UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                    FORM 10-Q
(Mark One)
(X)   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
      SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010
                                      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 0-11503

                               CEL-SCI CORPORATION
                            ------------------------

        Colorado                                     84-0916344
---------------------------                    ---------------------
State or other jurisdiction                      (IRS) Employer
  of  incorporation                            Identification Number

                         8229 Boone Boulevard, Suite 802
                             Vienna, Virginia 22182
                       ---------------------------------
                     Address of principal executive offices

                                 (703) 506-9460
                          ----------------------------
               Registrant's telephone number, including area code

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) had been subject to such filing
requirements for the past 90 days.

            Yes X                      No __________


Indicate  by  check  mark   whether   the   registrant   has   submitted
electronically  and  posted on its  corporate  Web site,  if any,  every
Interactive  Data File required to be submitted  and posted  pursuant to
Rule  405 of  Regulation  S-T  (ss.232.405  of this  chapter)  during  the
preceding 12 months (or for such shorter  period that the registrant was
required to submit and post such  files).     Yes [ ]      No [  ]

Indicate by check mark whether the Registrant is a large accelerated filer, and
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. (Check One):

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
Exchange Act Rule 12b-2 of the Exchange Act).

            Yes _________                       No  X

      Class of Stock           No. Shares Outstanding              Date

         Common                    204,728,670                August 6, 2010




                                TABLE OF CONTENTS

PART I  FINANCIAL INFORMATION

Item 1.                                                                 Page
                                                                        ----

Condensed Consolidated Balance Sheet (unaudited)                         3
Condensed Consolidated Statements of Operations (unaudited)            4-5
Condensed Consolidated Statements of Cash Flow (unaudited)               6
Notes to Condensed Consolidated Financial Statements (unaudited)      8-22

Item 2.
      Management's Discussion and Analysis of Financial Condition        23
        and Results of Operations

Item 3.
      Quantitative and Qualitative Disclosures about Market Risks        26

Item 4.
      Controls and Procedures                                            26

PART II

Item 1.
      Legal Proceedings                                                  27

Item 4.
      Submission of Matters to a Vote of Security Holders                27

Item 6.
      Exhibits                                                           28

 Signatures                                                              29

                                       2



                               CEL-SCI CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
 ASSETS                                           June 30,        September 30,
                                                    2010               2009
                                                 ----------       ------------
 CURRENT ASSETS

   Cash and cash equivalents                   $  30,475,636     $  33,567,516
   Prepaid expenses                                  188,746            39,972
   Inventory used for R&D and manufacturing        1,751,987           399,474
   Deferred rent - current portion                   761,786           419,354
   Deposits                                           10,132         1,585,064
                                               -------------     --------------
         Total current assets                     33,188,287        36,011,380

 RESEARCH AND OFFICE EQUIPMENT AND
   LEASEHOLD IMPROVEMENTS--
   Less accumulated depreciation of
     $2,526,572 and $2,259,237                     1,296,668         1,200,611

 PATENT COSTS- less accumulated
   amortization of  $1,190,299 and $1,132,612        374,089           423,104

 RESTRICTED CASH                                      21,337            68,552
 DEFERRED RENT                                     7,227,243         8,323,951
                                               -------------     --------------
                            TOTAL ASSETS       $  42,107,624     $  46,027,598
                                               =============     ==============

 LIABILITIES AND STOCKHOLDERS' EQUITY
 CURRENT LIABILITIES

   Accounts payable                            $     758,614     $     793,148
   Accrued expenses                                  213,901            98,665
   Due to employees                                   24,507            49,527
   Deposits held                                      10,000            10,000
   Deferred revenue                                  125,000                 -
   Related party loan                              1,104,057         1,107,339
                                               -------------     --------------
        Total current liabilities                  2,236,079         2,058,679


   Derivative instruments                          5,175,372        35,113,970
   Deferred rent                                      14,366            14,305
                                               -------------     --------------
        Total liabilities                          7,425,817        37,186,954

  COMMITMENTS AND CONTINGENCIES

 STOCKHOLDERS' EQUITY
  Preferred stock, $.01 par value;
    authorized, 200,000 shares;no
    shares issued and outstanding                       -                 -
  Common stock, $.01 par value;
    authorized, 450,000,000 shares;
    issued and outstanding, 204,728,670 and
    191,972,021 shares at June 30, 2010
    and September 30, 2009, respectively           2,047,287         1,919,720
   Additional paid-in capital                    187,104,043       173,017,978
   Accumulated deficit                          (154,469,523)     (166,097,054)
                                               -------------     --------------
          Total stockholders' equity             34,681,807         8,840,644
                                               -------------     --------------
 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $   42,107,624    $   46,027,598
                                              ==============    ==============

            See notes to condensed consolidated financial statements.

                                      3



                               CEL-SCI CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)
                                                    For the Nine Months Ended
                                                             June 30,
                                                     2010               2009
                                                 ----------          ---------
 REVENUE:

   Rent income                                    $  91,500          $  49,643
   Other income                                           -                450
                                                -----------       ------------

                   Total revenue                     91,500             50,093
 EXPENSES:
   Research and development, excluding
       depreciation of $316,575 and
       $266,739 included below                    7,733,544          3,832,582
   Depreciation and amortization                    377,458            331,656
   General and administrative                     4,947,764          4,015,921
                                                -----------       ------------

                     Total expenses              13,058,766          8,180,159
                                                -----------       ------------


 LOSS FROM OPERATIONS                           (12,967,266)        (8,130,066)

 GAIN (LOSS) ON DERIVATIVE INSTRUMENTS           30,614,451         (1,993,250)

 INTEREST INCOME                                    287,613            208,113

 INTEREST EXPENSE                                  (120,924)          (614,654)
                                                 ----------       ------------

 NET INCOME (LOSS) BEFORE INCOME TA              17,813,874        (10,529,857)

 INCOME TAX PROVISION                                     -                  -
                                                 ----------       ------------

 NET INCOME (LOSS)                               17,813,874        (10,529,857)
 DIVIDENDS                                                -           (466,667)
 MODIFICATION OF SERIES M WARRANTS               (1,432,456)                 -
                                                 ----------       ------------

 NET INCOME (LOSS) AVAILABLE TO COMMON
    SHAREHOLDERS                               $ 16,381,418       $(10,996,524)
                                               ============       ============

 NET INCOME (LOSS) PER COMMON SHARE-BASIC      $       0.08       $      (0.09)
                                               ============       ============

 NET LOSS PER COMMON SHARE-DILUTED             $      (0.02)      $      (0.09)
                                               ============       ============

 WEIGHTED AVERAGE COMMON
   SHARES OUTSTANDING-BASIC                     201,208,121        125,655,445
                                               ============       ============
 WEIGHTED AVERAGE COMMON
   SHARES OUTSTANDING-DILUTED                   228,443,595        125,655,445
                                               ============       ============


            See notes to condensed consolidated financial statements.


