FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   (Mark One)

      (X)   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF  1934
                  For the fiscal year ended September 30, 2008.

                                       OR

      (  )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
            EXCHANGE ACT OF 1934

For the transition period from _________ to __________.

Commission file number 1-11889
                               CEL-SCI CORPORATION
                           ---------------------------
             (Exact name of registrant as specified in its charter)

                        COLORADO                            84-0916344
              ------------------------------            -------------------
             (State or other jurisdiction of             (I.R.S.Employer
             incorporation or organization)             Identification No.)

                   8229 Boone Blvd., Suite 802
                        Vienna, Virginia                     22182
               --------------------------------           -----------
            (Address of principal executive offices)       (Zip Code)

Registrant's telephone number, including area code: (703) 506-9460
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.01 par value
                           -------------------------
                                (Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. [ ]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. [ ]

Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer  [ ]                      Accelerated filer  [ ]

Non-accelerated filer  [ ]                        Smaller reporting company  [X]
(Do not check if a smaller reporting company)

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act):    [ ] Yes      [X] No

The aggregate market value of the voting stock held by non-affiliates of the
Registrant, based upon the closing sale price of the common stock on March 31,
2008, as quoted on the NYSE Alternext US, was $73,839,745.

As of December 31, 2008, the Registrant had 123,636,965 issued and outstanding
shares of common stock.

Documents Incorporated by Reference:   None




                                     PART I

ITEM 1.  BUSINESS
-----------------

      CEL-SCI Corporation (CEL-SCI) was formed as a Colorado corporation in
1983. CEL-SCI's principal office is located at 8229 Boone Boulevard, Suite 802,
Vienna, VA 22182. CEL-SCI's telephone number is 703-506-9460 and its web site is
www.cel-sci.com. CEL-SCI makes its electronic filings with the Securities and
Exchange Commission (SEC), including its annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K and amendments to these
reports available on its website free of charge as soon as practicable after
they are filed or furnished to the SEC.

OVERVIEW
--------

      CEL-SCI's lead product, Multikine(R), has been cleared for a global Phase
III clinical trial in advanced primary (previously untreated) head and neck
cancer patients. Multikine is being developed for the treatment of cancer. It is
the first of a new class of cancer immunotherapy drugs called Immune SIMULATORs.
It simulates the activities of a healthy person's immune system, which battles
cancer every day. Multikine is multi-targeted; it is the only cancer
immunotherapy that both kills cancer cells in a targeted fashion and activates
the general immune system to destroy the cancer. We believe Multikine is the
first immunotherapeutic agent being developed as a first-line standard of care
treatment for cancer.

         CEL-SCI took delivery of its new manufacturing facility for its lead
drug Multikine on October 8, 2008. This dedicated facility will be used to
produce the Multikine that will be used for CEL-SCI's pivotal Phase III clinical
trial and subsequently for sale following approval of the drug. CEL-SCI needs to
raise additional funds in order to launch the global Phase III clinical trial.
CEL-SCI is currently working on partnerships and joint ventures to finance the
part of the Phase III clinical trial that will not be funded by its existing
partners. If CEL-SCI cannot raise the funds in a timely manner the Phase III
clinical trial will be delayed.

      Multikine is a new type of immunotherapy in that it is a comprehensive
immunotherapy, incorporating both active and passive immune activity. A
comprehensive immunotherapy most closely resembles the workings of the natural
immune system in the sense that it works on multiple fronts in the battle
against cancer. A comprehensive immunotherapy causes a direct and targeted
killing of the tumor cells and activates the immune system to produce a more
robust and sustainable anti-tumor response.

      Multikine is designed to target the tumor micro-metastases that are mostly
responsible for treatment failure. The basic concept is to add Multikine to the
current cancer treatments with the goal of making the overall cancer treatment
more successful. Phase II data indicated that Multikine treatment resulted in a
substantial increase in the survival of patients. The lead indication is
advanced primary (previously untreated) head & neck cancer (about 600,000 new
cases per annum). Since Multikine is not tumor specific, it may also be
applicable in many other solid tumors.


                                       2


      Multikine is the first immunotherapeutic agent being developed as a
first-line treatment for cancer. It is administered prior to any other cancer
therapy because that is the period when the anti-tumor immune response can still
be fully activated. Once the patient has had surgery or has received radiation
and/or chemotherapy, the immune system is severely weakened and is less able to
mount an effective anti-tumor immune response. To date, other immunotherapies
have been administered later in cancer therapy (i.e., after radiation,
chemotherapy, surgery).

      In January 2007, the US Food and Drug Administration (FDA) concurred with
the initiation of a global Phase III clinical trial in head and neck cancer
patients using Multikine. The Canadian regulatory agency, the Biologics and
Genetic Therapies Directorate, had previously concurred with the initiation of a
global Phase III clinical trial in head and neck cancer patients using
Multikine.

      The protocol is designed to develop conclusive evidence of the efficacy of
Multikine in the treatment of advanced primary (previously untreated) squamous
cell carcinoma of the oral cavity (head and neck cancer). A successful outcome
from this trial should enable CEL-SCI to apply for a Biologics License to market
Multikine for the treatment of this patient population.

      The trial will test the hypothesis that Multikine treatment administered
prior to the current standard therapy for head and neck cancer patients
(surgical resection of the tumor and involved lymph nodes followed by
radiotherapy or radiotherapy and concurrent chemotherapy) will extend the
overall survival, enhance the local/regional control of the disease and reduce
the rate of disease progression in patients with advanced oral squamous cell
carcinoma.

      Clinical trials in over 200 patients have been completed with Multikine
with the following results:

   1)      It has been demonstrated to be safe and non-toxic.

   2)      It has been shown to render cancer cells much more susceptible to
           radiation therapy (The Laryngoscope, December 2003, Vol.113 Issue
           12).

   3)      A publication in the Journal of Clinical Oncology (Timar et al, JCO,
           23(15): May 2005), revealed the following:

          (i)  Multikine   induced   anti-tumor  immune  responses  through  the
               combined activity of the different cytokines present in Multikine
               following local administration of Multikine for only three weeks.

         (ii)  The combination of the different cytokines caused the induction,
               recruitment into the tumor bed, and proliferation of anti-tumor
               T-cells and other anti-tumor inflammatory cells, leading to a
               massive anti-tumor immune response.

        (iii) Multikine induced a reversal of the CD4/CD8 ratio in the tumor
              infiltrating cells, leading to a marked increase of CD4 T-cells in


                                       3


              the tumor, which resulted in the prolongation of the anti-tumor
              immune response and tumor cell destruction.

        (iv)  The anti-tumor immune-mediated processes continued long after the
              cessation of Multikine administration.

        (v)   A three-week Multikine treatment of patients with advanced primary
              oral squamous cell carcinoma resulted in an overall response rate
              of 42% prior to standard therapy, with 12% of the patients having
              a complete response.

        (vi)  A histopathology study showed that the tumor load in Multikine
              treated patients was reduced by nearly 50% as compared to tumors
              from control patients in the same pathology study.

        (vii) The tumors of all of the patients in this Phase II trial who
              responded to Multikine treatment were devoid of the cell surface
              marker for HLA Class II. This finding, if confirmed in this global
              Phase III clinical trial, may lead to the establishment of a
              marker for selecting the patient population best suited for
              treatment with Multikine.

       (viii) In a Phase II study, using the same drug regimen as will be used
              in the Phase III study, the addition of Multikine as first-line
              treatment prior to the standard of care treatment resulted in a
              33% improvement in the median overall survival at 3 1/2 years
              post-surgery, when compared to the results of 55 OSCC clinical
              trials published in the scientific literature between 1987 and
              2007.

      CEL-SCI also owns a pre-clinical technology called L.E.A.P.S.TM (Ligand
Epitope Antigen Presentation System). One of the lead products derived from this
technology is the CEL-1000 peptide which has shown protection in animals against
herpes, malaria, viral encephalitis and cancer. Another product is CEL-2000
which is being tested for the treatment of rheumatoid arthritis. Recent data
indicate that CEL-SCI's rheumatoid arthritis vaccine CEL-2000 prevents or
retards the permanent tissue damage caused by rheumatoid arthritis in an animal
model of the disease, The data were derived from a histopathological analysis of
tissues samples collected in comparative studies of CEL-2000 and Enbrel(R) that
were conducted in a well established animal model of rheumatoid arthritis.
Enbrel is a leading treatment for people with rheumatoid arthritis.

MULTIKINE
---------

      Multikine is the first of a new class of cancer immunotherapy drugs called
Immune SIMULATORs. It simulates the activities of a healthy person's immune
system, which battles cancer every day. Multikine is multi-targeted; it is the
only cancer immunotherapy that both kills cancer cells in a targeted fashion and
activates the general immune system to destroy the cancer.

      Multikine is a new type of immunotherapy in that it is a comprehensive
immunotherapy, incorporating both active and passive immune activity. A
comprehensive immunotherapy most closely resembles the workings of the natural


                                       4


immune system in the sense that it works on multiple fronts in the battle
against cancer. A comprehensive immunotherapy causes a direct and targeted
killing of the tumor cells and activates the immune system to produce a more
robust and sustainable anti-tumor response.

      Multikine works in a comprehensive way to marshal an effective killing of
the tumor:

     1.   Multikine attacks multiple antigens on the cancer cells.

     2.   Multikine directly kills cancer cells:

          o    The various  cytokines  present in Multikine,  such as TNF, IL-1,
               along with other cytokines, are responsible for this activity.

     3.   Multikine  signals  the  immune  system  to  mount  an  effective  and
          sustainable anti-tumor immune response:

          o    Multikine  changes the type of cells that  infiltrate  and attack
               the tumor from the `usual'  CD-8 cells to CD-4 cells.  These CD-4
               cells bring about a more robust anti-tumor response.

               -    This is  extremely  important  because  the tumor is able to
                    shut down the infiltrating CD-8 cells, but is unable to shut
                    down the CD-4 cell  attack.  In  addition,  CD-4  cells help
                    break "tumor tolerance,"  thereby allowing the immune system
                    to  recognize,  attack,  and destroy  the tumor.  The normal
                    immune  system is `blind' to tumor  cells  because the tumor
                    cells are  derived  from the body's own cells,  and thus the
                    body  `thinks'  of the tumor as `self',  a  phenomenon  also
                    known as `tumor tolerance'.

     4.   Multikine  renders the remaining  cancer cells  potentially  much more
          susceptible to radiation and  chemotherapy  treatment,  thereby making
          these treatments much more effective.

      Multikine is currently being developed as first-line therapy for advanced
primary head and neck cancer. This is a deadly cancer in which there is a clear
unmet medical need. The recurrence rate is high and about one out of every two
patients die within three years. Currently used therapies (surgery followed by
radiation, chemotherapy or radio-chemotherapy) fail to completely arrest the
disease because they are unable to completely remove or kill all of the cancer
cells. The persistence of these residual cells is responsible for the cancer's
recurrence or metastasis. Multikine is injected five times a week for three
weeks around the tumor (peri-tumorally) as well as in the vicinity of the local
lymph nodes (peri-lymphatically) prior to the patient's tumor being removed
surgically and the patient receiving any other therapy because these are the
areas in which the cancer will recur and from which metastases will develop.
Multikine unleashes and then harnesses and enhances the immune system's ability
to target and kill those tumor cells before they can cause recurrence or
metastasize. It is expected that multiple indications will be pursued over time
since it is the same principle for different cancers.


                                       5


Summary of Key Multikine Responses:

The following efficacy was seen in the last Phase II study conducted with
Multikine. This study used the same treatment protocol as will be used in the
Phase III study:

     -    33% improvement in median overall survival: In the last Phase II study
          a 33% improvement in median overall  survival at a median of 3.5 years
          post  surgery  was seen in  patients  with  locally  advanced  disease
          treated with Multikine as first-line  therapy (absolute  survival rate
          63%)  over  the 3.5 year  median  overall  survival  rates of the same
          cancer  patient  population  determined  from a review of 55  clinical
          trials  reported  in the  scientific  literature  that were  conducted
          between 1987 and 2007. CEL-SCI's Phase III clinical trial will need to
          demonstrate a 10% improvement in overall  survival for Multikine to be
          successful.

     -    Average  of  50%  reduction  in  tumor  cells:  The 3  week  Multikine
          treatment  regimen used in the last Phase II study killed, on average,
          about half of the cancer  cells  before the start of standard  therapy
          like  surgery,   radiation   and   chemotherapy   (as   determined  by
          histopathology).

     -    12% complete  response:  In 12% of patients  the tumor was  completely
          eliminated after only a 3 week treatment with Multikine (as determined
          by histopathology).

History of Multikine

      Multikine has been tested in over 200 patients 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, HIV-infected patients and HIV-infected women with Human
Papilloma Virus ("HPV")-induced cervical dysplasia, the precursor stage before
the development of cervical cancer. The safety profile was found to be very good
and CEL-SCI believes that the clinical data suggests that further studies are
warranted.

      The objective of CEL-SCI scientists is to use Multikine as an adjunct
(additive) therapy to the existing treatment of previously untreated head & neck
cancer patients with the goal of killing cancer cells and activating the general
immune system to destroy the cancer. However, pursuant to FDA regulations,
CEL-SCI was required to test the drug first for safety in locally recurrent,
locally metastatic head and neck cancer patients who had failed other cancer
therapies. This dose escalation study was started in 1995 at several centers in
Canada and the US where 16 patients were enrolled at 4 different dosage levels.
The study ended in 1998 and showed Multikine to be safe and well tolerated at
all dose levels.

      Because CEL-SCI scientists have determined that patients with previously
untreated disease would most likely benefit more from Multikine treatment,
CEL-SCI started a safety trial in Canada in 1997 in advanced primary head & neck
cancer patients who had just recently been diagnosed with head & neck cancer.
This study ultimately enrolled 28 patients, also at 4 different dosage levels,
and ended in late 1999. Halfway through this study, CEL-SCI launched a number of
Phase II studies in advanced primary head & neck cancer to determine the best


                                       6


dosage, best route of administration and best frequency of administration of
Multikine. Those studies involved 19 patients in Israel (1997 - 2000), 30
patients in Poland and the Czech Republic (1999 - 2000), and 94 patients (half
treated with Multikine and the other half disease-matched cancer patients served
as control) in Hungary (1999 - 2003). The Hungarian trial compared the control
group (receiving only conventional cancer therapy) to the Multikine treated
patients (receiving Multikine prior to conventional therapy) by histopathology
and immunohistochemistry. The results of these studies were published in
peer-reviewed scientific journals and/or presented at scientific meetings. The
studies that have not yet been published were conducted in support of
Multikine's safety and clinical utility.

      The above studies, which are all completed, indicate that Multikine was
safe and well tolerated at all dose levels investigated. The studies also showed
partial and complete tumor responses following Multikine treatment at the best
treatment regimen combinations as well as tumor necrosis (destruction) and
fibrosis (as determined by histopathology).

       The initial results of the Hungarian study were published in December
2003. Data from a Phase I/II clinical trial in fifty-four (54) advanced primary
head and neck cancer patients (half treated, half control), the first part of
the Hungarian study, were published in The Laryngoscope, December 2003, Vol.113
(12). The title of the article is "The Effect of Leukocyte Interleukin Injection
(MULTIKINE) on the Peritumoral and Intratumoral Subpopulation of Mononuclear
Cells and on Tumor Epithelia: A Possible New Approach to Augmenting Sensitivity
to Radiation Therapy and Chemotherapy in Oral Cancer - A Multi Center Phase I/II
Clinical Trial".

      The data demonstrate that treatment with Multikine rendered a high
proportion of the tumor cell population highly susceptible to radiation therapy.
This finding represents a major advance in the treatment of cancer since, under
current standard therapy, only about 5%-10% of the cancer cells are thought to
be susceptible to radiation therapy at any one point in time.

      The increased sensitivity of the Multikine-treated tumors to radiation was
derived from a dramatic increase in the number of proliferating (those that are
in cell cycle) cancer cells. Following Multikine treatment, the great majority
of the tumor cells were in a proliferative state, as measured by the
well-established cell proliferation marker Ki67. The control patients (not
treated with Multikine) had only low expression (near background) of the same
proliferation marker (Ki67) in this study. These findings were statistically
significant (p<0.05, ANOVA).

      This is an important finding because the ability of radiation therapy (and
chemotherapy) to kill tumor cells is dependent, in large part, on the
proliferative state of the tumor cells at the time of radiation (and
chemotherapy) treatment. As seen in the control group in this study, and also in
many other tumor types, the great majority of tumor cells (about 90% or more)
are in a "resting" state (non-proliferating). It is generally accepted that
tumor cells in the "resting" state are by-and-large resistant to radiation and
chemotherapy. However, Multikine treatment induced a reversal of this
non-proliferative state of the tumor cells and caused the great majority of the
tumor cells to enter into the proliferative state, thereby rendering the tumor
highly susceptible to radiation therapy (and chemotherapy).


                                       7


      The results of the Israeli trial have been published in Archives of
Otolaryngology - Head & Neck Surgery, August 2003, Vol.129. This paper on 12
patients treated by Dr. Feinmesser shows positive safety, tumor response and
clinical outcome data.

      Results from the Multikine Phase II clinical trials were published in June
2004 at the 40th ASCO Annual Meeting. The study involved 39 head & neck cancer
patients, 19 of whom were treated with CEL-SCI's immunotherapy drug Multikine
prior to surgery and radiation. The other 20 patients served as matched
controls, meaning that they did not receive Multikine prior to surgery and
radiation. In a comparison pathology study of the tumors, Multikine treatment
caused a significant shift in the ratio of key immune cells that infiltrate the
tumor. The cancer patients treated with Multikine were shown to have much higher
rate of tumor cell killing, resulting in a 42% overall response rate, including
12% complete responses.

      The tumors of the 39 head & neck cancer patients were analyzed by three
independent pathologists, blinded to the study. Of the 19 Multikine treated
patients in this study, 2 patients (12%) had no remaining cancer cells, another
2 patients (12%) had a reduction in the cancer cell mass greater than 50% and an
additional 4 patients (21%) had a reduction in the cancer cell mass of more than
30%. The objective response rate in this trial was 21%, with an overall response
rate of 42%, as determined by pathology.

      This study, which used a three-week, non-toxic treatment with Multikine,
caused a shift from a low CD4/CD8 cell ratio (less than one CD4 cell for each
CD8 cell) to a high (over 2.5 - 3) CD4/CD8 cell ratio (2.5 - 3 CD4 cells for
each CD8 cell) in the tumor. This indicates that Multikine treatment shifts the
immune response from a mainly CD8 cell anti-tumor response to a predominately
CD4 anti-tumor response. Both CD4 and CD8 are key cells of the immune system.

      CEL SCI believes the change in the immune response from CD8 to CD4 cells
is very important for the cancer patient because the cancer cells seem to have
learned to shut down the CD8 anti-tumor immune response. This "shut-down" of the
CD8 cells was evident in the tumors of the control (non-Multikine treated)
group. The control group had predominately CD8 cell infiltrate which was
inactive against the tumor. The Multikine treated group, on the other hand, had
a predominately CD4 cell infiltrate. The tumor was unable, or less able, to shut
down the Multikine induced CD4 cell immune response and, as a result thereof,
the cancer patients treated with Multikine were shown to have a much higher rate
of tumor cell killing.

      In May 2006, CEL-SCI presented long-term survival data from its last Phase
II clinical trial in patients with head and neck cancer (oral squamous cell
carcinoma -- OSCC) treated with its anti-cancer drug Multikine. The addition of
Multikine as first-line treatment prior to the standard of care treatment
resulted in a 33% improvement in the median overall survival at 3 1/2 years
post-surgery, when compared to the results of 55 OSCC clinical trials published
in the scientific literature between 1987 and 2007. The data were presented at
the "Vaccine Discovery and Commercialization" conference in Philadelphia, PA.

      The long-term survival data were collected by the treating physicians in a
follow-up study of 22 patients with advanced untreated primary tumors, who were
enrolled in the Multikine Phase II clinical trial. The Multikine treatment


                                       8


regimen was administered to these patients prior to the standard of care
treatment (i.e., surgery + radiation or surgery + chemo-radiation). Informed
consent was obtained from all patients in the clinical trial and from 19
patients for the long-term follow-up study. Investigational Review Board /
Ethics Committee approval was provided before the initiation of the clinical
trial and again for the data collection in the follow-up study. The follow-up
study questionnaire assessed the overall survival and the local regional control
of the Multikine treated patients in this Phase II trial.

      Documented data were available for 19 of the 22 patients in the follow-up
portion of this clinical trial. Of the three patients who could not be evaluated
in the follow-up study, one patient was known to be alive, but failed to give
informed consent, and the other two were lost to follow-up. One patient died the
day after definitive surgery, unrelated to Multikine therapy.

      The median overall survival (calculated by including death from any cause
of patients in the trial, even deaths not related to the disease) of the 19
evaluable patients in the follow-up portion of this clinical trial was 63% at a
median follow-up of 40 months post-surgery. The results of the published
scientific literature (55 OSCC clinical trials published between 1987 and 2007)
document that survival at 3 1/2 years is approximately 47% following standard of
care treatment. The addition of Multikine to the standard of care treatment
resulted in a 33% increase in overall survival over the results published in the
literature.

      Multikine first-line treatment also resulted in a 2-year local regional
control (LRC) rate of 79%, as compared to the median 2-year LRC of 73% reported
in the same 39 scientific publications. Multikine treatment resulted in an
improvement over the published local regional control rate. It is clinically
recognized that recurrence of disease in head & neck cancer is associated with a
very poor prognosis.

      Multikine treatment did not result in any severe adverse events (SAE) in
this Phase II clinical trial. No SAEs related to Multikine have been reported in
other trials conducted with Multikine either.

      The data from CEL-SCI's Multikine Phase II clinical trial are thought to
be directly applicable to CEL-SCI's planned global Phase III clinical trial, as
the Multikine treatment regimen planned in the Phase III trial is identical to
that of the Multikine treatment in the Phase II Clinical trial.

      In January 2007, CEL-SCI received a no objection letter from the FDA
indicating that it could proceed with the Phase III protocol with Multikine in
head & neck cancer patients. The protocol for the Phase III clinical trial was
designed to develop conclusive evidence of the safety and efficacy of Multikine
in the treatment of advanced primary squamous cell carcinoma of the oral cavity.
CEL-SCI had previously received a "no objection" letter from the Canadian
Biologics and Genetic Therapies Directorate which enabled CEL-SCI to begin its
Phase III clinical trial in Canada.

      The Phase III trial will test the hypothesis that Multikine administered
prior to the current standard therapy for head and neck cancer patients
(surgical resection of the tumor and involved lymph nodes followed by


                                       9


radiotherapy or radiotherapy and concurrent chemotherapy) will extend the
overall survival, enhance the local/regional control of the disease and reduce
the rate of disease progression in patients with advanced oral squamous cell
carcinoma. A successful outcome from this trial should enable CEL-SCI to apply
for a Biologics License to market Multikine for the treatment of this patient
population.

      In May 2005, CEL-SCI was issued a new U.S. patent covering Multikine. The
patent, No. 6,896,879, relates to a new method for pre-sensitizing cancer with
Multikine prior to therapeutic treatment such as chemotherapy, radiation therapy
or immunotherapy.

      Multikine has also been tested in 15 HIV-infected patients (1998 - 1999)
in California. This small study found Multikine to be safe in the HIV-infected
population and showed preliminary evidence of improved delayed type
hypersensitivity response to recall antigens. The results of this study were
reported in Antiviral Therapy 5 (Supplement), 2000.

      Another study at the Thomas Jefferson Medical Center (1998) used very
small amounts of Multikine to determine the feasibility of injecting Multikine
into the prostate of 5 hormonal therapy refractive prostate cancer patients
scheduled for prostatectomy. Although deemed safe by the investigators,
Multikine administration in this trial directly into the prostate (under
ultrasound guidance) resulted in occasional mild dysuria and mild increase in
urinary frequency. Two out of the five treated cases had an inflammatory
response in the prostate and a third case had fibrosis. CEL-SCI believes that
more Multikine injections will need to be given to achieve a potential outcome
as seen in head & neck cancer. None of the prostate cancer patients received
more than half of the amounts given to the head & neck cancer patients. Also, no
testing was done at the time to determine if Multikine would enhance
susceptibility to radiation therapy in the prostate. The results of this trial
were published in Seminars in Oncology Vol. 26 (4) (August) 1999.

      In May 2001, CEL-SCI started a Phase I clinical trial at the University of
Maryland Biotechnology Institute (UMBI). The focus of this study was
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 was 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 may
safely boost the patients' immune systems to the point where their immune
systems can 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 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
(about 83%) and cervical cancer is considered an AIDS-defining illness.


                                       10


      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.

      At the March 2002 33rd Annual Meeting of the Society of Gynecological
Oncologists in Miami, Florida, scientists from UMBI and CEL-SCI presented data
from this trial in HIV-infected women with HPV induced cervical dysplasia. The
results were as follows: 8 patients had been treated with no major toxicity. The
lower dosage group had 3 out of 5 patients resolved/improved with 2 out of 5
patients with no change in their cervical dysplasia status as compared to the
patient's own baseline disease. The higher dosage group had 2 out of 3 patients
who improved and 1 out of 3 patients with no change. The changes in disease
status were determined by both Colposcopy and Histology.

      Subsequent HPV testing during 2001 and 2002 of the first three patients
revealed the elimination of HPV virus types (using in situ PCR) following
treatment with Multikine and ranged from 54% to 84% (Avg = 68%) reduction in HPV
virus in the cervical tissue of Multikine treated HIV/HPV co-infected patients.
The study was closed due to the inability to enroll further patients.

      CEL-SCI's future studies in the HPV-induced cervical dysplasia area will
only be conducted with grant or government funds as CEL-SCI plans to devote its
resources to head and neck cancer, the area where it has the most data.

      Since 1985, Multikine has been well tolerated in clinical studies
involving over 200 patients. Forty-eight patients were treated in the United
States in accordance with clinical trials authorized by the FDA. The remaining
patients were treated outside of the United States in accordance with protocols
authorized by comparable health regulatory authorities in the countries where
the patients were treated. All the clinical trials were conducted in accordance
with the Declaration of Helsinki (1985), and informed consent was obtained from
each patient volunteer. This process is the standard procedure for the conduct
of human clinical trials.

      Proof of efficacy for anti-cancer drugs is a lengthy and complex process.
At this 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.

Development, Supply and Distribution Agreements

      CEL-SCI has a development, supply and distribution agreement with Orient
Europharma of Taiwan. The agreement gave Orient Europharma the exclusive
marketing rights to Multikine for all cancer indications in Taiwan, Singapore,
Hong Kong and Malaysia. On November 3, 2008 CEL-SCI expanded its exclusive


                                       11


licensing agreement for Multikine with Orient Europharma. The new agreement
extends the Multikine collaboration to also cover South Korea, the Philippines,
Australia and New Zealand. As part of this new agreement, Orient Europharma
invested an additional $500,000 in CEL-SCI. The agreement provides for Orient
Europharma to fund the clinical trials needed to obtain marketing approvals in
these 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. Orient Europharma will
participate and pay for part of CEL-SCI's head and neck Phase III clinical
trial.

      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. As
of September 30, 2008, Orient Europharma had not started any clinical trials and
CEL-SCI agreed in December 2007 with Orient Europharma, that Orient EuroPharma
will participate in the global Phase III clinical trial by enrolling and paying
for a substantial number of patients in its territory. Orient Europharma will
also purchase Multikine from CEL-SCI for these patients at a rate established in
the November 2000 agreement.

      Pursuant to an agreement dated May 2003, Eastern Biotech will receive a
royalty equal to 2% of CEL-SCI's net sales of Multikine and CEL-1000 prior to
May 30, 2033.

