<PAGE>


                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549
                                   Form 10-QSB


(Mark One)

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


         For the quarterly period ended March 31, 2003

         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
---
         For the transition period from _______________ to ______________

                         Commission file number 0-11480

                           BIOVEST INTERNATIONAL, INC.
        (Exact name of small business issuer as specified in its charter)

              Delaware                                   41-1412084
              --------                                   ----------
(State or other jurisdiction                (IRS Employer Identification Number)
of incorporation or organization)

              8500 Evergreen Blvd. NW, Minneapolis, Minnesota 55433
              -----------------------------------------------------
                    (Address of principal executive offices)

Issuer's telephone number: 763-786-0302
                           ------------

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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

         At May 19, 2003, there were 10,289,696 shares of the registrant's
Common Stock, no par value, issued and outstanding.

                  Transitional Small Business Disclosure Format
                              (check one) Yes No  X
                                                 ---

<PAGE>

INDEX
BIOVEST INTERNATIONAL, INC.

<TABLE>
<CAPTION>

                                                                                                          PAGE
                                                                                                          -----
<S>       <C>                                                                                             <C>
PART I.    FINANCIAL INFORMATION

     ITEM 1.  Financial Statements

          Balance Sheet as of March 31, 2003 (unaudited)..................................................  3

          Statements of Operations for the Three Months and Six Months ended
             March 31, 2003 and 2002 (unaudited)..........................................................  4

          Statements of Cash Flows for the Six Months ended March 31, 2003 and 2002 (unaudited)...........  5

          Notes to Financial Statements...................................................................  6

     ITEM 2.  Management's Discussion and Analysis or Plan
                  of Operations........................................................................... 14

     ITEM 4.  Controls and Procedures..................................................................... 18

PART II.   OTHER INFORMATION


     ITEM  6.  Exhibits and Reports on Form 8-K........................................................... 19

         Signatures....................................................................................... 19

         Certifications................................................................................... 20
</TABLE>



                                                                               2
<PAGE>

<TABLE>
<CAPTION>
 PART I - FINANCIAL INFORMATION
     ITEM 1.  FINANCIAL STATEMENTS - BIOVEST INTERNATIONAL, INC.
                                     BALANCE SHEET                                                    MARCH 31, 2003
                                         ASSETS                                                         (UNAUDITED)
                                         ------                                                 ------------------------
<S>                                                                                            <C>
 Current assets
   Cash                                                                                         $               160,000
   Accounts receivable, net of $196,000 allowance for doubtful accounts                                       1,197,000
   Costs and estimated earnings in excess of billings on uncompleted contracts                                   78,000
   Inventories                                                                                                  991,000
   Other                                                                                                        115,000
                                                                                                ------------------------
     Total current assets                                                                                     2,541,000
 Property, plant and equipment, net                                                                             985,000
 Other assets:
   Inventories                                                                                                  245,000
   Patents and trademarks, net                                                                                  696,000
   Reorganization value in excess of amounts allocable to identifiable assets                                 2,131,000
                                                                                                ------------------------
                                                                                                $              6,598,000
                                                                                                ========================
                           LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities
   Short term borrowings-affiliate                                                              $               300,000
   Notes payable                                                                                                496,000
   Current portion of long-term debt                                                                             29,000
   Accounts payable                                                                                           1,379,000
   Customer deposits                                                                                            159,000
   Accrued liabilities
      Compensation and related taxes                                                                          1,987,000
      Other                                                                                                     779,000
   Billings in excess of costs and estimated earnings on uncompleted contracts                                  345,000
                                                                                                ------------------------
      Total current liabilities                                                                               5,474,000
 Long-term notes payable                                                                                      2,329,000
 Long-term debt                                                                                                 115,000
 Commitments and contingencies                                                                                       --
 Shareholders' equity
    Preferred stock, $.01 par value, 10,000,000 shares authorized; none issued
      and outstanding                                                                                                --
    Common stock, $.01 par value, 50,000,000 shares authorized;
      10,289,696 shares issued and outstanding                                                                  103,000
   Additional paid-in capital                                                                                13,660,000
   Accumulated deficit                                                                                      (14,833,000)
   Stock subscription receivable                                                                               (250,000)
                                                                                                ------------------------
     Total shareholders' equity                                                                              (1,320,000)
                                                                                                ------------------------
                                                                                                $             6,598,000
                                                                                                ========================
</TABLE>


    The accompanying notes are an integral part of this financial statement.