                                      4


                               CEL-SCI CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)
                                                      For the Three Months
                                                         Ended June 30,
                                                       2010             2009
                                                   ---------        ---------
 REVENUE:
   Rent income                                      $ 30,900         $ 30,000
   Other income                                            -              450
                                                   ---------        ---------
                          Total revenue               30,900           30,450
 EXPENSES:
   Research and development, excluding
       depreciation of $113,146 and
       $101,108 included below                     1,587,520        1,174,066
   Depreciation and amortization                     134,574          123,114
   General and administrative                      1,702,865        1,946,396
                                                   ---------        ---------
                          Total expenses           3,424,959        3,243,576
                                                   ---------        ---------


  LOSS FROM OPERATIONS                            (3,394,059)      (3,213,126)
 GAIN (LOSS) ON DERIVATIVE INSTRUMENTS             2,754,512       (2,649,493)
 INTEREST INCOME                                      79,825           68,716
 INTEREST EXPENSE                                    (41,402)        (445,161)
                                                   ---------        ---------

 NET LOSS BEFORE INCOME TAXES                       (601,124)      (6,239,064)
 INCOME TAX PROVISION                                      -                -
                                                   ---------        ---------
  NET LOSS                                          (601,124)      (6,239,064)
  DIVIDENDS                                                -         (466,667)
                                                    ---------       ---------

 NET LOSS AVAILABLE TO COMMON SHAREHOLDERS          $(601,124)    $(6,705,731)
                                                    =========     ===========
 NET LOSS PER COMMON SHARE-BASIC                    $   (0.00)    $     (0.05)
                                                    =========     ===========
 NET LOSS PER COMMON SHARE-DILUTED                  $   (0.01)    $     (0.05)
                                                    =========     ===========
 WEIGHTED AVERAGE COMMON
   SHARES OUTSTANDING-BASIC                       204,592,051     130,076,656
                                                  ===========     ===========
 WEIGHTED AVERAGE COMMON
   SHARES OUTSTANDING-DILUTED                     231,827,525     130,076,656
                                                  ===========     ===========


            See notes to condensed consolidated financial statements.




                                      5



                               CEL-SCI CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
                                   (unaudited)
                                                            Nine Months
                                                          Ended June 30,
                                                        2010             2009
                                                    -----------     -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS)                                  $ 17,813,874   $ (10,529,857)
Adjustments to reconcile net income (loss) to
  net cash used in operating activities:
  Depreciation and amortization                         377,458         331,656
  Issuance of common stock, warrants and stock
    options for services                              1,159,450       1,718,450
  Common stock contributed to 401(k) plan                83,023          19,972
  Extension of employee options                         212,444               -
  Employee option cost                                  939,350       1,403,155
  (Gain) loss on derivative instruments             (30,614,451)      1,993,250
  Amortization of discount on convertible debt                -         111,990
  Amortization of loan premium                           (3,282)              -
  Decrease (increase) in deferred rent asset            754,276         (42,316)
  Loss on abandonment of patents                          5,381         138,526
  Loss on retirement of equipment                         2,081               -
 (Increase) decrease in prepaid expenses               (148,774)         26,214
 (Increase) in inventory for R&D and manufacturing   (1,352,513)         (7,214)
  Decrease in deposits                                1,574,932          14,828
  Increase in deposits held                                   -          10,000
 (Decrease) increase  in accounts payable               (83,191)      1,091,454
  Increase in accrued expenses                          115,236         576,733
 (Decrease) increase in amount due to employees         (25,020)         67,298
  Increase in deferred revenue                          125,000               -
  Increase in accrued interest on convertible debt            -          23,730
  Increase in deferred rent liability                        61           7,668
                                                    -----------     -----------
NET CASH USED IN OPERATING ACTIVITIES                (9,064,665)     (3,044,463)
                                                    -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Decrease in restricted cash                            47,215         918,816
  Sale of investments available-for-sale securities           -         200,000
  Purchase of equipment                                (368,281)       (173,828)
  Patent costs                                          (15,023)        (26,264)
                                                    -----------     -----------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES    (336,089)        918,724
                                                    -----------     -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from exercise of stock options and
      warrants and sale of stock                      6,308,874       5,845,241
  Licensing proceeds (Note D)                                 -       1,249,981
  Repayment of convertible notes                              -        (630,000)
  Proceeds from short term loan-related party                 -       1,060,000
  Repayment of short term loan                                -        (200,000)
  Financing costs                                             -        (339,330)
                                                    -----------     -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES             6,308,874       6,985,892
                                                    -----------     -----------

NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS                                          (3,091,880)      4,860,153

CASH AND CASH EQUIVALENTS:
  Beginning of period                                33,567,516         711,258
                                                    -----------     -----------
  End of period                                     $30,475,636     $ 5,571,411
                                                    ===========     ===========

                                                                     (continued)

                                      6



                               CEL-SCI CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
                                   (unaudited)
                                   (continued)
                                                         Nine Months
                                                         Ended June 30,
SUPPLEMENTAL INFORMATION ON NONCASH TRANSACTIONS:      2010             2009
                                                   -----------      -----------
Patent costs included in accounts payable:

Increase in accounts payable                       $         -      $    (4,050)
Increase in patent costs                                     -            4,050
                                                   -----------      -----------
                                                   $         -      $         -
                                                   ===========      ===========
Equipment costs included in accounts payable:

Increase in accounts payable                       $   (48,657)     $    (8,090)
Increase in research and office equipment               48,657            8,909
                                                   -----------      -----------
                                                   $         -      $         -
                                                   ===========      ===========
Modification of Series M warrants:

Increase in additional paid-in capital             $(1,432,456)     $         -
Decrease in additional paid capital                  1,432,456                -
                                                   -----------      -----------
                                                   $         -      $         -
                                                   ===========      ===========
Cost of investor shares issued and warrant
   extension:

Increase in accumulated deficit                    $         -      $   466,667
Increase in additional paid-in capital                       -         (466,667)
                                                   -----------      -----------
                                                   $         -      $         -
                                                   ===========      ===========
Payment of convertible debt principal with
  common stock:

Decrease in convertible debt                       $         -      $   190,000
Increase in common stock                                     -           (7,216)
Increase in additional paid-in capital                       -         (182,784)
                                                   -----------      -----------
                                                   $         -      $         -
                                                   ===========      ===========
Conversion of interest on convertible debt
    into common stock:

Decrease in accrued interest on convertible debt   $         -      $    40,153
Increase in common stock                                     -           (1,705)
Increase in additional paid-in capital                       -          (38,448)
                                                   -----------      -----------
                                                   $         -      $         -
                                                   ===========      ===========
Warrants issued for deferred rent:

Increase in deferred rent                          $         -      $   366,894
Increase in additional paid-in capital                       -         (366,894)
                                                   -----------      -----------
                                                   $         -      $         -
                                                   ===========      ===========
Issuance of warrants with licensing agreement:

Increase in additional paid-in capital             $         -      $(1,015,771)
Decrease in additional paid-in capital                       -        1,015,771
                                                   -----------      -----------
                                                   $         -      $         -
                                                   ===========      ===========
Exercise of derivative liability warrants:

Decrease in derivative liabilities                 $ 5,510,490      $         -
Increase in additional paid-in capital              (5,510,490)               -
                                                   -----------      -----------
                                                   $         -      $         -
                                                   ===========      ===========
Conversion of warrants from additional paid
    in capital to derivative liabilities:

Increase in derivative liabilities                 $(6,186,343)    $          -
Increase in accumulated deficit                      6,186,343                -
                                                   -----------      -----------
                                                   $         -      $         -
                                                   ===========      ===========
Issuance of warrants in connection with financing:

Increase in additional paid-in capital             $         -      $(2,731,471)
Decrease in additional paid-in capital                       -        2,731,471
                                                   -----------      -----------
                                                   $         -                -
                                                   ===========      ===========
NOTE:
Cash expenditures for interest expense             $   124,206      $    85,406

            See notes to condensed consolidated financial statements.