      On August 19, 2008 CEL-SCI entered into an agreement with Teva
Pharmaceutical Industries Ltd. (Teva), a leading global pharmaceutical company,
under which CEL-SCI granted Teva an exclusive license to market and distribute
CEL-SCI's cancer drug Multikine in Israel and Turkey (the "Territory"). Although
the licensing agreement is initially restricted to the areas of head and neck
cancer, Teva has the right, subject to certain conditions, to include other
cancers during the term of the agreement. Multikine is currently thought to be
potentially useful in treating many tumor types.

      Pursuant to the agreement, Teva will participate in CEL-SCI's upcoming
global Phase III clinical trial. Teva will fund a portion of the Phase III
clinical study and Teva's clinical group will conduct part of the clinical study
in Israel under the auspices of CEL-SCI and its Clinical Research Organization.
Teva will also be responsible for registering Multikine in the Territory. If
Multikine is approved, CEL-SCI will be responsible for manufacturing the
product, while Teva will be responsible for sales in the Territory. Revenues
will be divided equally between CEL-SCI and Teva.

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 as well as
autoimmune, allergies, transplantation rejection and cancer, when it cannot do


                                       12


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.

     Using the LEAPS technology,  CEL-SCI discovered a peptide,  named CEL-1000,
which is currently being tested in animals for the prevention/treatment of avian
flu, herpes  simplex,  malaria,  viral  encephalitis,  smallpox,  vaccinia and a
number of other indications.  In addition,  CEL-SCI announced the discovery of a
novel peptide for the treatment of rheumatoid  arthritis.  This peptide,  called
CEL-2000,  was tested in a well established animal model of rheumatoid arthritis
and was compared to Enbrel(R),  a leading  treatment for people with  rheumatoid
arthritis.  The tests showed that CEL-2000 is equivalent or possibly superior to
Enbrel in  slowing  disease  progression  and  lessening  symptoms  in mice.  In
addition,  the vaccine has the potential to require fewer and smaller doses,  be
less toxic, more disease specific and much less invasive. Further data indicates
that, in mice  vaccinated  with CEL-2000  after  appearance of visible  disease,
statistically  significant less inflammation and permanent damage with regard to
1)  bone  erosion,  2)  cartilage  destruction,  and 3)  pannus  formation  were
observed.  These are some of the same  parameters that can be seen in rheumatoid
arthritis damage in humans.  CEL-2000 was as good as, and possibly  superior to,
Enbrel in slowing further disease progression as evaluated by these histological
parameters and by footpad swelling as well as externally visible joint damage.

      In May 2005, CEL-SCI scientists, in collaboration with scientists from the
laboratory of Dr. Noel Rose at The Johns Hopkins University Department of
Pathology, presented animal data showing that pretreatment and early therapy of
Experimental Autoimmune Myocarditis with a compound developed by CEL-SCI
resulted in significant reduction in heart enlargement and disease associated
histopathological changes. The compound used to achieve these results was
derived from CEL-SCI's patented LEAPS technology.

      The protection observed was statistically significant for both
pretreatment and early therapy. This protective effect was shown to be
antigen-specific and was associated with an increase in IL-13 in both the sera
and heart tissue and of IL-1a in the sera of the protected mice. Other studies
from Dr. Rose's laboratory with IL-13 knockout mice (mice missing the IL-13
gene) demonstrate the importance of IL-13 in this model of Experimental
Autoimmune Myocarditis and corroborated these findings.

      CEL-SCI has also evaluated the use of CEL-1000 as a vaccine adjuvant with
both hepatitis B Virus antigen and an antigen from Bird Influenza. These
findings were reported at two scientific conferences in April and May 2007.

      As of November 30, 2008, CEL-SCI was involved in a number of pre-clinical
studies with respect to its L.E.A.P.S. technology. CEL-SCI intends to continue
to prepare and submit scientific papers to disclose future results for CEL-1000,
CEL-2000 and the L.E.A.P.S. technology and to continue to apply for government
grants to help fund future studies. However CEL-SCI does not know what obstacles


                                       13


it will encounter in future pre-clinical and clinical studies involving its
L.E.A.P.S. technology.

RESEARCH AND DEVELOPMENT
------------------------

      Since 1983, and through September 30, 2008, approximately $59,319,600 has
been spent on CEL-SCI-sponsored research and development, including
approximately $4,101,600, $2,529,000, and $1,897,000 respectively during the
years ended September 30, 2008, 2007 and 2006.

      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 CEL-SCI's securities and
borrowings from third parties, including affiliates of CEL-SCI. The extent of
CEL-SCI's clinical trials and research programs is primarily based upon the
amount of capital available to CEL-SCI and the extent to which CEL-SCI has
received regulatory approvals for clinical trials.

GOVERNMENT REGULATION
---------------------

New drug development and approval process

      Regulation by governmental authorities in the United States and other
countries is a significant factor in the manufacture and marketing of biological
and other drug products and in ongoing research and product development
activities. CEL-SCI's products will require regulatory approval by governmental
agencies prior to commercialization. In particular, these products are subject
to rigorous preclinical and clinical testing and other premarket approval
requirements by the FDA and regulatory authorities in other countries. In the
United States, various statutes and regulations also govern or influence the
manufacturing, safety, labeling, storage, record keeping and marketing of
pharmaceutical and biological drug products. The lengthy process of seeking
these approvals, and the subsequent compliance with applicable statutes and
regulations, require the expenditure of substantial resources. CEL-SCI believes
that it is currently in compliance with applicable statutes and regulations that
are relevant to its operations. CEL-SCI has no control, however, over compliance
by its manufacturing and other partners.

      The FDA's statutes, regulations, or policies may change and additional
statutes or government regulations may be enacted which could prevent or delay
regulatory approvals of biological or other drug products. CEL-SCI cannot
predict the likelihood, nature or extent of adverse governmental regulation that
might arise from future legislative or administrative action, either in the U.S.
or abroad.

      Regulatory approval, when and if obtained, may be limited in scope. In
particular, regulatory approvals will restrict the marketing of a product to
specific uses. Further, approved biological and other drugs, as well as their
manufacturers, are subject to ongoing review. Discovery of previously unknown
problems with these products may result in restrictions on their manufacture,
sale or use or in their withdrawal from the market. Failure to comply with


                                       14


regulatory requirements may result in criminal prosecution, civil penalties,
recall or seizure of products, total or partial suspension of production or
injunction, as well as other actions affecting CEL-SCI. Any failure by CEL-SCI
or its manufacturing and other partners to obtain and maintain, or any delay in
obtaining, regulatory approvals could materially adversely affect CEL-SCI's
business.

      The process for new drug approval has many steps, including:

Preclinical testing

      Once a biological or other drug candidate is identified for development,
the drug candidate enters the preclinical testing stage. During preclinical
studies, laboratory and animal studies are conducted to show biological activity
of the drug candidate in animals, both healthy and with the targeted disease.
Also, preclinical tests evaluate the safety of drug candidates. These tests
typically take approximately two years to complete. Preclinical tests must be
conducted in compliance with good laboratory practice regulations. In some
cases, long-term preclinical studies are conducted while clinical studies are
ongoing.

Investigational new drug application

      When the preclinical testing is considered adequate by the sponsor to
demonstrate the safety and the scientific rationale for initial human studies,
an investigational new drug application (IND) is filed with the FDA to seek
authorization to begin human testing of the biological or other drug candidate.
The IND becomes effective if not rejected by the FDA within 30 days after
filing. The IND must provide data on previous experiments, how, where and by
whom the new studies will be conducted, the chemical structure of the compound,
the method by which it is believed to work in the human body, any toxic effects
of the compound found in the animal studies and how the compound is
manufactured. All clinical trials must be conducted under the supervision of a
qualified investigator in accordance with good clinical practice regulations.
These regulations include the requirement that all subjects provide informed
consent. In addition, an institutional review board (IRB), comprised primarily
of physicians and other qualified experts at the hospital or clinic where the
proposed studies will be conducted, must review and approve each human study.
The IRB also continues to monitor the study and must be kept aware of the
study's progress, particularly as to adverse events and changes in the research.
Progress reports detailing the results of the clinical trials must be submitted
at least annually to the FDA and more frequently if adverse events occur. In
addition, the FDA may, at any time during the 30-day period after filing an IND
or at any future time, impose a clinical hold on proposed or ongoing clinical
trials. If the FDA imposes a clinical hold, clinical trials cannot commence or
recommence without FDA authorization, and then only under terms authorized by
the FDA. In some instances, the IND process can result in substantial delay and
expense.

      Some limited human clinical testing may also be done under a physician's
IND that allows a single individual to receive the drug, particularly where the
individual has not responded to other available therapies. A physician's IND
does not replace the more formal IND process, but can provide a preliminary


                                       15


indication as to whether further clinical trials are warranted, and can, on
occasion, facilitate the more formal IND process.

      Clinical trials are typically conducted in three sequential phases, but
the phases may overlap.

Phase I clinical trials

      Phase I human clinical trials usually involve between 20 and 80 healthy
volunteers or patients and typically take one to two years to complete. The
tests study a biological or other drug's safety profile, and may seek to
establish the safe dosage range. The Phase I clinical trials also determine how
a drug candidate is absorbed, distributed, metabolized and excreted by the body,
and the duration of its action.

Phase II clinical trials

      In Phase II clinical trials, controlled studies are conducted on an
expanded population of patients with the targeted disease. The primary purpose
of these tests is to evaluate the effectiveness of the drug candidate on the
volunteer patients as well as to determine if there are any side effects or
other risks associated with the drug. These studies generally take several years
and may be conducted concurrently with Phase I clinical trials. In addition,
Phase I/II clinical trials may be conducted to evaluate not only the efficacy of
the drug candidate on the patient population, but also its safety.

Phase III clinical trials

      This phase typically lasts several years and involves an even larger
patient population, often with several hundred or even several thousand patients
depending on the use for which the drug is being studied. Phase III trials are
intended to establish the overall risk-benefit ratio of the drug and provide, if
appropriate, an adequate basis for product labeling. During the Phase III
clinical trials, physicians monitor the patients to determine efficacy and to
observe and report any reactions or other safety risks that may result from use
of the drug candidate.

Chemical and formulation development

      Concurrent with clinical trials and preclinical studies, companies also
must develop information about the chemistry and physical characteristics of the
drug and finalize a process for manufacturing the product in accordance with
current good manufacturing practice requirements (cGMPs). The manufacturing
process must be capable of consistently producing quality batches of the product
and the manufacturer must develop methods for testing the quality, purity, and
potency of the final drugs. Additionally, appropriate packaging must be selected
and tested and chemistry stability studies must be conducted to demonstrate that
the product does not undergo unacceptable deterioration over its shelf-life.


                                       16


New drug application or biological license application

      After the completion of the clinical trial phases of development, if the
sponsor concludes that there is substantial evidence that the biological or
other drug candidate is effective and that the drug is safe for its intended
use, a new drug application (NDA) or biologics license application (BLA) may be
submitted to the FDA. The application must contain all of the information on the
biological or other drug candidate gathered to that date, including data from
the clinical trials.

      The FDA reviews all NDAs and BLAs submitted before it accepts them for
filing. It may request additional information rather than accepting an
application for filing. In this event, the application must be resubmitted with
the additional information. The resubmitted application is also subject to
review before the FDA accepts it for filing. Once the submission is accepted for
filing, the FDA begins an in-depth review of the application. The FDA may refer
the application to an appropriate advisory committee, typically a panel of
clinicians, for review, evaluation and a recommendation. The FDA is not bound by
the recommendation of an advisory committee. If FDA evaluations of the NDA or
BLA and the manufacturing facilities are favorable, the FDA may issue an
approval letter authorizing commercial marketing of the drug or biological
candidate for specified indications. The FDA could also issue an approvable
letter, which usually contains a number of conditions that must be met in order
to secure final approval of the NDA or BLA. When and if those conditions have
been met to the FDA's satisfaction, the FDA will issue an approval letter. On
the other hand, if the FDA's evaluation of the NDA or BLA or manufacturing
facilities is not favorable, the FDA may refuse to approve the application or
issue a non-approvable letter.

      Among the conditions for NDA or BLA approval is the requirement that each
prospective manufacturer's quality control and manufacturing procedures conform
to current good manufacturing practice standards and requirements (cGMPs).
Manufacturing establishments are subject to periodic inspections by the FDA and
by other federal, state or local agencies.

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.
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 compounds that utilize
cytokines. However, CEL-SCI believes that its main advantage lies in two areas
and that those two areas will allow it to be successful: 1) Multikine is given
prior to surgery, radiation and/or chemotherapy, a time when the immune system
can still be activated effectively. Other companies give their immunotherapy


                                       17


drugs after these cancer treatments. At that time the immune system is already
so weakened that it can no longer mount a good immune response. 2) Multikine
simulates the activities of a healthy person's immune system, which battles
cancer every day. Multikine is multi-targeted; it is a cancer immunotherapy that
both kills cancer cells in a targeted fashion and activates the general immune
system to destroy the cancer. In addition, since Multikine is a complex
biologic, CEL-SCI believes that it will be close to impossible for someone to
copy Multikine.

      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 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.

      Once CEL-SCI has acquired the necessary funding to begin the Phase III
clinical trial, we will retain a Clinical Research Organization to establish an
accurate budget for the Phase III clinical trial.

EMPLOYEES
---------

      As of December 31, 2008, CEL-SCI had 30 employees. Nine employees are
involved in administration and 21 employees are involved in manufacturing.

ITEM 1A.  RISK FACTORS
----------------------

      Investors should be aware that the risks described below could adversely
affect the price of CEL-SCI's common stock.

Risks Related to CEL-SCI
------------------------

Since CEL-SCI has earned only limited revenues and has a history of losses,
CEL-SCI will require additional capital to remain in operation.

      CEL-SCI has had only limited revenues since it was formed in 1983. Since
the date of its formation and through September 30, 2008 CEL-SCI incurred net
losses of approximately $124,696,000. CEL-SCI has relied principally upon the
proceeds of public and private sales of its securities to finance its activities
to date. All of CEL-SCI's potential products, with the exception of Multikine,


                                       18


are in the early stages of development, and any commercial sale of these
products will be many years away. Even potential product sales from Multikine
are many years away as cancer trials can be lengthy. Accordingly, CEL-SCI
expects to incur substantial losses for the foreseeable future.

Since CEL-SCI does not intend to pay dividends on its common stock, any return
to investors will come only from potential increases in the price of CEL-SCI's
common stock.

      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 and CEL-SCI has no intention of paying any common
stock dividends.

If CEL-SCI cannot obtain additional capital, CEL-SCI may have to postpone
development and research expenditures and may be in default on its manufacturing
facility lease, which will delay CEL-SCI's ability to produce a competitive
product. Delays of this nature may depress the price of CEL-SCI's common stock.

      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. 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. 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
substantial 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.

      The extent of CEL-SCI's clinical trials and research programs are
primarily based upon the amount of capital available to CEL-SCI and the extent
to which CEL-SCI has received regulatory approvals for clinical trials. CEL-SCI
is currently in the process of establishing estimates of the future costs of the
Phase III clinical trial.

      In accordance with the terms of the manufacturing facility's lease,
CEL-SCI must maintain a certain amount of cash. Should CEL-SCI's cash position
fall below the amount stipulated in the lease CEL-SCI would be required to
deposit with the landlord the equivalent of one year's base rent.

      The inability of CEL-SCI to conduct clinical trials or research, whether
due to a lack of capital or regulatory approval, will prevent CEL-SCI from
completing the studies and research required to obtain regulatory approval for
any products which CEL-SCI is developing.

No definite plan for marketing of Multikine has been established.

      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 sell Multikine itself in certain markets and to enter into written marketing


                                       19


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 head and neck cancer.

      CEL-SCI may encounter problems, delays and additional expenses in
developing marketing plans with outside firms. In addition, even though
Multikine should be very cost effective to use if proven to increase overall
survival, 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.

Potential Future Dilution

      To raise additional capital CEL-SCI may have to sell shares of its common
stock or securities convertible into common stock at prices that may be below
the prevailing market price of CEL-SCI's common stock at the time of sale. The
issuance of additional shares will have a dilutive impact on other stockholders
and could have a negative effect on the market price of CEL-SCI's common stock.

      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.

Multikine is made from components of human blood which involves inherent risks
that may lead to product destruction or patient injury which could materially
harm CEL-SCI's financial results, reputation and stock price.

      Multikine is made, in part, from components of human blood. There are
inherent risks associated with products that involve human blood such as
possible contamination with viruses, including Hepatitis or HIV. Any possible
contamination could require CEL-SCI to destroy batches of Multikine or cause
injuries to patients who receive the product thereby subjecting CEL-SCI to
possible financial losses and harm to its business.

Although CEL-SCI has product liability insurance for Multikine, 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.

      Although no claims have been brought to date, participants in CEL-SCI's
clinical trials could bring civil actions against CEL-SCI for any unanticipated
harmful effects arising from the use of Multikine or any drug or product that
CEL-SCI may try to develop. Although CEL-SCI believes its insurance coverage of
$1,000,000 per claim is adequate, the defense or settlement of any product
liability claim could adversely affect CEL-SCI even if the defense and
settlement costs did not exceed CEL-SCI's insurance coverage.

CEL-SCI's directors are allowed to issue shares of preferred stock with
provisions that could be detrimental to the interests of the holders of
CEL-SCI's common stock.


                                       20



      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.

Our Independent Registered Public Accountants have issued a "Going Concern"
opinion raising doubt about our financial viability.

     As a result of our  continuing  losses,  negative cash flows,  and negative
working capital, our independent registered public accounting firm, BDO Seidman,
LLP,  issued a "going  concern"  opinion in  connection  with their audit of our
consolidated  financial  statements for the year ended  September 30, 2008. This
opinion  expressed  substantial  doubts as to our ability to continue as a going
concern.  The going concern  opinion could have an adverse impact on our ability
to execute our business  plan,  result in the  reluctance on the part of certain
suppliers  to do  business  with us, or  adversely  affect our  ability to raise
additional debt or equity capital.

Risks Related to Government Approvals
-------------------------------------

CEL-SCI's product candidates must undergo rigorous preclinical and clinical
testing and regulatory approvals, which could be costly and time-consuming and
subject CEL-SCI to unanticipated delays or prevent CEL-SCI from marketing any
products.

      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. Before obtaining marketing approval,
CEL-SCI's product candidates must undergo rigorous preclinical and clinical
testing which is costly and time consuming and subject to unanticipated delays.
There can be no assurance that such approvals will be granted.

      CEL-SCI cannot be certain when or under what conditions it will undertake
further clinical trials, including the Phase III clinical trial for Multikine.
The clinical trials of CEL-SCI's product candidates may not be completed on
schedule, the FDA or foreign regulatory agencies may order CEL-SCI to stop or
modify its research or these agencies may not ultimately approve any of
CEL-SCI's product candidates for commercial sale. Varying interpretations of the
data obtained from pre-clinical and clinical testing could delay, limit or
prevent regulatory approval of CEL-SCI's product candidates. The data collected
from CEL-SCI's clinical trials may not be sufficient to support regulatory
approval of its various product candidates, including Multikine. CEL-SCI's
failure to adequately demonstrate the safety and efficacy of any of its product
candidates would delay or prevent regulatory approval of its product candidates
in the United States, which could prevent CEL-SCI from achieving profitability.

      The requirements governing the conduct of clinical trials, manufacturing,
and marketing of CEL-SCI's product candidates, including Multikine, outside the
United States can vary from country to country. Foreign approvals may take
longer to obtain than FDA approvals and can require, among other things,
additional testing and different trial designs. Foreign regulatory approval
processes include all of the risks associated with the FDA approval processes.
Some of those agencies also must approve prices for products approved for
marketing. Approval of a product by the FDA does not ensure approval of the same
product by the health authorities of other countries. In addition, changes in
regulatory policy in the US or in foreign countries for product approval during
the period of product development and regulatory agency review of each submitted
new application may cause delays or rejections.


                                       21


      In addition to conducting further clinical studies of Multikine and
CEL-SCI's other product candidates, CEL-SCI also must undertake the development
of its manufacturing process and optimize its product formulations.

      CEL-SCI has only limited experience in filing and pursuing applications
necessary to gain regulatory approvals, which may impede its ability to obtain
timely approvals from the FDA or foreign regulatory agencies, if at all. CEL-SCI
will not be able to commercialize Multikine and other product candidates until
it has obtained regulatory approval, and any delay in obtaining, or inability to
obtain, regulatory approval could harm its business. In addition, regulatory
authorities may also limit the types of patients to which CEL-SCI or others may
market Multikine or CEL-SCI's other products.

Even if CEL-SCI obtains regulatory approval for its product candidates, CEL-SCI
will be subject to stringent, ongoing government regulation.

      If CEL-SCI's products receive regulatory approval, either in the United
States or internationally, CEL-SCI will be subject to extensive regulatory
requirements. These regulations are wide-ranging and govern, among other things:

     o    product design, development and manufacture;
     o    adverse drug experience;
     o    product advertising and promotion;
     o    product   manufacturing,   including   good   manufacturing   practice
          requirements;
     o    record keeping requirements;
     o    registration and listing of CEL-SCI's establishments and products with
          the FDA and certain state agencies;
     o    product storage and shipping;
     o    drug sampling and distribution requirements;
     o    electronic record and signature requirements; and
     o    labeling changes or modifications.

      CEL-SCI and any third-party manufacturers or suppliers must continually
adhere to federal regulations setting forth requirements, known as current Good
Manufacturing Practices, or cGMPs, and their foreign equivalents, which are
enforced by the FDA and other national regulatory bodies through their
facilities inspection programs. If CEL-SCI's facilities, or the facilities of
its contract manufacturers or suppliers, cannot pass a pre-approval plant
inspection, the FDA will not approve the marketing applications of CEL-SCI's
product candidates. In complying with cGMP and foreign regulatory requirements,
CEL-SCI and any of its potential third-party manufacturers or suppliers will be
obligated to expend time, money and effort in production, record-keeping and
quality control to ensure that its products meet applicable specifications and
other requirements. State regulatory agencies and the regulatory agencies of
other countries have similar requirements.

      If CEL-SCI does not comply with regulatory requirements at any stage,
whether before or after marketing approval is obtained, it may be subject to
license suspension or revocation, criminal prosecution, seizure, injunction,
fines, or be forced to remove a product from the market or experience other


                                       22


adverse consequences, including restrictions or delays in obtaining regulatory
marketing approval, which could materially harm CEL-SCI's financial results,
reputation and stock price. Additionally, CEL-SCI may not be able to obtain the
labeling claims necessary or desirable for product promotion. CEL-SCI may also
be required to undertake post-marketing trials. In addition, if CEL-SCI or other
parties identify adverse effects after any of CEL-SCI's products are on the
market, or if manufacturing problems occur, regulatory approval may be
withdrawn. CEL-SCI may be required to reformulate its products, conduct
additional clinical trials, make changes in its product's labeling or
indications of use, or submit additional marketing applications to support these
changes. If CEL-SCI encounters any of the foregoing problems, its business and
results of operations will be harmed and the market price of our common stock
may decline.

      Also, the extent of adverse government regulations which might arise from
future legislative or administrative action cannot be predicted. Without
government approval, CEL-SCI will be unable to sell any of its products.

Risks Related to Intellectual Property
--------------------------------------

CEL-SCI may not be able to achieve or maintain a competitive position and other
technological developments may result in CEL-SCI's proprietary technologies
becoming 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 companies are working on drugs designed to cure or treat cancer and
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, smaller companies and non-profit institutions are
active in research relating to cancer and infectious diseases.

CEL-SCI's patents might not protect CEL-SCI's technology from competitors, in
which case CEL-SCI may not have any advantage over competitors in selling any
products which it may develop.

      Certain aspects of CEL-SCI's technologies are covered by U.S. and foreign
patents. In addition, CEL-SCI has a number of new 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


                                       23


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.

Risks Related to CEL-SCI's Common Stock
---------------------------------------

Since the market price for CEL-SCI's common stock is volatile, investors may not
be able to sell any of CEL-SCI's shares at a profit.

      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. During the year ended September 30, 2008, CEL-SCI's stock
price has ranged from a low of $0.37 per share to a high of $0.78 per share.
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 future market price of CEL-SCI's
common stock.

Shares issuable upon the conversion of the Series K notes, the payment of
interest or principal on the Series K notes, the exercise of the Series K
warrants, or the exercise of other outstanding options and warrants, may
substantially increase the number of shares available for sale in the public
market and may depress the price of CEL-SCI's common stock.

      CEL-SCI had outstanding convertible notes, options and warrants which as
of November 30, 2008 could potentially allow the holders to acquire up to
approximately 174,100,000 additional shares of its common stock. Until the
options and warrants expire, or the convertible notes are paid, or the options
or warrants 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 convertible notes, options and warrants may
convert or exercise these securities at a time when CEL-SCI could obtain
additional capital on terms more favorable than those provided by the options.
The conversion of the notes or the exercise of the options and warrants will
dilute the voting interest of the owners of presently outstanding shares by
adding a substantial number of additional shares of CEL-SCI's common stock.

      CEL-SCI has filed registration statements with the Securities and Exchange
Commission so that substantially all of the shares of common stock which are
issuable upon the exercise of outstanding options and warrants may be sold in
the public market. The sale of common stock issued or issuable upon the exercise


                                       24


of the warrants described above, or the perception that such sales could occur,
may adversely affect the market price of CEL-SCI's common stock.

ITEM 1B. UNRESOLVED SEC COMMENTS
--------------------------------

      None

ITEM 2.   PROPERTIES
--------------------

      CEL-SCI leases office space at 8229 Boone Blvd., Suite 802, Vienna,
Virginia at a monthly rental of approximately $7,590. The lease on the office
space expires in June 2012. CEL-SCI believes this arrangement is adequate for
the conduct of its present business.

      CEL-SCI has a 17,900 square foot laboratory located at 4820 A-E Seton
Drive, Baltimore, Maryland. The laboratory is leased by CEL-SCI at a cost of
approximately $10,556 per month. The laboratory lease expires in 2009, with an
extension available until 2014.

     In August 2007,  CEL-SCI leased a building near  Baltimore,  Maryland.  The
building, which consists of approximately 73,000 square feet, has been remodeled
in accordance with CEL-SCI's specifications so that it can be used by CEL-SCI to
manufacture  Multikine for CEL-SCI's  Phase III clinical  trial and sales of the
drug if approved by the FDA. The lease  expires on October 31, 2028 and requires
annual base rent payments of $1,575,000  during the year ending 2009. The annual
base rent escalates each year  thereafter at 3%. CEL-SCI is also required to pay
all real and personal property taxes, insurance premiums,  maintenance expenses,
repair costs and utilities. The lease allows CEL-SCI, at its election, to extend
the lease for two ten-year periods or to purchase the building at the end of the
20-year  lease.  The  lease  requires  CEL-SCI  to pay  $3,150,000  towards  the
remodeling  costs,  which will be recouped by reductions in the annual base rent
of $303,228 beginning in 2014. In July 2008, CEL-SCI was required to deposit the
equivalent  of one  year's  base  rent in  accordance  with  the  contract.  The
$1,575,000 was required to be deposited when the amount of cash CEL-SCI had fell
below the amount  stipulated in the lease. In December 2008,  CEL-SCI was not in
compliance with certain lease requirements (i.e.,  failure to pay an installment
of Base Annual Rent). However, the landlord has not declared CEL-SCI formally in
default  under the terms of the lease.  The landlord  currently has the right to
declare  CEL-SCI in default if CEL-SCI fails to pay any  installment of the Base
Annual Rent when such failure  continues  for a period of 5 business  days after
CEL-SCI's receipt of written notice thereof from the Landlord,  provided that if
CEL-SCI fails to pay any of the  foregoing  within 5 business days more than two
(2) times in any twelve (12) month  period  during the lease term,  the Landlord
shall not be required  to provide  CEL-SCI  with any further  notice and CEL-SCI
shall be deemed to be in default.  CEL-SCI is currently in negotiation  with the
Landlord  for rent  deferral  on the lease in order to  conserve  its  cash.  If
CEL-SCI  does not  renegotiate  the  lease,  CEL-SCI  plans to either  obtain an
additional  loan from Mr. de Clara or use the equity  line of credit to make the
rent payments.

