchase the shares.
CEL-SCI may request a drawdown once every 22 trading days, although CEL-SCI is
under no obligation to request any drawdowns under the equity line of credit.

Calculation of Drawdown Amount, Purchase Price and Number of Shares Sold

The minimum amount CEL-SCI can draw down at any one time is $100,000.
Without the consent of Paul Revere Capital Partners, the maximum amount CEL-SCI
can draw down at any one time is the lesser of $2,000,000 or the amount equal
to:

o 4.5% of the weighted average price of CEL-SCI's common stock for the ninety
calendar day period prior to the date of the drawdown request
o multiplied by the total trading volume of CEL-SCI's common stock for the
ninety calendar day period prior to the date of the drawdown request.

On the day following the delivery of the drawdown notice, a valuation
period of 22 trading days will start:

o On each trading day during the valuation period where the daily volume
weighted average price of CEL-SCI's common stock on the American Stock
Exchange exceeds the minimum price, if any, specified by CEL-SCI in the
drawdown notice, the purchase price will equal 89% of the volume
weighted average price on that day.

o On each of the 22 trading days during the valuation period, the number
of shares to be sold to Paul Revere Capital Partners will be determined
by dividing 1/22 of the drawdown amount by the purchase price on each
trading day.

o If the volume weighted average price for CEL-SCI's common stock on any
trading day during the 22 trading day calculation period is below the
minimum price, then Paul Revere Capital Partners will not purchase any
shares on that day, and the drawdown amount will be reduced by 1/22.

Payment for Shares Issued

The shares purchased on the first 11 trading days will be issued and paid
for on the 13th trading day following the drawdown request. The shares purchased
on the 12th through the 22nd trading days will be issued and paid for on the
24th trading day following the drawdown request.

Upon closing of the equity line of credit Agreement, CEL-SCI paid $35,000
to Paul Revere Capital Partners legal counsel, Epstein Becker & Green P.C., to
cover its legal and administrative expenses.

Grant of Warrants

As consideration for extending the equity line of credit, CEL-SCI granted
Paul Revere Capital Partners warrants to purchase 200,800 shares of common stock
at any time prior to April 11, 2004 at a price of $1.64 per share. Paul Revere
Capital Partners is not obligated to exercise any warrants.

CEL-SCI believes that the fair value of these warrants using customary
pricing models is approximately $20,000. The fair value of these warrants will
be reflected in CEL-SCI's financial statements and recorded as an expense during
the quarter ended June 30, 2001.

Restrictions on Future Financings

During the term of the equity line of credit agreement, CEL-SCI may not
raise capital through any other equity line of credit arrangement.

Termination of the Equity Line of Credit Agreement

The Equity Line of Credit Agreement will terminated if:

o any event, which has not been corrected within 30 days, has taken place
which has any material adverse effect on the business or financial
condition of CEL-SCI or which prohibits or interferes with the ability
of CEL-SCI to perform any of its material obligations under the equity
line of credit agreement,
o CEL-SCI's common stock is de-listed from the American Stock Exchange
unless the de-listing is in connection with CEL-SCI's subsequent listing
of its common stock on the NASDAQ National Market, the NASDAQ SmallCap
Market or the New York Stock Exchange, or
o CEL-SCI files for protection from its creditors under the Federal Bankruptcy
laws.

CEL-SCI may terminate the equity line of credit if Paul Revere Capital
Partners fails to honor more than one drawdown notice.

Indemnification

Paul Revere Capital Partners is entitled to customary indemnification from
CEL-SCI for any losses or liabilities it suffers based upon material
misstatements or omissions from the registration statement and this prospectus,
except as they relate to information Paul Revere Capital Partners supplied to
CEL-SCI for inclusion in the registration statement and prospectus.

SELLING SHAREHOLDER

This prospectus relates to sales of CEL-SCI's common stock by Paul Revere
Capital Partners. Paul Revere Capital Partners will receive shares of CEL-SCI's
common stock under an equity line of credit agreement and up to 200,800 shares
of common stock upon the exercise of warrants. Paul Revere Capital Partners is
sometimes referred to in this prospectus as the selling shareholder.

CEL-SCI will not receive any proceeds from the sale of the shares by Paul
Revere Capital Partners. Paul Revere Capital Partners may resell the shares it
acquires by means of this prospectus from time to time in the public market. The
costs of registering the shares offered by Paul Revere Capital Partners is being
paid by CEL-SCI. Paul Revere Capital Partners will pay all other costs of the
sale of the shares offered by them.

On November 9, 2001, and following CEL-SCI's first drawdown request, Paul
Revere Capital Partners purchased 277,684 shares of common stock from CEL-SCI at
an average price of $1.08 per share.

The following table shows the shares which are being offered for sale by
Paul Revere Capital Partners.

Shares Share
Shares Issuable Upon Shares to Be Ownership
Presently the Exercise Sold in this After
Name Owned of Warrants Offering Offering

Paul Revere Capital Partners (1) 200,800 (1) --

(1) The number of shares owned by Paul Revere Capital Partners will vary from
time-to-time and will depend upon the number of shares purchased from CEL-SCI
pursuant to the terms of the Equity Line Agreement.

Manner of Sale.

The shares of common stock owned, or which may be acquired, by Paul Revere
Capital Partners may be offered and sold by means of this prospectus from time
to time as market conditions permit in the over-the-counter market, or
otherwise, at prices and terms then prevailing or at prices related to the
then-current market price, or in negotiated transactions. These shares may be
sold by one or more of the following methods, without limitation:

o a block trade in which a broker or dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
o face-to-face transactions between sellers and purchasers without a
broker/dealer.

In effecting sales, brokers or dealers engaged by Paul Revere Capital
Partners may arrange for other brokers or dealers to participate. Such brokers
or dealers may receive commissions or discounts from Paul Revere Capital
Partners in amounts to be negotiated.

Paul Revere Capital Partners is an "underwriter" and any broker/dealers
who act in connection with the sale of the shares by means of this prospectus
may be deemed to be "underwriters" within the meaning of ss.2(11) of the
Securities Acts of 1933, and any commissions received by them and profit on any
resale of the shares as principal might be deemed to be underwriting discounts
and commissions under the Securities Act. CEL-SCI has agreed to indemnify Paul
Revere Capital Partners and any securities broker/dealers who may be deemed to
be underwriters against certain liabilities, including liabilities under the
Securities Act as underwriters or otherwise.