                                      7


                                    CEL-SCI CORPORATION
                    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    NINE MONTHS ENDED JUNE 30, 2010 AND 2009


A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Basis of Presentation

      The accompanying condensed consolidated financial statements of CEL-SCI
      Corporation and subsidiary (the Company) are unaudited and certain
      information and footnote disclosures normally included in the annual
      financial statements prepared in accordance with accounting principles
      generally accepted in the United States of America have been omitted
      pursuant to the rules and regulations of the Securities and Exchange
      Commission. While management of the Company believes that the disclosures
      presented are adequate to make the information presented not misleading,
      interim condensed consolidated financial statements should be read in
      conjunction with the condensed consolidated financial statements and notes
      included in the Company's annual report on Form 10-K for the year ended
      September 30, 2009.

      In the opinion of management, the accompanying unaudited condensed
      consolidated financial statements contain all accruals and adjustments
      (each of which is of a normal recurring nature) necessary for a fair
      presentation of the financial position as of June 30, 2010 and the results
      of operations for the nine and three-month periods then ended. The
      condensed consolidated balance sheet as of September 30, 2009 is derived
      from the September 30, 2009 audited consolidated financial statements.
      Significant accounting policies have been consistently applied in the
      interim financial statements and the annual financial statements. The
      results of operations for the nine and three-month periods ended June 30,
      2010 and 2009 are not necessarily indicative of the results to be expected
      for the entire year.

      Certain items in the consolidated financial statements have been
      reclassified to conform to the current presentation.

      Significant accounting policies are as follows:

      Research and Office Equipment and Leasehold Improvements - 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 term of the lease. Repairs and maintenance
      which do not extend the life of the asset are expensed when incurred.
      Depreciation and amortization expense for the nine-month periods ended
      June 30, 2010 and 2009 was $318,800 and $267,327, respectively.
      Depreciation and amortization expense for the three-month periods ended
      June 30, 2010 and 2009 was $114,894 and $101,329, respectively. During the
      nine and three months ended June 30, 2010 and 2009, equipment with a net
      book value of $2,081 and $-0- was retired.

      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

                                      8


      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 would be the difference between the estimated fair value of the asset
      and its carrying value. During the nine-month periods ended June 30, 2010
      and 2009, the Company recorded patent impairment charges of $5,381 and
      $138,526, respectively. During the three-month periods ended June 30, 2010
      and 2009, the Company recorded patent impairment charges of $-0- and
      $121,567, respectively. For the nine-month periods ended June 30, 2010 and
      2009, amortization of patent costs totaled $58,658 and $64,329,
      respectively. For the three-month periods ended June 30, 2010 and 2009,
      amortization of patent costs totaled $19,680 and $21,785, respectively.
      The Company estimates that amortization expense will be $78,000 for each
      of the next five years, totaling $390,000.

      Research and Development Costs - Research and development expenditures are
      expensed as incurred. Total research and development costs, excluding
      depreciation, were $7,733,544 and $3,832,582, respectively, for the nine
      months ended June 30, 2010 and 2009. Total research and development costs,
      excluding depreciation, were $1,587,520 and $1,174,066, respectively, for
      the three months ended June 30, 2010 and 2009.

      Income Taxes - The Company has net operating loss carryforwards of
      approximately $107 million. 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 more
      likely than not to be recognized.

      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
      has also issued warrants to various parties in connection with work
      performed by these parties. The Company accounts for these arrangements in
      accordance with Codification 815-10-50, "Accounting for Derivative
      Instruments and Hedging Activities". The Company also accounts for
      warrants in accordance with Codification 815-40-15, "Determining Whether
      an Instrument (or Embedded Feature) is Indexed to an Entity's Own Stock".
      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 balance sheet 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. 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. The derivative liabilities are
      remeasured at fair value at the end of each interim period as long as they
      are outstanding.

                                      9


      Deferred rent (asset) - The deferred rent is discussed at Note J.
      Long-term interest receivable on the deposit on the manufacturing facility
      has been combined with the deferred rent (asset) for both periods for
      comparability.

      Stock-Based Compensation - The Company follows Codification 718-10-30-3,
      "Share-Based Payment". This Codification applies to all transactions
      involving issuance of equity by a company in exchange for goods and
      services, including to employees. Compensation expense has been recognized
      for awards that were granted, modified, repurchased or cancelled on or
      after October 1, 2005 as well as for the portion of awards previously
      granted that vested during the period ended June 30, 2010. For the nine
      months ended June 30, 2010 and 2009, the Company recorded $939,350 and
      $1,403,155, respectively, in general and administrative expense for the
      cost of employee options. For the three months ended June 30, 2010 and
      2009, the Company recorded $321,268 and $1,114,434, respectively, in
      general and administrative expense for the cost of employee options. The
      Company's options vest over a three-year period from the date of grant.
      After one year, the stock is one-third vested, with an additional
      one-third vesting after two years and the final one-third vesting at the
      end of the three-year period. There were 400,000 and 4,763,389 options
      granted to employees during the nine-month periods ended June 30, 2010 and
      2009, respectively. There were 6,000 and 4,763,389 options granted to
      employees during the three-month periods ended June 30, 2010 and 2009,
      respectively. Options are granted with an exercise price equal to the
      closing price of the Company's stock on the day before the grant. The
      Company determines the fair value of the employee compensation using the
      Black Scholes method of valuation.

      On January 13, 2010, the Company extended 518,832 employee options at a
      cost of $212,444, representing the difference between the fair value of
      the options before the extension and the fair value after the extension.
      The Company determined the fair value of the fully vested employee option
      extension using the Black Scholes method of valuation.

      The Company has Incentive Stock Option Plans, Non-Qualified Stock Option
      Plans, a Stock Compensation Plan and Stock Bonus Plans. All Plans have
      been approved by the stockholders. A summary description of the Stock
      Option Plans follows. For further discussion of the Stock Compensation
      Plan and Stock Bonus Plans, see Form 10-K for the year ended September 30,
      2009. In some cases these Plans are collectively referred to as the
      "Plans".

      Incentive Stock Option Plans. The Incentive Stock Option Plans authorize
      the issuance of shares of the Company's common stock to persons who
      exercise options granted pursuant to the Plans. Only Company employees may
      be granted options pursuant to the Incentive Stock Option Plans.


                                      10


                               CEL-SCI CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    NINE MONTHS ENDED JUNE 30, 2010 AND 2009

      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 the  Company  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 the Company is terminated, if such termination is due to
          the option holder's permanent and total disability;

     (c)  In the event of an option  holder's  death  while in the employ of the
          Company,  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;

      During the nine months ended June 30, 2010, 71,333 options were exercised
      from the Incentive Stock Option Plan. During the three months ended June
      30, 2010, no options were exercised from the Incentive Stock Option Plans.
      The total intrinsic value of options exercised during the nine months
      ended June 30, 2010 was $22,933. The total intrinsic value of options
      exercised during the three months ended June 30, 2010 was $0. There were
      no options exercised during the nine or three months ended June 30, 2009.