ITEM 3.   LEGAL PROCEEDINGS
---------------------------

      None.

                                       25


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------------------------------------------------------------

      Not applicable.

ITEM 5.   MARKET FOR REGISTRANT'S  COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES

      As of November 30, 2008, there were approximately 2,500 record holders of
CEL-SCI's common stock. CEL-SCI's common stock is traded on the NYSE Alternext
US (formerly the American Stock Exchange) under the symbol "CVM". Set forth



below are the range of high and low quotations for CEL-SCI's common stock for
the periods indicated as reported on the NYSE Alternext US. The market
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commissions and may not necessarily represent actual transactions.

      Quarter Ended           High               Low
      -------------           ----               ---

        12/31/06              $0.81             $0.55
         3/31/07              $0.90             $0.56
         6/30/07              $1.08             $0.71
         9/30/07              $0.76             $0.57

        12/31/07              $0.64             $0.48
         3/31/08              $0.74             $0.37
         6/30/08              $0.71             $0.60
         9/30/08              $0.78             $0.40

      Holders of common stock are entitled to receive dividends as may be
declared by the Board of Directors out of legally available funds 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.

      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

                                       26


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.

      The graph below compares the cumulative 5-year total return of holders of
CEL-SCI Corporation's common stock with the cumulative total returns of the AMEX
Composite index, and a customized peer group of three companies that includes:
IDM Pharma Inc, Neoprobe Corp. and Orchestra Therapeutics Inc. The graph tracks
the performance of a $100 investment in our common stock, in the peer group, and
the index (with the reinvestment of all dividends) from September 30, 2003 to
September 30, 2008.

                          9/03    9/04    9/05    9/06     9/07    9/08
------------------------------------------------------------------------

CEL-SCI Corporation     100.00   61.29   50.54   66.67    67.23   43.01
AMEX
Composite               100.00  127.97  188.44  212.08   270.41  208.31
Peer Group              100.00   80.89   36.12   19.51    10.29   16.10


     The stock  price  performance  included  in this  graph is not  necessarily
indicative of future stock price performance.


                                       27



ITEM 6.  SELECTED FINANCIAL DATA
--------------------------------

     The following selected historical consolidated financial data are qualified
by  reference  to,  and  should  be read in  conjunction  with the  consolidated
financial statements and the related notes thereto,  appearing elsewhere in this
report, as well as Item 7 of this report.


                                                                         
                                             For the years ended September 30,
                              ---------------------------------------------------------------
Statements of Operations        2008          2007         2006          2005          2004
------------------------     ---------------------------------------------------------------

Grant revenue and other      $  5,065    $   57,043    $  125,457    $  269,925      $325,479
Operating expenses:
Research and development    4,101,563     2,528,528     1,896,976     2,229,729     1,941,630
 Depreciation and
     amortization             215,060       176,186       170,903       190,420       198,269
General and
  administrative            5,200,735     6,704,538     3,406,774     1,930,543     2,310,279
Gain on derivative
  instruments               1,799,393       868,182     2,325,784       363,028     1,174,660
Other income                        -             -             -       625,472             -
Other costs of financing            -             -    (4,791,548)            -             -
Interest income               483,252       562,973        92,487        52,660        51,817
Interest expense             (473,767)   (1,708,603)     (216,737)            -       (53,855)
                          ------------  ------------  ------------  ------------  ------------
Net loss                   (7,703,415)  $(9,629,657)   (7,939,210)   (3,039,607)   (2,952,077)
                          ------------  ------------  ------------  ------------  ------------
Dividends                    (424,815)            -             -             -             -
                          ------------  ------------  ------------  ------------  ------------
Net loss available to
common shareholders       $(8,128,230)  $(9,629,657)  $(7,939,210)  $(3,039,607)  $(2,952,077)
                          ------------  ------------  ------------  ------------  ------------

Statements of Operations
------------------------

Net loss per common share
    Basic                 $     (0.07)  $     (0.10)  $     (0.10)  $     (0.04)  $     (0.04)
    Diluted               $     (0.07)  $     (0.10)  $     (0.11)  $     (0.05)  $     (0.06)

Weighted average common
  shares outstanding
    Basic                 117,060,866    97,310,488    78,971,290    72,703,395    67,273,133
    Diluted (1)           117,060,866    97,310,488    93,834,078    73,581,925    68,924,099


                                       28


                                                       September 30,
                              ---------------------------------------------------------------
Balance Sheets                  2008          2007         2006          2005          2004
---------------               ---------------------------------------------------------------

Working capital           $(2,492,555)  $10,257,568   $ 7,109,879   $ 2,235,297   $ 4,592,332
Total assets               14,683,672    20,730,802     9,653,277     3,092,352     5,513,810
Derivative instruments -
  current (2)               3,018,697       782,732     1,670,234         1,280             -
Derivative instruments -
  noncurrent (2)                    -     4,831,252     8,645,796       811,180     1,175,488
Total liabilities           3,847,637     6,060,703    10,583,878       987,313     1,391,468
Stockholders' equity
  (deficit)                10,836,035    14,670,099      (930,601)    2,105,039     4,122,342




(1) The calculation of diluted earnings per share for the year ended September
    30, 2007 and 2008 equals the basic earnings per share because the
    calculation would have been anti-dilutive.
(2) Included in total liabilities.

     No dividends  have been  declared on CEL-SCI's  common stock.  However,  in
December 2007, warrants held by outsiders were extended, resulting in a $424,815
charge,  which  was  treated  as a deemed  dividend  and is shown as such in the
consolidated   financial   statements.   No  actual   dividends   were  paid  to
shareholders.

      CEL-SCI's net losses for each fiscal quarter during the two years ended
September 30, 2008 were:

                                            Net income  (loss) per share
                      Net income            ----------------------------
Quarter                 (loss)              Basic                 Diluted
-------              ------------           -----                 -------

12/31/2006         $ (1,112,359)          $ (0.01)              $  (0.01)
3/31/2007          $ (2,723,885)          $ (0.03)              $  (0.03)
6/30/2007          $ (5,554,976)          $ (0.05)              $  (0.05)
9/30/2007          $   (238,437)          $ (0.00)              $  (0.00)

12/31/2007         $ (2,267,550)          $ (0.02)              $  (0.02)
3/31/2008          $ (3,210,294)          $ (0.03)              $  (0.03)
6/30/2008          $ (1,989,278)          $ (0.02)              $  (0.02)
9/30/2008          $   (684,389)          $ (0.01)              $  (0.01)

     The Company has  experienced  large swings in its quarterly  losses in 2008
and 2007.  These  swings  are  caused by the  changes  in the fair  value of the
convertible  debt each quarter.  These changes in the fair value of the debt are
recorded on the consolidated statements of operations.  In addition, the cost of
options granted to consultants, as discussed in the results of operations in the
10K, has affected the quarterly losses recorded by the Company.

                                       29



ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

     The  following   discussion   should  be  read  in  conjunction   with  the
consolidated  financial  statements  and the  related  notes  thereto  appearing
elsewhere in this report.

OVERVIEW
--------

     CEL-SCI's most advanced  product,  Multikine,  which is cleared for a Phase
III  clinical  trial in the U.S.  and in  Canada,  is  being  developed  for the
treatment  of  cancer.  It is the first of a new  class of cancer  immunotherapy
drugs  called  Immune  SIMULATORs.  It  simulates  the  activities  of a healthy
person's   immune  system,   which  battles  cancer  every  day.   Multikine  is
multi-targeted; it is the only cancer immunotherapy that both kills cancer cells
in a targeted  fashion and  activates  the general  immune system to destroy the
cancer.  We  believe  Multikine  is  the  first  immunotherapeutic  agent  being
developed  as a  first-line  standard  of care  treatment  for  cancer and it is
cleared for a global Phase III clinical  trial in advanced  primary  (previously
untreated) head and neck cancer patients.

      Multikine is a new type of immunotherapy in that it is a comprehensive
immunotherapy, incorporating both active and passive immune activity. A
comprehensive immunotherapy most closely resembles the workings of the natural
immune system in the sense that it works on multiple fronts in the battle
against cancer. A comprehensive immunotherapy causes a direct and targeted
killing of the tumor cells and activates the immune system to produce a more
robust and sustainable anti-tumor response.

      Multikine is designed to target the tumor micro-metastases that are mostly
responsible for treatment failure. The basic concept is to add Multikine to the
current cancer treatments with the goal of making the overall cancer treatment
more successful. Phase II data indicated that Multikine treatment resulted in a
substantial increase in the survival of patients. The lead indication is
advanced primary (previously untreated) head & neck cancer (about 600,000 new
cases per annum). Since Multikine is not tumor specific, it may also be
applicable in many other solid tumors.

      We believe Multikine is the first immunotherapeutic agent being developed
as a first-line treatment for cancer. It is administered prior to any other
cancer therapy because that is the period when the anti-tumor immune response
can still be fully activated. Once the patient has had surgery or has received
radiation and/or chemotherapy, the immune system is severely weakened and is
less able to mount an effective anti-tumor immune response. To date, other
immunotherapies have been administered later in cancer therapy (i.e., after
radiation, chemotherapy, surgery).

      CEL-SCI also owns a pre-clinical technology called L.E.A.P.S. (Ligand
Epitope Antigen Presentation System).

      Since inception, CEL-SCI has financed its operations through the issuance
of equity securities, convertible notes, loans and certain research grants.
CEL-SCI's expenses will likely exceed its revenues as it continues the

                                       30


development of Multikine and brings other drug candidates into clinical trials.
Until such time as CEL-SCI becomes profitable, any or all of these financing
vehicles or others may be utilized to assist CEL-SCI's capital requirements.

Results of Operations
---------------------

Fiscal 2008
-----------

     Grant  revenue  and  other  decreased  by  $51,978  during  the year  ended
September 30, 2008,  compared to fiscal 2007,  due to the completion of the work
funded by the grants.  The final grant ended on March 31, 2007. A training grant
in the amount of $3,535 was received from the State of Maryland  during the year
ended September 30, 2008. In addition, CEL-SCI received rent on an office sublet
during a portion of the fiscal year 2008.

     During the year ended September 30, 2008, research and development expenses
increased  by  $1,573,035  compared to fiscal  2007.  This  increase  was due to
expenses  relating  to the  preparation  for the  Phase  III  clinical  trial on
Multikine.

     During  the year ended  September  30,  2008,  general  and  administrative
expenses  decreased  by  $1,503,803  compared  to fiscal  2007.  This change was
primarily due to stock issued to consultants in 2007 (approximately  $1,825,000)
and a  reduction  in  the  public  relations  and  presentations  (approximately
$43,400) from fiscal 2007. This reduction on stock and public relation costs was
partially  offset  by  an  increase  in  filing  fees  (approximately  $41,600),
insurance ($35,000) and the implementation costs of Sarbanes-Oxley  requirements
(approximately $16,700).

     Interest  income  during the year ended  September  30, 2008  decreased  by
$79,721  compared to fiscal 2007. The decrease was due to fewer funds  available
for investment. This decrease was partially offset by interest income accrued on
the deferred rent on the manufacturing facility (approximately $190,550).

     The  gain on  derivative  instruments  of  $1,799,393  for the  year  ended
September  30,  2008 was the  result of the change in fair value of the Series K
Notes  and  Series K  Warrants  during  the year.  These  gains  were  caused by
fluctuations in the share price of CL-SCI's common stock.

     The interest  expense of $473,767 for the year ended September 30, 2008 was
composed of three elements: 1) amortization of the Series K discount ($249,106),
2)  interest  paid  and  accrued  on the  Series K debt  ($217,140)  and 3) loan
interest ($7,521).  This is a decline of approximately  $1,234,836 from the year
ended September 30, 2007 due to the lower principal balance of Series K notes.

Fiscal 2007
-----------

      Grant revenues and other decreased by approximately $68,400 during the
year ended September 30, 2007 compared to the previous year due to the
completion of the grant in March 2007.

      During the year ended September 30, 2007, research and development
expenses increased by approximately $631,600 compared to the year ended
September 30, 2006. This increase was due to work on two new CEL-1000 projects

                                       31


and the use of lab supplies in the preparation for the beginning of the Phase
III trials on Multikine.

      During the year ended September 30, 2007, general and administrative
expenses increased by approximately $3,297,800 compared to the year ended
September 30, 2006. This change was primarily due to: (1) increased public
relations, presentations and strategic consulting agreements (approximately
$3,231,000); (2) additional accounting expenses relating to the valuation of the
Series K notes and warrants (approximately $76,100), and, (3) increased travel
by CEL-SCI's employees (approximately $37,500).

      During the year ended September 30, 2007, interest income increased by
approximately $470,500 compared to the year ended September 30, 2006 due to
interest earned on the funds received from the sale of the Series K notes and
the shares of common stock sold in April 2007.

      The gain on derivative instruments of approximately $868,200 for the year
ended September 30, 2007, was the result of the change in fair value of the
Series K notes and warrants during the period.

      The interest expense of approximately $1,708,600 for the year ended
September 30, 2007 was composed of two elements: (1) amortization of the
discounted Series K notes (approximately $1,180,400) and (2) interest paid and
accrued on the Series K warrants (approximately $528,200).

Research and Development Expenses
---------------------------------

      During the five years ended September 30, 2008 CEL-SCI's research and
development efforts involved Multikine and L.E.A.P.S. The table below shows the
research and development expenses associated with each project during this
five-year period.

                      2008         2007         2006        2005       2004
                      ----         ----         ----        ----       ----

MULTIKINE          $3,765,258  $2,217,108  $1,656,362  $1,911,615  $1,539,454
L.E.A.P.S.            336,305     311,420     240,614     318,114     402,176
                 ------------------------------------ -----------------------

       TOTAL       $4,101,563  $2,528,528  $1,896,976  $2,229,729  $1,941,630
                   ==========  ==========  ==========  ==========  ==========

      In January 2007, FDA gave the go-ahead for the Phase III clinical trial
which had earlier been cleared by the Canadian regulatory agency, the Biologics
and Genetic Therapies Directorate.

      As explained in Item 1 of this report, as of September 30, 2008, CEL-SCI
was involved in a number of pre-clinical studies with respect to its L.E.A.P.S.
technology. As with Multikine, CEL-SCI does not know what obstacles it will
encounter in future pre-clinical and clinical studies involving its L.E.A.P.S.
technology. Consequently, CEL-SCI cannot predict with any certainty the funds
required for future research and clinical trials and the timing of future
research and development projects.

                                       32


      CEL-SCI's lead product, Multikine, has been cleared for a global Phase III
clinical trial in advanced primary (previously untreated) head and neck cancer
patients. CEL-SCI is currently working on partnerships and joint ventures to
finance the part of the Phase III clinical trial that is not currently funded by
its partners. Once CEL-SCI raises the necessary funding to begin the Phase III
clinical trial, we will retain a Clinical Research Organization to establish an
accurate budget for the Phase III clinical trial.

      Clinical and other studies necessary to obtain regulatory approval of a
new drug involve significant costs and require several years to complete. The
extent of CEL-SCI's clinical trials and research programs are primarily based
upon the amount of capital available to CEL-SCI and the extent to which CEL-SCI
has received regulatory approvals for clinical trials. The inability of CEL-SCI
to conduct clinical trials or research, whether due to a lack of capital or
regulatory approval, will prevent CEL-SCI from completing the studies and
research required to obtain regulatory approval for any products which CEL-SCI
is developing. Without regulatory approval, CEL-SCI will be unable to sell any
of its products.

      Since all of CEL-SCI's projects are under development, CEL-SCI cannot
predict when it will be able to generate any revenue from the sale of any of its
products.

Liquidity and Capital Resources
-------------------------------

      CEL-SCI has had only limited revenues from operations since its inception
in March l983. CEL-SCI has relied primarily upon proceeds realized from the
public and private sale of its common and preferred stock and convertible notes
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, and later purchase of, 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 research and
development sponsored by CEL-SCI, 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.

     CEL-SCI's  working capital at September 30, 2008 was $(2,492,555)  compared
to $10,257,568 at September 30, 2007. The convertible debt of $2,240,715 and the
short-term  loan of $200,000  (repaid in  November  2008) are the only debt that
CEL-SCI has outstanding.

      During fiscal year 2008, cash and cash equivalents decreased by
approximately $10,281,800 over fiscal year 2007. Net cash provided by financing
activities totaled approximately $183,150 and resulted primarily from the
issuance of stock and was used for the new manufacturing facility and equipment
purchases and patent costs.

      Cash used in investing activities totaled $2,523,123. The additional cost
of the manufacturing facility totaled $2,359,473 and equipment purchases, most
for the manufacturing facility, totaled $1,023,011. In addition, expenditures
for patent costs during the fiscal year were $121,616.

      Components of the cash used in operating activities ($7,941,790), were the
net loss of $7,703,415 and the cost of stock and options issued, options and
warrants extended and repriced, to both employees and nonemployees of
$2,841,201. The gain on derivative instruments of $1,799,393 and an additional
deposit on the manufacturing facility ($1,575,000) required by the contract were
other major components of the cash used in operating activities.

      In August 2007, CEL-SCI leased a building near Baltimore, Maryland. The
building, which consists of approximately 73,000 square feet, has been remodeled
in accordance with CEL-SCI's specifications so that it can be used by CEL-SCI to
manufacture Multikine for CEL-SCI's Phase III clinical trials and sales of the

                                       33


drug if approved by the FDA. The lease  expires on October 31, 2028 and requires
annual base rent payments of $1,575,000 during the year ending October 31, 2009.
The annual  base rent  escalates  each year  thereafter  at 3%.  CEL-SCI is also
required  to pay all real  and  personal  property  taxes,  insurance  premiums,
maintenance expenses,  repair costs and utilities.  The lease allows CEL-SCI, at
its  election,  to extend the lease for two ten-year  periods or to purchase the
building  at the end of the 20-year  lease.  The lease  required  CEL-SCI to pay
$3,150,000 towards the remodeling costs, which will be recouped by reductions in
the annual base rent of $303,228  beginning in 2014.

     In  December  2008,  CEL-SCI  was  not in  compliance  with  certain  lease
requirements (i.e., failure to pay an installment of Base Annual Rent). However,
the landlord has not declared CEL-SCI formally in default under the terms of the
lease.  The landlord  currently  has the right to declare  CEL-SCI in default if
CEL-SCI fails to pay any  installment  of the Base Annual Rent when such failure
continues  for a period of 5 business  days after  CEL-SCI's  receipt of written
notice  thereof from the Landlord,  provided that if CEL-SCI fails to pay any of
the foregoing  within 5 business days more than two (2) times in any twelve (12)
month  period  during the lease  term,  the  Landlord  shall not be  required to
provide  CEL-SCI  with any further  notice and CEL-SCI  shall be deemed to be in
default. CEL-SCI is currently in negotiation with the Landlord for rent deferral
on the lease in order to conserve its cash. If we do not  renegotiate  the lease
we plan to either get an additional loan from Mr. deClara or use the equity line
of credit to make the rent payments.

      Regulatory authorities prefer to see biologics, such as Multikine,
manufactured for commercial sale in the same facility used to produce dosages
used in Phase III clinical trials since this arrangement helps to ensure that
the drug lots used to conduct the clinical trials will be consistent with those
that nay be subsequently sold commercially. Although some biotech companies
outsource their manufacturing, this can prevent problems since biologics require
intense manufacturing and process control. With biologic products a minor change
in manufacturing and process control can result in a major change in the final
product. Good and consistent manufacturing and process control is critical and
is best assured if the product is manufactured and controlled in the
manufacturer's own facility by its own specially trained personnel.

      On August 4, 2006, CEL-SCI sold Series K convertible notes, plus Series K
warrants, to independent private investors for $8,300,000. The Notes bear
interest annually at the greater of 8% or 6 month LIBOR plus 3% per year. The
Notes are due and payable on August 4, 2011 and are secured and collateralized
by substantially all of CEL-SCI's assets.

      Interest is payable quarterly. Since March 2007 CEL-SCI has been required
to make monthly payments of $207,500 toward the principal amount of the Notes.
If CEL-SCI fails to make any interest or principal payment when due, the Notes
will become immediately due and payable.

      At CEL-SCI's election, and under certain conditions, CEL-SCI may use
shares of its common stock to make interest and principal payments.

      At the holder's option the Series K notes are convertible into shares of
the Company's common stock at a Conversion Price of $0.75.

      If CEL-SCI sells any additional shares of common stock, or any securities
convertible into common stock at a price below the then applicable Conversion
Price, the Conversion Price will be lowered to the price at which the shares
were sold or the lowest price at which the securities are convertible, as the
case may be. If CEL-SCI sells any additional shares of common stock, or any
securities convertible into common stock at a price above the Conversion Price,
but below the average closing price of CEL-SCI's common stock over the five
trading days prior to the sale of the shares, the Conversion Price will be
lowered to a price determined by a formula contained in the Notes. The
Conversion Price will also be proportionately adjusted in the event of any stock
splits.


                                       34


      CEL-SCI has filed a registration statement with the Securities and
Exchange Commission so that the shares of common stock issuable upon the
conversion of the Series K notes or the exercise of the Series K warrants may be
resold in the public market. CEL-SCI is required to keep the registration
statement continuously effective until the shares covered by the registration
statement have been sold or can be sold pursuant to Rule 144(k). If CEL-SCI
fails to comply with this provision, CEL-SCI will be required to pay damages to
the holders of the Notes.

      At any time after August 4, 2009 any Note holder will have the right to
require CEL-SCI to redeem all or any portion of the outstanding principal amount
of the Notes, plus all accrued but unpaid interest.

      The Series K warrants allow the holders to purchase up to 4,825,581 shares
of CEL-SCI's common stock at a price of $0.75 per share at any time prior to
February 4, 2012.

      The exercise price of the Series K warrants, as well as the shares
issuable upon the exercise of the warrants, will be proportionately adjusted in
the event of any stock splits.

      If CEL-SCI sells any additional shares of common stock, or any securities
convertible into common stock at a price below the then applicable exercise
price of the Series K warrants, the warrant exercise price will be lowered to
the price at which the shares were sold or the lowest price at which the
securities are convertible, as the case may be.

      If CEL-SCI sells any additional shares of common stock or any securities
convertible into common stock at a price above the exercise price but below the
market price of CEL-SCI's common stock, the exercise price of the Series K
warrants will be lowered to a price determined by a formula contained in the
warrants.

      As of September 30, 2008, Series K notes in the principal amount of
$4,399,284 had been converted into 5,744,765 shares of CEL-SCI's common stock.
In addition, principal payments of $1,452,500 in cash and $207,500 in shares of
common stock were made to the holders of the Series K notes. As of September 30,
2008 the outstanding principal balance on the Series K notes was $2,240,715.

      In April 2007 CEL-SCI raised $15,000,000 from the sale of 19,999,998
shares of its common stock at a price of $0.75 per share. The investors who
purchased the shares also received warrants which entitle the holders to
purchase 10,000,000 shares of CEL-SCI's common stock at a price of $0.75 per
share and warrants to purchase an additional 10,000,000 shares of common stock
at a price of $2.00 per share. The warrants expire on March 31, 2012.

      As a result of the April 2007 financing, and in accordance with the terms
of the Series K notes and warrants, the conversion price of the Series K notes
was reduced to $0.75 and the exercise price of the Series K warrants was reduced
to $0.75.

      On August 18, 2008, CEL-SCI sold 1,383,389 shares of common stock and
2,075,084 warrants in a private financing for $1,037,500. The shares were sold
at $0.75, a significant premium over the closing price of CEL-SCI's common stock
on the date of sale. Each warrant entitles the holder to purchase one share of


                                       35


CEL-SCI's common stock at a price of $0.75 per share at any time prior to August
18, 2014. The shares have no registration rights.

      Clinical and other studies necessary to obtain regulatory approval of a
new drug involve significant costs and require several years to complete. The
extent of CEL-SCI's clinical trials and research programs are primarily based
upon the amount of capital available to CEL-SCI and the extent to which CEL-SCI
has received regulatory approvals for clinical trials. The inability of CEL-SCI
to conduct clinical trials or research, whether due to a lack of capital or
regulatory approval, will prevent CEL-SCI from completing the studies and
research required to obtain regulatory approval for any products which CEL-SCI
is developing. Without regulatory approval, CEL-SCI will be unable to sell any
of its products.

Future Capital Requirements
---------------------------

     CEL-SCI has two partners who have agreed to participate in and pay for part
of the Phase III clinical trial for  Multikine.  However in light of the current
capital  market  environment,  CEL-SCI  believes  it is prudent not to start the
Phase  III  clinical  trial  until  it  has  firm  commitments  in the  form  of
partnerships and/or money raised for a substantial amount of cash to support the
Phase III clinical trial. In the meantime, CEL-SCI will operate at significantly
reduced cash  expenditure  levels and additional  cash may be raised by offering
contract  manufacturing  services  to the  pharmaceutical  industry  in its  new
manufacturing  facility.  CEL-SCI expects that it will need to raise  additional
capital in fiscal year 2009 in the form of corporate  partnerships and/or equity
financings to support its  operations at its current rate.  CEL-SCI is currently
working towards a transaction  which it expects to complete in fiscal 2009 which
will finance its Phase III clinical trial of Multikine. CEL-SCI believes that it
will be able to  obtain  additional  financing  since  Multikine  is a Phase III
product  designed to treat  cancer,  an area that  pharmaceutical  companies are
increasingly  targeting.  CEL-SCI is working on a sale-leaseback program for the
equipment  it owns which would  provide  CEL-SCI  approximately  $1.5 million in
additional cash. It is important to note that CEL-SCI's  expenditures for fiscal
year 2008 included  several very large  non-recurring  expenses that amounted to
several million  dollars,  mostly related to the build out of the  manufacturing
facility.  These expenses will not recur in fiscal year 2009,  thereby  reducing
CEL-SCI's expenditures significantly. Beyond those savings CEL-SCI has also made
other very  significant cuts in its expenditures and certain vendors have agreed
to take common stock in lieu of cash payments.  In addition,  CEL-SCI has put in
place a $5 million Equity Line of Credit (see Note 15). With this Equity Line of
Credit in place CEL-SCI  believes it will have the required  capital to continue
operations  into January 2010.  However,  if necessary  CEL-SCI can make further
reductions in  expenditures  by a reduction in force or by  implementation  of a
salary reduction program.

     The Company has determined that the convertible  debt holders of the Series
K Notes may require  repayment of the entire remaining  principal balance at any
time after August 4, 2009.  This debt can be paid in stock and may not require a
cash payment. In addition,  in December 2008, CEL-SCI was not in compliance with
certain lease requirements  (i.e.,  failure to pay an installment of Base Annual
Rent).  However, the landlord has not declared CEL-SCI formally in default under
the terms of the lease. The landlord  currently has the right to declare CEL-SCI
in default if CEL-SCI fails to pay any  installment of the Base Annual Rent when
such failure  continues for a period of 5 business days after CEL-SCI's  receipt
of written notice  thereof from the Landlord,  provided that if CEL-SCI fails to
pay any of the  foregoing  within 5 business days more than two (2) times in any
twelve  (12) month  period  during the lease  term,  the  Landlord  shall not be
required to provide  CEL-SCI with any further notice and CEL-SCI shall be deemed
to be in default. CEL-SCI is currently in negotiation with the Landlord for rent
deferral on the lease in order to conserve  its cash.  If we do not  renegotiate
the lease we plan to either get an additional  loan from Mr.  deClara or use the
equity line of credit to make the rent payments.