CEL-SCI has advised Paul Revere Capital Partners that it and any
securities broker/dealers or others who may be deemed to be statutory

underwriters will be subject to the prospectus delivery requirements under the
Securities Act of 1933. CEL-SCI has also advised Paul Revere Capital Partners,
Ltd. that in the event of a "distribution" of its shares Paul Revere Capital
Partners, any "affiliated purchasers", and any broker/dealer or other person who
participates in such distribution may be subject to Rule 102 under the
Securities Exchange Act of 1934 ("1934 Act") until their participation in that
distribution is completed. Rule 102 makes it unlawful for any person who is
participating in a distribution to bid for or purchase stock of the same class
as is the subject of the distribution. A "distribution" is defined in Rule 102
as an offering of securities "that is distinguished from ordinary trading
transactions by the magnitude of the offering and the presence of special
selling efforts and selling methods". CEL-SCI has also advised Paul Revere
Capital Partners, Ltd. that Rule 101 under the 1934 Act prohibits any
"stabilizing bid" or "stabilizing purchase" for the purpose of pegging, fixing
or stabilizing the price of the common stock in connection with this offering.

Grant of Registration Rights

CEL-SCI granted registration rights to Paul Revere Capital Partners, Ltd.
to enable it to sell the common stock it may acquire under the equity line of
credit agreement or upon the exercise of the warrants. Notwithstanding these
registration rights, CEL-SCI has no obligation:

o to assist or cooperate with Paul Revere Capital Partners, Ltd. in the
offering or disposition of their shares;

o to obtain a commitment from an underwriter relative to the sale of any the
shares; or

o to include the shares within any underwritten offering.

The registration rights agreement with Paul Revere Capital Partners, Ltd.
permits CEL-SCI to restrict the resale of the shares Paul Revere Capital
Partners, Ltd. has purchased under the equity line of credit agreement for a
period of time sufficient to permit CEL-SCI to amend or supplement this
prospectus to include material information. If CEL-SCI restricts the ability
Paul Revere Capital Partners, Ltd. to resell shares at any time during the
thirty-two trading days following the delivery of a drawdown notice, and
CEL-SCI's stock price declines during the restriction period, then, in order to
compensate Paul Revere Capital Partners, Ltd. for its inability to sell shares
during the restriction period, CEL-SCI will be required to pay Paul Revere
Capital Partners, Ltd. an amount determined by multiplying:

o the number of shares Paul Revere Capital Partners, Ltd. is committed to
purchase following the delivery of the drawdown notice, and

o the difference between the highest daily weighted average price of
CEL-SCI's common stock during the restriction period and the weighted
average price of CEL-SCI's common stock on the day after the restriction
period ends.

DESCRIPTION OF SECURITIES

Common Stock

CEL-SCI is authorized to issue 100,000,000 shares of common stock, (the
"common stock"). Holders of common stock are each entitled to cast one vote for

each share held of record on all matters presented to shareholders. Cumulative
voting is not allowed; hence, the holders of a majority of the outstanding
common stock can elect all directors.

Holders of common stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available therefor and,
in the event of liquidation, to share pro rata in any distribution of CEL-SCI's
assets after payment of liabilities. The board is not obligated to declare a
dividend. It is not anticipated that dividends will be paid in the foreseeable
future.

Holders of common stock do not have preemptive rights to subscribe to
additional shares if issued by CEL-SCI. There are no conversion, redemption,
sinking fund or similar provisions regarding the common stock . All of the
outstanding shares of Common stock are fully paid and non-assessable.

Preferred Stock

CEL-SCI is authorized to issue up to 200,000 shares of preferred stock.
CEL-SCI's Articles of Incorporation provide that the Board of Directors has the
authority to divide the preferred stock into series and, within the limitations
provided by Colorado statute, to fix by resolution the voting power,
designations, preferences, and relative participation, special rights, and the
qualifications, limitations or restrictions of the shares of any series so
established. As the Board of Directors has authority to establish the terms of,
and to issue, the preferred stock without shareholder approval, the preferred
stock could be issued to defend against any attempted takeover of CEL-SCI.

See "Comparative Share Data" for information concerning CEL-SCI's Series E
Preferred stock.

Transfer Agent

Computershare Trust Company, Inc. of Denver, Colorado, is the transfer
agent for CEL-SCI's common stock.

EXPERTS

The consolidated financial statements of CEL-SCI Corporation as of
September 30, 2000 and 1999, and for each of the three years in the period ended
September 30, 1999 included as part of this prospectus, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report and have
been so included in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.

INDEMNIFICATION

CEL-SCI's bylaws authorize indemnification of a director, officer,
employee or agent of CEL-SCI against expenses incurred by him in connection with
any action, suit, or proceeding to which he is named a party by reason of his
having acted or served in such capacity, except for liabilities arising from his
own misconduct or negligence in performance of his duty. In addition, even a
director, officer, employee, or agent of CEL-SCI who was found liable for
misconduct or negligence in the performance of his duty may obtain such
indemnification if, in view of all the circumstances in the case, a court of

competent jurisdiction determines such person is fairly and reasonably entitled
to indemnification. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, or persons
controlling CEL-SCI pursuant to the foregoing provisions, CEL-SCI has been
informed that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.

ADDITIONAL INFORMATION

CEL-SCI is subject to the requirements of the Securities Exchange Act of
l934 and is required to file reports, proxy statements and other information
with the Securities and Exchange Commission. Copies of any such reports, proxy
statements and other information filed by CEL-SCI can be read and copied at the
Commission's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.,
20549. The public may obtain information on the operation of the Public
Reference Room by calling the Commission at 1-800-SEC-0330. The Commission
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding CEL-SCI. The address of that site is
http://www.sec.gov.

CEL-SCI has filed with the Securities and Exchange Commission a
Registration Statement under the Securities Act of l933, as amended, with
respect to the securities offered by this prospectus. This prospectus does not
contain all of the information set forth in the Registration Statement. For
further information with respect to CEL-SCI and such securities, reference is
made to the Registration Statement and to the exhibits filed with the
Registration Statement. Statements contained in this prospectus as to the
contents of any contract or other documents are summaries which are not
necessarily complete, and in each instance reference is made to the copy of such
contract or other document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. The
Registration Statement and related exhibits may also be examined at the
Commission's internet site.