      During the nine months ended June 30, 2010, 100,000 Incentive stock
      options were granted. During the three months ended June 30, 2010, no
      Incentive stock options were granted.

      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 the Company 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 exercise price of an option 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 the
      Company's outstanding shares).

      Non-Qualified Stock Option Plans. The Non-Qualified Stock Option Plans
      authorize the issuance of shares of the Company's common stock to persons
      that exercise options granted pursuant to the Plans. The Company'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 a capital-raising transaction or
      promoting the Company's stock. The option exercise price is determined by
      the Company's Board of Directors.

                                      11


      During the nine months ended June 30, 2010, 18,625 options were exercised
      from the Non-Qualified Plans. During the three months ended June 30, 2010,
      no options were exercised from the Non-Qualified Plans. The total
      intrinsic value of options exercised during the nine months ended June 30,
      2010 was $10,066. The total intrinsic value of options exercised during
      the three months ended June 30, 2010 was $0. There were no options
      exercised during the nine or three months ended June 30, 2009.

      During the nine months ended June 30, 2010, 300,000 Non-Qualified stock
      options were granted. During the three months ended June 30, 2010, 6,000
      Non-Qualified stock options were granted.

      Options to non-employees are accounted for in accordance with Codification
      505-50-05-5, "Equity Based Payments to Non-Employees". Accordingly,
      compensation is recognized when goods or services are received and is
      measured using the Black-Scholes valuation model. The Black-Scholes model
      requires management to make assumptions regarding the fair value of the
      options at the date of grant and the expected life of the options. There
      were no options granted to non-employees during the nine months ended June
      30, 2010. There were 370,758 shares of common stock issued to consultants
      during the nine months ended June 30, 2010 at a cost for the nine months
      of $409,562. For the three months ended June 30, 2010, no shares were
      issued to non-employees. Additionally, a portion of the cost of common
      stock issued in previous quarters was expensed. The cost for the
      previously issued shares for the nine months ended June 30, 2010 was
      $349,074 and for the three months ended June 30, 2010 the cost for
      previously issued shares was $57,900. There were 450,000 options granted
      to non-employees during the nine months ended June 30, 2009 at a cost of
      $366,894. There were 2,581,488 shares of common stock issued to
      consultants during the nine months ended June 30, 2009 at a cost for the
      nine months ended June 30, 2009 of $462,234. In addition, a portion of the
      cost of common stock issued in previous quarters was expensed. This cost
      for the nine months ended June 30, 2009 was $391,000 and $97,601 for the
      three months ended June 30, 2009.

B. NEW ACCOUNTING PRONOUNCEMENTS

      In June 2008, the FASB finalized Codification 815-40-15, "Determining
      Whether an Instrument (or Embedded Feature) is Indexed to an Entity's Own
      Stock". The topic lays out a procedure to determine if the debt instrument
      is indexed to a corporation's common stock. The topic is effective for
      fiscal years beginning after December 15, 2008. The Company has adopted
      this topic and the effect was material. (See Note D).

      In January 2010, the FASB amended Codification 820-10, "Improving
      Disclosures about Fair Value Measurement", effective for interim periods
      beginning after December 15, 2009. This amendment changes disclosures
      required for interim and annual periods with respect to fair value
      measurements. The Company has adopted the change in the disclosure
      requirements and the effect was immaterial.

                                      12


C.     AVAILABLE-FOR-SALE SECURITIES

      At September 30, 2008, the Company had $200,000 in face value of Auction
      Rate Cumulative Preferred Shares (ARPs), liquidation preference of $25,000
      per share, of an income mutual fund. The ARPs were invested primarily in a
      globally diversified portfolio of convertible instruments, common and
      preferred stocks, and income producing securities such as investment grade
      and below investment grade (high yield/high risk) debt securities.

      The Company carried the ARPs at par value until they were repaid in
      November 2008. The loan that the Company had taken against these ARPs was
      repaid at the same time.

D.    STOCKHOLDERS' EQUITY

      In November 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. The agreement expires 15 years after the commencement date which
      is defined as the date of the first commercial sale of Multikine in any
      country within their territory. As a result of the agreement, Orient
      Europharma purchased 1,282,051 shares of common stock at a cost of $0.39
      per share, for a total to the Company, after expenses, of $499,982.

      During the nine months ended June 30, 2009, 2,568,816 shares of common
      stock were issued in payment of invoices totaling $868,846. Common stock
      was also issued to pay interest and principal on the Series K convertible
      debt. (See Note E) In addition, the balance of the shares issued to the
      President of the Company in September 2008 were expensed at a cost of
      $200,000. An additional 1,030,928 shares were issued to the President of
      the Company in March 2009. A portion of the cost of $200,000 was expensed
      during the nine months ended June 30, 2009, totaling $125,555. In
      addition, 12,672 shares were issued to an employee for expenses. The
      shares were expensed at a cost of $3,168 during the quarter ended June 30,
      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. There were no drawdowns during the nine and
      three months ended June 30, 2010 or 2009.

      On March 6, 2009, the Company entered into a licensing agreement with
      Byron Biopharma LLC ("Byron") under which the Company granted Byron an
      exclusive license to market and distribute the Company's cancer drug
      Multikine in the Republic of South Africa. The Company has existing
      licensing agreements for Multikine with Teva Pharmaceuticals and Orient


                                      13


      Europharma. Pursuant to the agreement Byron will be responsible for
      registering the product in South Africa. Once Multikine has been approved
      for sale, the Company will be responsible for manufacturing the product,
      while Byron will be responsible for sales in South Africa. Revenues will
      be divided equally between the Company and Byron. To maintain the license
      Byron, among other requirements, had to make a $125,000 payment to the
      Company on or before March 15, 2010. On March 8, 2010, Byron made the
      payment of $125,000. On March 30, 2009, and as further consideration for
      its rights under the licensing agreement, Byron purchased 3,750,000 Units
      from the Company at a price of $0.20 per Unit. Each Unit consisted of one
      share of the Company's common stock and two warrants. Each warrant
      entitles the holder to purchase one share of the Company's common stock at
      a price of $0.25 per share. The warrants expire on March 6, 2016. The
      shares of common stock included as a component of the Units were
      registered by the Company under the Securities Act of 1933. The Company
      filed a new registration statement to register the shares issuable upon
      the exercise of the warrants. The Units were accounted for as an equity
      transaction using the Black Scholes method to value the warrants. The fair
      value of the warrants was calculated to be $1,015,771.

      During the nine months ended June 30, 2010, there were 12,249,441 warrants
      and options exercised for 12,249,441 shares of common stock at prices
      ranging from $0.22 to $1.05. The Company received a total of $6,308,874
      from the exercise of warrants and options during the nine months ended
      June 30, 2010. During the three months ended June 30, 2010, there were
      319,767 warrants and options exercised for 319,767 shares of common stock
      at $0.40.