     In general,  with the reduction in expenses and the $5 million  Equity Line
in place, the Company expects to have enough cash to continue operations through
January  2010 if the debt  holders do not  exercise  their put  options  and the
landlord of their  manufacturing  facility does not issue a default notice.  The
Company's  independent  audit firm has issued an audit  opinion  that  expresses
doubt about the Company's  ability to continue as a going concern  mainly due to
continued losses from operations, the debt holders ability to exercise their put
options, and the potential for the landlord to issue a default notice.

     While there can be no  assurance  that the debt  holders  will not exercise
their put option, and the landlord of the manufacturing  facility will not issue
a default  notice,  the Company  continues to work on solutions  for  additional
financing  and ways to reduce  expenses.  The Company has shown in the past that
they are able to secure financing to continue operations.  However,  there is no
assurance to do so in the future.

      Other than funding operating losses, funding its research and development
program, and paying its liabilities, CEL-SCI does not have any material capital
commitments. Material future liabilities as of September 30, 2008 are as
follows:


                                       36


Contractual Obligations:

                                                                             

                                Years  Ending September 30,
                                  --------------------------------------------------------------------------
                     Total        2009         2010       2011        2012         2013    2014 & thereafter
                     -----        ----         ----       ----        ----         ----    -----------------

Operating Leases  $38,212,676  $1,711,320  $1,727,368  $1,779,188  $1,805,169  $1,751,839    $29,437,792
Employment
  Contracts       $ 1,576,400  $  963,825  $  612,575          --          --          --             --



       It should be noted that substantial funds will be needed for the clinical
trial 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. Ultimately, CEL-SCI must complete the development
of its products, obtain appropriate regulatory approvals and obtain sufficient
revenues to support its cost structure.

      Since all of CEL-SCI's projects are under development CEL-SCI cannot
predict with any certainty the funds required for future research and clinical
trials, the timing of future research and development projects, or when it will
be able to generate any revenue from the sale of any of its products.

      CEL-SCI's cash flow and earnings are subject to fluctuations due to
changes in interest rates on its certificates of deposit, and, to an immaterial
extent, foreign currency exchange rates.

Subsequent Events

      On November 3, 2008, the Company extended its licensing agreement for
Multikine with Orient Europharma. The new agreement extends the Multikine
collaboration to also cover South Korea, the Philippines, Australia and New
Zealand. The licensing agreement initially focuses on the areas of head and neck
cancer, nasopharyngeal cancer and potentially cervical cancer. As part of this
new agreement, Orient Europharma invested $500,000 in the Company.

     Effective December 3, 2008, Dr. Daniel Zimmerman, the Company's Senior Vice
President of Research,  Cellular  Immunology,  and John Cipriano,  the Company's
Senior Vice President of Regulatory  Affairs,  have agreed to become consultants
to the Company on an as needed basis thereby  ending their full time  employment
with the  Company.  The stock and options  owned by these two  individuals  will
fully vest on January 1, 2009

      On December 30, 2008, CEL-SCI entered into an equity line of credit
agreement as a source of funding for CEL-SCI. For a two-year period, the
agreement allows CEL-SCI, at its discretion, to sell up to $5 million of
CEL-SCI's common stock at the volume weighted average price on the day of the
drawdown, less 9%. CEL-SCI may request a drawdown once every ten trading days,
although CEL-SCI is under no obligation to request any drawdowns under the
equity line of credit. The equity line of credit expires on January 6, 2011.

      In December 2008 and January 2009 CEL-SCI Maximilian de Clara, CEL-SCI's
president and a director, loaned CEL-SCI a total of $230,000. The loan bears
interest at 15% per year and is payable on March 27, 2009.


                                       37


Critical Accounting Policies
----------------------------

      CEL-SCI's significant accounting policies are more fully described in Note
1 to the consolidated financial statements. However, certain accounting policies
are particularly important to the portrayal of financial position and results of
operations and require the application of significant judgments by management.
As a result, the consolidated financial statements are subject to an inherent
degree of uncertainty. In applying those policies, management uses its judgment
to determine the appropriate assumptions to be used in the determination of
certain estimates. These estimates are based on CEL-SCI's historical experience,
terms of existing contracts, observance of trends in the industry and
information available from outside sources, as appropriate. CEL-SCI's
significant accounting policies include:

      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. An impairment loss is
recognized when estimated future undiscounted cash flows expected to result from
the use of the asset, and from disposition, is less than the carrying value of
the asset. The amount of the impairment loss is the difference between the
estimated fair value of the asset and its carrying value.

      Stock Options and Warrants - SFAS No. 123R requires companies to recognize
expense associated with share based compensation arrangements, including
employee stock options, using a fair value-based option pricing model. SFAS No.
123R applies to all transactions involving issuance of equity by a company in
exchange for goods and services, including employees. Using the modified
prospective transition method of adoption, CEL-SCI reflects compensation expense
in the financial statements beginning October 1, 2005. The modified prospective
transition method does not require restatement of prior periods to reflect the
impact of SFAS No. 123R. As such, compensation expense is recognized for awards
that were granted, modified, repurchased or cancelled on or after October 1,
2005.

      Options to non-employees are accounted for in accordance with FASB's
Emerging Issues Task Force (EITF) Issue 96-18 Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services. Accordingly, compensation is recognized when goods
or services are received and is measured using the Black-Scholes valuation
model. The Black-Scholes model requires CEL-SCI's management to make assumptions
regarding the fair value of the options at the date of grant and the expected
life of the options.

      Asset Valuations and Review for Potential Impairments - CEL-SCI reviews
its fixed assets, intangibles and deferred rent every fiscal quarter. This
review requires that CEL-SCI make assumptions regarding the value of these
assets and the changes in circumstances that would affect the carrying value of
these assets. If such analysis indicates that a possible impairment may exist,
CEL-SCI is then required to estimate the fair value of the asset and, as deemed
appropriate, expense all or a portion of the asset. The determination of fair
value includes numerous uncertainties, such as the impact of competition on
future value. CEL-SCI believes that it has made reasonable estimates and


                                       38


judgments in determining whether its long-lived assets have been impaired;
however, if there is a material change in the assumptions used in its
determination of fair values or if there is a material change in economic
conditions or circumstances influencing fair value, CEL-SCI could be required to
recognize certain impairment charges in the future. As a result of the reviews,
no changes in asset values were required.

      Prepaid Expenses and Laboratory Supplies--The majority of prepaid expenses
consist of bulk purchases of laboratory supplies used on a daily basis in the
lab and items that will be used for future production. The items in prepaid
expenses are expensed when used in production or daily activity as Research and
Development expenses. These items are disposables and consumables and can be
used for both the manufacturing of Multikine for clinical studies and in the
laboratory for quality control and bioassay use. They can be used in training,
testing and daily laboratory activities. Other prepaid expenses are payments for
services over a long period and are expensed over the time period for which the
service is rendered.

      Derivative Instruments--CEL-SCI enters into financing arrangements that
consist of freestanding derivative instruments or are hybrid instruments that
contain embedded derivative features. CEL-SCI accounts for these arrangement in
accordance with Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities", ("SFAS No. 133") and
Emerging Issues Task Force Issue No. 00-19, "Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Company's Own Stock",
("EITF 00-19"), as well as related interpretations of these standards. In
accordance with accounting principles generally accepted in the United States
("GAAP"), derivative instruments and hybrid instruments are recognized as either
assets or liabilities in the statement of financial position and are measured at
fair value with gains or losses recognized in earnings or other comprehensive
income depending on the nature of the derivative or hybrid instruments. Embedded
derivatives that are not clearly and closely related to the host contract are
bifurcated and recognized at fair value with changes in fair value recognized as
either a gain or loss in earnings if they can be reliably measured. When the
fair value of embedded derivative features cannot be reliably measured, CEL-SCI
measures and reports the entire hybrid instrument at fair value with changes in
fair value recognized as either a gain or loss in earnings. CEL-SCI determines
the fair value of derivative instruments and hybrid instruments based on
available market data using appropriate valuation models, giving consideration
to all of the rights and obligations of each instrument and precluding the use
of "blockage" discounts or premiums in determining the fair value of a large
block of financial instruments. Fair value under these conditions does not
necessarily represent fair value determined using valuation standards that give
consideration to blockage discounts and other factors that may be considered by
market participants in establishing fair value.

Recent Accounting Pronouncements
--------------------------------

         In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements". The statement defines fair value, establishes a framework for
measuring fair value in GAAP and expands disclosures about fair value
measurements. In February 2008, the FASB issued FASB Staff Position ("FSP") No.
157-2, Effective Data of FASB Statement No. 157. FSP 157-2 delays the effective
date of SFAS 157 to fiscal years beginning after November 15, 2008, for


                                       39


nonfinancial assets and nonfinancial liabilities, except for items that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually). The Company is evaluating whether this statement will
affect its current practice in valuing fair value of its derivatives each
quarter. The effect of the adoption is expected to be immaterial.

      In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities - Including an amendment of FASB
Statement No. 15". The Statement permits companies to choose to measure many
financial instruments and certain other items at fair value. The statement is
effective for fiscal years that begin after November 15, 2007, but early
adoption is permitted. The effect will be immaterial.

     In December  2007, the FASB issued SFAS No. 141 (revised  2007),  "Business
Combinations",  which replaces SFAS No. 141. The statement  retains the purchase
method of  accounting  for  acquisitions,  but  requires  a number  of  changes,
including  changes in the way  assets  and  liabilities  are  recognized  in the
purchase  accounting.  It also changes the  recognition  of assets  acquired and
liabilities assumed arising from  contingencies,  requires the capitalization of
in-process research and development at fair value, and requires the expensing of
acquisition-related  costs as  incurred.  SFAS No. 141R is  effective  beginning
October 1, 2009 and will apply prospectively to business combinations  completed
on or after that date.

      In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests
in Consolidated Financial Statements, an amendment of ARB 51", which changes the
accounting and reporting for minority interests. Minority interests will be
recharacterized as noncontrolling interests and will be reported as a component
of equity separate from the parent's equity, and purchases or sales of equity
interests that do not result in a change in control will be accounted for as
equity transactions. In addition, net income attributable to the noncontrolling
interest will be included in consolidated net income on the face of the income
statement and, upon loss of control, the interest sold, as well as any interest
retained, will be recorded at fair value with any gain or loss recognized in
earnings. SFAS No. 160 is effective beginning October 1, 2009 and will apply
prospectively, except for the presentation and disclosure requirements, which
will apply retrospectively.

      In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities - an amendment of FASB Statement No. 133",
which changes disclosure requirements for derivative instruments and hedging
activities. The statement is effective for periods ending on or after November
15, 2008, with early application encouraged. The Company is currently assessing
the additional requirements of this statement.

      In April 2008, the FASB staff issued PSP FAS 142-3, "Determination of the
Useful Life of Intangible Assets", which amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under FASB Statement No. 142,
"Goodwill and Other Intangible Assets". The staff position is intended to
improve the consistency between the useful life of a recognized intangible asset
under Statement 142 and the period of expected cash flows used to measure the
fair value of the asset under FASB Statement No. 141, "Business Combinations",


                                       40


and other U.S. generally accepted accounting principles (GAAP). The Company is
currently assessing the potential impact of this staff position on its
consolidated financial statements.

     In June 2008, the FASB finalized EITF 07-5, "Determining Whether an
Instrument (or Embedded Feature) is Indexed to an Entity's Own Stock". The EITF
lays out a procedure to determine if the debt instrument is indexed to its own
common stock. The EITF is effective for fiscal years beginning after December
15, 2008. The Company believes it will have an impact on the convertible debt
and certain warrants and it could be material.

      In September 2008, the FASB staff issued PSP FAS 133-1 and FIN 45-4,
"Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of
FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the
Effective Date of FASB Statement No. 161". The FSP applies to credit derivatives
within the scope of Statement 133 and hybrid instruments that have embedded
credit derivatives. It deals with disclosures related to these derivatives and
is effective for reporting periods ending after November 15, 2008. It also
clarifies the effective date of SFAS No. 161 as any reporting period beginning
after November 15, 2008. The Company is currently assessing the potential impact
of this staff position on its consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS
-------------------------------------------------------------------

      Market risk is the potential change in an instrument's value caused by,
for example, fluctuations in interest and currency exchange rates. CEL-SCI
enters into financing arrangements that are or include freestanding derivative
instruments or that are or include hybrid instruments that contain embedded
derivative features. CEL-SCI does not enter into derivative instruments for
trading purposes. Additional information is presented in the notes to
consolidated financial statements. The fair value of these instruments is
affected primarily by volatility of the trading prices of the CEL-SCI's common
stock. For the years ended September 30, 2008, 2007 and 2006, CEL-SCI recognized
a gain of $1,799,393, $868,182, and $2,325,784, respectively, resulting from
changes in fair value of derivative instruments. CEL-SCI has no exposure to
risks associated with foreign exchange rate changes because none of the
operations of CEL-SCI are transacted in a foreign currency. The interest rate
risk on investments is considered immaterial due to the dollar value of
investments as of September 30, 2008, 2007 and 2006.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


      See the consolidated financial statements included with this Report.

ITEM  9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON  ACCOUNTING  AND
        FINANCIAL DISCLOSURE

      Not applicable


                                       41


ITEM 9A. and 9A(T).   CONTROLS AND PROCEDURES

     Under the direction  and with the  participation  of CEL-SCI's  management,
including CEL-SCI's Chief Executive Officer and Chief Financial Officer, CEL-SCI
carried out an  evaluation of the  effectiveness  of the design and operation of
its  disclosure  controls  and  procedures  as of September  30,  2008.  CEL-SCI
maintains  disclosure  controls and procedures  that are designed to ensure that
information required to be disclosed in its periodic reports with the Securities
and Exchange Commission is recorded,  processed,  summarized and reported within
the time  periods  specified in the SEC's rules and  regulations,  and that such
information is accumulated and communicated to CEL-SCI's  management,  including
its principal executive officer and principal financial officer, as appropriate,
to allow timely decisions regarding required  disclosure.  CEL-SCI's  disclosure
controls and procedures are designed to provide a reasonable  level of assurance
of reaching its desired disclosure control objectives.  Based on the evaluation,
the Chief  Executive  Officer and Cheif  Financial  Officer have  concluded that
these disclosure controls and procedures are effective as of September 30, 2008.

Management's Report on Internal Control Over Financial Reporting

      CEL-SCI's management is responsible for establishing and maintaining
adequate internal control over financial reporting and for the assessment of the
effectiveness of internal control over financial reporting. As defined by the
Securities and Exchange Commission, internal control over financial reporting is
a process designed by, or under the supervision of CEL-SCI's principal executive
officer and principal financial officer and implemented by CEL-SCI's Board of
Directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
CEL-SCI's financial statements in accordance with U.S. generally accepted
accounting principles.

      Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

     Geert Kersten,  CEL-SCI's Chief Executive and Principal  Financial Officer,
evaluated  the  effectiveness  of  CEL-SCI's  internal  control  over  financial
reporting as of  September  30, 2008 based on criteria  established  in Internal
Control  -  Integrated   Framework   issued  by  the   Committee  of  Sponsoring
Organizations of the Treadway  Commission,  or the COSO Framework.  Management's
assessment  included an evaluation of the design of CEL-SCI's  internal  control
over financial  reporting and testing of the operational  effectiveness of those
controls.

      Based on this evaluation, Mr. Kersten concluded that CEL-SCI's internal
control over financial reporting was effective as of September 30, 2008.

     There was no change in CEL-SCI's internal control over financial  reporting
that occurred  during the quarter ended  September 30, 2008 that has  materially
affected,  or is reasonably  likely to  materially  affect,  CEL-SCI's  internal
control over financial reporting.


                                       42


      This report does not include an attestation report of CEL-SCI's
independent registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by
CEL-SCI's independent registered public accounting firm pursuant to temporary
rules of the SEC that permit CEL-SCI to provide only management's report on
internal control in this report.

ITEM 9B.  OTHER INFORMATION
---------------------------

      Not applicable.

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Officers and Directors

Name                     Age   Position
----                     ---   --------

Maximilian de Clara      78   Director and President
Geert R. Kersten, Esq.   49   Director, Chief Executive Officer and Treasurer
Patricia B. Prichep      57   Senior Vice President of Operations and Secretary
Dr. Eyal Talor           52   Senior Vice President of Research and
                                Manufacturing
Dr. Daniel H. Zimmerman  67   Senior Vice President of  Research, Cellular
Immunology
John Cipriano            66   Senior Vice President of Regulatory Affairs
Alexander G. Esterhazy   66   Director
Dr.C. Richard Kinsolving 72   Director
Dr. Peter R. Young        63   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 SEC.

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

      Maximilian 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"


                                       43


honorary medal of the Austrian Military Order "Merito Navale" as well as the
honor cross of the Austrian Albert Schweitzer Society.

      Geert Kersten has served in his current leadership role at CEL-SCI since
1995. Mr. Kersten has been with CEL-SCI from the early days of its inception
since 1987. He has been involved in the pioneering field of cancer immunotherapy
for almost two decades and has successfully steered CEL-SCI through many
challenging cycles in the biotechnology industry. Mr. Kersten also provides
CEL-SCI with significant expertise in the fields of finance and law and has a
unique vision of how the company's Multikine product will change the way cancer
is treated. Prior to CEL-SCI, Mr. Kersten worked at the law firm of Finley &
Kumble and worked at Source Capital, an investment banking firm located in
McLean, VA. He is a native of Germany, graduated from Millfield School in
England, and completed his studies in the US. Mr. Kersten completed his
Undergraduate Degree in Accounting, received an M.B.A. from George Washington
University, and a law degree (J.D.) from American University in Washington, DC.

      Patricia B. Prichep joined CEL-SCI in 1992 and 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. Ms. Prichep became
CEL-SCI's Corporate Secretary in May 2000. She is responsible for all day-to-day
operations of the Company, including human resources and is the liaison with the
auditing firm for financial reporting. June 1990 to December 1992, Ms. Prichep
was the Manager of Quality and Productivity for the NASD's Management, Systems
and Support Department. She was responsible for the internal auditing and work
flow analysis of operations. Between 1982 and 1990, Ms. Prichep was Vice
President and Operations Manager for Source Capital, Ltd. She handled all
operations and compliance for the company and was licensed as a securities
broker. Ms. Prichep received her B.A. from the University of Bridgeport in
Connecticut.

      Eyal Talor, Ph.D. joined CEL-SCI in October 1993 and has been Senior Vice
president of Research and Manufacturing since March of 1994. He is a clinical
immunologist with over 19 years of hands-on management of clinical research and
drug development for immunotherapy application; pre-clinical to Phase III, in
the biopharmaceutical industry. His expertise includes; biopharmaceutical R&D
and Biologics product development, GMP (Good Manufacturing Practices)
manufacture, Quality Control testing, and the design and building of GMP
manufacturing and testing facilities. He served as Director of Clinical
Laboratories (certified by the State of Maryland) and has experience in the
design of clinical trials (Phase I - III) and GCP (Good Clinical Practices)
requirements. He also has broad experience in the different aspects of
biological assay development, analytical methods validation, raw material
specifications, and QC (Quality Control) tests development under FDA/GMP, USP,
and ICH guidelines. He has extensive experience in the preparation of
documentation for IND and other regulatory submissions. His scientific area of
expertise encompasses immune response assessment. He is the author of over 25
publications and has published a number of reviews on immune regulations in
relation to clinical immunology. Before coming to CEL-SCI, he was Director of
R&D and Clinical Development at CBL, Inc., Principal Scientist - Project
Director, and Clinical Laboratory Director at SRA Technologies, Inc. Prior to
that he was a full time faculty member at The Johns Hopkins University, Medical
Intuitions; School of Public Health. He holds two US patents; one on Multikine's


                                       44


composition of matter and method of use in cancer, and one on a platform Peptide
technology (`Adapt') for the treatment of autoimmune diseases, asthma, allergy,
and transplantation rejection. He also has numerous product and process
inventions as well as a number of pending US and PCT patent applications. He
received his Ph.D. in Microbiology and Immunology from the University of Ottawa,
Ottawa, Ontario, Canada, and had post-doctoral training in clinical and cellular
immunology at The John Hopkins University, Baltimore, Maryland, USA. He holds an
Adjunct Associate teaching position at the Johns Hopkins University Medical
Institutions.

      Daniel H. Zimmerman, Ph.D., has been CEL-SCI's Senior Vice President of
Cellular Immunology since 1996. He joined CEL-SCI in January 1996 as the Vice
President of Research, Cellular Immunology. Dr. Zimmerman founded CELL-MED, Inc.
and was its president from 1987-1995. From 1973-1987, Dr. Zimmerman served in
various positions at Electronucleonics, Inc. His positions included: Scientist,
Senior Scientist, Technical Director and Program Manager. Dr Zimmerman held
various teaching positions at Montgomery College between 1987 and 1995. Dr.
Zimmerman holds over a dozen US patents as well as many foreign equivalent
patents. He is the author of over 40 scientific publications in the area of
immunology and infectious diseases. He has been awarded numerous grants from NIH
and DOD. From 1969-1973, Dr. Zimmerman was a Senior Staff Fellow at NIH. For the
following 25 years, he continued on at NIH as a guest worker. Dr Zimmerman
received a Ph.D. in Biochemistry in 1969, a Masters in Zoology in 1966 from the
University of Florida and a B.S. in Biology from Emory and Henry College in
1963. Dr. Zimmerman ended his full time employment with the Company on December
3, 2008.

      John Cipriano, has been CEL-SCI's Senior Vice President of Regulatory
Affairs since March 2004. Mr. Cipriano brings to CEL-SCI over 30 years of
experience in both biotech and pharmaceutical companies. In addition, he held
positions at the United States Food and Drug Administration (FDA) as Deputy
Director, Division of Biologics Investigational New Drugs, Office of Biologics
Research and Review and was the Deputy Director, IND Branch, Division of
Biologics Evaluation, Office of Biologics. Mr. Cipriano completed his B.S. in
Pharmacy from the Massachusetts College of Pharmacy in Boston, Massachusetts and
his M.S. in Pharmaceutical Chemistry from Purdue University in West Lafayette,
Indiana. Mr. Cipriano ended his full time employment with the Company on
December 3, 2008.

      Alexander G. Esterhazy has been a Director of CEL-SCI since December 1999
and 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 CEL-SCI 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


                                       45


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).

      Peter R. Young, Ph.D. has been a Director of CEL-SCI since August 2002.
Dr. Young has been a senior executive within the pharmaceutical industry in the
United States and Canada for most of his career. Over the last 20 years he has
primarily held positions of Chief Executive Officer or Chief Financial Officer
and has extensive experience with acquisitions and equity financings. Since
November 2001, Dr. Young has been the President of Agnus Dei, LLC, which acts as
a partner in an organization managing immune system clinics which treat patients
with diseases such as cancer, multiple sclerosis and hepatitis. Since January
2003, Dr. Young has been the President and Chief Executive Officer of SRL
Technology, Inc., a company involved in the development of pharmaceutical (drug)
delivery systems. Between 1998 and 2001, Dr. Young was the Chief Financial
Officer of Adams Laboratories, Inc. Dr. Young received his Ph.D. in Organic
Chemistry from the University of Bristol, England (1969), and his Bachelor's
degree in Honors Chemistry, Mathematics and Economics also from the University
of Bristol, England (1966).

      All of CEL-SCI's officers devote substantially all of their time to
CEL-SCI's business.

      CEL-SCI has an audit committee and compensation committee. The members of
the audit committee are Alexander G. Esterhazy, C. Richard Kinsolving and Dr.
Peter Young. Dr. Peter Young serves as the audit committee's financial expert.
In this capacity, Dr. Young is independent, as that term is defined in the
listing standards of the NYSE Alternext US. The members of the compensation
committee are Maximilian de Clara, Alexander Esterhazy and C. Richard
Kinsolving.

      CEL-SCI has adopted a Code of Ethics which is applicable to CEL-SCI'S
principal executive, financial, and accounting officers and persons performing
similar functions. The Code of Ethics is available on CEL-SCI's website, located
at www.cel-sci.com.

      If a violation of this code of ethics act is discovered or suspected, the
Senior Officer must (anonymously, if desired) send a detailed note, with
relevant documents, to CEL-SCI's Audit Committee, c/o Dr. Peter Young, 1247
Dodgeton Drive, Frisco, TX 75034-1432.

ITEM 11.  EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

      The Company's Compensation Committee is empowered to review and approve
the annual compensation and compensation procedures for our executive officers
and annually determines the total compensation level for our President and Chief
Executive Officer. The total proposed compensation of our named executive


                                       46


officers is formulated and evaluated by our Chief Executive Officer and
submitted to the Compensation Committee for consideration.

      The key components of CEL-SCI's executive compensation program include
annual base salaries and long-term incentive compensation consisting of stock
options. It is CEL-SCI's policy to target compensation (i.e., base salary, stock
option grants and other benefits) at approximately the median of comparable
companies in the biotechnology field. Accordingly, data on compensation
practices followed by other companies in the biotechnology industry is
considered.

Objectives and Components of the Compensation Program

     The primary objective of our compensation  program is to attract,  motivate
and retain  talented  executives  who are  enthusiastic  about our mission.  The
components of our compensation practices are:

     o    CEL-SCI's base salary levels are commensurate with those of comparable
          positions  at  other  biotechnology   companies  given  the  level  of
          seniority  and skills  possessed  by the  executive  officer and which
          reflect  the  individual's  performance  with us over  time.  The base
          salary of the President, CEO and our other named executive officers is
          reviewed annually.  Current  employment  agreements with Maximilian de
          Clara and Geert Kersten set minimums for their base salary rates.

     o    CEL-SCI's   long-term   stock  option   incentive   program   consists
          exclusively of periodic grants of stock options with an exercise price
          equal to the fair market value of  CEL-SCI's  common stock on the date
          of grant.  To  encourage  retention,  the ability to exercise  options
          granted  under  the  program  is  subject  to  vesting   restrictions.
          Decisions  made  regarding  the timing and size of option  grants take
          into  account  the  performance  of both  CEL-SCI  and  the  employee,
          "competitive market" practices, and the size of the option grants made
          in  prior  years.  The  weighting  of  these  factors  varies  and  is
          subjective.  Current option  holdings are not considered when granting
          options.

     o    CEL-SCI's  stock-based incentive awards are intended to strengthen the
          mutuality  of  interests  between  the  executive   officers  and  our
          stockholders.

     o    CEL-SCI has a defined contribution  retirement plan,  qualifying under
          Section 401(k) of the Internal Revenue Code and covering substantially
          all CEL-SCI's employees. CEL-SCI's contribution to the plan is made in
          shares of CEL-SCI's common stock. 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 6% of
          the participant's total 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 two fiscal
years ended September 30, 2008.


                                       47



                                                            
                                                                              All
                                                                             Other
                                                      Restric-               Annual
                                                     ted Stock    Option     Compen-
Name and Princi-        Fiscal    Salary     Bonus     Awards      Awards    sation
 pal Position            Year      (1)        (2)       (3)         (4)        (5)          Total
--------------------     -----    ------     ------  ---------    --------   -------      ---------

Maximilian de Clara,     2008   $363,000       --     $543,174    $103,320    $ 89,268    $1,098,762
President                2007    363,000       --      418,327     105,460      64,693       951,480

Geert R. Kersten,        2008    404,900       --      156,674     103,320      39,901       704,795
Chief Executive          2007    389,637       --       31,752     105,460      16,114       542,963
Officer and
Treasurer

Patricia B. Prichep      2008    185,780       --       82,558      51,660       4,225       324,223
Senior Vice President    2007    179,574       --       19,520      52,730       4,225       256,049
of Operations and
Secretary

Eyal Talor, Ph.D.        2008    229,353       --       81,187      51,660       4,225       366,425
Senior Vice President    2007    218,587       --       18,764      52,730       4,225       294,306
of Research and
Manufacturing

Daniel Zimmerman, Ph.D.  2008    175,988       --       46,186      38,745       4,225       265,144
Senior Vice President    2007    169,127       --       14,469      39,548       4,225       227,369
of Cellular Immunology

John Cipriano            2008    171,028       --       45,893      38,745          25       255,691
Senior Vice President    2007    165,400       --       14,196      39,548          25       219,169
of Regulatory Affairs



(1)  The dollar value of base salary (cash and non-cash) earned. During the
     years ended September 30, 2008 and 2007, $18,730 and $28,429, respectively,
     of the total salaries paid to the persons shown in the table were paid in
     restricted shares of CEL-SCI's common stock.