CEL-SCI CORPORATION

Consolidated Financial Statements for the Years
Ended September 30, 2000, 1999, and 1998,
and Independent Auditors' Report

CEL-SCI CORPORATION

TABLE OF CONTENTS
------------------------------------------------------------------------------

Page

INDEPENDENT AUDITORS' REPORT F-1

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED SEPTEMBER 30, 2000, 1999, AND 1998:

Consolidated Balance Sheets F-2

Consolidated Statements of Operations F-3

Consolidated Statements of Comprehensive Loss F-4

Consolidated Statements of Stockholders' Equity F-5

Consolidated Statements of Cash Flows F-6 - F-7

Notes to Consolidated Financial Statements F-8 - F-17

CEL-SCI CORPORATION

CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2000 AND 1999
--------------------------------------------------------------------------------
ASSETS 2000 1999

CURRENT ASSETS:
Cash and cash equivalents $ 6,909,263 $ 2,747,644
Investment securities available for sale 3,760,922 3,191,491
Interest and other receivables 39,252 62,825
Prepaid expenses 1,838,376 514,572
Advances to officer/shareholder and employees 728 69,448

Total current assets
12,548,541 6,585,980

RESEARCH AND OFFICE EQUIPMENT - Less accumulated
depreciation of $1,721,336 and $1,563,586 594,919 468,627

DEPOSITS 139,828 14,828

PATENT COSTS - Less accumulated amortization
of $574,362 and $511,118 525,594 490,337
----------- ---------
$ 13,808,882 $ 7,559,772
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 822,601 $ 433,265
----------- ---------
Total current liabilities 822,601 433,265
DEFERRED RENT 24,822 28,321
Total liabilities ----------- ---------
847,423 461,586

STOCKHOLDERS' EQUITY:
Common stock, $.01 par value - authorized,
100,000,000 shares;
issued and outstanding, 20,459,700 and
17,002,341 shares 204,597 170,023
Additional paid-in capital 73,924,653 59,672,652
Accumulated other comprehensive loss (61,564) (116,659)
Accumulated deficit (61,106,227) (52,627,830)
------------ -----------
Total stockholders' equity 12,961,459 7,098,186

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 13,808,882 $ 7,559,772
=========== ==========

See notes to consolidated financial statements.

CEL-SCI CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 2000, 1999, AND 1998
--------------------------------------------------------------------------------
2000 1999 1998

INVESTMENT INCOME $ 402,011 $ 402,831 $ 728,421

OTHER INCOME 40,540 66,687 64,573
------- ------- -------
Total income 442,551 469,518 792,994
------- ------- -------

OPERATING EXPENSES:
Research and development 4,978,714 4,461,051 3,833,854
Depreciation and amortization 220,994 268,210 295,331
General and administrative 3,721,240 3,230,982 3,106,492
--------- --------- ---------
Total operating expenses 8,920,948 7,960,243 7,235,677
--------- --------- ---------
NET LOSS 8,478,397 7,490,725 6,442,683
ACCRETION OF PREFERRED STOCK - - 1,980,000
--------- --------- ---------
NET LOSS ATTRIBUTABLE TO COMMON
STOCKHOLDERS $ 8,478,397 $ 7,490,725 $ 8,422,683
========= ========= =========
LOSS PER COMMON SHARE (BASIC) $ 0.44 $ 0.52 $ 0.74
========= ========= =========
LOSS PER COMMON SHARE (DILUTED) $ 0.44 $ 0.52 $ 0.74
========= ========= =========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 19,259,190 14,484,352 11,379,437
========== ========== ==========

See notes to consolidated financial statements.

CEL-SCI CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
YEARS ENDED SEPTEMBER 30, 2000, 1999, AND 1998
--------------------------------------------------------------------------------
2000 1999 1998

NET LOSS ATTRIBUTABLE TO COMMON
STOCKHOLDERS $ 8,478,397 $ 7,490,725 $8,422,683

OTHER COMPREHENSIVE LOSS - Unrealized (gain)
loss on investments (55,095) 68,368 44,792
--------- --------- ---------
COMPREHENSIVE LOSS $ 423,302 $ 7,559,093 $8,467,475
========= ========= =========

See notes to consolidated financial statements.

CEL-SCI CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS'
EQUITY
YEARS ENDED SEPTEMBER 30, 2000, 1999, AND
1998
-------------------------------------------------------------------------------

Accumulated
Preferred Additional Other
Series D Stock Common Stock Paid-In Comprehensive Accumulated
Shares Amount Shares Amount Capital (Loss) Income Deficit Total

BALANCE, OCTOBER 1, 1997 - $ - 10,445,691 $104,457 $44,419,244 $ (3,499) $ (38,694,422) $ 5,825,780

Exercise of stock options
- - 300,048 3,000 882,372 - - 885,372
Exercise of warrants
- - 768,243 7,682 3,621,744 - - 3,629,426
Stock options issued to
nonemployees
for services
- - - - 564,031 - - 564,031
Issuance - Series D
preferred stock, net of
offering costs 10,000 100 - - 9,499,900 - - 9,500,000
Preferred Series D
conversion (998) (10) 441,333 4,413 (4,403) - - -
401(k) contributions - - 17,380 174 57,976 - - 58,150
Change in unrealized gain
(loss) of marketable securities
available for sale - - - - - (44,792) - (44,792)
Net loss - - - - - - (6,442,683) (6,442,683)
--------------------------------------------------------------------------------------------------
BALANCE, SEPTEMBER 30, 1998 9,002 90 11,972,695 119,726 59,040,864 (48,291) (45,137,105) 13,975,284

Exercise of stock options - - 28,500 285 70,965 - - 71,250
Stock options issued to
nonemployees for services - - - - 88,166 - - 88,166
Preferred Series D
conversion (9,002) (90) 4,760,126 47,602 (47,512) - - -
401(k) contributions - - 41,020 410 86,544 - - 86,954
Stock bonus to officer - - 200,000 2,000 433,625 - - 435,625
Change in unrealized gain
(loss) of marketable securities
available for sale - - - - - (68,368) - (68,368)
Net loss - - - - - - (7,490,725) (7,490,725)
---------------- ---------------------------------------------------------------------------------
BALANCE, SEPTEMBER 30, 1999 - - 17,002,341 170,023 59,672,652 (116,659) (52,627,830) 7,098,186

Exercise of stock options - - 1,047,612 10,476 3,646,991 - - 3,657,467
Issuance - common stock - - 2,175,258 21,753 9,958,247 - - 9,980,000
401(k) contributions - - 34,489 345 98,762 - - 99,107
Stock bonus to officer - - 200,000 2,000 548,000 - - 550,000
Change in unrealized gain
(loss) of marketable securities
available for sale - - - - - 55,095 - 55,095
Net loss - - - - - - (8,478,397) (8,478,397)
--------------------------------------------------------------------------------------------------
BALANCE, SEPTEMBER 30, 2000 - $ - 20,459,700 $204,597 $73,924,653 $(61,564) $(61,106,227) $12,961,459
==================================================================================================

See notes to consolidated financial statements.