      Included in the warrants and options exercised during the nine months
      ended June 30, 2010 were 1,335,221 Series K warrants (See Note E), on
      which the Company recognized a gain on conversion of $280,223 and
      8,813,088 Series A warrants, on which the Company recognized a total gain
      of $8,433,451. These amounts include adjustments to correct errors made in
      prior periods totaling $209,302 relating to the mark to market adjustment
      for the exercise of the Series K warrants. Management believes the impact
      of these adjustments to be immaterial to the current and prior periods.
      Both the Series K warrants and the Series A warrants were accounted for as
      derivative liabilities. Series A warrants were issued in connection with
      the June 2009 financing. When the warrants were exercised, the value of
      these warrants was converted from derivative liabilities to equity. Series
      K warrants transferred to equity totaled $1,233,518 and Series A warrants
      transferred to equity totaled $4,276,972. The remaining Series A through E
      warrants were valued at $3,074,913 at June 30, 2010, which resulted in a
      gain of $13,956,036 for the nine months ended June 30, 2010 and $1,897,335
      for the three months ended June 30, 2010. See Note G for details of the
      balances of derivative instruments at June 30, 2010 and September 30,
      2009.

      On March 12, 2010, the Company temporarily reduced the exercise price of
      the Series M warrants, originally issued on April 18, 2007. The exercise
      price was reduced from $2.00 to $0.75. At any time prior to June 16, 2010
      investors could have exercised the Series M warrants at a price of $0.75
      per share. For every two Series M warrants exercised prior to June 16,
      2010 the investor would have received one Series F warrant. Each Series F


                                      14


      warrant would have allowed the holder to purchase one share of the
      Company's common stock at a price of $2.50 per share at any time on or
      before June 15, 2014. After June 15, 2010 the exercise price of the Series
      M warrants reverted back to $2.00 per share. Any person exercising a
      Series M warrant after June 15, 2010 would not receive any Series F
      warrants. The Series M warrants expire on April 17, 2012. An analysis of
      the modification to the warrants determined that the modification
      increased the value of the warrants by $1,432,456. There were no exercises
      of the Series M warrants at the reduced price and the exercise price of
      the Series M warrants reverted back to $2.00 on June 16, 2010.

      On October 1, 2009, the Company reviewed all outstanding warrants in
      accordance with the requirements of Codification 815-40, "Determining
      Whether an Instrument (or Embedded Feature) is Indexed to an Entity's Own
      Stock". This topic provides that an entity should use a two-step approach
      to evaluate whether an equity-linked financial instrument (or embedded
      feature) is indexed to its own stock, including evaluating the
      instrument's contingent exercise and settlement provisions. Two warrant
      agreements provide for adjustments to the purchase price for certain
      dilutive events, which includes an adjustment to the warrant exercise
      price in the event that the Company makes certain equity offerings in the
      future at a price lower than the exercise price of the warrants. Under the
      provisions of Codification 815-40, the warrants are not considered indexed
      to the Company's stock because future equity offerings or sales of the
      Company's stock are not an input to the fair value of a "fixed-for-fixed"
      option on equity shares, and equity classification is therefore precluded.
      Accordingly, effective October 1, 2009, 3,890,782 warrants issued in
      August 2008 were determined to be subject to the requirements of this
      topic and were valued using the Black-Scholes formula as of October 1,
      2009 at $6,186,343. Effective October 1, 2009, the warrants are recognized
      as a liability in the Company's condensed consolidated balance sheet at
      fair value with a corresponding adjustment to accumulated deficit and will
      be marked-to-market each reporting period. The warrants were revalued on
      June 30, 2010 at $1,361,774, which resulted in a gain on derivatives and a
      reduction in derivative liabilities of $4,824,569 for the nine months
      ended June 30, 2010 and $583,617 for the three months ended June 30, 2010
      due to the decline in the Company's stock price since October 1, 2009. The
      assumptions used in the fair value calculation for the warrants as of
      October 1, 2009 and June 30, 2010 are as follows:

                                           October 1, 2009     June 30, 2009
                                           ---------------     -------------
      Expected stock price volatility          95%                95%
      Risk-free interest rate                  2.151%             1.449%
      Expected life of warrant                 4.88 years         4.14 years

E. SERIES K CONVERTIBLE DEBT

     In August 2006, the Company issued $8,300,000 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

                                      15


      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.

      The Company accounted for the Series K Warrants as derivative liabilities
      in accordance with Codification 815-10. A debt discount of $1,734,472 was
      amortized to interest expense using the effective interest method over the
      expected term of the Series K Notes. During the nine-month periods ended
      June 30, 2010 and 2009, the Company recorded interest expense of $-0- and
      $111,990, respectively, in amortization of the debt discount. During the
      fiscal year ended September 30, 2009, the balance of the debt was either
      repaid or converted into shares of common stock. The Company recorded a
      loss on derivative instruments of $1,892,084 during the nine months ended
      June 30, 2009. For the three months ended June 30, 2009, the Company
      recorded a loss on derivative instruments of $2,548,327.

      During the nine months ended June 30, 2009, principal payments of $630,000
      were made in cash to the holders of the Series K Notes. In addition,
      721,565 shares of common stock were issued in December 2008 for the
      principal payment due on January 4, and February 4, 2009 of $190,000. The
      Company also paid the interest expense through December 31, 2008 with
      170,577 shares of common stock.

      During the nine months ended June 30, 2010, the Company recorded a gain on
      remaining Series K warrants of $3,120,172. The following summary comprises
      the total of the fair value of the Series K convertible debt and related
      derivative instruments at June 30, 2010 and September 30, 2009:

                                             June 30, 2010   September 30, 2009
                                             -------------   ------------------

            Investor warrants                 $1,734,472          $1,734,472
            Fair value adjustment-
               investor warrants                (995,786)          3,638,126
                                              ----------          ----------
            Total fair value                  $  738,686          $5,372,598
                                              ==========          ==========

F. FAIR VALUE MEASUREMENTS

      Effective October 1, 2008, the Company adopted the provisions of
      Codification 820-10, "Fair Value Measurements", which defines fair value,
      establishes a framework for measuring fair value and expands disclosures
      about such measurements that are permitted or required under other
      accounting pronouncements. While Codification 820-10 may change the method
      of calculating fair value, it does not require any new fair value
      measurements. The new effective date is for fiscal years beginning after
      November 15, 2008 and the interim periods within the fiscal year. The
      adoption of Codification 820-10 did not have a material impact on the
      Company's results of operations, financial position or cash flows.


                                      16


      In accordance with Codification 820-10, the Company determines fair value
      as the price that would be received to sell an asset or paid to transfer a
      liability in an orderly transaction between market participants at the
      measurement date. The Company generally applies the income approach to
      determine fair value. This method uses valuation techniques to convert
      future amounts to a single present amount. The measurement is based on the
      value indicated by current market expectations with respect to those
      future amounts.

      Codification 820-10 establishes a fair value hierarchy that prioritizes
      the inputs used to measure fair value. The hierarchy gives the highest
      priority to active markets for identical assets and liabilities (Level 1
      measurement) and the lowest priority to unobservable inputs (Level 3
      measurement). The Company classifies fair value balances based on the
      observability of those inputs. The three levels of the fair value
      hierarchy are as follows:

     o    Level 1 - Observable  inputs such as quoted  prices in active  markets
          for identical assets or liabilities.

     o    Level 2 - Inputs other than quoted prices that are  observable for the
          asset or  liability,  either  directly or  indirectly.  These  include
          quoted prices for similar  assets or  liabilities  in active  markets,
          quoted  prices for  identical  or  similar  assets or  liabilities  in
          markets that are not active and amounts derived from valuation  models
          where all significant inputs are observable in active markets.

     o    Level 3 - Unobservable inputs that reflect management's assumptions

      For disclosure purposes, assets and liabilities are classified in their
      entirety in the fair value hierarchy level based on the lowest level of
      input that is significant to the overall fair value measurement. The
      Company's assessment of the significance of a particular input to the fair
      value measurement requires judgment and may affect the placement within
      the fair value hierarchy levels.