      Information concerning the issuance of these restricted shares is shown in
the following table:

        Date Shares           Number of            Price
          Issued            Shares Issued        Per Share

        09/20/2006             49,016              $0.52
        01/15/2008             36,020              $0.52


                                       48


      On each date the amount of compensation satisfied through the issuance of
shares was determined by multiplying the number of shares issued by the price
per share. The price per share was equal to the closing price of CEL-SCI's
common stock on the date prior to the date the shares were issued.

(2)  The dollar value of bonus (cash and non-cash) earned.

(3)  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, during the years ended September
     30, 2008 and 2007 $400,000 and $400,000, respectively, were paid in
     restricted shares of CEL-SCI's common stock which cannot be sold in the
     public market for a period of three years after the date of issuance. 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 and restricted shares issued from the Stock
     Compensation Plan.

(4)  The value of all stock options granted during the periods covered by the
     table are calculated according to SFAS 123R requirements.

(5)  All other compensation received that CEL-SCI could not properly report in
     any other column of the table including annual 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. Includes board of directors fees for M. de
     Clara and G. Kersten.

Long Term Incentive Plans - Awards in Last Fiscal Year

      See Footnote 6 to the financial statements.

Employee Pension, Profit Sharing or Other Retirement Plans

      CEL-SCI has a defined contribution retirement plan, qualifying under
Section 401(k) of the Internal Revenue Code and covering substantially all
CEL-SCI's employees. CEL-SCI's contribution to the plan is made in shares of
CEL-SCI's common stock. 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 its common stock. The fiscal
2008 expenses for this plan were $110,024. Other than the 401(k) Plan, CEL-SCI
does not have a defined benefit, pension plan, profit sharing or other
retirement plan.


                                       49


Compensation of Directors During Year Ended September 30, 2008

                                      Stock          Option
Name                 Paid in Cash    Awards (1)     Awards (2)      Total
----                 ------------    ----------     ----------    --------

Maximilian de Clara    $20,000      $124,000        $103,320      $247,320
Geert Kersten          $20,000      $124,000        $103,320      $247,320
Alexander Esterhazy    $20,000      $ 62,000        $ 51,660      $133,660
C. Richard Kinsolving  $20,000      $ 62,000        $ 51,660      $133,660
Peter R. Young         $20,000      $ 62,000        $ 51,660      $133,660

(1)  The fair value of stock issued for services.
(2)  The fair value of options granted computed in accordance with FAS 123R on
     the date of grant.

      Directors' fees paid to Maximilian de Clara and Geert Kersten are included
in the Executive Compensation table.

Employment Contracts.

     In April 2005, CEL-SCI entered into a three-year  employment agreement with
Mr. de Clara.  The  employment  agreement  provided that CEL-SCI will pay Mr. de
Clara  an  annual  salary  of  $363,000  during  the term of the  agreement.  On
September 8, 2006 Mr. de Clara's  Employment  Agreement was amended and extended
to April 30,  2010.  The terms of the  amendment  to Mr. de  Clara's  employment
agreement are  referenced in a report on Form 8-K filed with the  Securities and
Exchange  Commission on September 8, 2006. 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  ($544,500),  the remaining stock payments per
the amendment to Mr. de Clara's  employment  agreement  (valued at $200,000) and
the unvested portion of any stock options would vest immediately ($227,333). 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.

      The Employment Agreement will also terminate upon the death of Mr. de
Clara, Mr. de Clara's physical or mental disability, the conviction of Mr. de
Clara for any crime involving fraud, moral turpitude, or CEL-SCI's property, or
a breach of the Employment Agreement by Mr. de Clara. If the Employment
Agreement is terminated for any of these reasons, Mr. de Clara, or his legal
representatives, as the case may be, will be paid the salary provided by the
Employment Agreement through the date of termination.

      Effective September 1, 2003, 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 $370,585 plus any increases approved by the Board of Directors during the
period of the employment agreement. In the event there is a change in the


                                       50


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
($809,800) and the unvested portion of any stock options would vest immediately
($246,666). 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. Effective September 1,
2006 Mr. Kersten's employment agreement was extended to September 1, 2011.

      The Employment Agreement will also terminate upon the death of Mr.
Kersten, Mr. Kersten's physical or mental disability, willful misconduct, an act
of fraud against CEL-SCI, or a breach of the Employment Agreement by Mr.
Kersten. If the Employment Agreement is terminated for any of these reasons Mr.
Kersten, or his legal representatives, as the case may be, will be paid the
salary provided by the Employment Agreement through the date of termination.

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, 2008, 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, 2008, 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 show information concerning the options granted
during the fiscal year ended September 30, 2008, to the persons named below.

                                 Options Granted
                                                       Exercise
                              Grant        Options    Price Per  Expiration
    Name                      Date       Granted (#)     Share      Date
   ------                     ----       -----------  ----------    ----
   Maximilian de Clara     03/05/2008      200,000      $0.62    03/04/2018
   Geert Kersten           03/05/2008      200,000      $0.62    03/04/2018
   Patricia B. Prichep     03/05/2008      100,000      $0.62    03/04/2018
   Eyal Talor, Ph.D.       03/05/2008      100,000      $0.62    03/04/2018
   Daniel Zimmerman, Ph.D. 03/05/2008       75,000      $0.62    03/04/2018
   John Cipriano           03/05/2008       75,000      $0.62    03/04/2018


                                       51


                                Options Exercised

                                           Shares
                       Date of           Acquired On           Value
                      Exercise            Exercise            Realized
                      --------           ------------         --------

                                      None

                      Shares underlying unexercised
                            Option which are:          Exercise    Expiration
 Name                 Exercisable     Unexercisable      Price         Date
 ----                 -----------     -------------    ---------   -----------

 Maximilian de Clara    23,333                           2.87       07/31/13
                        95,000 (1)                       1.94       08/31/13
                        70,000                           1.05       09/25/09
                        56,666                           1.05       05/01/10
                        50,000                           1.05       05/01/13
                        50,000                           1.05       04/12/09
                        60,000                           1.05       04/19/10
                        60,000                           1.38       03/22/11
                        75,000                           0.54       03/14/12
                        50,000                           0.61       09/02/14
                        50,000                           0.48       09/21/15
                        66,667                           0.58       09/12/16
                        66,667                           0.63       09/13/17
                        ------
                       773,333
                                         33,333          0.58       09/12/16
                                        133,333          0.63       09/13/17
                                        200,000          0.62       03/04/18
                                        -------
                                        366,666

 Geert R. Kersten       50,000                           1.05       11/01/13
                        14,000                           1.05       10/31/13
                        50,000                           1.05       07/31/13
                       224,000 (1)                       1.05       06/10/13
                        50,000                           1.05       09/25/09
                       150,000                           1.05       05/01/10
                        50,000                           1.05       05/01/13
                        50,000                           1.05       04/12/09
                        95,000 (1)                       1.94       08/31/13
                        60,000                           1.05       04/19/10
                        60,000                           1.38       03/22/11
                       560,000 (1)                       1.05       10/16/13
                       105,000                           0.54       03/14/12
                     1,890,000                           0.22       04/01/13
                        50,000                           0.61       09/02/14
                        50,000                           0.48       09/21/15
                       133,334                           0.58       09/12/16
                        66,667                           0.63       09/13/17
                        ------
                     3,708,001

                                       52


                      Shares underlying unexercised
                            Option which are:          Exercise    Expiration
 Name                 Exercisable     Unexercisable      Price         Date
 ----                 -----------     -------------    ---------   -----------

Geert R. Kersten (cont'd)                66,666          0.58       09/12/16
                                        133,333          0.63       09/13/17
                                        200,000          0.62       03/04/18
                                        -------
                                        399,999

------------------------------------------------------------------------------

 Patricia B. Prichep     6,000                           1.05       12/01/13
                        10,000                           1.05       11/30/13
                         9,500                           1.05       07/31/13
                         3,000                           1.05       12/31/09
                        35,000                           1.05       03/01/10
                        17,000                           1.05       12/01/13
                        15,000                           1.05       04/12/09
                        47,500 (1)                       1.94       08/31/13
                        23,000                           1.05       02/02/10
                        25,000                           1.18       12/08/10
                        30,000                           1.00       12/03/11
                       200,000 (1)                       1.05       10/16/13
                        10,500                           0.54       03/14/12
                        50,000                           0.33       04/26/12
                       243,000                           0.22       04/01/13
                       337,000                           0.22       04/01/13
                        50,000                           0.61       09/02/14
                        30,000                           0.48       09/21/15
                        60,000                           0.58       09/12/16
                        33,334                           0.63       09/13/17
                        ------
                     1,234,834
                                          30,000         0.58       09/12/16
                                          66,666         0.63       09/13/17
                                         100,000         0.62       03/04/18
                                         -------
                                         196,666

-------------------------------------------------------------------------------

 Eyal Talor, Ph.D.      15,500                           1.05       07/31/13
                        16,666                           1.05       03/16/10
                        15,000                           1.05       08/03/13
                        10,000 (1)                       1.94       08/31/13
                        20,000                           1.05       08/02/09
                        25,000                           1.76       11/10/10
                        35,000                           1.00       12/03/11
                       160,000 (1)                       1.05       10/16/13
                        50,000                           0.33       04/26/12
                       374,166                           0.22       04/01/13
                        50,000                           0.61       09/02/14
                        30,000                           0.48       09/21/15
                        53,334                           0.58       09/12/16
                        33,334                           0.63       09/13/17
                        ------
                       888,000


                                       53

                      Shares underlying unexercised
                            Option which are:          Exercise    Expiration
 Name                 Exercisable     Unexercisable      Price         Date
 ----                 -----------     -------------    ---------   -----------

Eyal Talor, Ph.D (cont'd)                 26,666         0.58       09/12/16
                                          66,666         0.63       09/13/17
                                         100,000         0.62       03/04/18
                                         -------
                                         193,332

-------------------------------------------------------------------------------

 Daniel Zimmerman, Ph.D.12,000                           1.05       12/31/13
                         3,000                           1.05       12/31/09
                         7,000                           1.05       06/19/10
                        15,000                           1.05       02/19/13
                        30,000 (1)                       1.94       08/31/13
                        15,000                           1.05       04/12/09
                        20,000                           1.05       02/02/10
                        20,000                           1.85       01/26/11
                       120,000 (1)                       1.05       10/16/13
                        41,000                           0.54       03/14/12
                        50,000                           0.33       04/16/12
                       392,000                           0.22       04/01/13
                        50,000                           0.61       09/02/14
                        30,000                           0.48       09/21/15
                        40,000                           0.58       09/12/16
                        25,000                           0.63       09/13/17
                        ------
                       870,000


                                         20,000      0.58       09/12/16
                                         50,000          0.63       09/13/17
                                         75,000          0.62       03/04/18
                                         ------
                                        145,000

-------------------------------------------------------------------------------

 John Cipriano          100,000                          1.13       03/01/14
                         20,000                          0.61       09/02/14
                         30,000                          0.48       09/21/15
                         40,000                          0.58       09/12/16
                         25,000                          0.63       09/13/17
                        ------
                       215,000
                                         20,000          0.58       09/12/16
                                         50,000          0.63       09/13/17
                                         75,000          0.62       03/04/18
                                        ------
                                       145,000


(1) Options purchased by Employee through the Salary Reduction Plan.


                                       54


Stock Option, Bonus and Compensation Plans

      CEL-SCI has Incentive Stock Option Plans, Non-Qualified Stock Option,
Stock Bonus and Stock Compensation Plans. All Stock Option, Bonus and
Compensation Plans have been approved by the stockholders. 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 authorize
the issuance of shares of CEL-SCI's common stock to persons who exercise options
granted pursuant to the Plan. Only CEL-SCI's 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 Plans. The Non-Qualified Stock Option Plans
authorize the issuance of 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 CEL-SCI's Board of Directors.


                                       55


      Stock Bonus Plan. Under the Stock Bonus Plans shares of CEL-SCI's common
stock may be issued to CEL-SCI's employees, directors, officers, consultants and
advisors, 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.

      Stock Compensation Plan. Under the Stock Compensation Plan, shares of
CEL-SCI's common stock may be issued to CEL-SCI's employees, directors,
officers, consultants and advisors in payment of salaries, fees and other
compensation owed to these persons. However, 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


                                       56


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 shows certain information as of November 30, 2008
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               10,100,000   4,745,266         n/a    5,003,000
Non-Qualified Stock
  Option Plans               13,760,000   8,404,565         n/a    2,028,000
Stock Bonus Plans             7,940,000         n/a   4,805,019    3,134,897
Stock Compensation Plan       5,500,000         n/a   4,062,146    1,437,854


      Of the shares issued pursuant to CEL-SCI's Stock Bonus Plans 1,180,544
shares were issued as part of CEL-SCI's contribution to its 401(k) plan.

      The following table shows the weighted average exercise price of the
outstanding options granted pursuant to CEL-SCI's Incentive and Non-Qualified
Stock Option Plans as of September 30, 2008, CEL-SCI's most recent fiscal year
end. CEL-SCI's Incentive and Non-Qualified Stock Option Plans have been approved
by CEL-SCI's shareholders.


                                                                        
                                                                        Number of Securities
                                      Number                            Remaining Available
                                   of Securities                         For Future Issuance
                                    to be Issued    Weighted-Average         Under Equity
                                  Upon Exercise    Exercise Price of      Compensation Plans,
                                  of Outstanding    of Outstanding     Excluding Securities
Plan category                       Options (a)         Options         Reflected in Column (a)
------------------------------------------------------------------------------------------------

Incentive Stock Option Plans         4,745,266           $0.53                 5,003,000
Non-Qualified Stock Option Plans     8,406,265           $0.68                 2,028,000




                                       57


ITEM 12.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

      The following table shows, as of November 30, 2008, information with
respect to the only persons owning beneficially 5% or more of the outstanding
common stock and the number and percentage of outstanding shares owned by each
director and officer and by 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                   1,211,410                   1.0%
Bergstrasse 79
6078 Lungern,
Obwalden, Switzerland

Geert R. Kersten                      7,034,583                   5.6%
8229 Boone Blvd., Suite 802
Vienna, VA  22182

Patricia B. Prichep                   2,029,987                   1.6%
8229 Boone Blvd., Suite 802
Vienna, VA  22182

Eyal Talor, Ph.D.                     1,403,209                   1.1%
8229 Boone Blvd., Suite 802
Vienna, VA  22182

Daniel H. Zimmerman, Ph.D.            1,392,820                   1.1%
8229 Boone Blvd., Suite 802
Vienna, VA  22182

John Cipriano                           401,693                   0.3%
8229 Boone Blvd., Suite 802
Vienna, VA  22182

Alexander G. Esterhazy                  516,666                   0.4%
20 Chemin du Pre-Poiset
CH- 1253 Vandoeuvres
Geneve, Switzerland

C. Richard Kinsolving, Ph.D.            745,757                   0.6%
P.O. Box 20193
Bradenton, FL 34204-0193

Peter R. Young, Ph.D.                   517,934                   0.4%
1247 Dodgeton Drive
Frisco, TX 75034-1432


                                       58


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

All Officers and Directors           15,254,059                  11.6%
as a Group (9 persons)

(1)  Includes shares issuable prior to January 31, 2009 upon the exercise of
     options or warrants granted to the following persons:

Options or Warrants Exercisable

      Name                                  Prior to January 31, 2009
      ----                                  --------------------------

      Maximilian de Clara                          773,333
      Geert R. Kersten                           3,708,001
      Patricia B. Prichep                        1,234,834
      Eyal Talor, Ph.D.                            888,000
      Daniel H. Zimmerman, Ph.D.                   870,000
      John Cipriano                                215,000
      Alexander G. Esterhazy                       296,666
      C. Richard Kinsolving, Ph.D.                 456,667
      Peter R. Young, Ph.D.                        283,333

(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.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      None.

ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

         BDO Seidman, LLP served as CEL-SCI's independent registered public
accountant for the two years ended September 30, 2008. The following table shows
the aggregate fees billed to CEL-SCI for these years by BDO Seidman, LLP:

                                      Year Ended September 30,
                                      2008               2007
                                      ----               ----

Audit Fees                          $173,052         $ 142,704
Audit-Related Fees                        --                --
Tax Fees                                  --                --
All Other Fees                            --                --


                                       59


      Audit fees represent amounts billed for professional services rendered for
the audit of the CEL-SCI's annual financial statements and the reviews of the
financials statements included in CEL-SCI's 10-Q reports for the fiscal year and
all regulatory filings. Before BDO Seidman, LLP was engaged by CEL-SCI to render
audit or non-audit services, the engagement was approved by CEL-SCI's audit
committee. CEL-SCI's Board of Directors is of the opinion that the Audit Related
Fees charged by BDO Seidman, LLP are consistent with BDO Seidman, LLP
maintaining its independence from CEL-SCI.

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) See the Financial Statements attached to this Report.

Exhibits

3(a)Articles of  Incorporation          Incorporated by reference to Exhibit
                                        3(a) of CEL-SCI's combined Registration
                                        Statement on Form S-1 and Post-Effective
                                        Amendment ("Registration Statement"),
                                        Registration Nos. 2-85547-D and 33-7531.

3(b) Amended Articles                   Incorporated by
                                        reference to Exhibit 3(a) of CEL-SCI's
                                        Registration Statement on Form S-1,
                                        Registration Nos. 2-85547-D and 33-7531.

3(c)Amended Articles (Name change only) Filed as Exhibit 3(c) to CEL-SCI's
                                        Registration Statement on Form S-1
                                        Registration Statement (No. 33-34878).

3(d) Bylaws                             Incorporated by reference to
                                        Exhibit 3(b) of CEL-SCI's Registration
                                        Statement on Form S-1, Registration Nos.
                                        2-85547-D and 33-7531.

4 Shareholders Rights Agreement         Incorporated by reference to Exhibit 4
                                        of CEL-SCI'S report on Form 8-K dated
                                        November 7, 2007.

10(d)Employment Agreement with          Incorporated  by reference to Exhibit
    Maximilian de Clara                 10(d) of CEL-SCI's report on Form 8-K
                                        (dated April 21, 2005) and Exhibit 10(d)
                                        to CEL-SCI's report on Form 8-K dated
                                        September 8, 2006.

10(e) Employment Agreement with        Incorporated  by reference to Exhibit
    Geert Kersten                      10(e) of CEL-SCI's Registration Statement
                                       on Form S-3 (Commission File #106879)
                                       and Exhibit 10(c) to CEL-SCI's report on
                                       Form 8-K dated September 8, 2006.


                                       60


10(f)Distribution and Royalty Agreement Incorporated by reference to Exhibit
    with Eastern Biotech                10(x) to Amendment No. 2 to CEL-SCI's
                                        Registration statement on Form S-3
                                        (Commission File No. 333-106879).

10(g) Securities Purchase Agreement     Incorporated by reference to Exhibit 10
      (together with schedule required  to CEL-SCI's report on Form 8-K dated
      by Instruction 2 to Item 601 of   August 4, 2006.
      Regulation S-K) pertaining to
      Series K notes and warrants,
      together with the exhibits to the
      Securities Purchase Agreement.

10(h) Subscription Agreement (together   Incorporated by reference to Exhibit
      with Schedule required by          10 of CEL-SCI's report on Form 8-K
      Instruction 2 to Item 601 of       dated April 18, 2007
      Regulation S-K) pertaining to
      April 2007 sale of 20,000,000
      shares of CEL-SCI's common stock,
      10,000,000 Series L warrants and
      10,000,000 Series M Warrants.

23    Consent of BDO Seidman, LLP
                                          -------------------------------

31    Rule 13a-14(a) Certifications
                                          -------------------------------

32    Section 13


                                       61


                CEL-SCI CORPORATION

                Consolidated Financial Statements for the Years
                Ended September 30, 2008, 2007, and 2006, and
                Report of Independent Registered Public Accounting Firm




CEL-SCI CORPORATION

                               TABLE OF CONTENTS

                                                                        Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                  F- 2

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED
  SEPTEMBER 30, 2008, 2007, AND 2006:

    Consolidated Balance Sheets                                          F- 3

    Consolidated Statements of Operations                                F- 5

    Consolidated Statements of Stockholders' Equity                      F- 6

    Consolidated Statements of Cash Flows                                F- 8

    Notes to Consolidated Financial Statements                           F- 13



                                      F-1



Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders
CEL-SCI Corporation
Vienna, Virginia

We have audited the accompanying consolidated balance sheets of CEL-SCI
Corporation as of September 30, 2008 and 2007 and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
three years in the period ended September 30, 2008. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of CEL-SCI Corporation
at September 30, 2008 and 2007, and the results of its operations and its cash
flows for each of the three years in the period ended September 30, 2008, in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 3 to the
consolidated financial statements, the Company has suffered recurring net
losses, negative cash flows, and negative working capital. The Company has
convertible debt that allows the debt holders to exercise a put option in August
2009. In December 2008, the Company was not in compliance with certain lease
requirements related with its facility lease. These factors raise substantial
doubt about the Company's ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 3. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.


/s/ BDO SEIDMAN LLP

Bethesda, Maryland
January __, 2009


                                      F-2


                               CEL-SCI CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                           SEPTEMBER 30, 2008 AND 2007

ASSETS                                       2008                 2007
                                       -----------------   --------------
CURRENT ASSETS:
     Cash and cash equivalents           $  711,258          $ 10,993,021
     Short-term investments                 200,000                     -
     Interest and other receivables               -                57,476
     Prepaid expenses                        27,209                34,578
     Inventory used for R&D and
       manufacturing                        395,170               385,650
     Deposits                                14,828                14,828
                                         ----------          ------------
Total current assets                      1,348,465            11,485,553

RESEARCH AND OFFICE EQUIPMENT AND
  LEASEHOLD IMPROVMENTS - less
   accumulated depreciation of
   $1,964,597 and $1,859,644              1,324,686               233,876

PATENT COSTS--less accumulated
   amortization of $1,091,597 and
   $896,407                                 587,439               541,380

RESTRICTED CASH                             987,652             2,168,629

INTEREST RECEIVABLE - LONG TERM             199,593                     -

DEPOSITS                                  1,575,000                     -

DEFERRED RENT                             8,660,837             6,301,364
                                         ----------          ------------
TOTAL ASSETS                            $14,683,672          $ 20,730,802
                                        ===========          ============

LIABILITIES AND  STOCKHOLDERS' EQUITY         2008                  2007
                                           --------               -------
CURRENT LIABILITIES:
  Accounts payable                      $   427,509          $    248,120
  Accrued expenses                          113,179                98,603
  Due to employees                           36,077                26,735
  Accrued interest on convertible debt       45,558                68,795
  Short-term loan                           200,000                     -
  Deposits held                                   -                 3,000
  Derivative instruments - current
     portion                              3,018,697               782,732
                                         ----------          ------------
Total current liabilities                 3,841,020             1,227,985
  Deferred rent                               6,617                 1,466
  Derivative instruments - noncurrent
     portion                                      -             4,831,252
                                         ----------          ------------
Total liabilities                         3,847,637             6,060,703
                                         ----------          ------------


                                      F-3




                               CEL-SCI CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                           SEPTEMBER 30, 2008 AND 2007
                                   (continued)

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Preferred stock, $.01 par value--authorized
    100,000 shares, issued and outstanding,
    -0- Common stock, $.01 par value--authorized
    300,000,000 shares; issued and outstanding,
    120,796,094 and 115,678,662 shares at
    September 30, 2008 and 2007, respectively        1,207,961       1,156,787

  Additional paid-in capital                       134,324,370     130,081,378

  Accumulated deficit                             (124,696,296)   (116,568,066)
                                                  ------------    ------------

Total stockholders' equity                          10,836,035      14,670,099
                                                  ------------    ------------
TOTAL LIABILITIES AND

STOCKHOLDERS' EQUITY                              $ 14,683,672    $ 20,730,802
                                                  ============    ============











                 See notes to consolidated financial statements


                                      F-4

                               CEL-SCI CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  YEARS ENDED SEPTEMBER 30, 2008, 2007 AND 2006

                                             2008         2007         2006
                                            -----        -----         ----

GRANT REVENUE AND OTHER                 $    5,065    $   57,043    $   125,457

OPERATING EXPENSES:
  Research and development (excluding
    R&D depreciation of $124,705,
    $91,292 and $74,043 respectively,
    included below)                      4,101,563     2,528,528      1,896,976

  Depreciation and amortization            215,060       176,186        170,903

  General & administrative               5,200,735     6,704,538      3,406,774
                                        ----------    ----------     ----------
Total operating expenses                 9,517,358     9,409,252      5,474,653
                                        ----------    ----------     ----------

NET OPERATING LOSS                      (9,512,293)   (9,352,209)    (5,349,196)

GAIN ON DERIVATIVE INSTRUMENTS           1,799,393       868,182      2,325,784

COSTS ASSOCIATED WITH CONVERTIBLE DEBT           -             -     (4,791,548)

INTEREST INCOME                            483,252       562,973         92,487

INTEREST EXPENSE                          (473,767)   (1,708,603)      (216,737)
                                        ----------    ----------     ----------

NET LOSS                                (7,703,415)   (9,629,657)    (7,939,210)

DIVIDENDS                                 (424,815)            -              -
                                        ----------    ----------     ----------

NET LOSS AVAILABLE TO COMMON
   SHAREHOLDERS                        $(8,128,230)  $(9,629,657)   $(7,939,210)
                                      ============   ===========    ===========
NET LOSS PER COMMON SHARE

      BASIC                            $     (0.07)  $     (0.10)   $     (0.10)

      DILUTED                          $     (0.07)  $     (0.10)   $     (0.11)

WEIGHTED AVERAGE COMMON SHARES
  OUTSTANDING
      BASIC                            117,060,866    97,310,488     78,971,290

      DILUTED                          117,060,866    97,310,488     93,834,078



                 See notes to consolidated financial statements.