                                                                               3

<PAGE>

                           BIOVEST INTERNATIONAL, INC.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                  THREE MONTHS          THREE MONTHS           SIX MONTHS           SIX MONTHS
                                                     ENDED                 ENDED                 ENDED                ENDED
                                                 MARCH 31, 2003        MARCH 31, 2002        MARCH 31, 2003         MARCH 31, 2002
                                               ------------------    ------------------    ------------------    -------------------
<S>                                            <C>                   <C>                   <C>                   <C>
Revenues:
  Contract production services                 $         968,000     $       1,232,000     $       1,873,000     $        3,049,000
  Consumable sales                                       410,000             1,041,000               878,000              1,332,000
  System sales                                           285,000               486,000               367,000                950,000
  Other                                                  132,000                86,000               221,000                180,000
                                               ------------------    ------------------    ------------------    -------------------

  Total revenues                                       1,795,000             2,845,000             3,339,000              5,511,000

Operating costs and expenses:
  Cost of sales                                        1,356,000             2,192,000             2,824,000              4,138,000
  Research and development                               496,000               448,000               922,000              1,501,000
  Marketing, general and administrative                  959,000             1,007,000             1,750,000              2,101,000
                                               ------------------    ------------------    ------------------    -------------------

  Total operating costs and expenses                   2,811,000             3,647,000             5,496,000              7,740,000
                                               ------------------    ------------------    ------------------    -------------------

Loss from operations                                  (1,016,000)             (802,000)           (2,157,000)            (2,229,000)

Other income (expense):
  Interest expense, net                                 (187,000)             (146,000)             (299,000)              (252,000)
  Financing expense                                     (286,000)                    -              (286,000)                     -
  Other income                                                 -                20,000                50,000                 20,000
  Loss on disposal of assets                             (29,000)                    -               (29,000)                     -
                                               ------------------    ------------------    ------------------    -------------------

Net loss                                       $      (1,518,000)    $        (928,000)    $      (2,721,000)    $       (2,461,000)
                                               ==================    ==================    ==================    ===================

Net loss per common share-basic and diluted    $            (.15)    $            (.10)    $            (.28)    $             (.26)
                                               ==================    ==================    ==================    ===================
Weighted average number of common shares
  outstanding- basic and diluted                       9,953,104             9,629,696             9,883,982              9,629,147
                                               ==================    ==================    ==================    ===================
</TABLE>



   The accompanying notes are an integral part of these financial statements.


                                                                               4
<PAGE>

                          BIOVEST INTERNATIONAL, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                             SIX MONTHS ENDED      SIX MONTHS ENDED
                                                                                              MARCH 31, 2003        MARCH 31, 2002
                                                                                              --------------        --------------
<S>                                                                                         <C>                   <C>
Cash flows from operating activities:
   Net loss                                                                                  $    (2,721,000)      $  (2,461,000)
   Adjustments to reconcile net loss to net cash provided by (used in) operating activities
     Depreciation                                                                                    120,000              96,000
     Amortization                                                                                     61,000             124,000
     Issuance of common stock, options and warrants for services                                     790,000              55,000
     Loss on asset disposal                                                                           29,000              ------
     Amortization of warrants related to debt                                                        159,000             148,000
     Changes in operating items:
         Accounts receivable                                                                          95,000             147,000
         Costs and estimated earnings in excess of billings on uncompleted contracts                 (50,000)            303,000
         Inventories                                                                                  78,000             102,000
         Other                                                                                        88,000             267,000
         Accounts payable and accrued liabilities                                                    697,000             129,000
         Customer deposits                                                                           (18,000)            481,000
         Billings in excess of costs and estimated earnings on uncompleted contracts                  58,000              94,000
                                                                                             ----------------      --------------
           Net cash used in operating activities                                                    (614,000)           (515,000)
Cash flows from investing activities:
   Capital expenditures                                                                               ------            (243,000)
   Disposal of assets                                                                                 47,000              ------
                                                                                             ----------------      --------------
           Net cash used in investing activities                                                      47,000            (243,000)
Cash flows from financing activities:
   Proceeds from short-term borrowings                                                               300,000           1,250,000
   Repayment of short-term borrowings                                                                 ------            (200,000)
   Principal payments on long-term debt                                                             (191,000)            (68,000)
   Financing costs                                                                                  (286,000)            (30,000)
   Proceeds from long-term borrowings                                                                410,000              ------
                                                                                             ----------------      ----------------
          Net cash provided by financing activities                                                  233,000             952,000
                                                                                             ----------------      ----------------
Net (decrease) increase in cash                                                                     (334,000)            194,000
Cash at beginning of period                                                                          494,000               -----
                                                                                             ----------------      ----------------
Cash at end of period                                                                        $       160,000       $     194,000
                                                                                             ----------------      ----------------
Cash paid for interest                                                                       $        17,000       $      28,000
                                                                                             ================      ================
</TABLE>