CEL-SCI CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2000, 1999, AND 1998

2000 1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(8,478,396)(7,490,725)(6,442,683)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 220,994 268,210 295,331
Issuance of stock options for services - 88,166 564,031
Stock bonus granted to officer 550,000 435,625 -
Stock contributed to 401(k) plan 99,107 86,954 58,150
Net realized loss on sale of
securities 49,962 151,349 9
Changes in assets and liabilities:
Increase in interest and other
receivables 23,573 6,984 36,625
(Increase) decrease in prepaid
expenses (1,323,804) 209,262 (313,046)
Decrease (increase) in advances 68,720 (69,275) 4,733
(Increase) decrease in deposits (125,000) - 3,350
Decrease (increase) in accounts
payable and accrued expenses 389,336 6,118 (54,440)
(Increase) decrease in deferred
rent (3,499) (1,061) 2,352
-------- -------- -----

Net cash used in
operating activities (8,529,007)(6,308,393)(5,845,588)

CASH FLOWS PROVIDED BY (USED IN)
INVESTING ACTIVITIES:
Purchases of investments (2,000,587) (235,698)(13,480,816)
Sales and maturities of investments 1,436,289 6,499,801 4,501,828
Repayment on note receivable from
shareholder - 70,809 216,066
Expenditures for property and equipment (284,043) (60,552) (70,559)
Expenditures for patents (98,500) (102,798) (35,211)
--------- ---------- --------

Net cash (used in)
provided by investing activities (946,841) 6,171,562 (8,868,692)
--------- ----------------------

(Continued)

CEL-SCI CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2000, 1999, AND 1998
--------------------------------------------------------------------------------

2000 1999 1998

CASH FLOWS PROVIDED BY
FINANCING ACTIVITIES:
Cash proceeds from issuance of
preferred and common stock and warrant
conversion for cash 13,637,467 71,250 14,018,899
------------ -------- ----------

Net cash provided by
financing activities 13,637,467 71,250 14,018,899
------------ -------- ----------

NET INCREASE (DECREASE) IN CASH 4,161,619 (65,581) (695,381)

CASH, BEGINNING OF YEAR 2,747,644 2,813,225 3,508,606
----------- --------------------
CASH, END OF YEAR $6,909,263 $2,747,644 $2,813,225
================================

SUPPLEMENTAL DISCLOSURES:

At September 30, 2000, 1999, and 1998, the net unrealized gain (loss) on
investments available-for-sale was $61,564, $(116,659), and $(48,291),
respectively.

During the year ended September 30, 1999, 9,002 shares of Series D Preferred
Stock were converted into 4,760,126 shares of common stock.

(Concluded)

See notes to consolidated financial statements.

CEL-SCI CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
------------------------------------------------------------------------------

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CEL-SCI Corporation (the Company) was incorporated on March 22, 1983, in the
State of Colorado, to finance research and development in biomedical science and
ultimately to engage in marketing products.

Significant accounting policies are as follows:

Principles of Consolidation - The consolidated financial statements
include the accounts of CEL-SCI Corporation and its wholly owned
subsidiaries, Viral Technologies, Inc., and MaxPharma AG. All
significant intercompany transactions have been eliminated upon
consolidation.

Investments - Investments that may be sold as part of the liquidity
management of the Company or for other factors are classified as
available-for-sale and are carried at fair market value. Unrealized
gains and losses on such securities are reported as a separate component
of stockholders' equity. Realized gains and losses on sales of
securities are reported in earnings and computed using the specific
identified cost basis.

Research and Office Equipment - Research and office equipment is
recorded at cost and depreciated using the straight-line method over
estimated useful lives of five to seven years.

Research and Development Costs - Research and development expenditures
are expensed as incurred. The Company has an agreement with an unrelated
corporation for the production of MULTIKINE, which is the Company's only
product source.

Research and Development Grant Revenues - The Company's grant
arrangements are handled on a reimbursement basis. Costs incurred under
the arrangements are expensed as incurred. Subsequent reimbursements
from the granting agency are applied against such expenses.

Patents - Patent expenditures are capitalized and amortized using the
straight-line method over 17 years. In the event changes in technology
or other circumstances impair the value or life of the patent,
appropriate adjustment in the asset value and period of amortization is
made.

Net Loss Per Share - Net loss per common share is computed by dividing
the net loss, after increasing the loss for the effect of any preferred
stock dividends, by the weighted average number of common shares
outstanding during the period. Common stock equivalents, including
options to purchase common stock, were excluded from the calculation for
all periods presented as they were antidilutive.

Prepaid Expenses - The majority of prepaid expenses consist of
manufacturing production advances, bulk purchases of laboratory supplies
to be consumed in the manufacturing of the Company's product for
clinical studies and the cost of options for nonemployee services.

Income Taxes - Income taxes are accounted for using the liability
method under which deferred tax liabilities or assets are determined
based on the difference between the financial statement and tax bases
of assets and liabilities (i.e., temporary differences) and are
measured at the enacted tax rates. Deferred tax expense is determined
by the change in the liability or asset for deferred taxes.

Statement of Cash Flows - For purposes of the statements of cash flows,
cash consists principally of unrestricted cash on deposit, and
short-term money market funds. The Company considers all highly liquid
investments with a maturity of less than three months to be cash
equivalents.

Use of Estimates - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Reclassifications - Certain reclassifications have been made to the 1999
and 1998 financial statements to conform with the current-year
presentation.

2. INVESTMENTS

The carrying values and estimated market values of investments
available-for-sale at September 30, 2000 and 1999, are as follows:

September 30, 2000
Gross Gross Market Value
Amortized Unrealized Unrealized at September 30,
Cost Gains Losses 2000
--------- ---------- ---------- ---------------

Bonds $2,000,000 $ 4,720 $ -- $2,004,720
Fixed income mutual
funds 1,822,486 - (66,284) 1,756,202
----------- ------- --------- ---------
Total $3,822,486 $4,720 $(66,284) $3,760,922
============ ======= ========= =========

September 30, 1999
Gross Gross Market Value
Amortized Unrealized Unrealized at September 30,
Cost Gains Losses 1999

Fixed income
mutual funds $3,308,150 $ -- $(116,659) $3,191,491
---------- ------ --------- ----------

Total $3,308,150 $ -- $(116,659) $3,191,491
============ ====== ========= ==========

The gross realized gains and losses of sales of investments available-for-sale
for the years ended September 30, 2000, 1999, and 1998, are as follows:

2000 1999 1998
---- ---- ----

Realized gains $ - $ - $1,485
Realized losses 49,962 151,349 1,494
------ ------- -----
Net realized loss $(49,962) $(151,349) $ (9)
========== =========== =====

3. RESEARCH AND OFFICE EQUIPMENT

Research and office equipment at September 30, 2000 and 1999, consist
of the following:

2000 1999

Research equipment $ $
2,052,082 1,781,666
Furniture and equipment
258,780 245,154
Leasehold improvements
5,393 5,393

2,316,255 2,032,213

Less accumulated depreciation and amortization
(1,721,336) (1,563,586)
Net research and office equipment $ 594,919 $ 468,627
========== ==========

4. INCOME TAXES

The approximate tax effect of each type of temporary difference and carryforward
that gave rise to the Company's deferred tax assets and liabilities at September
30, 2000 and 1999, is as follows:

2000 1999

Depreciation $ (28,964) $ (18,536)

Prepaid expenses
(697,848) (101,769)

Net operating loss carryforward
22,905,872 17,082,000

Other
9,422 10,751

Less: Valuation allowance (22,188,482) (16,972,446)
----------- -----------
Net deferred $ - $ -
=========== ===========

The Company has available for income tax purposes net operating loss
carryforwards of approximately $50,242,000, expiring from 2001 through 2020.