                                      F-5


                               CEL-SCI CORPORATION
                       CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  YEARS ENDED SEPTEMBER 30, 2008, 2007 AND 2006

                                                                                            
                                                            Additional
                                  Common       Stock          Paid-In        Unearned       Accumulated
                                  Shares       Amount         Capital     Compensation        Deficit          Total
                                --------------------------------------------------------------------------------------

BALANCE SEPTEMBER 30, 2005       74,494,206  $  744,942     $100,359,296   $        -      $ (98,999,199)   $ 2,105,039
Stock issued to nonemployees
  for service                       980,000       9,800          611,250                                        621,050
Exercise of stock options           150,000       1,500           37,217                                         38,717
Issuance of stock  options to
  non-employees                                                  271,893                                        271,893
Extension of options                                              86,864                                         86,864
401(k) contributions paid
  in common stock                   132,989       1,330           84,150                                         85,480
Issuance of common stock to
  employees                         583,815       5,838          317,468                                        323,306
Issuance of common stock
  for equity line of credit       1,419,446      14,194          663,533                                        677,727
Payment of interest on
  convertible debt in common stock   68,500         685           37,228                                         37,913
Penalty shares issued               186,250       1,863          130,624                                        132,487
Exercise of warrants              1,300,000      13,000          652,000                                        665,000
Cashless exercise of warrants       882,222       8,822           (8,822)                                             -
Private placement                 2,500,000      25,000          975,000                                      1,000,000
Reclassification of derivatives                                  797,835                                        797,835
SFAS  123R  cost of  employee
   options                                                       180,298                                        180,298
Financing costs                                                  (15,000)                                       (15,000)
Net loss                                                                                      (7,939,210)    (7,939,210)
                                -----------    --------     ------------    ---------      ------------    ------------
BALANCE, SEPTEMBER 30, 2006      82,697,428    $826,974     $105,180,834            -      $(106,938,409)  $   (930,601)




                                      F-6

                               CEL-SCI CORPORATION
                       CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  YEARS ENDED SEPTEMBER 30, 2008, 2007 AND 2006
                                   (continued)

                                                                                            
                                                            Additional
                                  Common       Stock          Paid-In        Unearned       Accumulated
                                  Shares       Amount         Capital     Compensation        Deficit          Total
                                --------------------------------------------------------------------------------------

Private placement                20,043,331     200,433       14,832,067                                     15,032,500
401(k) contributions paid
  in common stock                   137,546       1,376           88,347                                         89,723
Issuance of common stock to
  employees                       1,663,830      16,638          308,140                                        324,778
Exercise of stock options         1,337,364      13,374          599,092                                        612,466
Penalty shares issued               245,000       2,450          153,900                                        156,350
Stock issued to non-employee
  for service                     3,466,300      34,663        2,512,736                                      2,547,399
Issuance of stock options to
  non-employees                                                1,556,228                                      1,556,228
Payment of principal on
  convertible debt in common stock  343,099       3,431          229,724                                        233,155
Conversion of convertible debt
  into common stock               5,744,764      57,448        4,323,279                                      4,380,727
SFAS 123R cost of employee
  options                                                        307,201                                        307,201
Financing costs                                                  (10,170)                                       (10,170)
Net loss                                                                                      (9,629,657)    (9,629,657)
                                -----------    --------     ------------    ---------       ------------    ------------
BALANCE, SEPTEMBER 30, 2007     115,678,662   1,156,787      130,081,378            -       (116,568,066)    14,670,099

Sale of common stock              1,383,389      13,834        1,023,708                                      1,037,542
401(k) contributions paid
  in common stock                   205,125       2,051          106,539                                        108,590
Issuance of common stock to
  employees                       1,789,451      17,894        1,306,580                                      1,324,474
Exercise of stock options            50,467         505           13,898                                         14,403
Correction of stock overpayment pricing                            1,471                                          1,471
Stock issued to non-employees
  for service                     1,689,000      16,890          251,858                                        268,748
Issuance of stock options  to
  non-employees                                                   12,342                                         12,342
SFAS 123R cost of employee
  options                                                        561,387                                        561,387
Modification of stock options                                    564,189                                        564,189
Financing costs                                                  (23,795)                                       (23,795)
Dividends                                                        424,815                        (424,815)             -
Net loss                                                                                      (7,703,415)    (7,703,415)
                                -----------    --------     ------------    ---------       ------------    -----------
BALANCE, SEPTEMBER 30, 2008     120,796,094   1,207,961      134,324,370            -       (124,696,296)    10,836,035
                                ===========   =========     ============    =========       ============    ===========


                                      F-7


                               CEL-SCI CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED SEPTEMBER 30, 2008, 2007 AND 2006


                                                                          
                                                    2008          2007            2006
                                                  --------      ---------       --------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                     $(7,703,415)   $ (9,629,657)   $(7,939,210)
  Adjustments to reconcile net loss to
    net cash used for operating activities:
      Depreciation and amortization                215,060         176,186        170,902
      Issuance of stock options to
         nonemployees for services                  12,342         191,455        271,893
      Issuance of common stock for services        268,748       2,547,399        621,050
     Correction of stock overpayment pricing         1,471               -              -
      Penalty shares issued to nonemployees              -         156,350        132,487
      Modification of stock options                564,189               -         86,864
      Issuance of stock to employees             1,324,474         324,778        323,306
      Employee option cost                         561,387         307,201        180,298
      Common stock contributed to 401(k)
         plan                                      108,590          89,723         85,480
      Impairment loss on abandonment of
         patents                                     8,114          34,122              -
      Loss on retired equipment                        595               -            645
      Deferred rent                                  5,151           1,466              -
      Amortization of discount on
         convertible note                          249,106       1,180,421        104,351
      Gain on derivative instruments            (1,799,393)       (868,182)    (2,325,784)
      Change in assets and liabilities:
        Increase in deposits                    (1,575,000)              -              -
        Increase in interest and
          other receivables                       (142,117)        (14,753)       (14,462)
        Decrease (increase) in prepaid
          expenses                                   7,369         491,920       (454,651)
        (Increase) decrease in inventory
          used in R&D and manufacturing             (9,520)          4,994        (29,839)
        Increase (decrease) in accounts
          payable                                  (36,622)         89,159          3,637
        Increase in accrued expenses                 14,576         23,709            275
        Increase (decrease) in accrued
          interest on convertible debt              (23,237)        (5,678)       112,386
        Increase (decrease) in due to
          employees                                   9,342          9,310         (5,455)
        Decrease in deposits held                    (3,000)             -              -
                                               ------------     ----------     ----------
Net cash used in operating activities            (7,978,544)    (4,890,077)    (8,675,827)
                                               ------------     ----------     ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Deferred rent on manufacturing
     facility                                             -     (4,936,591)             -
   Additional investment in
     manufacturing facility                      (2,359,473)             -              -
      (Increase) decrease in restricted cash      1,180,977     (2,168,629)             -
      Investment in available-for-sale
        securities                               (6,000,000)             -              -
      Sale of investments in
        available-for-sale securities             5,800,000              -              -
      Purchases of equipment                     (1,023,011)      (181,459)        (1,885)
      Expenditures for patent costs                (121,616)      (137,884)       (88,819)
                                               ------------     ----------     ----------
Net cash used in investing activities            (2,486,369)    (7,424,563)       (90,704)
                                               ------------     ----------     ----------

                                                                                 (continued)


                 See notes to consolidated financial statements.

                                      F-8




                               CEL-SCI CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED SEPTEMBER 30, 2008, 2007 AND 2006
                                   (continued)


                                                                       
                                                  2008           2007          2006
                                              ------------  ------------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock      $  1,037,542  $ 15,032,500   $ 1,000,000
  Proceeds from exercise of warrants                     -             -       665,000
  Draw-downs on equity line of credit                    -             -       677,727
  Proceeds from exercise of stock options           14,403       612,466        38,717
  Proceeds from short-term loan                  1,956,803             -             -
  Repayment of short-term loan                  (1,756,803)            -             -
  Proceeds from convertible debt                         -             -     8,300,000
  Fair value adjustment for convertible debt             -             -     3,163,265
  Fair value adjustment for warrants  issued
    in relation to convertible debt                      -             -       835,666
  Principal payments on convertible debt        (1,045,000)     (407,500)            -
  Warrants issued to placement agent                     -             -       223,907
  Costs for equity related transactions            (23,795)      (10,170)      (15,000)
                                              ------------  ------------   -----------
Net cash provided by financing activities          183,150    15,227,296    14,889,282
                                              ------------  ------------   -----------
NET INCREASE (DECREASE)IN CASH
   AND CASH EQUIVALENTS                        (10,281,763)    2,912,656     6,122,751

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR    10,993,021     8,080,365     1,957,614
                                              ------------  ------------   -----------
 CASH AND CASH EQUIVALENTS, END OF YEAR       $    711,258  $ 10,993,021   $ 8,080,365
                                              ============  ============   ===========









                                                                   (continued)

                 See notes to consolidated financial statements.


                                      F-9

                               CEL-SCI CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED SEPTEMBER 30, 2008, 2007 AND 2006
                                   (continued)


 
                                                                      
                                                  2008           2007          2006
                                              ------------  ------------   -----------
CONVERSION OF CONVERTIBLE DEBT
  INTO COMMON STOCK:
    Decrease in convertible debt              $          -  $  4,373,631   $         -
    Increase in receivables                              -         7,096             -
    Increase in common stock                             -       (57,448)            -
    Increase in additional paid-in capital               -    (4,323,279)            -
                                              ------------  ------------   -----------
                                              $          -  $          -   $         -
                                              ============  ============   ===========
CONVERSION OF INTEREST ON
  CONVERTIBLE DEBT INTO COMMON STOCK:
    Decrease in accrued liabilities           $         -   $          -   $    37,913
    Increase in common stock                            -              -          (685)
    Increase in additional paid-in capital              -              -       (37,228)
                                              -----------   ------------   -----------
                                              $         -   $          -   $         -
                                              ===========   ============   ===========
PAYMENT OF CONVERTIBLE DEBT PRINCIPAL WITH
COMMON STOCK:
     Decrease in convertible debt             $         -        233,155   $         -
     Increase in common stock                           -         (3,431)            -
     Increase in additional paid-in capital             -       (229,724)            -
                                              -----------   ------------   -----------
                                              $         -   $          -   $         -
                                              ============  ============   ===========
ISSUANCE OF WARRANTS:
     Increase in additional paid-in capital   $  (891,336)  $ (5,598,655)  $         -
     Decrease in additional paid-in capital       891,336      5,598,655             -
                                              -----------   ------------   -----------
                                              $         -   $          -   $         -
                                              ===========   ============   ===========
WARRANTS ISSUED TO LESSOR:
     Increase in deferred rent                $         -      1,364,773   $         -
     Increase in additional paid-in capital             -     (1,364,773)            -
                                              -----------   ------------   -----------
                                              $         -   $          -   $         -
                                              ===========   ============   ===========
PATENT COSTS INCLUDED IN
  ACCOUNTS PAYABLE:
    Increase in patent costs                  $   14,013    $      8,429   $    20,065
    Increase in accounts payable                 (14,013)         (8,429)      (20,065)
                                              ----------    ------------   -----------
                                              $        -    $          -   $         -
                                              ===========   ============   ===========
EQUIPMENT COSTS INCLUDED IN
  ACCOUNTS PAYABLE:
    Increase in research and office
      equipment                                  201,998          52,476             -
    Increase in accounts payable                (201,998)        (52,476)            -
                                              ----------    ------------   -----------
                                              $        -    $          -   $         -
                                              ==========    ============   ===========
CASHLESS EXERCISE OF WARRANTS:
    Increase in common stock                  $        -    $          -   $    (8,822)
    Increase in additional paid-in capital             -               -         8,822
                                              ----------    ------------   -----------
                                              $        -    $          -   $         -
                                              ==========    ============   ===========


                                                                   (continued)

                 See notes to consolidated financial statements.

                                      F-10



                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED SEPTEMBER 30, 2008, 2007 AND 2006
                                   (continued)

 
                                                                      
                                                  2008           2007          2006
                                              ------------  ------------   -----------
MODIFICATION OF WARRANTS:
    Increase in additional paid-in capital     $  (173,187)  $         -    $        -
     Decrease in additional paid-in capital        173,187             -             -
                                               -----------   -----------    ----------
                                               $         -   $         -    $        -
                                               ===========   ===========    ==========























                                                                     (continued)

                 See notes to consolidated financial statements.


                                      F-11


                               CEL-SCI CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED SEPTEMBER 30, 2008, 2007 AND 2006
                                   (continued)

 
                                                                      
                                                  2008           2007          2006
                                              ------------  ------------   -----------
RECLASSIFICATION OF DERIVATIVE
  INSTRUMENTS:
    Decrease in derivative instruments         $       -     $        -      $797,835
    Increase in additional paid-in capital             -              -      (797,835)
                                               ---------     ----------      --------
                                               $       -     $        -      $      -
                                               =========     ==========      ========
FAIR VALUE ADJUSTMENT FOR CONVERTIBLE
  DEBT AND RELATED WARRANTS:
    Increase in convertible debt                       -              -     3,998,931
    Increase in costs associated with
      convertible debt                                 -              -    (3,998,931)
                                               ---------     ----------    ----------
                                               $       -     $        -    $        -
                                               =========     ==========    ==========
COST OF NEW WARRANTS AND REPRICING OF
  OLD WARRANTS ON PRIVATE PLACEMENT:
      Increase in additional paid-in capital           -              -     1,192,949
      Decrease in additional paid-in capital           -              -    (1,192,949)
                                               ---------     ----------    ----------
                                               $       -     $        -    $        -
                                               =========     ==========    ==========

STOCK MODIFICATION RECORDED AS DIVIDEND
     Increase additional paid-in capital       $(424,815)    $        -    $        -
     Increase accumulated deficit                424,815              -             -
                                               ---------     ----------    ----------
                                               $       -     $        -    $        -
                                               =========     ==========    ==========


                 See notes to consolidated financial statements.



SUPPLEMENTAL DISCLOSURE OF CASH
     FLOWS INFORMATION

Cash expenditure for interest expense            224,662        528,182             -




                                      F-12



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 and selling products.

   CEL-SCI's lead product, Multikine(R), is being developed for the treatment of
   cancer. Multikine is a patented immunotherapeutic agent consisting of a
   mixture of naturally occurring cytokines, including interleukins,
   interferons, chemokines and colony-stimulating factors, currently being
   developed for the treatment of cancer. Multikine is designed to target the
   tumor micro-metastases that are mostly responsible for treatment failure. The
   basic concept is to add Multikine to the current cancer treatments with the
   goal of making the overall cancer treatment more successful. Phase II data
   indicated that Multikine treatment resulted in a substantial increase in the
   survival of patients. The lead indication is advanced primary head & neck
   cancer. Since Multikine is not tumor specific, it may also be applicable in
   many other solid tumors.

   Significant accounting policies are as follows:

a. Principles of Consolidation--The consolidated financial statements include
   the accounts of the Company and its wholly owned subsidiary, Viral
   Technologies, Inc. (VTI). All significant intercompany transactions have been
   eliminated upon consolidation.

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

c. Restricted Cash--The restricted cash is money held in escrow pursuant to the
   lease agreement for the manufacturing facility.

d. Interest and other receivables--Interest and other receivables consists of
   interest accrued on any investments and on the deferred rent. Interest on the
   deferred rent is calculated at 3% on the funds deposited on the manufacturing
   facility. This interest income will be used to offset future rent.

e. Prepaid Expenses and Inventory--Prepaid expenses consist of expenses which
   benefit a substantial period of time. Inventory consists of manufacturing
   production advances and bulk purchases of laboratory supplies to be consumed
   in the manufacturing of the Company's product for clinical studies.

f. Deposits--The deposits are both deposits on the office ($14,828) and the
   deposit on the manufacturing facility ($1,575,000) required by the lease
   agreement.


                                      F-13



g. 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. Leasehold improvements are depreciated over the
   shorter of the estimated useful life of the asset or the terms of the lease.
   Repairs and maintenance which do not extend the life of the asset are
   expensed when incurred. The fixed assets are reviewed on a quarterly basis to
   determine if any of the assets are impaired. Depreciation expense for the
   years ended September 30, 2008, 2007 and 2006 totaled $133,604, $92,176 and
   $90,664, respectively.

h. Patents--Patent expenditures are capitalized and amortized using the
   straight-line method over the shorter of the expected useful life or the
   legal life of the patent (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. An
   impairment loss is recognized when estimated future undiscounted cash flows
   expected to result from the use of the asset, and from disposition, is less
   than the carrying value of the asset. The amount of the impairment loss is
   the difference between the estimated fair value of the asset and its carrying
   value. During the years ended September 30, 2008, 2007 and 2006, the Company
   recorded patent impairment charges of $8,114, $34,122 and $-0-, respectively,
   for the net book value of patents abandoned during the year. These
   abandonments included the write off in the year ended September 30, 2007 of
   the unamortized patent costs in Viral Technologies, Inc., the Company's
   wholly owned subsidiary, totaling $34,122. These amounts are included in
   general and administrative expenses. Amortization expense for the years ended
   September 30, 2008, 2007 and 2006 totaled $81,456, $84,010 and $80,238,
   respectively. The Company estimates that amortization expense will be $82,000
   for each of the next five years, totaling $410,000.

i. Deferred Rent--On  September 30, 2008, the Company has included in deferred
   rent the following:  1) deposit on the manufacturing facility ($3,150,000);
   2) the  fair  value of the  warrants  issued  to  lessor  ($1,364,773);  3)
   additional  investment  ($2,359,473);  and 4)  deposit  on the  cost of the
   leasehold  improvements for the  manufacturing  facility  ($1,786,591).  On
   September  30,  2007,  the  Company  has  included  in  deferred  rent  the
   following:  1) deposit on the manufacturing facility  ($3,150,000);  2) the
   fair value of the warrants issued to lessor ($1,364,773); and 3) deposit on
   the  cost of the  leasehold  improvements  for the  manufacturing  facility
   ($1,786,591).

j. Deferred Rent (liability)-The deferred rent (liability) is amortized on a
   straight-line basis over the term of the lease with the offset going against
   rent expense.

k. Derivative Instruments--The Company has entered into financing arrangements
   that consist of freestanding derivative instruments or are hybrid instruments
   that contain embedded derivative features. The Company accounts for these
   arrangement in accordance with Statement of Financial Accounting Standards
   No. 133, "Accounting for Derivative Instruments and Hedging Activities",
   ("SFAS No. 133") and Emerging Issues Task Force Issue No. 00-19, "Accounting
   for Derivative Financial Instruments Indexed to, and Potentially Settled in,
   a Company's Own Stock", ("EITF 00-19"), as well as related interpretations of
   these standards. In accordance with accounting principles generally accepted
   in the United States ("GAAP"), derivative instruments and hybrid instruments
   are recognized as either assets or liabilities in the statement of financial
   position and are measured at fair value with gains or losses recognized in
   earnings or other comprehensive income depending on the nature of the
   derivative or hybrid instruments. Embedded derivatives that are not clearly
   and closely related to the host contract are bifurcated and recognized at
   fair value with changes in fair value recognized as either a gain or loss in


                                      F-14


   earnings if they can be reliably measured. When the fair value of embedded
   derivative features cannot be reliably measured, the Company measures and
   reports the entire hybrid instrument at fair value with changes in fair value
   recognized as either a gain or loss in earnings. The Company determines the
   fair value of derivative instruments and hybrid instruments based on
   available market data using appropriate valuation models, giving
   consideration to all of the rights and obligations of each instrument and
   precluding the use of "blockage" discounts or premiums in determining the
   fair value of a large block of financial instruments. Fair value under these
   conditions does not necessarily represent fair value determined using
   valuation standards that give consideration to blockage discounts and other
   factors that may be considered by market participants in establishing fair
   value.

l. Research and Development Grant Revenues--The Company's grant arrangements are
   handled on a reimbursement basis. Grant revenues under the arrangements are
   recognized as grant revenue when costs are incurred. The grants which the
   Company had been receiving have been exhausted in fiscal year 2007 and the
   Company is currently not receiving funds from any grants.

m. Research and Development Costs--Research and development expenditures are
   expensed as incurred. Total research and development costs, excluding
   depreciation, were $4,101,563, $2,528,528 and $1,896,976 for the years ended
   September 30, 2008, 2007 and 2006.

n. Net Loss Per Common 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. Potentially dilutive common stock equivalents, including
   convertible preferred stock, convertible debt and options to purchase common
   stock, were included in the calculation unless it was antidilutive.

o. Concentration of Credit Risk--Financial instruments, which potentially
   subject the Company to concentrations of credit risk, consist of cash and
   cash equivalents. The Company maintains its cash and cash equivalents with
   high quality financial institutions. At times, these accounts may exceed
   federally insured limits. The Company has not experienced any losses in such
   bank accounts. The Company believes it is not exposed to significant credit
   risk related to cash and cash equivalents.

p. Income Taxes--The Company adopted the provisions of FASB Interpretation No.
   48, Accounting for Uncertainty in Income Taxes, on October 1, 2007. The
   Company has net operating loss carryforwards approximately $98,093,100. The
   Company uses the asset and liability method of accounting for income taxes.
   Under the asset and liability method, deferred tax assets and liabilities are
   recognized for future tax consequences attributable to differences between
   the financial statement carrying amounts of existing assets and liabilities
   and their respective tax bases and operating and tax loss carryforwards.
   Deferred tax assets and liabilities are measured using enacted tax rates
   expected to apply to taxable income in the years in which those temporary
   differences are expected to be recovered or settled. The effect on deferred
   tax assets and liabilities of a change in tax rates is recognized in income
   in the period that includes the enactment date. The Company records a
   valuation allowance to reduce the deferred tax assets to the amount that is


                                      F-15


   more likely than not to be recognized. There has been no change in the
   Company's financial position and results of operations due to the adoption of
   FIN 48.

q. 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. Accounting for derivatives is
   based upon valuations of derivative instrument determined using various
   valuation techniques including the Black-Scholes and binomial pricing
   methodologies. The Company considers such valuations to be significant
   estimates.

r. Recent Accounting  Pronouncements--In  September 2006, the FASB issued SFAS
   No. 157,  "Fair Value  Measurements".  The  statement  defines  fair value,
   establishes  a  framework  for  measuring  fair  value in GAAP and  expands
   disclosures about fair value  measurements.  The statement is effective for
   financial  statements  issued for fiscal years beginning after November 15,
   2007 and interim  periods within those fiscal years.  In February 2008, the
   FASB issued FASB Staff Position  ("FSP") No. 157-2,  Effective Data of FASB
   Statement  No.  157.  FSP 157-2  delays the  effective  date of SFAS 157 to
   fiscal years beginning after November 15, 2008, for nonfinancial assets and
   nonfinancial liabilities, except for items that are recognized or disclosed
   at fair value in the financial  statements  on a recurring  basis (at least
   annually). The  Company is evaluating whether this statement will affect its
   current practice in valuing fair value of its derivatives each quarter. The
   effect of the adoption is expected to be immaterial.

   In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
   Financial Assets and Financial Liabilities - Including an amendment of FASB
   Statement No. 15". The Statement permits companies to choose to measure many
   financial instruments and certain other items at fair value. The statement is
   effective for fiscal years that begin after November 15, 2007, but early
   adoption is permitted. The effect will be immaterial.

   In December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business
   Combinations", which replaces SFAS No. 141. The statement retains the
   purchase method of accounting for acquisitions, but requires a number of
   changes, including changes in the way assets and liabilities are recognized
   in the purchase accounting. It also changes the recognition of assets
   acquired and liabilities assumed arising from contingencies, requires the
   capitalization of in-process research and development at fair value, and
   requires the expensing of acquisition-related costs as incurred. SFAS No.
   141R is effective beginning October 1, 2009 and will apply prospectively to
   business combinations completed on or after that date.

   In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
   Consolidated Financial Statements, an amendment of ARB 51", which changes the
   accounting and reporting for minority interests. Minority interests will be
   recharacterized as noncontrolling interests and will be reported as a
   component of equity separate from the parent's equity, and purchases or sales
   of equity interests that do not result in a change in control will be
   accounted for as equity transactions. In addition, net income attributable to


                                      F-16


   the noncontrolling interest will be included in consolidated net income on
   the face of the income statement and, upon loss of control, the interest
   sold, as well as any interest retained, will be recorded at fair value with
   any gain or loss recognized in earnings. SFAS No. 160 is effective beginning
   October 1, 2009 and will apply prospectively, except for the presentation and
   disclosure requirements, which will apply retrospectively.

   In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
   Instruments and Hedging Activities - an amendment of FASB Statement No. 133",
   which changes disclosure requirements for derivative instruments and hedging
   activities. The statement is effective for periods ending on or after
   November 15, 2008, with early application encouraged. The Company is
   currently assessing the additional requirements of this statement.

   In April 2008, the FASB staff issued PSP FAS 142-3, "Determination of the
   Useful Life of Intangible Assets", which amends the factors that should be
   considered in developing renewal or extension assumptions used to determine
   the useful life of a recognized intangible asset under FASB Statement No.
   142, "Goodwill and Other Intangible Assets". The staff position is intended
   to improve the consistency between the useful life of a recognized intangible
   asset under Statement 142 and the period of expected cash flows used to
   measure the fair value of the asset under FASB Statement No. 141, "Business
   Combinations", and other U.S. generally accepted accounting principles
   (GAAP). The Company is currently assessing the potential impact of this staff
   position on its consolidated financial statements.

   In June 2008, the FASB finalized EITF 07-5, "Determining Whether an
   Instrument (or Embedded Feature) is Indexed to an Entity's Own Stock". The
   EITF lays out a procedure to determine if the debt instrument is indexed to
   its own common stock. The EITF is effective for fiscal years beginning after
   December 15, 2008. The Company believes it will have an impact on the
   convertible debt and certain warrants and it could be material.

   In September 2008, the FASB staff issued PSP FAS 133-1 and FIN 45-4,
   "Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of
   FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of
   the Effective Date of FASB Statement No. 161". The FSP applies to credit
   derivatives within the scope of Statement 133 and hybrid instruments that
   have embedded credit derivatives. It deals with disclosures related to these
   derivatives and is effective for reporting periods ending after November 15,
   2008. It also clarifies the effective date of SFAS No. 161 as any reporting
   period beginning after November 15, 2008. The Company is currently assessing
   the potential impact of this staff position on its consolidated financial
   statements.


                                      F-17


s. Stock-Based Compensation-- In December 2004, the FASB issued SFAS No. 123R,
   "Share-Based Payment". SFAS No. 123R requires companies to recognize
   compensation expense in an amount equal to the fair value of the share-based
   payment (stock options and restricted stock) issued to employees. 123R
   applies to all transactions involving issuance of equity by a Company in
   exchange for goods and services, including transactions with employees. SFAS
   No. 123R was effective for the first fiscal period in the fiscal year
   beginning after June 15, 2005. The Company recognized expense of $ 561,387
   for options issued or vested during the fiscal year ended September 30, 2008,
   expense of $307,201 for options issued or vested during the fiscal year ended
   September 30, 2007 and expense of $180,298 for options issued or vested
   during the fiscal year ending September 30, 2006. This expense was recorded
   as general and administrative expense. The following table summarizes stock
   option activity for the year ended September 30, 2008.

Non-Qualified Stock Option Plan

                                                                                             
                                    Outstanding                                                   Exercisable
                     ------------------------------------------------         ---------------------------------------------------
                                              Weighted                                             Weighted
                                   Weighted    Average                                 Weighted     Average
                      Number       Average    Remaining     Aggregate         Number    Average    Remaining       Aggregate
                        of         Exercise  Contractual    Intrinsic           of     Exercise   Contractual      Intrinsic
                      Shares        Price    Term (Years)     Value           Shares     Price    Term (Years)       Value
                     ------------------------------------------------         ---------------------------------------------------
Outstanding at
 October 1, 2007     6,907,698      $0.70        5.17       1,162,496       5,467,712    $0.64        4.02          $1,085,252
Vested                                                                        616,328    $0.59
Granted              1,038,000      $0.61        9.47                       1,038,000    $0.61        9.47
Exercised              (50,467)     $0.59        3.99      $    5,784         (50,467)   $0.59        3.99          $    5,784
Forfeited               (9,332)     $0.57                                      (9,332)   $0.57
Expired                (34,634)     $1.07                                     (34,634)   $1.07
Outstanding at
 September 30, 2008  7,851,265      $0.65        5.30      $  293,449       5,998,939    $0.66        4.15          $  293,449



Incentive Stock Option Plan
---------------------------


                                                                                             
                                    Outstanding                                                   Exercisable
                     ------------------------------------------------         ---------------------------------------------------
                                              Weighted                                             Weighted
                                   Weighted    Average                                 Weighted     Average
                      Number       Average    Remaining     Aggregate         Number    Average    Remaining       Aggregate
                        of         Exercise  Contractual    Intrinsic           of     Exercise   Contractual      Intrinsic
                      Shares        Price    Term (Years)     Value           Shares     Price    Term (Years)       Value
                     ------------------------------------------------         ---------------------------------------------------
Outstanding at
 October 1, 2007     4,601,933      $0.64        5.38      $1,078,567       3,998,601    $0.63        4.52          $1,050,067
Vested                                                                        280,001    $0.58
Granted                300,000      $0.62        9.50                         300,000    $0.62        9.50
Exercised
Forfeited
Expired               (156,667)     $3.83                                    (156,667)   $3.83
Outstanding at
 September 30, 2008  4,745,266      $0.53        5.30        $454,200       4,121,935    $0.52        4.45          $  454,200



                                      F-18



      The total intrinsic value of options exercised during the fiscal years
      2008, 2007 and 2006 was $5,784, $257,463 and $67,432, respectively.