   The accompanying notes are an integral part of these financial statements.


                                                                               5
<PAGE>




BIOVEST INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)

(1)      DESCRIPTION OF THE COMPANY

         The Company is a biotechnology company focused on production and
contract manufacturing of biologic drugs and products from small through
commercial scale. It has historically developed, manufactured and marketed
patented cell culture systems and equipment to pharmaceutical, diagnostic and
biotechnology companies, as well as leading research institutions worldwide, and
has provided contract cell production services to those institutions. While
continuing this business, management has chosen to re-orient the Company's
focus, assets and operations to increase contract cell production and biologic
drug development and ownership. The Company's first drug product, a personalized
vaccine for the most common and fastest-growing form of hematologic cancer,
known as B-cell Non-Hodgkin's lymphoma, is currently in a Phase III FDA-approved
pivotal licensing trial.

(2)      SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

         The accompanying unaudited condensed financial statements have been
derived from unaudited interim financial information prepared in accordance with
the rules and regulations of the Securities and Exchange Commission for
quarterly financial statements. Certain information and note disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to those rules and regulations, although the
Company believes that the disclosures made are adequate to make the information
presented not misleading. The financial statements of the Company, in the
opinion of management, include all normal and recurring adjustments necessary
for a fair presentation of results as of the dates and for the periods covered
by the financial statements.

         Operating results for the three and six months ended March 31, 2003 are
not necessarily indicative of the results that may be expected for the entire
fiscal year. For further information, refer to the financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-KSB for the
fiscal year ended September 30, 2002.

         Fresh-start reporting resulted in material changes to the Company's
balance sheet, including valuation of assets at fair value in accordance with
principles of the purchase method of accounting, valuation of liabilities
pursuant to provisions of the Company's Modified First Amended Plan of
Reorganization ("Plan") and valuation of equity based on the reorganization
value of the ongoing business.

         As of the first fiscal quarter, the Company adopted SFAS 142 under
which amortization of goodwill is no


                                                                               6
<PAGE>



BIOVEST INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)



longer permitted. Intangible assets such as goodwill are to be tested for
impairment annually and whenever there is an impairment indicator. No impairment
losses resulted from initial testing in the first six months of this fiscal
year. During the comparable quarters last year, the Company recognized $30,000
and $63,000 in the three months and six months ended March 31, 2002 as
amortization and reported as general and administrative expense. For the six
months ended March 31, 2002 this amounted to $0.01 loss per share.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

         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 disclosures about contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and
expenses during the reported period. Actual results could differ from those
estimates.

NET INCOME (LOSS) PER COMMON SHARE

         Basic net income (loss) per share of common stock is computed by
dividing net income (loss) by the weighted average number of outstanding common
shares. Diluted net income (loss) per common share is computed by dividing net
income (loss) by the weighted average number of outstanding common shares and
common share equivalents relating to stock options and warrants, when dilutive.
For the three and six months ended March 31, 2003 and 2002 no common share
equivalents would have been included in the computation of diluted net income
(loss) per share because there were losses in all periods and the effect would
have been antidilutive.

RECENT ACCOUNTING PRONOUNCEMENT

         On July 30, 2002, the FASB issued Statement of Financial Accounting
Standards No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities" ("SFAS 146"), that is applicable to exit or disposal activities
initiated after December 31, 2002. This standard requires companies to recognize
costs associated with exit or disposal activities when they are incurred rather
than at the date of a commitment to an exit or disposal plan. This standard does
not apply where SFAS 144 is applicable.