In the event of a significant change in the ownership of the Company, the
utilization of such carryforwards could be substantially limited.

The difference in the Company's U.S. Federal statutory income tax rate and the
Company's effective rate is primarily attributed to the recording of a valuation
allowance due to the uncertainty of the amount of future tax benefits that will
be realized because it is more likely than not that future taxable income will
not be sufficient to realize such tax benefits.

5. STOCK OPTIONS, BONUS PLAN, AND WARRANTS

Non-Qualified Stock Option Plan - At September 30, 2000, the Company has
collectively authorized the issuance of 3,260,000 shares of common stock under
the Non-Qualified Plan. Options typically vest over a three-year period and
expire no later than ten years after the grant date. Terms of the options are to
be determined by the Company's Compensation Committee, which administers all of
the plans. The Company's employees, directors, officers, and consultants or
advisors are eligible to be granted options under the Non-Qualified Plan.

Information regarding the Company's Non-Qualified Stock Option Plan is
summarized as follows:

Outstanding Exercisable
------------------- ------------------
Weighted Weighted
Average Average
Exercise Exercise
Shares Price Shares Price

Options outstanding,
October 1, 1997 1,672,834 $3.44

Options granted 474,700 2.98

Options exercised (170,334) 2.92

Options forfeited (17,500) 6.23

Options outstanding,
September 30, 1998 1,959,700 3.32 1,315,002 $3.10

Options granted 470,959 2.02

Options forfeited (56,602) 4.78

Options outstanding,
September 30, 1999 2,374,057 2.80 1,595,934 3.09

Options granted 262,500 3.09

Options exercised (789,085) 3.41

Options forfeited (46,266) 2.34
---------

Options outstanding,
September 30, 2000 1,801,206 3.18 1,547,445 3.19
=========

At September 30, 2000, options outstanding and exercisable were as
follows:

Weighted Average Weighted Average Weighted Average
Range of Number Exercise Price Remaining Number Exercise Price
Exercise Outstanding Outstanding Contractual Exercisable Exercisable
Prices Life

$1.87-$2.50 688,327 $2.11 3.0 years 633,263 $2.15
$2.56-$3.75 793,246 3.07 3.4 years 625,015 3.06
$3.87-$4.68 174,833 4.13 5.9 years 146,667 4.07
$5.00-$7.25 144,800 5.50 4.3 years 142,500 5.49

During 1999, the Company extended the expiration date on 35,000 options at $2.87
from the Non-qualified Stock Option Plan. The options were to expire March 30,
1999, and were extended to March 30, 2000. The options had originally been
granted in December 1994. As of March 30, 2000, all options had been exercised.

During 1999, the Company extended the expiration date on 750 options at $2.87
from the Non-qualified Stock Option Plan. The options were to expire March 31,
1999, and were extended to March 31, 2000. The options had originally been
granted in March 1988. As of March 31, 2000, all options had been exercised.

During March 2000, the Company agreed to restore and vest 40,000 options at
prices ranging from $5.25 to $5.62, to one former Director and one Director as
part of a settlement agreement. The options will expire on September 25, 2006.
As of September 30, 2000, 20,000 options had been exercised.

Incentive Stock Option Plan - At September 30, 2000, the Company has
collectively authorized the issuance of 1,600,000 shares of common stock under
the Incentive Stock Option Plan. Options vest after one year to three-year
period and expire no later than ten years after the grant date. Terms of the
options are to be determined by the Company's Compensation Committee, which
administers all of the plans. Only the Company's employees are eligible to be
granted options under the Incentive Plan.

Information regarding the Company's Incentive Stock Option Plan is
summarized as follows:

Outstanding Exercisable
----------------- ----------------
Weighted Weighted
Average Average
Exercise Exercise
Shares Price Shares Price

Options outstanding,
October 1, 1997 573,716 $3.81

Options granted 205,500 4.76

Options exercised (3,166) 2.87

Options forfeited (3,666) 5.34
-------

Options outstanding,
September 30, 1998 772,384 4.06 311,622 $3.64

Options granted 206,500 2.14

Options forfeited (2,034) 3.70
-------

Options outstanding,
September 30, 1999 976,850 3.71 520,688 3.86

Options granted 140,000 3.77

Options exercised (68,418) 4.47

Options forfeited (1,666) 3.38
-------

Options outstanding,
September 30, 2000 1,046,766 3.62 722,435 3.98
=========

At September 30, 2000, options outstanding and exercisable were as
follows:

Weighted Weighted Weighted
Average Average Average
Range of Number Exercise Remaining Number Exercise
Price - Price -
Exercise Outstanding Outstanding Contractual Exercisable Exercisable
Prices Life
------------ --------------------- ----------- --------------------

$1.94-$2.87 322,500 $2.39 5.4 years 223,168 $2.51

$2.94-$4.31 406,900 3.45 7.4 years 290,567 3.47

$4.50-$6.00 316,766 5.07 7.3 years 208,100 5.11

$11.00 600 11.00 5.7 years 600 11.00

During 1999, the Company extended the expiration date on 23,000 options at $3.25
from the Incentive Stock Option Plan. The options were to expire February 21,
1999, and were extended to February 21, 2000. The options had originally been
granted in February 1996. All options were exercised as of September 30, 2000.

Stock Bonus Plan - At September 30, 2000, the Company has authorized the
issuance of 840,000 shares of common stock under the Stock Bonus Plan. All
employees, directors, officers, consultants, and advisors are eligible to be
granted options.

Other Options and Warrants - In connection with the 1992 public offering,
5,175,000 common stock purchase warrants were issued and outstanding at
September 30, 1997. Every ten warrants entitled the holder to purchase one share
of common stock at a price of $15.00 per share. Subsequently, the expiration
date of the warrants was extended to February 1998. Effective June 1, 1997, the
exercise price of warrants was lowered from $15 to $6 and only five warrants,
rather than 10 warrants, were required to purchase one share of common stock.
Subsequent to September 30, 1997, warrant-holders who tendered five warrants and
$6.00 between January 9, 1998, and February 7, 1998, would receive one share of
the Company's common stock and one new warrant. The new warrants would permit
the holder to purchase one share of the Company's common stock at a price of
$10.00 per share prior to February 7, 2000. During 1998, the expiration date of
the original warrants was extended to July 31, 1998, and 582,025 original
warrants were tendered for 116,405 common shares. As of September 30, 1998, the
remaining 4,592,975 original warrants had expired.

During 1995, the Company granted a consultant options to purchase 17,858 shares
of the Company's common stock. These shares became exercisable on November 2,
1995, and were to expire November 1, 1999. In February 2000, the Company

extended the expiration date on the options by one year to February 6, 2001.
These options are exercisable at $5.60 per share and as of September 30, 2000,
all 17,858 options remain outstanding.