      The table below sets forth the assets and liabilities measured at fair
      value on a recurring basis, by input level, in the condensed consolidated
      balance sheet at June 30, 2010 and the consolidated balance sheet at
      September 30, 2009:


                                                  June 30, 2010
                          ------------------------------------------------------------------
                                                                             
                          Quoted Prices in      Significant
                          Active Markets for       Other            Significant
                         Identical Assets or     Observable         Unobservable
                        Liabilities (Level 1)  Inputs (Level 2)    Inputs (Level 3)       Total
                       ---------------------   ----------------    ---------------        -----

Derivative instruments   $         -             $5,175,372          $        -         $5,175,372
                         ===========             ==========          ==========         ==========



                                      17




                                                  September 30, 2009
                          ------------------------------------------------------------------
                                                                             
                          Quoted Prices in      Significant
                          Active Markets for       Other            Significant
                         Identical Assets or     Observable         Unobservable
                        Liabilities (Level 1)  Inputs (Level 2)    Inputs (Level 3)       Total
                       ---------------------   ----------------    ---------------        -----

Derivative instruments      $        -           $35,113,970         $        -         $35,113,970
                            ==========           ===========         ==========         ===========


      The fair values of the Company's derivative instruments disclosed above
      are primarily derived from valuation models where significant inputs such
      as historical price and volatility of the Company's stock as well as U.S.
      Treasury Bill rates are observable in active markets.

G. DERIVATIVE LIABILITIES

      The Company has several groups of warrants that require classification in
      the balance sheet as derivative liabilities. These warrants have been
      discussed above. Below is a summary of the derivative liabilities at June
      30, 2010 and September 30, 2009:

                                             June 30, 2010    September 30, 2009
                                             -------------    ------------------

      Series K warrants (Note E)              $    738,686       $  5,372,598
      2009 financings warrants (Note D)          3,074,912         29,741,372
      2008 warrants reclassified from equity
        to derivative liabilities on
        October 1, 2009 (Note D)                 1,361,774                  -
                                               -----------       ------------
       Total derivative liabilities           $  5,175,372       $ 35,113,970
                                              ============       ============

H.    SHORT-TERM LOANS

      The Company had a line of credit with its bank to borrow up to 100% of the
      ARPs (see Note C) at an interest rate of prime minus 1%. As of September
      30, 2008, the Company had borrowed $200,000, which was repaid in November
      2008. During the three months ended December 31, 2008, the Company had
      paid $813 in interest on the line of credit.

      Between December 2008 and June 2009, Maximilian de Clara, the Company's
      President and a director, loaned the Company $1,104,057. The loan from Mr.
      de Clara bears interest at 15% per year and was secured by a lien on
      substantially all of the Company's assets. The Company does not have the
      right to prepay the loan without Mr. de Clara's consent. The loan was
      initially payable at the end of March 2009, but was extended to the end of
      June 2009. At the time the loan was due, and in accordance with the loan
      agreement, the Company issued Mr. de Clara warrants which entitle Mr. de
      Clara to purchase 1,648,244 shares of the Company's common stock at a
      price of $0.40 per share. The warrants are exercisable at any time prior
      to December 24, 2014. Pursuant to Codification section 470-50, the fair
      value of the warrants issuable under the first amendment was recorded as a


                                      18


      discount on the note payable with a credit recorded to additional paid-in
      capital. The discount was amortized from April 30, 2009 through June 27,
      2009. Although the loan was to be repaid from the proceeds of the
      Company's June 2009 financing, the Company's Directors deemed it
      beneficial not to repay the loan and negotiated a second extension of the
      loan with Mr. de Clara on terms similar to the June 2009 financing.
      Pursuant to the terms of the second extension, the note is now due on July
      6, 2014 but, at Mr. de Clara's option, the loan can be converted into
      shares of the Company's common stock. The number of shares which will be
      issued upon any conversion will be determined by dividing the amount to be
      converted by $0.40. As further consideration for the second extension, Mr.
      de Clara received warrants which allow Mr. de Clara to purchase 1,849,295
      shares of the Company's common stock at a price of $0.50 per share at any
      time prior to January 6, 2015.

      In accordance with Codification 470-50, the second amendment to the loan
      was accounted for as an extinguishment of the first amendment debt. The
      extinguishment of the loan required that the new loan be recorded at fair
      value and a gain or loss must be recognized, including the warrants issued
      in connection with the second amendment. This resulted in a premium of
      $341,454, which was amortized over the period from July 6, 2009, the date
      of the second amendment, to October 1, 2009, the date at which the loan
      holder may demand payment of the loan. During the nine months ended June
      30, 2010, the Company amortized the remaining $3,282 in premium on the
      loan. As of June 30, 2010, the fair value and the face value of the loan
      was $1,104,057. As of September 30, 2009, the balance of the loan with
      unamortized premium was $1,107,339.

I.    OPERATIONS, 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, as well as
      loans from affiliates. 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 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. The Company believes that it has sufficient
      funds to support its operations for more than the next twelve months.

      The Company has two partners who have agreed to participate in and pay for
      part of the Phase III clinical trial for Multikine. Since the Company was
      able to raise substantial capital during 2009, the Company is currently
      preparing the Phase III trial for Multikine. The net cost to the Company
      of the clinical trial is estimated to be $25 million.

                                      19


J.    COMMITMENTS AND CONTINGENCIES

      In August 2007, the Company leased a building near Baltimore, Maryland.
      The building, which consists of approximately 73,000 square feet, was
      remodeled in accordance with the Company's specifications so that it can
      be used by the Company to manufacture Multikine for the Company's Phase
      III clinical trial and sales of the drug if approved by the FDA. 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%. The Company is also required to pay all real
      and personal property taxes, insurance premiums, maintenance expenses,
      repair costs and utilities. The lease allows the Company, 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 the Company 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 the Company maintaining compliance with the lease
      covenants. On January 24, 2008, a second amendment to the lease for the
      manufacturing facility was signed. In accordance with the amendment, the
      Company was required to pay the following: 1) an additional $518,790 for
      movable equipment, which increased restricted cash, and 2) an additional
      $1,295,528 into an escrow account to cover additional costs, which
      increased deferred rent. These funds were transferred in early February
      2008. In April 2008, an additional $288,474 was paid toward the completion
      of the manufacturing facility. The Company took possession of the
      manufacturing facility in October of 2008. An additional $505,225 was paid
      for the completion of the work on the manufacturing facility in October
      2008. During the nine months ended June 30, 2010, an additional $32,059
      was paid for final completion costs.