         In the quarter ended December 31, 2002, the Company closed its
corporate headquarters in Englewood Cliffs, New Jersey and relocated to existing
Company facilities in Minneapolis, Minnesota. At the closed facility the lease
had expired before December 31, 2002. Termination benefits amounting to $14,000
were paid in the quarter ended December 31, 2002. In the quarter ended March 31,
2003 the Company consolidated the San Diego facility into the Minneapolis
facility and the Hopkinton facility into the Worcester, Massachusetts facility
and recorded $29,000 as a loss on disposal of fixed assets and $92,000 in
terminating benefits and other consolidation costs. These relocations and
consolidations were


                                                                               7

<PAGE>



BIOVEST INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)


undertaken in an effort by the Company to improve efficiency and operating
results. The Company has determined that these actions do not require
discontinued operations treatment.

         On December 31, 2002, the FASB issued Statement of Financial Accounting
Standards No. 148, "Accounting for Stock-Based Compensation-Transition and
Disclosure" ("SFAS 148"), that is applicable to financial statements issued for
fiscal years ending after December 15, 2002. In addition, interim disclosure
provisions are applicable for financial statements issued for interim periods
beginning after December 15, 2002. This standard amends SFAS 123 and provides
guidance to companies electing to voluntarily change to the fair value method of
accounting for stock-based compensation. In addition, this standard amends SFAS
123 to require more prominent and more frequent disclosures in financial
statements regarding the effects of stock-based compensation.


(3)      GOING CONCERN

         During the six months ended March 31, 2003 the Company incurred a net
loss of $2,721,000. At March 31, 2003 the Company had a deficit in working
capital of approximately $2,933,000. The Company has been meeting its cash
requirements through the use of cash on hand and short-term borrowings,
primarily from affiliates.

         In September 2001 the Company successfully entered into a definitive
Cooperative Research and Development Agreement ("CRADA") with the National
Cancer Institute ("NCI") for the development and ultimate commercialization of
patient-specific vaccines for the treatment of non-Hodgkin's low-grade
follicular lymphoma. The terms of the CRADA included, among other things, a
requirement for us to pay $530,000 quarterly to NCI for expenses incurred in
connection with the ongoing Phase III clinical trials. The Company made the
first payment in the quarter ended September 30, 2001. On May 8, 2002 the
Company and the NCI executed an amendment to the CRADA, which required a single
payment of $350,000, due on September 30, 2002, in lieu of the quarterly
payments of the original agreement. Under the amendment, quarterly payments of
$530,000 were to resume on October 1, 2002. On October 15, 2002 a new amendment
to the CRADA was executed under which the Company is not required to make the
$350,000 payment due to the NCI on September 30, 2002 nor the $530,000 payment
due on October 1, 2002. The next payment due from the Company is $530,000 within
30 days of the April 1, 2003 due date. In April 2003, the Company made the
required payment. Failure to remit this payment would have constituted the
Company's unilateral termination of the CRADA and the loss of the rights to
commercialize the results of our research with the NCI. Successful development
of the vaccine, if approved by the FDA, from Phase III clinical trials through
commercialization will commit the Company to several years of significant
expenditures before revenues will be realized, if ever.

         The Company's ability to continue its present operations and meet its
obligations under the CRADA is dependent upon its ability to obtain significant
additional funding. Such additional financing


                                                                               8
<PAGE>

BIOVEST INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)



could be sought from a number of sources, including the sale of equity or debt
securities, strategic collaborations or recognized research funding programs.
Management is currently in the process of exploring various financing
alternatives to meet the Company's cash needs, including additional short-term
loans from shareholders and others and the sale of equity securities. Management
believes they will be able to raise the necessary funds to continue operations
in the near term. (See Note 9 - Subsequent Events.)

         There is no assurance that any additional required funds can be
obtained on terms acceptable or favorable to the Company, if at all. The net
losses incurred and the need for additional funding raise substantial doubt
about the Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

(4)      DETAILS TO BALANCE SHEET

CONCENTRATION OF CREDIT RISK

         The Company grants credit to customers in the normal course of
business, but generally does not require collateral or any other security to
support amounts due. Management performs on-going credit valuations of its
customers. Three customers accounted for approximately 16%, 14% and 10% of the
Company's trade accounts receivable balance at March 31, 2003.

         A significant amount of the Company's revenue has been derived from
export sales. The Company's export sales were 22% and 49% for the six months
ended March 31, 2003, and 2002, respectively.