In June and September 1995, the Company completed private offerings whereby it
sold a total of 1,150,000 units at $2.00 per unit. Each unit consisted of one
share of Common Stock and one warrant. Each warrant entitled the holder to
purchase one additional share of Common Stock at a price of $3.25 per share at
any time prior to June 30, 1997. All warrants sold in this Offering were
exercised during 1996. Additionally, the Company issued to the underwriter
warrants to purchase 230,000 equity units. Each unit consisted of one share of
the Company's common stock. For the June 1995 private placement, 57,500 equity
units were issued at $2.00 per unit and another 57,500 equity units were issued
at $3.25 per unit. All units issued in the June 1995 private placement were
exercised at September 30, 1996. For the September 1995 private placement,
57,500 equity units were issued at $2.40 per unit and another 57,500 equity
units were issued at $3.25 per unit. As of September 30, 1996, 21,890 equity
units had been exercised at $3.25 per unit and 21,890 equity units had been
exercised at $2.40 per unit. As of September 30, 1997, 35,610 equity units had
been exercised at $2.40 per unit and 25,610 equity units were exercised at $3.25
per unit. All remaining 10,000 equity units will expire on February 6, 2001.

During 1997, the Company granted four consultants options to purchase a total of
268,000 shares of the Company's common stock. The fair value of the options is
expensed over the life of the consultants' contracts. Of the 268,000 options,
218,000 options became exercisable during 1997 at prices ranging from $2.50 to
$4.50. The remaining 50,000 options became exercisable during 1998 at $5.00.
During 1997, 50,000 options were exercised at $3.50. During 1998, 114,500
options were exercised at prices ranging from $3.50 to $4.50. During 1999,
18,500 options were exercised at prices ranging from $3.50 to $4.50. In December
1999, the Company extended the expiration date on 10,000 options exercisable at
$3.25 per share to June 30, 2000. Subsequently, the expiration date was extended
to June 30, 2001. During 2000, 25,000 options were exercised at prices ranging
from $2.50 to $3.94. At September 30, 2000, 60,000 options related to the four
consultants remained outstanding at prices ranging from $3.50 to $5.00.

During 1998, the Company granted seven consultants options to purchase a total
of 282,000 shares of the Company's common stock. The fair value of the options
is expensed over the life of the consultants' contracts. All options became
exercisable during 1998 that were exercisable at prices ranging from $3.50 to
$7.31. During 1998, 22,000 options were exercised at prices ranging from $3.50
to $4.50. During 1999, 75,000 options expired ranging in price from $5.06 to
$7.31, and 10,000 options were exercised at a price of $2.50. In December 1999,
the Company extended the expiration date on 20,000 options exercisable at $3.94
per share and 10,000 options exercisable at $3.50 per share to June 30, 2000.
Subsequently, the expiration date was extended to June 30, 2001. During 2000,
165,000 options were exercised at prices ranging from $2.50 to $5.62. At
September 30, 2000, 5,000 options related to the consultants remained
outstanding at a price of $3.50 per common share.

During 1999, the Company granted one consultant options to purchase a total of
50,000 shares of the Company's common stock. The fair value of the options is
expensed over the life of the consultant's contract. All 50,000 options became
exercisable during 1999 at $2.50 per share. At September 30, 2000, all 50,000
options remained outstanding.

In January 1999, the Company revised the terms of 23,500 and 125,000 options
granted to consultants in 1997 and 1998, respectively. The terms of the
agreements set the exercise price of the 148,500 options at $4.00 and set the
expiration date of the options at December 31, 1999. During 1999, 28,500 options
to purchase shares were exercised at $2.50 per share. The options were further
revised in December 1999 to extend the expiration date to June 30, 2001. During
2000, all 120,000 options to purchase shares were exercised at $2.50 per share.

In connection with the December 1997 private offering, the Company issued to the
underwriters warrants to purchase 50,000 shares of common stock at $8.63 per
share. The warrants are exercisable at any time prior to December 22, 2000. At
September 30, 2000, all warrants remained outstanding.

In connection with the December 1999 private offering, the Company issued
402,007 common stock purchase warrants. Each warrant entitled the holder to
purchase one share of common stock at $2.925 per share, expiring December 2002.
The investors in this private offering also received warrants that allow
investors under certain circumstances to acquire additional shares of the
Company's common stock at a nominal price. At September 30, 2000, all warrants
remained outstanding.

In connection with the March 2000 private offering, the Company issued 413,334
common stock purchase warrants. Each warrant entitled the holder to purchase one
share of common stock at $8.50 per share, expiring March 2003. The investors in
this private offering also received warrants that allow investors under certain
circumstances to acquire additional shares of the Company's common stock at a
nominal price. At September 30, 2000, all warrants remained outstanding.

In October 1996, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS No. 123). This statement encourages but does not require
companies to account for employee stock compensation awards based on their
estimated fair value at the grant date with the resulting cost charged to
operations. The Company has elected to continue to account for its employee
stock-based compensation using the intrinsic value method prescribed in
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and related Interpretations. If the Company had elected to recognize
compensation expense based on the fair value of the awards granted, consistent
with the provisions of SFAS No. 123, the Company's net loss and net loss per
common share would have been increased to the pro forma amounts indicated below:

Year Ended September 30,
--------------------------------------
2000 1999 1998
---- ---- ----
(In Thousands)
Net loss:
As reported
$(8,478,396)$(7,490,725) $(6,442,638)
Pro forma
(8,908,999) (8,124,159) (7,018,634)

Loss per common share:
As reported $ 0.44 $ 0.52 $ 0.74

Pro forma 0.46 0.56 0.79

The weighted average fair value at the date of grant for options granted during
2000, 1999, and 1998, was $2.57, $1.21, and $2.17 per option, respectively.

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following assumptions:

2000 1999 1998
---- ---- ----

Expected stock risk volatility 98 % 91 % 79 %
Risk-free interest rate
6.32 % 5.48 % 5.49 %
Expected life options 4.91 3.23 2
Expected dividend yield - - -

The effects of applying SFAS No. 123 in this pro forma disclosure are not
necessarily indicative of the effect on future amounts.

The Company's stock options are not transferable, and the actual value of the
stock options that an employee may realize, if any, will depend on the excess of
the market price on the date of exercise over the exercise price. The Company
has based its assumption for stock price volatility on the variance of monthly
closing prices of the Company's stock from its initial offering date to the
present. The risk-free rate of return used equals the yield on one- to
three-year zero-coupon U.S. Treasury issues on the grant date. No discount was
applied to the value of the grants for nontransferability or risk of forfeiture.