      In December 2008, the Company was not in compliance with certain lease
      requirements (i.e., failure to pay an installment of Base Annual Rent).
      However, the landlord did not declare the Company formally in default
      under the terms of the lease and renegotiated the lease. In January 2009,
      as part of an amended lease agreement on the manufacturing facility, the
      Company repriced the 3,000,000 warrants initially issued to the landlord
      in July 2007 at $1.25 per share with an expiration date of July 12, 2013.
      These warrants are now repriced at $0.75 per share and expire on January
      26, 2014. The cost of this repricing and extension of the warrants was
      $70,515. In addition, 787,500 additional warrants were given to the
      landlord on the same date. These warrants are exercisable at $0.75 per
      share and will expire on January 26, 2014. The cost of these warrants was
      $45,207. All back rent was paid to the landlord in early July 2009. During
      the three months ended June 30, 2009, the Company issued the landlord an
      additional 2,296,875 warrants in accordance with an amendment to the
      agreement. These warrants were valued at $251,172 using the Black Scholes
      method. The Company is in compliance with the lease and in February 2010,
      received a refund of the $1,575,000 deposited with the landlord in July
      2008.

      On January 28, 2009, the Company subleased a portion of the manufacturing
      facility. The sublease commenced on February 2, 2009 and expires on
      January 31, 2011. The Company currently receives $10,300 per month in rent
      for the subleased space.


                                      20


      The Company began amortizing the deferred rent on the building on October
      7, 2008, the day that the Company took possession of the building. The
      amortization of the deferred rent for the nine months ended June 30, 2010
      was $606,583 and for the nine months ended June 30, 2009 was $595,994. The
      amortization on the deferred rent for the three months ended June 30, 2010
      was $201,820 and for the three months ended June 30, 2009 was $150,940.

K.   EARNINGS PER SHARE

      The Company's diluted earnings per share (EPS) are as follows for June 30,
      2010. The June 30, 2009 diluted earnings per share were the same as the
      basic earnings per share.

                                          Nine Months Ended June 30, 2010
                                    -------------------------------------------
                                                     Weighted average
                                     Net Income           Shares          EPS
                                     ----------      ----------------    -----

      Basic Earnings per Share     $ 16,381,418        201,208,121       $ 0.08
      Note conversion                   124,206          2,760,142
      Warrants and options
        convertible into shares
        of common stock             (21,900,777)       24,475,332
                                   -------------      -----------
      Dilutive EPS                 $ (5,395,153)      228,443,595        $(0.02)
                                   ==============     ===========        ======


                                         Three Months Ended June 30, 2010
                                     ------------------------------------------
                                                     Weighted average
                                     Net Income            Shares         EPS
                                    ------------     ----------------    -----

      Basic Earnings per Share  $      (601,124)       204,592,051       $(0.00)
      Note conversion                    41,402          2,760,142
      Warrants and options
        convertible into shares
        of common stock              (2,903,058)        24,475,332
                                    --------------    ------------
      Dilutive EPS               $   (3,462,780)       231,827,525       $(0.01)
                                 ==============       ============       ======


                                          Nine Months Ended June 30, 2009
                                    -------------------------------------------
                                                     Weighted average
                                     Net Income           Shares          EPS
                                     ----------      ----------------    -----

      Basic Earnings per Share   $  (10,996,524)       125,655,445     $(0.09)
      Warrants and options
        convertible into shares
        of common stock                       -                  -
                                 --------------        -----------
      Dilutive EPS               $  (10,996,524)       125,655,445       $(0.09)
                                 ==============        ===========       ======


                                      21


                                         Three Months Ended June 30, 2010
                                    ------------------------------------------
                                                     Weighted average
                                     Net Income            Shares         EPS
                                    ------------     ----------------    -----


      Basic Earnings per Share    $  (6,705,731)       130,076,656      $(0.05)
      Warrants and options
        convertible into shares
        of common stock                       -                  -
                                  -------------        -----------
      Dilutive EPS                $  (6,705,731)       130,076,656      $(0.05)
                                 ==============        ===========      ======


L. SUBSEQUENT EVENTS

      The Company has evaluated subsequent events through the date these
      financial statements were filed. On August 3, 2010, the Company's Board of
      Directors approved an amendment to the terms of the Series M warrants held
      by an investor. The investor is the owner of 8,800,000 warrants priced at
      $2.00 per share. The investor may now purchase 6,000,000 shares of the
      Company's common stock (reduced from 8,800,000) at a price of $0.60 per
      share. In approving the amendment, CEL-SCI's Directors determined that
      reducing the number of CEL-SCI's outstanding warrants would be beneficial.


                                      22


Item 2.   MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
          RESULTS OF OPERATIONS

Liquidity and Capital Resources

The Company has had only limited revenues from operations since its inception in
March 1983. The Company has relied upon capital generated from the public and
private offerings of its securities as well as loans to meet its capital
requirements. Capital has primarily been used for patent applications, debt
repayment, research and development, administrative costs, and the construction
of the Company's laboratory facilities. The Company does not anticipate
realizing significant revenues until it enters into licensing arrangements
regarding its technology and know-how or until it receives regulatory approval
to sell its products (which could take a number of years). As a result the
Company has been dependent upon the proceeds from the sale of its securities and
loans from third parties to meet all of its liquidity and capital requirements
and anticipates having to do so in the future.

The Company will be required to raise additional capital or find additional
long-term financing in order to continue with its research efforts. 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 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. The Company believes
that it has sufficient capital to support its operations for more than the next
twelve months.

The Company has two partners who have agreed to participate in and pay for part
of the Phase III clinical trial for Multikine. The Company also raised
significant capital through stock sales and the exercise of warrants and options
during 2009. If needed, the Company can access a $5 million Equity Line of
Credit (see Note D). Since the Company was able to raise substantial capital in
2009, the Company is currently preparing the Phase III trial for Multikine. The
net cost to the Company of the Phase III clinical trial is estimated to be $25
million.

During the nine-month period ended June 30, 2010, the Company's cash decreased
by $3,091,880 compared to an increase in cash of $4,860,153 during the nine
months ended June 30, 2009. For the nine months ended June 30, 2010 and 2009,
cash used in operating activities totaled $9,064,665 and $3,044,463,
respectively. For the nine months ended June 30, 2010 and 2009, cash provided by
financing activities totaled $6,308,874 and $6,985,892, respectively. The
repayment of the Series K convertible notes ($630,000), financing costs
($339,330) and the repayment of the short-term loan ($200,000) was used in
financing activities during the nine months ended June 30, 2009. Licensing
proceeds of $1,249,981 and receipt of short-term loans to the Company of
$1,060,000 provided funds, as did the June 2009 financing ($5,845,241). For the
nine months ended June 30, 2010, cash provided by financing was from the
exercise of warrants and options ($6,308,874). Cash used by investing activities
was $336,089 and provided by investing activities was $918,724, respectively,
for the nine months ended June 30, 2010 and 2009. The use of cash in investing
activities consisted of purchases of equipment and legal costs incurred in
patent applications and, for the nine months ended June 30, 2009, the sale of
the final $200,000 in ARPs.


                                       23


In August 2007, the Company leased a building near Baltimore, Maryland. The
building, which consists of approximately 73,000 square feet, was remodeled in
accordance with the Company specifications so that it can be used by the Company
to manufacture Multikine for the Company's Phase III clinical trial and sales of
the drug if approved by the FDA. See Note J to the financial statements included
as part of this report for information concerning the terms of the lease.