      A summary of the status of the Company's non-vested options as of
      September 30, 2008 is presented below:

Non-qualified Stock Option Plan:
                                           Weighted
                                           Number of             Average
                                            Shares                Price
                                          ----------            ---------

      Nonvested at October 1, 2005         1,572,470              $0.25
         Vested                           (1,538,821)
         Granted                           1,091,000
         Forfeited                                 -
         Expired                                   -
                                          ----------

      Nonvested at September 30, 2006      1,124,649              $0.23
         Vested                             (554,663)
         Granted                             870,000
         Forfeited                                 -
         Expired                                   -
                                          ----------

      Nonvested at September 30, 2007      1,439,986              $0.51
         Vested                             (616,328)
         Granted                           1,038,000
         Forfeited                            (9,332)
         Expired                                   -
                                         -----------

      Nonvested at September 30, 2008      1,852,326              $0.61

Incentive Stock Option Plan:
                                           Weighted
                                           Number of             Average
                                            Shares                Price
                                           ---------             -------

      Nonvested at October 1, 2005         1,086,665              $0.21
         Vested                             (939,999)
         Granted                             370,000
         Forfeited                                 -
         Expired                                   -
                                           ---------

      Nonvested at September 30, 2006        516,666              $0.46
         Vested                             (213,334)
         Granted                             300,000
         Forfeited                                 -
         Expired                                   -
                                          ----------

                                      F-19


      Nonvested at September 30, 2007        603,332              $0.49
         Vested                             (280,001)
         Granted                             300,000
         Forfeited                                 -
         Expired                                   -
                                         -----------

      Nonvested at September 30, 2008        623,331              $0.62


   The weighted average fair value at the date of grant for options granted
   during fiscal years 2008, 2007 and 2006 was $0.51, $0.53 and $0.58,
   respectively.

   In fiscal year 2008, CEL-SCI issued 1,338,000 stock options to employees and
   directors at a fair value of $677,661, or weighted average $0.51 per share.
   In September 2007, CEL-SCI issued 1,170,000 stock options to employees and
   directors at a fair value of $616,977, or $0.53 per share. In September 2006,
   CEL-SCI issued 1,086,000 stock options to employees and directors at a fair
   value of $543,699, or $0.50 per share. The fair value of each option grant
   was estimated on the date of grant using the Black-Scholes option-pricing
   model with the following assumptions:

                                           2008        2007        2006
                                           ----        ----        ----

      Expected stock risk volatility      79-81%        80%         78%
      Risk-free interest rate           3.68-4.53%    4.67%       4.88%
      Expected life options             10 Years    10 Years    10 Years
      Expected dividend yield               -            -          -

   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. The risk-free rate of
   return used for fiscal years 2008, 2007 and 2006 equals the yield on ten-year
   zero-coupon U.S. Treasury issues on the grant date. Historical data was used
   to estimate option exercise and employee termination within the valuation
   model. The expected term of options represents the period of time that
   options granted are expected to be outstanding and has been determined based
   on an analysis of historical exercise behavior. No discount was applied to
   the value of the grants for non-transferability or risk of forfeiture.

   At the annual shareholders' meeting on March 3, 2008, the following plans
were adopted:

o     CEL-SCI's 2008 Incentive Stock Option Plan which provides that up to
      1,000,000 shares of common stock may be issued upon the exercise of
      options granted pursuant to the Incentive Stock Option Plan.

o     CEL-SCI's 2008 Non-Qualified Stock Option Plan which provides that up to
      1,000,000 shares of common stock may be issued upon the exercise of
      options granted pursuant to the Non-Qualified Stock Option Plan.


                                      F-20


o     CEL-SCI's 2008 Stock Bonus Plan which provides that up to 1,000,000 shares
      of common stock may be issued to persons granted stock bonuses pursuant to
      the Stock Bonus Plan.

o     CEL-SCI's Stock Compensation Plan was amended to provide for the issuance
      of up to 1,000,000 additional restricted shares of common stock to
      CEL-SCI's directors, officers, employees and consultants for services
      provided to CEL-SCI.

2.   SERIES K CONVERTIBLE DEBT

     In August 2006, the Company issued $8,300,000 million in aggregate
     principal amount of convertible notes (the "Series K Notes") together with
     warrants to purchase 4,825,581 shares of the Company's common stock (the
     "Series K Warrants"). Additionally, in connection with issuance of the
     Series K Notes and Series K Warrants, the placement agent received a fee of
     $498,000 and 386,047 fully vested warrants (the "Placement Agent Warrants")
     to purchase shares of the Company's common stock. Net proceeds were
     $7,731,290, net of $568,710 in direct transaction costs, including the
     placement agent fee.

     Features of the Convertible Debt Instrument and Warrants

     The Series K Notes were convertible into 9,651,163 shares of the Company's
     common stock at the option of the holder at any time prior to maturity at a
     conversion price of $0.86 per share, subject to adjustment for certain
     events described below. The Series K Warrants were exercisable over a
     five-year period from February 4, 2007 through February 4, 2012 at $0.95
     per share.

     The Series K Notes  bear  interest  at the  greater of 8% or LIBOR plus 300
     basis  points,  and are  required  to be  repaid in  thirty  equal  monthly
     installments of $95,000  beginning on March 4, 2007 and continuing  through
     September 4, 2010. The remaining  principal balance of $950,000 is required
     to be repaid on August 4, 2011; however,  holders of the Series K Notes may
     require  repayment of the entire  remaining  principal  balance at any time
     after August 4, 2009, accordingly,  the debt has been classified as current
     as of September 30, 2008.  Interest has been payable quarterly beginning in
     September 30, 2006.  Each payment of principal and accrued  interest may be
     settled in cash or in shares of common  stock at the option of the Company.
     The  number of shares  deliverable  under  the  share-settlement  option is
     determined based on the lower of (a) $0.86 per share, as adjusted  pursuant
     to the terms of the  Series K Notes or (b) 90%  applied  to the  arithmetic
     average of the  volume-weighted-average  trading  prices for the twenty day
     period immediately preceding each share settlement.

     In the event of default,  as defined in the Series K Notes, all amounts due
     and  outstanding  thereunder  shall  become,  at the option of the holders,
     immediately  due and  payable in cash,  in an amount that equals the sum of
     (i) the greater of (a) 115% of the outstanding balance plus all accrued and
     unpaid   interest   or  (b)  115%  of  the   arithmetic   average   of  the
     volume-weighted-average  trading prices for the five day period immediately
     preceding  notice  requiring  repayment,  and (ii) all other amounts due in
     connection with the Series K Notes and associated agreements. Additionally,
     if a certain breach occurs under a related  registration  rights agreement,
     the Company will be required to pay, as liquidated damages,  1.5% per month


                                      F-21


     of the  outstanding  balance of the Series K Notes,  until such  default is
     cured  (or 2% per month if such  breach  occurs  after  180 days  following
     closing of the  transaction).  Events of default include  circumstances  in
     which the Company either fails to have a registration  statement for shares
     into which the Series K Notes can be converted be declared effective by the
     SEC within 180 days of the issuance  date of the Series K Notes or that the
     registration statement's effectiveness lapses for any reason.

     The Company may not make payments in shares if such payments would result
     in the cumulative issuance of shares of its common stock exceeding 19.999%
     of the shares outstanding on the day immediately preceding the issuance
     date of the Series K Notes, unless prior approval is given by vote of at
     least a majority of the shares outstanding. The Company received such
     approval on November 17, 2006. The Company cannot determine at this time if
     it will be required to issue shares in excess of the Issuable Maximum
     because the number of shares issuable as payments of principal and interest
     under the Series K Notes will depend on future share prices. The conversion
     price of the Series K Notes and exercise price of the Series K Warrants are
     each subject to certain anti-dilution protections, including for stock
     splits, stock dividends, change in control events and dilutive issuances of
     common stock or common stock equivalents, such as stock options, at an
     effective price per share that is lower than the then conversion price. In
     the event of a dilutive issuance of common stock or common stock
     equivalents, the conversion price and exercise price would be reduced to
     equal the lower per share price of the subsequent transaction.

     Accounting for the Convertible Debt Instrument and Warrants

     The Company is accounting for the Series K Warrants as derivative
     liabilities in accordance with SFAS No. 133. The Company has determined
     that the Series K Notes constitute a hybrid instrument that has the
     characteristics of a debt host contract containing several embedded
     derivative features that would require bifurcation and separate accounting
     as a derivative instrument pursuant to the provisions of FAS 133. The
     Company has determined that certain of these features can not be reliably
     measured and, in accordance with the requirements of SFAS No. 133, has
     measured the entire hybrid instrument at fair value with changes in fair
     value recognized as either a gain or loss.

     Upon issuance of the Series K Notes and Series K Warrants, the Company
     allocated proceeds received to the Series K Notes and the Series K Warrants
     on a relative fair value basis. As a result of such allocation, the Company
     determined the initial carrying value of the Series K Notes to be
     $6,565,528. The Series K Notes were immediately marked to fair value
     resulting in a derivative liability in the amount of $9,728,793 and
     recognized a charge of $3,163,265, which was recorded as costs associated
     with convertible debt. As of September 30, 2008, the fair value of the
     Series K Notes is $1,943,240, and the Company recognized a total gain of
     $1,799,393 on the convertible debt and associated warrants during the year
     ended September 30, 2008. A debt discount in the amount of $1,734,472 is
     being amortized to interest expense using the effective interest method
     over the expected term of the Series K Notes. During the year ended
     September 30, 2008, the Company recorded interest expense of $249,106 in
     related amortization of the debt discount over the term of the Series K
     Notes.


                                      F-22


     Upon issuance, the Series K Warrants and Placement Agent Warrants did not
     meet the requirements for equity classification set forth in EITF Issue No.
     00-19, "Accounting for Derivative Financial Instruments Indexed to, and
     Potentially Settled in, a Company's Own Stock," because such warrants (a)
     must be settled in registered shares and (b) are subject to substantial
     liquidated damages if the Company is unable to maintain the effectiveness
     of the resale registration of the shares. Therefore such warrants must be
     accounted for as freestanding derivative instruments pursuant to the
     provisions of FAS 133. Accordingly, the Company allocated $2,570,138 of the
     initial proceeds to the Series K Warrants and immediately marked them to
     fair value resulting in a derivative liability of $2,570,138 and recognized
     a charge of $835,666, which was recorded as costs associated with
     convertible debt. As of September 30, 2008, the fair value of the Series K
     Warrants is $995,793. The Company paid $568,710 in cash transaction costs
     and incurred another $223,907 in costs based upon the fair value of the
     Placement Agent Warrants, which was recorded as costs associated with
     convertible debt. Such costs were expensed immediately as part of fair
     value adjustments required in connection with the convertible debt
     instrument and the Company's irrevocable election to initially and
     subsequently measure the Series K Notes at fair value. As of September 30,
     2008, the fair value of the Placement Agent Warrants was $79,664.

     During the year ended September 30, 2007, $4,399,285 in convertible debt
     was converted into 5,744,764 shares of common stock. No debt was converted
     into common stock during the year ended September 30, 2008.

     The following summary comprises the total of the fair value of the
     convertible debt at September 30, 2008 and 2007:

                                             2008           2007
                                             ----           ----

     Face value of debt                  $2,240,715     $3,285,715
     Discount on debt                      (193,980)      (443,086)
     Investor warrants                    1,734,472      1,734,472
     Placement agent warrants                79,664        192,826
     Fair value adjustment-convertible debt (103,495)      168,207
     Fair value adjustment-investor warrants   (738,679)      675,850
                                            -----------  ------------
     Total fair value                    $3,018,697     $5,613,984
                                         ==========     ==========

3.    OPERATIONS AND FINANCING

   The Company has incurred significant costs since its inception in connection
   with the acquisition of certain patented and unpatented proprietary
   technology and know-how relating to the human immunological defense system,
   patent applications, research and development, administrative costs,
   construction of laboratory facilities, and clinical trials. The Company has
   funded such costs with proceeds realized from the public and private sale of
   its common and preferred stock. The Company will be required to raise
   additional capital or find additional long-term financing in order to
   continue with its research efforts. To date, the Company has not generated
   any revenue from product sales. The ability of the Company to complete the
   necessary clinical trials and obtain Federal Drug Administration (FDA)
   approval for the sale of products to be developed on a commercial basis is


                                      F-23


   uncertain. Ultimately, the Company must complete the development of its
   products, obtain the appropriate regulatory approvals and obtain sufficient
   revenues to support its cost structure.

   CEL-SCI has two partners who have agreed to participate in and pay for part
   of the Phase III clinical trial for Multikine. However in light of the
   current capital market environment, CEL-SCI believes it is prudent not to
   start the Phase III clinical trial until it has firm commitments in the form
   of partnerships and/or money raised for a substantial amount of cash to
   support the Phase III clinical trial. In the meantime, CEL-SCI will operate
   at significantly reduced cash expenditure levels and additional cash may be
   raised by offering contract manufacturing services to the pharmaceutical
   industry in its new manufacturing facility. CEL-SCI expects that it will need
   to raise additional capital in fiscal year 2009 in the form of corporate
   partnerships and/or equity financings to support its operations at its
   current rate. CEL-SCI is currently working towards a transaction which it
   expects to complete in fiscal 2009 which will finance its Phase III clinical
   trial of Multikine. CEL-SCI believes that it will be able to obtain
   additional financing since Multikine is a Phase III product designed to treat
   cancer, an area that pharmaceutical companies are increasingly targeting.
   CEL-SCI is working on a sale-leaseback program for the equipment it owns
   which would provide CEL-SCI approximately $1.5 million in additional cash. It
   is important to note that CEL-SCI's expenditures for fiscal year 2008
   included several very large non-recurring expenses that amounted to several
   million dollars, mostly related to the build out of the manufacturing
   facility. These expenses will not recur in fiscal year 2009, thereby reducing
   CEL-SCI's expenditures significantly. Beyond those savings CEL-SCI has also
   made other very significant cuts in its expenditures and certain vendors have
   agreed to take common stock in lieu of cash payments. In addition, CEL-SCI
   has put in place a $5 million Equity Line of Credit (see Note 15).
   With this Equity Line of Credit in place CEL-SCI believes it will have the
   required capital to continue operations into January 2010. However, if
   necessary CEL-SCI can make further reductions in expenditures by a reduction
   in force or by implementation of a salary reduction program.  The Company has
   determined that the convertible debt holders of the Series K Notes may
   require repayment of the entire remaining principal balance at any time after
   August 4, 2009.  This debt can be paid in stock and would not require a cash
   payment.  In addition, CEL-SCI is currently in negotiation with the Landlord
   of the manufacturing facility for rent deferral on the lease in order to
   conserve its cash.  If we do not renegotiate the lease, we plan to either get
   an additional loan from Mr. de Clara or use the equity line of credit to
   make the rent payments.

   The Company has determined that the convertible  debt holders of the Series
   K Notes may require repayment of the entire remaining  principal balance at
   any time after  August 4, 2009.  This debt can be paid in stock and may not
   require a cash payment.  In addition,  in December 2008, CEL-SCI was not in
   compliance  with  certain  lease  requirements  (i.e.,  failure  to  pay an
   installment  of Base Annual Rent).  However,  the landlord has not declared
   CEL-SCI  formally  in default  under the terms of the lease.  The  landlord
   currently  has the right to declare  CEL-SCI in default if CEL-SCI fails to
   pay any installment of the Base Annual Rent when such failure continues for
   a period of 5 business  days  after  CEL-SCI's  receipt  of written  notice
   thereof from the Landlord, provided that if CEL-SCI fails to pay any of the
   foregoing within 5 business days more than two (2) times in any twelve (12)
   month period during the lease term,  the Landlord  shall not be required to
   provide  CEL-SCI with any further  notice and CEL-SCI shall be deemed to be
   in default.  CEL-SCI is currently in negotiation with the Landlord for rent
   deferral  on  the  lease  in  order  to  conserve  its  cash.  If we do not
   renegotiate  the lease we plan to either  get an  additional  loan from Mr.
   deClara or use the equity line of credit to make the rent payments.

   In general,  with the reduction in expenses and the $5 million  Equity Line
   in place,  the Company  expects to have enough cash to continue  operations
   through  January 2010 if the debt holders do not exercise their put options
   and the landlord of their  manufacturing  facility does not issue a default
   notice.

     While there can be no  assurance  that the debt  holders  will not exercise
     their put option,  and the landlord of the manufacturing  facility will not
     issue a default  notice,  the Company  continues to work on  solutions  for
     additional financing and ways to reduce expenses.  The Company has shown in
     the past that they are able to secure  financing  to  continue  operations.
     There is no assurance the Company can do so in the future.  These financial
     statements  do not  reflect  any  adjustments  that might  result from this
     uncertainty.

4.   RESEARCH AND OFFICE EQUIPMENT

   Research and office equipment at September 30, 2008 and 2007, consists of the
following:
                                                    2008            2007
                                                    ----            ----

   Research equipment                           $3,125,982      $1,931,459
   Furniture and equipment                         118,881         119,020
   Leasehold improvements                           44,419          43,041
                                              ------------      ----------
                                                 3,289,283       2,093,520

   Less:  Accumulated depreciation and
      amortization                              (1,964,597)     (1,859,644)
                                              ------------     -----------
   Net research and office equipment          $  1,324,686     $   233,876
                                              ============     ===========

                                      F-24


5. INCOME TAXES

   At September 30, 2008 the Company had a federal net operating loss
   carryforward of approximately $98.1 million expiring from 2009 through 2028.

   In addition, the Company has a general business credit as a result of the
   credit for increasing research activities of $2,342,000 and $1,950,700 at
   September 30, 2008 and 2007, respectively. These tax credits begin expiring
   after twenty years from the year in which the credit was generated. The
   components of the deferred taxes at September 30, 2008 and 2007 are comprised
   of the following:

                                             2008           2007
                                             ----           ----

   Net operating loss                    $37,235,972     $35,596,301

   R&D credit                              2,341,994       1,950,699
   Amortization of debt discount             584,771         502,349
   FAS 123R                                  207,635               -
   Vacation                                    5,533               -
                                         -----------     -----------
   Total deferred tax assets              40,375,905      38,049,349

   Derivative gain                        (1,895,479)     (1,242,453)
                                         -----------     -----------
   Total deferred tax liability           (1,895,479)              -

   Valuation allowance                   (38,480,426)    (36,806,896)
                                         -----------     -----------
   Net Deferred Tax Asset               $          -    $          -
                                        ============    ============

   In assessing the realization of the deferred tax assets, management
   considered whether it was more likely than not that some portion or all of
   the deferred tax asset will be realized. The ultimate realization of the
   deferred tax assets are dependent upon the generation of future taxable
   income. Management has considered the history of the Company's operating
   losses and believes that the realization of the benefit of the deferred tax
   assets cannot be determined. In addition, under the Internal Revenue Code
   Section 382, the Company's ability to utilize these net operating loss
   carryforwards may be limited or eliminated in the event of a change in
   ownership in the future. Internal Revenue Code Section 382 generally defines
   a change in ownership as the situation where there has been a more than 50
   percent change in ownership of the value of the Company within the last three
   years.

   The Company's effective tax rate is different from the applicable federal
   statutory tax rate. The reconciliation of these rates for the years ended
   September 30 is as follows:

                                                2008       2007        2006
                                                ----       ----        ----

      Federal Rate                              34.0%      35.0%       35.0%
      State tax rate, net of federal benefit    3.96%      3.96%        3.9%
      R&D credit                                5.06%         0%          0%
      Nondeductible expenses                   (0.04%)    (0.10%)      (6.4%)
      Valuation allowance                     (42.98%)   (38.86%)    (32.50%)

      Effective tax rate                         0.0%       0.0%        0.0%


                                      F-25


     The  Company  adopted  the  provisions  of  FIN  No.  48,  "Accounting  for
     Uncertainty  in Income Taxes" on October 1, 2007 which  requires  financial
     statement  benefits  be  recognized  for  positions  taken  for tax  return
     purposes,  when it is more  likely  than  not  that  the  position  will be
     sustained.  The Company has  concluded  that it has properly  filed its tax
     returns and does not believe  that any of the  positions it has taken would
     result in a  disallowance  of any of these tax  positions.  Therefore,  the
     Company  has  concluded  that  adoption  of FIN No. 48 had no impact on its
     financial  positions.  It is the  Company's  policy to record  interest and
     penalties,  if any, related to unrecognized tax benefits as part income tax
     expense for financial  reporting  purposes.  No interest or penalties  were
     accrued as of October 1, 2007 as a result of adoption of FIN No. 48. In the
     United States, the Company is still open to examination from 2004 forward.

6. STOCK OPTIONS, BONUS PLAN AND WARRANTS

   Non-Qualified Stock Option Plan--At September 30, 2008, the Company has
   collectively authorized the issuance of 13,760,000 shares of common stock
   under the Non-Qualified Stock Option 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 Stock Option 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, 2005                   6,215,363      $0.66     4,642,893     $0.76
       Options granted             1,466,000      $0.63
       Options exercised            (150,001)     $0.26
       Options forfeited             (20,000)     $1.05
                                  ----------

Options outstanding,
 September 30, 2006                7,511,362      $0.66     6,011,713     $0.69
        Options granted            1,395,000      $0.66
        Options exercised         (1,403,664)     $0.47
        Options forfeited            (40,000)     $2.15
                                  ----------

Options outstanding,
 September 30, 2007                7,462,698      $0.69     5,972,712     $0.67
        Options granted            1,038,000      $0.60
        Options exercised            (50,467)     $0.29
        Options forfeited            (43,966)     $0.96
                                  ----------

Options outstanding,
 September 30, 2008                8,406,265      $0.68     6,553,939    $ 0.64


                                      F-26


   In April 2005, the Company extended the expiration date on 1,625,333 options
   from the Nonqualified Stock Option Plan with exercise prices ranging from
   $1.05 to $1.94. The options originally would have expired from June 2005 to
   October 2005 and were extended for three years to expiration dates ranging
   from June 2008 to October 2008. This extension was considered a new
   measurement date with respect to the modified options. At the date of
   modification, the exercise price of the options exceeded the fair market
   value of the Company's common stock and no compensation expense was recorded.
   As of September 30, 2008, 1,622,833 options remain outstanding.

   In September 2006, the Company extended the expiration date on 126,666
   options from the Nonqualified Stock Option Plan with an exercise price of
   $1.05. The options originally would have expired from September 2006 to May
   2007 and were extended for three years to expiration dates ranging from
   September 2009 to May 2010. This extension was considered a new measurement
   date with respect to the modified options. At the date of modification,
   compensation expense of $30,468 was recorded. As of September 30, 2008, all
   of these options remain outstanding.

   In December 2007, the Company extended the expiration date on 1,680,533
   options from the Nonqualified Stock Option Plan with exercise prices ranging
   from $1.05 to $1.94. The options originally would have expired between
   February 2008 to October 2008 and were extended for five years to expiration
   dates ranging from February 2013 to October 2013. This extension was
   considered a new measurement date with respect to the modified options. At
   the date of modification, the additional cost of the options was $410,471. As
   of September 30, 2008, all of these options remain outstanding.

   Incentive Stock Option Plan--At September 30, 2008, the Company has
   collectively authorized the issuance of 10,100,000 shares of common stock
   under the Incentive Stock Option Plan. Options vest over a 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
   and directors 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, 2005                  3,972,633      $0.68     2,885,968    $0.81
        Options granted              370,000      $0.58
        Options exercised                  -
        Options forfeited            (15,700)     $5.36
                                  ----------


                                      F-27



Options outstanding,
 September 30, 2006                4,326,933      $0.65     3,810,267     $0.66
         Options granted             300,000      $0.63
         Options exercised                 -
         Options forfeited           (25,000)     $3.12
                                   ---------

Options outstanding,
  September 30, 2007               4,601,933      $0.64     3,998,601     $0.63
         Options granted             300,000      $0.62
         Options exercised
         Options forfeited          (156,667)     $3.83
                                   ---------

Options outstanding,
 September 30, 2008                4,745,266      $0.53     4,121,935     $0.52

   In April 2005, the Company extended the expiration date on 128,100 options
   from the Incentive Stock Option Plan with exercise prices ranging from $1.05
   to $1.94. The options originally would have expired from July 2005 to
   December 2005 and were extended for three years to expiration dates ranging
   from July 2008 to December 2008. This was considered a new measurement date
   with respect to all of the modified options. At each of the dates of
   modification, the exercise price of the options exceeded the fair market
   value of the Company's common stock and no compensation expense was recorded.
   As of September 30, 2008, all options remain outstanding.

   In September 2006, the Company extended the expiration date on 268,166
   options from the Incentive Stock Option Plan with an exercise price of $1.05.
   The options originally would have expired from September 2006 to August 2007
   and were extended for three years to expiration dates ranging from September
   2009 to August 2010. This extension was considered a new measurement date
   with respect to the modified options. At the date of modification,
   compensation expense of $56,396 was recorded. As of September 30, 2008, all
   of these options remain outstanding.

   In December 2007, the Company extended the expiration date on 225,100 options
   from the Incentive Stock Option Plan with exercise prices ranging from $1.05
   to $1.94. The options originally would have expired between February 2008 to
   December 2008 and were extended for five years to expiration dates ranging
   from February 2013 to December 2013. This extension was considered a new
   measurement date with respect to the modified options. At the date of
   modification, the additional cost of the options was $54,537. As of September
   30, 2008, all of these options remain outstanding.

   Other Options and Warrants

   In February 2005, the Company granted a consultant options to purchase 15,000
   shares of the Company's common stock at a price of $0.73 per share. The
   options vest over a three year period and expire in February 2015. The
   expense for these options was determined using the Black Scholes pricing
   methodology with the following assumptions:

         Expected stock risk volatility       93%
         Risk-free interest rate            3.89%
         Expected life of warrant         5 Years
         Expected dividend yield              -0-


                                      F-28


   The fair value of the options was recorded as general and administrative
   expense. Expense of $7,972 was recorded for the year ended September 30,
   2005.

   On July 18, 2005, CEL-SCI sold 1,250,000 shares of its common stock and
   375,000 warrants to one investor for $500,000. The warrants vested
   immediately. Each warrant entitles the holder to purchase one share of
   CEL-SCI's common stock at a price of $0.65 per share at any time prior to
   July 18, 2009. The shares of common stock and warrants are "restricted"
   securities as defined in Rule 144 of the Securities and Exchange Commission.
   The warrants were valued at $155,671 and recorded as a debit and a credit to
   additional paid-in capital.