INVENTORIES

      Inventories consist of the following:

                                                         MARCH 31, 2003
                                                         --------------
                     Finished goods .......                $  188,000
                     Work-in-process.......                    97,000
                     Raw materials ........                   951,000
                                                         -------------
                                                            1,236,000
                     Less non-current portion                (245,000)
                                                         -------------

                                                           $  991,000
                                                         =============

         The Company has inventory quantities in excess of anticipated sales
requirements for the twelve months subsequent to March 31, 2003. Accordingly, a
portion of the Company's inventory balance is classified as a non-current asset
as of that date.


                                                                               9
<PAGE>


BIOVEST INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)


LONG-TERM DEBT

         Long-term debt was entered into pursuant to the Company's
reorganization and consists of the following at March 31, 2003:

 Promissory note payable to State of Minnesota, with interest of
  8% per annum, payable in monthly installments of $2,700,
  including interest through February 1, 2005...............             57,000

Amounts payable to regulatory agencies (i)..................             87,000
                                                                       --------
                                                                        144,000

Less current portion of long-term debt......................             29,000
                                                                       --------
                                                                       $115,000
                                                                       ========

(i)      Pursuant to the Plan, the Company is obligated to repay certain
         regulatory agencies an aggregate amount of $94,000 in equal monthly
         installments for six years from the date of assessment with interest at
         the rate of 8% per annum. During fiscal 2001, the Company was assessed
         $7,000, which was paid in full, by one of these agencies, but
         promissory notes with the others have not been signed.

         At March 31, 2003, the aggregate maturities of long-term debt by fiscal
year are as follows: remainder of 2003-$14,000; 2004-$30,000; 2005-$13,000; and
subsequent years- $87,000.

(5)      NOTES PAYABLE

         In March 2003, the Company borrowed $250,000 from an individual at 7%
interest for two years. The loan is convertible into shares of the Company's
common stock at $0.50 per share at the holder's option and includes warrants to
purchase up to 250,000 shares of common stock at a purchase price of $0.50 per
share exercisable over the next five years. The aggregate value of the warrants
using the Black-Scholes pricing model, assuming zero dividend yield; a risk-free
rate of 2.56%; expected volatility of 78.97%; and term of approximately four
years and four months, was estimated to be $61,000 and is being amortized over
the life of the loan which results in a higher effective interest rate.

         In January and in February 2003, a stockholder in the Company loaned
the Company $300,000 and $160,000, respectively. The January loan was advanced
in three equal weekly tranches and is fully secured by a receivable due to
Biovest in the amount of $500,000 from the National Institutes of Health. This
loan includes an interest rate of 1% simple interest for two months and is
convertible into the



                                                                              10
<PAGE>


BIOVEST INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)


Company's common stock at $0.50 per share. In addition, the Company issued
warrants to purchase 200,000 shares of common stock at $0.50 per share. The
warrants are exercisable immediately and have a term of five years. The
aggregate additional value of the repriced warrants using the Black-Scholes
pricing model, assuming zero dividend yield; risk-free interest rate of 2.99%;
expected volatility of 77.89%; and term of four years, was estimated to be
$83,000 and was expensed in the quarter. This note was subsequently extended
until the earlier of July 1, 2003 or the closing of the investment agreement
with Accentia. (See Note 9 - Subsequent Events).

         The February loan for $160,000 is for a term of two years and accrues
interest at 7% per year. The loan is convertible into shares of the Company's
common stock at $0.50 per share at the holder's option and includes warrants to
purchase up to 160,000 shares of common stock at a purchase price of $0.50 per
share exercisable over the next five years. The aggregate value of the warrants
using the Black-Scholes pricing model, assuming zero dividend yield; a risk-free
rate of 2.75%; expected volatility of 79.97%; and term of approximately four
years and four months, was estimated to be $39,000 and is being amortized over
the life of the loans which results in a higher effective interest rate.

         In January 2003, the investor who made loans to the Company in January
and February 2003, negotiated a financing agreement with the Company whereby he
would receive compensation in the form of fully paid shares of the Company's
stock at the rate of 0.66667 shares for every dollar raised through his efforts
until April 1, 2003. As a result of raising the $710,000 during the quarter
ended March 31, 2003, the Company issued 473,333 shares of stock, valued at
$0.50 per share and adding $237,000 to paid in capital.