6. EMPLOYEE BENEFIT PLAN

The Company maintains a defined contribution retirement plan, qualifying under
Section 401(k) of the Internal Revenue Code, subject to the Employee Retirement
Income Security Act of 1974, as amended, and covering substantially all CEL-SCI
employees. Prior to January 1, 1998, the employer contributed an amount equal to
50% of each employee's contribution not to exceed 3% of the participant's
salary. Effective January 1, 1998, the plan was amended such that the Company's
contribution is now made in shares of the Company's common stock as opposed to
cash. Each participant's contribution is matched by the Company with shares of
common stock that have a value equal to 100% of the participant's contribution,
not to exceed the lesser of $10,000 or 6% of the participant's total
compensation. The Company's contribution of common stock is valued each quarter
based upon the closing price of the Company's common stock. The expense for the
years ended September 30, 2000, 1999, and 1998, in connection with this plan was
$99,107, $86,954, and $70,519, respectively.

7. LEASE COMMITMENTS

Operating Leases - The future minimum annual rental payments due under
noncancelable operating leases for office and laboratory space are as follows:

Year Ending September 30,

2001
$202,934
2002
209,490
2003
180,035
2004
36,565
2005
-
------
Total minimum lease
payments $629,024
========

Rent expense for the years ended September 30, 2000, 1999, and 1998, was
approximately $233,559, $214,205, and $165,067, respectively.

8. STOCKHOLDERS' EQUITY

During December 1997, the Company issued 10,000 shares of Series D Preferred
Stock for $10,000,000. The issuance included 550,000 Series A Warrants and
550,000 Series B Warrants. The number of common shares issuable upon conversion
of the Preferred Shares is determinable by dividing $1,000 by $8.28 prior to
September 19, 1998, or at any time at which the Company's common stock is $3.45
or less for five consecutive days. On or after September 19, 1998, the number of
common shares to be issued upon conversion is determined by dividing $1,000 by
the lesser of (1) $8.28 or (2) the average price of the stock for any two
trading days during the ten trading days preceding the conversion date. The
Series A Warrants are exercisable at any time for $8.62 prior to December 22,
2001, and the Series B Warrants are exercisable at any time for $9.31 prior to
December 22, 2001. Each warrant entitles the holder to purchase one share of
common stock. At September 30, 1998, 998 shares of Series D Preferred Stock had
been converted into 441,333 shares of common stock. At September 30, 1999, 9,002
shares of Series D Preferred Stock had been converted into 4,760,127 shares of
common stock. There are no remaining shares of Series D Preferred Stock. All
Series A and Series B Warrants issued remain outstanding at September 30, 2000.
In connection with the Company's December 1997 $10,000,000 Series D Preferred
Stock offering, the Series A and Series B warrants were assigned a relative fair
value of $1,980,000 in accordance with APB No. 14, Accounting for Convertible
Debt and Debt Issued with Stock Purchase Warrants, and have been recorded as
additional paid-in capital. The $1,980,000 allocated to the warrants was
accredited immediately.

9. LOSS PER SHARE

Basic EPS excludes dilution and is computed by dividing net income or loss
attributable to common stockholders by the weighted average of common shares
outstanding for the period. Diluted EPS reflects the potential dilution that
could occur if securities or other contracts to issue common stock (convertible
preferred stock, warrants to purchase common stock and common stock options
using the treasury stock method) were exercised or converted into common stock.
Potential common shares in the diluted EPS computation are excluded in net loss
periods as their effect would be antidilutive. The loss attributable to common
stockholders includes the impact of the accretion of Series D Preferred Stock
warrants and preferred stock dividends.

2000 1999 1998
---- ---- ----

Loss per common share (basic and diluted) $0.44 $0.52 $0.74
====== ====== ======

10. RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, FASB issued SFAS No. 133, Accounting for Derivative Instruments
and Hedging Activities. SFAS No. 133 establishes accounting and reporting
standards for derivative instruments and for hedging activities. The Company
does not believe that the adoption of SFAS No. 133 will have a material effect
on its financial position or results of operation.

11. SEGMENT REPORTING

The Company adopted Statement of Financial Accounting Standards No. 131,
Disclosure about Segments of an Enterprise and Related Information (SFAS No.
131) in the fiscal year ended September 30, 1999. SFAS No. 131 establishes
standards for reporting information regarding operating segments in annual
financial statements and requires selected information for those segments to be
presented in interim financial reports issued to stockholders. SFAS No. 131 also
establishes standards for related disclosures about products and services and
geographic areas. Operating segments are identified as components of an
enterprise about which separate discrete financial information is available for
evaluation by the chief operating decision maker, or decision making group, in
making decisions how to allocate resources and assess performance. The Company's
chief decision maker, as defined under SFAS No. 131, is the Chief Executive
Officer. To date, the Company has viewed its operations as principally one
segment, the research and development of certain drugs and vaccines. As a
result, the financial information disclosed herein, materially represents all of
the financial information related to the Company's principal operating segment.

CEL-SCI CORPORATION
-------------------
CONSOLIDATED CONDENSED BALANCE SHEETS
------------------------
ASSETS
(unaudited)

June 30, 2001 September 30, 2000
CURRENT ASSETS:

Cash and cash equivalents $ 2,591,933 $ 6,909,263
Investments, net 576,304 3,760,922
Interest and other receivables 63,792 39,252
Prepaid expenses 696,841 1,838,376
Advances to officer/shareholder
and employees 12,599 728
--------- ---------
Total Current Assets 3,941,469 12,548,541

RESEARCH AND OFFICE EQUIPMENT-

Less accumulated depreciation of $1,825,638
and $1,721,336 633,907 594,919

DEPOSITS 184,828 139,828

PATENT COSTS- less accumulated
amortization of $623,966 and $574,362 509,302 525,594
-------- ---------
$ 5,269,506 $ 13,808,882
============ ============

See notes to consolidated condensed financial statements.

CEL-SCI CORPORATION
-------------------
CONSOLIDATED CONDENSED BALANCE SHEETS
------------------------
(continued)

LIABILITIES AND STOCKHOLDERS' EQUITY
(unaudited)

June 30, 2001 September 30, 2000
------------- ------------------
CURRENT LIABILITIES:

Accounts payable $ 402,076 $ 822,601
------------ -----------

Total current liabilities 402,076 822,601

DEFERRED RENT 24,822 24,822
------------ -----------
Total liabilities 426,898 847,423

STOCKHOLDERS' EQUITY

Preferred stock, $.01 par value;
authorized 200,000 shares; no shares
issued and outstanding -- --
Common stock, $.01 par value; authorized,
100,000,000 shares; issued and outstanding,
24,307,262 and 20,459,700 shares 243,073 204,597
Additional paid-in capital 73,963,580 73,924,653
Net unrealized gain/(loss) on investments (35,231) (61,564)
Deficit (69,328,814) (61,106,227)
------------- -----------
TOTAL STOCKHOLDERS' EQUITY 4,842,608 12,961,459
------------- -----------
$ 5,269,506 $ 13,808,882
============= ============

See notes to consolidated condensed financial statements.