   The value was determined using the Black Scholes pricing methodology with the
   following assumptions:

         Expected stock risk volatility       75%
         Risk-free interest rate            3.92%
         Expected life of warrant         5 Years
         Expected dividend yield              -0-

   On October 14, 2005, CEL-SCI granted a consultant options to purchase 80,000
   shares of the Company's common stock at a price of $1.00 per share and 80,000
   shares of the Company's common stock at a price of $2.00 per share. The
   options vested immediately. The options expire in October 2010. The expense
   for these options of $66,718, recorded as general and administrative expense
   was determined using the Black Scholes pricing methodology with the following
   assumptions:

         Expected stock risk volatility       75%
         Risk-free interest rate            4.33%
         Expected life of warrant         5 Years
         Expected dividend yield              -0-

   On October 31, 2005 in connection with the 2005 Equity Line of Credit,
   CEL-SCI granted options to purchase 271,370 shares of the Company's common
   stock at a price of $0.55 per share. The options vested immediately. The
   options expire in October 2010. The options were recorded as a derivative
   instrument at the time of issuance but reverted back to equity on December
   27, 2005. The expense for these options at the time of issuance of $104,721,
   recorded as general and administrative expense, was determined using the
   Black Scholes pricing methodology with the following assumptions:

         Expected stock risk volatility       87%
         Risk-free interest rate            4.33%
         Expected life of warrant         5 Years
         Expected dividend yield              -0-

   On February 9, 2006, CEL-SCI sold 2,500,000 shares of its common stock and
   750,000 warrants to one investor for $1,000,000. The warrants vested
   immediately. Each warrant entitles the holder to purchase one share of
   CEL-SCI's common stock at a price of $0.56 per share at any time prior to
   February 9, 2011. The warrants were valued at $238,986 and recorded as a
   debit and credit to additional paid-in capital. In addition, 441,176 warrants

                                      F-29


   previously issued to the investor were repriced and extended for one year.
   The revaluing of the warrants was valued at $76,122 and recorded as a debit
   and a credit to additional paid-in capital. The Black Scholes pricing
   methodology was used with the following assumptions:

                                              New Warrants    Extended Warrants

         Expected stock risk volatility             78%                78%
         Risk-free interest rate                  4.57%              4.67%
         Expected life of warrant                5 Years         1.83 years
         Expected dividend yield                    -0-               -0-

   On April 1, 2006, CEL-SCI granted a consultant options to purchase 375,000
   shares of the Company's common stock at a price of $0.73 per sharey. The
   options vested over a three-month period.  In March 2007 66,300 options were
   exercised.  The expiration date on the remaining 308,700 options was extended
   to May 1, 2007.  All options were exercised.  As of September 30, 2007, there
   were no remaining options.  The fair value of $87,007 was recorded as general
   and administrative expense over the service period of April 1, 2006 to March
   31, 2007. The fair valuye for these options was determined using the Black
   Scholes pricing methodology with the following assumptions:

         Expected stock risk volatility                    77%
         Risk-free interest rate                         4.86%
         Expected life of warrant                       1 Year
         Expected dividend yield                          -0-

   On April 12, 2006, CEL-SCI granted a consultant options to purchase 100,000
   shares of the Company's common stock at a price of $1.50 per share and vested
   immediately. The options expire in April 2009. The general and administrative
   expense of $79,976 for these options was determined using the Black Scholes
   pricing methodology with the following assumptions:

         Expected stock risk volatility                    77%
         Risk-free interest rate                         4.90%
         Expected life of warrant                      3 Years
          Expected dividend yield                          -0-

   On April 17, 2006, 800,000 warrants were issued to an investor. These
   warrants granted the investor the right to purchase shares of the Company's
   common stock at a price of $1.25 and vested immediately. The warrants were
   given to the investor to induce the investor to exercise 700,000 warrants at
   $0.47 for unregistered common stock. The warrants expired in June 2008. These
   warrants were extended for 5 years and will expire in June 2013. The expense
   of $460,920 recorded as a debit and a credit to additional paid-in capital
   and was determined using the Black Scholes pricing methodology with the
   following assumptions:

                                              Original          Extended
                                              Warrants          Warrants

         Expected stock risk volatility         77%                72%
         Risk-free interest rate              4.91%              5.50%
         Expected life of warrant           2.17 Years       5.50 Years
         Expected dividend yield               -0-               -0-

   On May 18, 2006, the Company issued 800,000 warrants to an investor to
   purchase shares of the Company's common stock at a price of $0.82 per share
   and vested immediately. The warrants were given to the investor to induce the
   investor to exercise 600,000 warrants at $0.56 for unregistered common stock
   and will expire on May 17, 2011. The expense of $416,921 was recorded as a
   debit and a credit to additional paid-in capital and was determined using the
   Black Scholes pricing methodology with the following assumptions:


                                      F-30



         Expected stock risk volatility                         73%
         Risk-free interest rate                              4.96%
         Expected life of warrant                           5 Years
          Expected dividend yield                               -0-

   Series K Warrants were issued in connection with the issuance of convertible
   debt in August 2006. The Series K Warrants allow the holders to purchase up
   to 4,825,581 shares of the Company's common stock at a price equal to $0.95
   per share between February 4, 2007 and February 4, 2012. The exercise price
   of the Series K warrants, as well as the shares issuable upon the exercise of
   the warrants, will be proportionately adjusted in the event of any stock
   splits. If CEL-SCI sells any additional shares of common stock, or any
   securities convertible into common stock at a price below the then applicable
   exercise price of the Series K warrants, the warrant exercise price will be
   lowered to the price at which the shares were sold or the lowest price at
   which the securities are convertible, as the case may be. If CEL-SCI sells
   any additional shares of common stock, or any securities convertible into
   common stock at a price above the exercise price but below the market price
   of CEL-SCI's common stock, the exercise price of the Series K warrants will
   be lowered to a price determined by a formula contained in the warrants.

   On September 29, 2006, CEL-SCI granted a consultant options to purchase
   375,000 shares of the Company's common stock at a price of $0.62 per share.
   The options vested over a three month period and would have expired in
   September 2007. All options were exercised. The general and administrative
   expense of $74,992 for these options was determined using the Black Scholes
   pricing methodology with the following assumptions:

            Expected stock risk volatility                      78%
            Risk-free interest rate                           5.08%
            Expected life of warrant                         1 Year
            Expected dividend yield                             -0-

   In February 2007, 50,000 options were issued to each of two consultants to
   purchase shares of common stock at $0.70 and $0.81. The options vested in 3
   months and 3 1/2 months respectively and expire in 1.5 and two years. The
   options were valued at $30,375 using the Black Scholes pricing methodology,
   using the following assumptions, and the cost was recorded as a debit to
   general and administrative expense. In August 2008, 50,000 of these options
   were extended for one year. The revaluing of the options was valued at less
   than the original value, so no additional cost needed to be recognized.

                                              Original         Extended
                                              Warrants         Warrants

            Expected stock risk volatility      74.0%            74.0%
            Risk-free interest rate             4.85%            4.85%
             Expected life of warrant      1.5 and 2 Years      1 Year


                                      F-31


   On April 5, 2007, 375,000 options were issued to a consultant to purchase
   shares of common stock at $0.72 per share and vested immediately. The options
   were valued at $76,617 using the Black Scholes pricing methodology, using the
   following assumptions, and the cost was recorded as a debit to general and
   administrative expense. In December 2007, these warrants were extended for
   five years. The revaluing of the warrants was valued at an additional $99,181
   and recorded as general and administrative expense. The Black Scholes pricing
   methodology was used with the following assumptions:

                                                Original    Extended
                                                Warrants    Warrants

            Expected stock risk volatility       68.02%      68.02%
            Risk-free interest rate               4.73%       4.73%
            Expected life of warrant             1 Year   5.33 Years


   On May 29, 2007,  100,000  options were issued to a consultant  to purchase
   shares of common  stock at $0.84 and vested  immediately.  The options were
   valued at $45,583 using the Black Scholes  pricing  methodology,  using the
   following assumptions,  and the cost was recorded as a debit to general and
   administrative expense:

            Expected stock risk volatility                 66.93%
            Risk-free interest rate                         4.60%
            Expected life of warrant                      4 Years

   In July 2007, the Company issued 3,000,000 warrants to VIF II CEL-SCI
   Partners LLC in connection with the manufacturing facility lease agreement.
   The warrants vested immediately. The cost of the warrants, $1,403,654 was
   recorded as an increase in deferred rent and will be expensed over the life
   of the lease.

   In September 2007, 50,000 options were issued to a consultant and valued at
   $12,342. The options vested and were recorded as a general and administrative
   expense in January 2008.

   In November and December 2007, the Company extended 2,016,176 investor and
   consultant warrants. The options and warrants were due to expire from
   December 1, 2007 through December 31, 2008. All options and warrants were
   extended for an additional five years from the original expiration date. The
   cost of the extension of investor warrants of $424,815 was recorded as a
   debit to accumulated deficit (dividend) and a credit to additional paid-in
   capital. The cost of the extension of the consultant warrants of $99,181 is
   recorded as a debit to general and administrative expense and a credit to
   additional paid-in capital. The additional cost of the extension of investor
   and consultant warrants was determined using the Black Scholes method.


                                      F-32


   Stock Bonus Plan -- At September 30, 2008, the Company had been authorized to
   issue up to 7,940,000 shares of common stock under the Stock Bonus Plan. All
   employees, directors, officers, consultants, and advisors are eligible to be
   granted shares. During the year ended September 30, 2006, 132,989 shares were
   issued to the Company's 401(k) plan for a cost of $85,480. During the year
   ended September 30, 2007, 137,546 shares were issued to the Company's 401(k)
   plan for a cost of $89,722. During the year ended September 30, 2008, 205,125
   shares were issued to the Company's 401(k) plan for a cost of $108,590.

   Stock Compensation Plan-- At September 30, 2008, 5,500,000 shares were
   authorized for use in the Company's stock compensation plan. During the year
   ended September 30, 2006, 266,355 shares were issued in lieu of salary
   increases extending through August 31, 2007. These shares were issued at
   $0.58 per share for a total cost of $154,486. During the year ended September
   30, 2007, 1,075,000 shares were issued at $0.63 per share for a total cost of
   $677,250. During the year ended September 30, 2008, 1,789,451 shares were
   issued at the weighted average $0.62 per share for a total cost of
   $1,324,474.

7.    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 Company employees. 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 bid price of the
   Company's common stock. The expense for the years ended September 30, 2008,
   2007, and 2006, in connection with this Plan was $110,670, $92,035, and
   $88,054, respectively.

8. COMMITMENTS AND CONTINGENCIES

   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,

                 2009                               $ 1,711,320
                 2010                                 1,727,368
                 2011                                 1,779,188
                 2012                                 1,805,169
                 2013                                  1,751,83
                 2014 and thereafter                 29,437,792
                                                    -----------
                 Total minimum lease payments:     $ 38,212,676
                                                   ============

   Rent expense for the years ended September 30, 2008, 2007, and 2006, was
   $253,526, $240,914 and $250,994, respectively. Minimum payments have not been
   reduced by minimum sublease rental receivable under future cancelable
   subleases. These leases expire between September 2008 and August 2028.


                                      F-33


   In August 2007 CEL-SCI leased a building near Baltimore, Maryland. The
   building was be remodeled in accordance with CEL-SCI's specifications so that
   it can be used by CEL-SCI to manufacture Multikine for CEL-SCI's Phase III
   clinical trial and sales of the drug if approved by the FDA. The Company took
   possession of the building in October 2008.

   The lease is for a term of twenty years and requires annual base rent
   payments of $1,575,000 during the first year of the lease. The annual base
   rent escalates each year at 3%. CEL-SCI is also required to pay all real and
   personal property taxes, insurance premiums, maintenance expenses, repair
   costs and utilities. The lease allows CEL-SCI, at its election, to extend the
   lease for two ten-year periods or to purchase the building at the end of the
   20-year lease. The lease required CEL-SCI to pay $3,150,000 towards the
   remodeling costs, which will be recouped by reductions in the annual base
   rent of $303,228 in years six through twenty of the lease, subject to CEL-SCI
   maintaining compliance with the lease covenants. Included on the consolidated
   balance sheet is an asset of $8,660,837 shown as deferred rent. Included in
   deferred rent are the following: 1) deposit on the manufacturing facility
   ($3,150,000); 2) warrants issued to lessor ($1,364,773); 3) deposit on the
   cost of the leasehold improvements for the manufacturing facility
   ($1,786,591); and 4) additional investment in the manufacturing facility
   during the year ended September 30, 2008 ($2,359,473). Also included on the
   consolidated balance sheet is restricted cash of $987,652. The restricted
   cash amount includes funds for the following: 1) contingency escrow of
   $551,155; and 2) movable equipment escrow of $436,497. In July 2008, the
   Company was required to deposit the equivalent of one year of base rent in
   accordance with the contract. The $1,575,000 included in noncurrent assets
   was required to be deposited when the amount of cash the Company had dipped
   below the amount stipulated in the contract. In December 2008, CEL-SCI was
   not in compliance with certain lease requirements (i.e., failure to pay an
   installment of Base Annual Rent). However, the landlord has not declared
   CEL-SCI formally in default under the terms of the lease. The landlord
   currently has the right to declare CEL-SCI in default if CEL-SCI fails to pay
   any installment of the Base Annual Rent when such failure continues for a
   period of 5 business days after CEL-SCI's receipt of written notice thereof
   from the Landlord, provided that if CEL-SCI fails to pay any of the foregoing
   within 5 business days more than two (2) times in any twelve (12) month
   period during the lease term, the Landlord shall not be required to provide
   CEL-SCI with any further notice and CEL-SCI shall be deemed to be in default.
   CEL-SCI is currently in negotiation with the Landlord for rent deferral on
   the lease.  In order to conserve its cash, if CEL-SCI does not renegotiate
   the lease it plans to either get an additional loan from Mr. de Clara or use
   the equity line of credit to make the rent payments.

    Employment Contracts--In April 2005 the Company entered into a three year
    employment agreement with its President and Chairman of the Board which
    expired April 30, 2008. However, on September 8, 2006 CEL-SCI agreed to
    extend its employment agreement with Maximilian de Clara, CEL-SCI's
    President, to April 30, 2010. During the term of the employment agreement,
    CEL-SCI will pay Mr. de Clara an annual salary of $363,000.

    The employment agreement, as amended, also provided that on September 8,
    2006, March 8, 2007, September 8, 2007, March 8, 2008, September 8, 2008 and
    March 8, 2009, each date being a "Payment Date", CEL-SCI will issue Mr. de
    Clara shares of its common stock equal in number to the amount determined by
    dividing $200,000 by the average closing price of CEL-SCI's common stock for
    the twenty trading days preceding the Payment Date. A total of 673,431
    shares were issued to Mr. de Clara during the fiscal year ended September
    30, 2008.

                                      F-34


   The employment agreement provides that CEL-SCI will pay him an annual salary
   of $363,000 during the term of the agreement. In the event that there is a
   material reduction in his authority, duties or activities, or in the event
   there is a change in the control of the Company, then the agreement allows
   him to resign from his position at the Company 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.

   In September 2006, CEL-SCI agreed to extend its employment agreement with
   Geert R. Kersten, CEL-SCI's Chief Executive Officer, to September 2011. The
   employment agreement, which is essentially the same as Mr. Kersten's prior
   employment agreement, provides that during the term of the agreement CEL-SCI
   will pay Mr. Kersten an annual salary of $370,585 plus any increases approved
   by the Board of Directors during the period of the employment agreement. In
   the event there is a change in the control of the Company, the agreement
   allows him to resign from his position at the Company and receive a lump-sum
   payment from the Company equal to 24 months of salary. For purposes of the
   employment agreement a change in the control of the Company means: (1) the
   merger of the Company with another entity if after such merger the
   shareholders of the Company do not own at least 50% of voting capital stock
   of the surviving corporation; (2) the sale of substantially all of the assets
   of the Company; (3) the acquisition by any person of more than 50% of the
   Company's common stock; or (4) a change in a majority of the Company's
   directors which has not been approved by the incumbent directors.

9. CONVERTIBLE DEBT

   As of September 30, 2008, the Company has outstanding convertible debt with a
   fair value of $3,018,697. As of September 30, 2007, the Company had
   outstanding convertible debt with a fair value totaling $5,613,984. In August
   2006, the Company sold Series K Notes and Series K warrants to a group of
   private investors for proceeds of $8,300,000, less transaction costs of
   $568,710. For a further discussion of this transaction, see Note 2.

10. SHORT-TERM INVESTMENTS/EQUITY LINES OF CREDIT

    At September 30, 2008, the Company had $200,000 of a short-term investment
    in Auction Rate Cumulative Preferred Shares (ARPs), liquidation preference
    of $25,000 per share, of an income mutual fund. On May 6, 2008, the fund
    company announced the redemption of $300 million or, 85.7% of the ARPs on
    various dates between May 19, 2008 and May 23, 2008 subject to the
    investment fund lottery system. All of the Company's ARPs, except for the
    currently held $200,000, were redeemed.

    In conjunction with the ARPs, the Company has a line of credit to borrow up
    to 100% of the ARPs at an interest rate of prime minus 1% (prime equals 5%
    on September 30, 2008). During the fiscal year, the Company borrowed
    $1,956,803 against the ARPs and paid back $1,756,803 in May 2008. On
    September 30, 2008, the Company had a $200,000 outstanding loan balance

                                      F-35


    secured by the investment balance of ARPs. On November 4, 2008, the $200,000
    loan was repaid when the ARPs were redeemed at face value. During the fiscal
    year, the Company paid $7,522 in interest expense on the loan.

11.   STOCKHOLDERS' EQUITY

   On July 18, 2005, CEL-SCI sold 1,250,000 shares of its common stock and
   375,000 warrants to one investor for $500,000. Each warrant entitles the
   holder to purchase one share of CEL-SCI's common stock at a price of $0.65
   per share at any time prior to July 18, 2009. The shares of common stock and
   warrants are "restricted" securities as defined in Rule 144 of the Securities
   and Exchange Commission.

   On February 9, 2006, CEL-SCI sold 2,500,000 shares of its common stock and
   750,000 warrants to one investor for $1,000,000. Each warrant entitles the
   holder to purchase one share of CEL-SCI's common stock at a price of $0.56
   per share at any time prior to February 9, 2011. The warrants were valued at
   $238,986. In addition, 441,176 warrants previously issued to the investor
   were repriced and extended for one year. The revaluing of the warrants was
   valued at $76,122, as discussed in Note 6.

   On April 18, 2007, the Company completed a $15 million private financing.
   Shares were sold at $0.75, a premium over the closing price of the previous
   two weeks. The financing was accompanied by 10 million warrants with an
   exercise price of $0.75 and 10 million warrants with an exercise price of
   $2.00. The warrants are known as Series L and Series M warrants,
   respectively. The shares were registered in May 2007.

   The financing resulted in the issuance of 19,999,998 shares of common stock
   to the  investors.  The warrants  issued with the  financing  qualified for
   equity  treatment.  The Series L warrants  were  recorded  as a debit and a
   credit to  additional  paid-in  capital  at a value of  $5,164,355  and the
   Series M  warrants  were  recorded  as a debit and a credit  to  additional
   paid-in capital at a fair value of $434,300.

   In September 2008, 2,250,000 of the original Series L warrants were repriced
   at $0.56 and extended for one year to April 17, 2013. The increase in the
   value of the warrants of $173,187 was recorded as a debit and a credit to
   additional paid-in capital in accordance with the original accounting for the
   Series L warrants.

   As a result of the financing, and in accordance with the original Series K
   agreement, the Series K conversion price of the shares were repriced to $0.75
   from the original $0.86 and the warrants were repriced to $0.75 from the
   original $0.95. The Series K convertible debt and warrants were revalued with
   the new conversion price and were adjusted to their new fair value.

   On August 18, 2008, the Company sold 1,383,389 shares of common stock and
   2,075,084 warrants in a private financing for $1,037,542. The shares were
   sold at $0.75, a significant premium over the closing price of the Company's
   common stock. The warrants were valued at $891,336 and recorded as a debit
   and a credit to additional paid-in capital. Each warrant entitles the holder
   to purchase one share of CEL-SCI's common stock at a price of $0.75 per share
   at any time prior to August 18, 2014. The shares have no registration rights.

                                      F-36


   On February 26, 2008, the Company issued a total of 258,000 shares of
   restricted common stock to two consultants at $0.53 per share for a total
   cost of $136,740 of which $70,312 had been expensed at September 30, 2008.
   This stock will be expensed over the period of the contracts with the
   consultants. In April 2008, an additional 258,000 shares of restricted common
   stock to two consultants were issued at $0.69 for a total cost of $178,020,
   of which $86,984 had been expensed at September 30, 2008. The stock will be
   expensed over the remaining period of the contracts with the consultants.

   During the fourth quarter, an additional 1,173,000 shares were issued to
   consultants at prices ranging from $0.55 to $0.578. The total cost of
   $649,994 will be expensed to general and administrative expense. At September
   30, 2008, $111,452 had been expensed to general and administrative expense.

12.   NET LOSS PER COMMON SHARE

   Basic earnings per share (EPS) excludes dilution and is computed by dividing
   net income by the weighted average of common shares outstanding for the
   period. Diluted EPS reflects the potential dilution that could occur if
   securities or other common stock equivalents (convertible preferred stock,
   convertible debt, warrants to purchase common stock and common stock options)
   were exercised or converted into common stock. The following table provides a
   reconciliation of the numerators and denominators of the basic and diluted
   per-share computations:

                                        2008           2007          2006
                                        ----           ----          ----

  Net loss - basic                $ (8,128,230)  $ (9,629,657)  $ (7,939,210)
     Add:  Interest on
        convertible debt                     -              -        216,737
     Gain on derivative instruments          -              -     (2,276,358)

    Net loss - diluted            $ (8,128,230)  $ (9,629,657)  $ (9,998,831)

    Weighted average number of
      shares - basic               117,060,866     97,310,488     78,971,290
    Incremental shares from:
        Warrants                             -              -      5,211,628
        Convertible debt                     -              -      9,651,160

     Weighted average number of
       shares - diluted            117,060,866     97,310,488     93,834,078

     Earnings per share - basic   $      (0.07)   $     (0.10)   $     (0.10)
     Earnings per share - diluted $      (0.07)   $     (0.10)   $     (0.11)



                                      F-37


   Excluded from the above computations of weighted-average shares for diluted
   net loss per share were options and warrants to purchase 14,488,124,
   11,054,492 and 4,075,446 shares of common stock as of September 30, 2008,
   2007 and 2006, respectively. These securities were excluded because their
   inclusion would have an anti-dilutive effect on net loss per share. The
   calculation of diluted earnings per share for the year ended September 30,
   2008 equals the basic earnings per share because the calculation would have
   been anti-dilutive.

13.  SEGMENT REPORTING

   SFAS No. 131, "Disclosure about Segments of an Enterprise and Related
   Information" 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.

14.  QUARTERLY INFORMATION (UNAUDITED)

   The following quarterly data are derived from the Company's consolidated
   statements of operations.

Financial Data

Fiscal 2008

                                                                         
                              Three         Three         Three       Three
                              Months        Months        Months      Months
                              ended         ended         ended       ended          Year ended
                           December 31,    March 31,     June 30,   September 30,   September 30,
                               2007          2008          2008        2008             2008
                       ------------------------------------------------------------------------

 Revenue                  $     1,530     $       -    $    3,535     $       -      $    5,065
 Operating expenses         2,868,968     2,085,098     2,180,214     2,383,078       9,517,358
 Non-operating (expense)
     income                    34,715        35,741       (18,705)      (42,266)          9,485
 Gain (loss) on derivative
   Instruments                989,988    (1,160,937)      206,106     1,764,236       1,799,393
 Net loss                  (1,842,735)   (3,210,294)   (1,989,278)     (661,108)     (7,703,415)
 Dividends                   (424,815)            -             -             -        (424,815)
Net loss available to
   common shareholders     (2,267,550)   (3,210,294)   (1,989,278)     (661,108)     (8,128,230)
 Loss per common share
   - basic                      (0.02)        (0.03)        (0.02)        (0.01)          (0.07)
 Loss per common share
   - diluted                    (0.02)        (0.03)        (0.02)        (0.01)          (0.07)



                                      F-38


Fiscal 2007

                                                                         
                              Three         Three         Three       Three
                              Months        Months        Months      Months
                              ended         ended         ended       ended          Year ended
                           December 31,    March 31,     June 30,   September 30,   September 30,
                               2006          2007          2007        2007             2007
                       ------------------------------------------------------------------------

 Revenue                  $    20,793     $  24,722    $    6,449     $   5,079      $   57,043
 Operating expenses         1,600,704     2,037,327     3,782,712     1,988,509       9,409,252
 Non-operating (expense)
    Income                   (251,695)     (263,924)     (688,242)       58,231      (1,145,630)
 Gain (loss) on derivative
    instruments               719,247      (447,356)   (1,090,471)    1,686,762         868,182
 Net loss                  (1,112,359)   (2,723,885)   (5,554,976)     (238,437)     (9,629,657)
 Loss per common
    share - basic         $     (0.01)   $    (0.03)   $    (0.05)   $    (0.00)    $     (0.10)
 Loss per common
    share - diluted       $     (0.01)   $    (0.03)   $    (0.05)   $    (0.00)    $     (0.10)




    The Company has experienced large swings in its quarterly losses in 2008 and
    2007. These swings are caused by the changes in the fair value of the
    convertible debt each quarter. These changes in the fair value of the debt
    are recorded on the consolidated statements of operations. In addition, the
    cost of options granted to consultants has affected the quarterly losses
    recorded by the Company.

15.  SUBSEQUENT EVENTS

    On November 3, 2008, the Company extended its licensing agreement for
    Multikine with Orient Europharma. The new agreement extends the Multikine
    collaboration to also cover South Korea, the Philippines, Australia and New
    Zealand. The licensing agreement initially focuses on the areas of head and
    neck cancer, nasopharyngeal cancer and potentially cervical cancer. As part
    of this new agreement, Orient Europharma invested $500,000 in the Company.

    Effective December 3, 2008, Dr. Daniel Zimmerman, the Company's Senior Vice
    President of Research, Cellular Immunology, and John Cipriano, the Company's
    Senior Vice President of Regulatory Affairs, have agreed to become
    consultants to the Company on an as needed basis thereby ending their full
    time employment with the Company.  The stock and options owned by these two
    employees will fully vest on January 1, 2009.

    On December 30, 2008, the Company entered into an Equity Line of Credit
    agreement as a source of funding for the Company. For a two-year period, the
    agreement allows the Company, at its discretion, to sell up to $5 million of
    the Company's common stock at the volume weighted average price of the day
    minus 9%. The Company may request a drawdown once every ten trading days,
    although the company is under no obligation to request any drawdowns under
    the equity line of credit. The equity line of credit expires on January 6,
    2011.

    In December 2008 and January 2009 CEL-SCI Maximilian de Clara, CEL-SCI's
    president and a director, loaned CEL-SCI a total of $230,000. The loan bears
    interest at 15% per year and is payable on March 27, 2009.


                                      F-39


                                   SIGNATURES

      In accordance with Section 13 or 15(a) of the Exchange Act, the Registrant
has caused this Report to be signed on its behalf by the undersigned, thereunto
duly authorized on the 12th day of January 2009.

                               CEL-SCI CORPORATION


                                     By: /s/ Maximilian de Clara
                                         ------------------------------
                                         Maximilian de Clara, President


                                     By: /s/ Geert R. Kersten
                                         -------------------------------
                                         Geert R. Kersten, Chief Executive,
                                           Principal Accounting and Principal
                                           Financial Officer

      Pursuant to the requirements of the Securities Act of l934, this Report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

Signature                        Title                Date


/s/ Maximilian de Clara        Director            January 12, 2009
----------------------
Maximilian de Clara


/s/ Geert R. Kersten           Director            January 12, 2009
----------------------
Geert R. Kersten


/s/ Alexander G. Esterhazy     Director            January 12, 2009
----------------------
Alexander G. Esterhazy


/s/ Dr. C. Richard Kinsolving  Director            January 12, 2009
----------------------
Dr. C. Richard Kinsolving


/s/ Dr. Peter R. Young         Director            January 12, 2009
----------------------
Dr. Peter R. Young






                               CEL-SCI CORPORATION

                                    FORM 10-K

                                    EXHIBITS