Regulatory authorities prefer to see biologics such as Multikine manufactured
for commercial sale in the same manufacturing facility for Phase III clinical
trials and the sale of the product since this arrangement helps to ensure that
the drug lots used to conduct the clinical trials will be consistent with those
that may be subsequently sold commercially. Although some biotech companies
outsource their manufacturing, this can be risky with biologics because they
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 their own specially trained personnel.

On January 28, 2009, the Company subleased a portion of the manufacturing
facility. The sublease commenced on February 2, 2009 and expires on January 31,
2011. The Company currently receives $10,300 per month in rent for the subleased
space.

Results of Operations and Financial Condition

During the nine-month period ended June 30, 2010, research and development
expenses increased by $3,900,962 compared to the nine-month period ended June
30, 2009. This increase was due to continuing expenses relating to the
preparation for the Phase III clinical trial. During the three month period
ended June 30, 2010, research and development expenses increased by $413,454
compared to the three-month period ended June 30, 2009 for the same reason.

During the nine-month period ended June 30, 2010, general and administrative
expenses increased by $931,843 compared to the nine-month period ended June 30,
2009. During the three-month period ended June 30, 2010, general and
administrative expenses decreased by $243,531 compared to the three-month period
ended June 30, 2009. This increase for the nine months ended June 30, 2010 was
caused by higher costs for employee options and a bonus given to the Company's
Chief Executive Officer in the three-months ended March 31, 2010. The decrease
in the three month period ended June 30, 2010 was due to a reduced cost of
employee options when compared to the three month period ended June 30, 2009.

Interest income during the nine months ended June 30, 2010 increased by $79,500
compared to the nine-month period ended June 30, 2009. Interest income during
the three months ended June 30, 2010 increased by $11,109 compared to the
three-month period ended June 30, 2009. The increase was due to the increase in
the funds available for investment, partially offset by lower interest rates.

The gain on derivative instruments of $30,614,451 for the nine months ended June
30, 2010 was the result of the change in fair value of the Series A through E
Warrants and Series K Warrants during the period. The gain on derivative
instruments of $2,754,512 for the three months ended June 30, 2010, was the
result of the change in fair value of the Series A through E Warrants and Series


                                       24


K Warrants during the period. These gains were caused by fluctuations in the
price of the Company's common stock.

The interest expense of $120,924 for the nine months ended June 30, 2010 was
interest on the loan from the Company's president, offset by the amortization of
the remaining premium on the loan of ($3,282). The interest expense of $41,402
for the three months ended June 30, 2010 also represented interest on the loan
from the Company's president. The interest expense of $614,654 for the nine
months ended June 30, 2009 was composed of five elements: 1) amortization of the
Series K discount ($111,990), 2) interest paid and accrued on the Series K debt
($103,784), 3) margin interest ($813), 4) interest on the short term loan
($39,265), and 5) cost of warrants issued to short term loan holder ($358,802).
The interest expense of $445,161 for the three months ended June 30, 2009 was
composed of four elements: 1) amortization of the Series K discount ($31,439),
2) interest paid and accrued on the Series K debt ($29,134), 3) interest on the
short term loan ($25,786), and 4) cost of warrants issued to short term loan
holder ($358,802).

Research and Development Expenses

During  the nine and  three-month  periods  ended  June 30,  2010 and 2009,  the
Company's   research   and   development    efforts   involved   Multikine   and
L.E.A.P.S.(TM).  The table below shows the  research  and  development  expenses
associated with each project during the nine and three-month periods

                    Nine Months Ended June 30,    Three Months Ended June 30,
                      2010            2009           2010            2009
                      ----            ----           ----            ----

MULTIKINE          $6,823,218       $3,769,302     $1,434,208     $1,165,834
   L.E.A.P.S          910,326           63,280        153,312          8,232
                   ----------       ----------     ----------     ----------

   TOTAL           $7,733,544       $3,832,582     $1,587,520     $1,174,066
                   ==========       ==========     ==========     ==========

In January 2007, the Company 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.
The Company had previously received a "no objection" letter from the Canadian
Biologics and Genetic Therapies Directorate which enabled the Company to begin
its Phase III clinical trial in Canada. The Company is preparing for the start
of its Phase III clinical trial in the United States, Canada and other
countries.

As of June 30, 2010, the Company was involved in a number of pre-clinical
studies with respect to its L.E.A.P.S. technology. The Company does not know
what obstacles it will encounter in future pre-clinical and clinical studies
involving its L.E.A.P.S. technology.

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
the Company's clinical trials and research programs are primarily based upon the
amount of capital available to the Company and the extent to which the Company
has received regulatory approvals for clinical trials. The inability of the
Company to conduct clinical trials or research, whether due to a lack of capital


                                       25


or regulatory approval, will prevent the Company from completing the studies and
research required to obtain regulatory approval for any products which the
Company is developing. Without regulatory approval, the Company will be unable
to sell any of its products. Since all of the Company's projects are under
development, the Company cannot predict when it will be able to generate any
revenue from the sale of any of its products.

Critical Accounting Estimates and Policies

Management's discussion and analysis of the Company's financial condition and
results of operations is based on its unaudited condensed consolidated financial
statements. The preparation of these financial statements is based on the
selection of accounting policies and the application of significant accounting
estimates, some of which require management to make judgments, estimates and
assumptions that affect the amounts reported in the financial statements and
notes. The Company believes some of the more critical estimates and policies
that affect its financial condition and results of operations are in the areas
of operating leases and stock-based compensation. For more information regarding
the Company's critical accounting estimates and policies, see Part II, Item 7,
MD&A "Critical Accounting Estimates and Policies" of the Company's 2009 10-K
report. The application of these critical accounting policies and estimates have
been discussed with the Audit Committee of the Company's Board of Directors.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

The Company has a loan from its President that bears interest at 15%. The
Company does not believe that it has any significant exposures to market risk.

Item 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the direction and with the participation of the Company's management,
including the Company's Chief Executive and Chief Financial Officer, the Company
has conducted an evaluation of the effectiveness of the design and operation of
its disclosure controls and procedures as of June 30, 2010. The Company
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 the Company's management,
including its principal executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required disclosure. The
Company'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 and Chief Financial
Officer has concluded that the Company's disclosure controls and procedures were
effective as of June 30, 2010.


                                       26



Changes in Internal Control over Financial Reporting

The Company's management, with the participation of the Chief Executive and
Chief Financial Officer, has evaluated whether any change in the Company's
internal control over financial reporting occurred during the three months ended
June 30, 2010. There was no change in the Company's internal control over
financial reporting during the three months ended June 30, 2010.


                                     PART II


Item 1.  Legal Proceedings

      See Item 3 of the Company's report on Form 10-K for the year ended
September 30, 2009.



Item 6.   (a)    Exhibits

       Number           Exhibit

       31               Rule 13a-14(a) Certifications

       32               Section 1350 Certifications


                                       27



                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                    CEL-SCI CORPORATION


Date: August 16, 2010               /s/ Geert Kersten
                                    ------------------------------------
                                    Geert Kersten, Principal Executive Officer*









* Also signing in the capacity of the Principal Accounting and Financial
Officer.









                                       28