CEL-SCI CORPORATION
-------------------
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
---------------------------------
(unaudited)

Nine Months Ended June 30,
2001 2000
----- ----
REVENUES:

Interest income $ 368,657 $ 269,305
Other income 182,529 30,318
-------- ----------

TOTAL INCOME 551,186 299,623

EXPENSES:
Research and development 6,419,512 3,866,572
Depreciation and
amortization 153,906 174,326
General and administrative 2,200,355 2,986,080
--------- ------------

TOTAL OPERATING EXPENSES 8,773,773 7,026,978
------------ -----------------

NET LOSS $ 8,222,587 $ 6,727,355
============ =============
LOSS PER COMMON SHARE (BASIC) $ 0.39 $ 0.36
================ =================

LOSS PER COMMON SHARE (DILUTED) $ 0.39 $ 0.36
================ =================
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 21,274,537 18,857,493
========== ==========

See notes to consolidated condensed financial statements.

CEL-SCI CORPORATION
-------------------
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
---------------------------------
(unaudited)

Three Months Ended June 30,
2001 2000
---- ----
REVENUES:

Interest income $ 150,426 $ 161,713
Other income 63,064 2,062
-------------- -----------

TOTAL INCOME 213,490 163,775

EXPENSES:
Research and development 1,598,251 1,379,282
Depreciation and amortization 53,972 30,989
General and administrative 606,422 918,611
-------------- -----------

TOTAL OPERATING EXPENSES 2,258,645 2,328,882
------------------------------

NET LOSS $ 2,045,155 $ 2,165,107
============= ==============
LOSS PER COMMON SHARE (BASIC) $ 0.09 $ 0.11
================= ==================

LOSS PER COMMON SHARE (DILUTED) $ 0.09 $ 0.11
================= =================
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 22,696,735 20,438,736
========== ==========

See notes to consolidated condensed financial statements.

CEL-SCI CORPORATION
-------------------
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
---------------------------------
(unaudited)
Nine Months Ended June 30,
2001 2000
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:

NET LOSS $(8,222,587) $(6,727,355)
Adjustments to reconcile net loss to
net cash used in operating activities:

Depreciation and amortization 153,906 174,326
Stock issued in settlement of a lawsuit -- 33,750
Stock issued to 401(k) 76,246 72,882
Net realized (gain) loss on sale of securities (2,764)
Warrants exercised for stock 1,157
Stock bonus granted to officer -- 550,000

Decrease (increase) in deposits (45,000) --
Decrease (Increase) in receivables (24,540) 2,885
Decrease (increase) in prepaid expenses 1,141,535 (396,397)
Decrease (increase) in advances (11,871) 69,448
Increase (decrease) in accounts payable (420,525) 54,977
--------- -----------

NET CASH USED IN OPERATING ACTIVITIES (7,354,443) (6,165,484)
--------- -----------

CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITY:
Sales of investments 3,213,714 1,485,145
Purchase of investments -- (2,000,000)
Purchase of research and office equipment (143,290) (128,259)
Patent costs (33,311) (90,177)
--------- -----------

NET CASH PROVIDED BY(USED IN)
INVESTING ACTIVITY 3,037,113 (733,291)
---------- -----------

CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:

Cash proceeds from issuance of common
stock and warrant conversion for cash -- 13,636,218
---------- -----------

NET CASH PROVIDED BY FINANCING ACTIVITIES -- 13,636,218
--------------- ------------
NET INCREASE (DECREASE) IN CASH (4,317,330) 6,737,443

CASH AND CASH EQUIVALENTS:
Beginning of period 6,909,263 2,746,531
----------------- ---------------
End of period $ 2,591,933 $ 9,483,974
============== =============

See notes to consolidated condensed financial statements.

CEL-SCI CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

NINE MONTHS ENDED JUNE 30, 2001 AND 2000
(unaudited)

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements have been prepared in accordance
with rules established by the Securities and Exchange Commission for Form
10-Q. Not all financial disclosures required to present the financial
position, results of operations and cash flows in accordance with
accounting principles generally accepted in the United States of America
are included herein. The reader is referred to the Company's Financial
Statements included for the year ended September 30, 2000, which are
included elsewhere in this prospectus. In the opinion of management, all
accruals and adjustments (each of which is of a normal recurring nature)
necessary for a fair presentation of the financial position as of June 30,
2001 and the results of operations for the three and nine-month periods
then ended have been made. Significant accounting policies have been
consistently applied in the interim financial statements and the annual
financial statements.

Investments

Investments that may be sold as part of the liquidity management of the
Company or for other factors are classified as available-for-sale and are
carried at fair market value. Unrealized gains and losses on such
securities are reported as a separate component of stockholders' equity.
Realized gains and losses on sales of securities are reported in earnings
and computed using the specific identified cost basis.

Loss per Share

Net loss per common share is computed by dividing the net loss by the
weighted average number of common shares outstanding during the period.
Common stock equivalents, including options to purchase common stock, were
excluded from the calculation because they are antidilutive due to the net
losses.

B. COMPREHENSIVE LOSS
------------------

Comprehensive income (loss) is the change in equity of a business
enterprise during a period from transactions and other events and
circumstances from non-owner sources. The Company's source of other
comprehensive loss, other than net losses, is from unrealized gain or loss
on investments. The components of comprehensive income (loss) are as
follows:

Nine months ended Nine months ended
June 30, 2001 June 30, 2000
------------- -------------

Net Loss $(8,222,587) $(6,727,355)
Other Comprehensive Income:
Unrealized Loss From Investments (35,231) (26,487)
------------------------------
Comprehensive Loss $(8,187,356) $(6,700,868)
============ ============

No dealer salesman or other person has been authorized to give any information
or to make any representations, other than those contained in this prospectus.
Any information or representation not contained in this prospectus must not be
relied upon as having been authorized by CEL-SCI. This prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, the
securities offered hereby in any state or other jurisdiction to any person to
whom it is unlawful to make such offer or solicitation. Neither the delivery of
this prospectus nor any sale made hereunder shall, under any circumstances,
create an implication that there has been no change in the affairs of CEL-SCI
since the date of this prospectus.

TABLE OF CONTENTS

Page
Prospectus Summary............................................. 2
Risk Factors................................................... 5
Comparative Share Data......................................... 10
Market for CEL-SCI's Common Stock.............................. 14
Management's Discussion and Analysis of.
Financial Condition and Results of Operations................ 15
Business....................................................... 18
Management..................................................... 26
Principal Shareholders......................................... 35
Equity Line of Credit Agreement................................ 37
Selling Shareholder............................................ 39
Description of Securities...................................... 41
Experts........................................................ 42
Indemnification................................................ 42
Additional Information......................................... 43

------------------------------
Common stock

CEL-SCI CORPORATION

PROSPECTUS