(6)      SHAREHOLDERS' EQUITY

         STOCK OPTIONS AND WARRANTS

         During the three months ended March 31, 2003, the Company granted
610,000 warrants to creditors of the Company as part of their incentive to make
the loans. The warrants have an exercise price of $0.50 per share and a
five-year term.

         As a result of raising the $710,000 during the quarter ended March 31,
2003, the Company issued 473,333 shares of stock to a stockholder for assistance
in raising the funds.

         Also during the three months ended March 31, 2003, the Company agreed
to grant an option to purchase 1,000,000 shares of common stock at $0.50 per
share to the stockholder receiving the 473,333 shares in the above paragraph.
Completion of the grant is subject to stockholder approval because the number of
shares to be granted exceeds those authorized in the stock option plan.

         During the three months ended December 31, 2002, the Company granted
550,000 warrants to



                                                                              11
<PAGE>


BIOVEST INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)


existing creditors to the Company as part of their incentive to extend their
existing loans for two years. The warrants have an exercise price of $1.25 per
share and a five-year term.

(7)      INCOME TAXES

         No provision for income taxes has been recorded for the three and six
months ended March 31, 2003 and 2002 due to the losses incurred during the
periods. At March 31, 2003, the Company has net operating loss carryforwards of
approximately $48,000,000 (expiring 2003 to 2020) and a capital loss
carryforward of approximately $14,000,000 (expiring in 2003). Due to various
changes in ownership of the Company, virtually all of these carryforwards are
subject to significant restrictions with respect to the ability of the Company
to use these amounts to offset future taxable income. Use of the Company's net
operating loss carryfowards may be further limited as a result of future equity
transactions.

(8)      COMMITMENTS AND CONTINGENCIES

LEGAL PROCEEDINGS

         During fiscal 2001 the Company entered into a settlement agreement in
connection with a legal matter. The terms of the settlement agreement provide
for the Company and another plaintiff to be jointly paid an aggregate principal
amount of $1,000,000 plus interest at prime. The principal amount is to be paid
in increments of $50,000, $100,000 and $200,000 payable on various dates
beginning July 2001 and ending June 2004, when all interest accrued on the
principal shall be due and payable. The $100,000 payment due on August 15, 2002
was paid on October 10, 2002. The $100,000 payment due on January 15, 2003 has
not been paid and is under renegotiation per the terms of the note. An
additional $450,000 is due in future periods, of which $375,000 is due to the
Company.

         The Company and the defendant also entered into a royalty agreement
whereby the defendant is to pay a royalty to the Company of three percent of its
product sales up to an aggregate of $3,000,000 in total royalty payments. There
have been no product sales and no accrual for royalties has been recorded.

         The Company is uncertain about future collections and is not able to
assess the defendant's ability to perform under the settlement agreement. As a
result, the Company will record additional payments as income when received. In
the quarter ended December 31, 2002 the Company received a payment under the
agreement amounting to $50,000 which was reported as other income.

          From time to time the Company is subject to various legal proceedings
in the normal course of business. Management believes that these proceedings
will not have a material adverse effect on the financial statements.


                                                                              12

<PAGE>


BIOVEST INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)


 (9)     SUBSEQUENT EVENTS

         On April 15, 2003, Biovest International, Inc. ("Biovest") entered into
an investment agreement with Accentia, Inc. ("Accentia"), one of the Hopkins
Capital Group portfolio companies, whereby Accentia has agreed to purchase all
common stock that is authorized but unissued, which will equal an approximate
80% equity interest in Biovest, for $20 million. Payments under the agreement
will consist of $5,000,000 in cash to be paid at the last to occur of closing
or 60 days following the execution of the investment agreement, and a
non-interest bearing note with annual payments of $2,500,000 on each of the
first and second anniversaries of closing and $5,000,000 on each of the third
and fourth anniversaries of closing. Pursuant to the agreement Accentia has
advanced $530,000 to the Company, as part of the $5,000,000 cash payment to be
made at closing, to meet Biovest's April 2003 financial obligation to the
National Cancer Institute under the terms of the CRADA.


                                                                              13
<PAGE>





ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

OVERVIEW

         As of July 31, 1999, we adopted fresh start reporting in accordance
with the American Institute of Certified Public Accountants' Statement of
Position 90-7 "Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code".

         Fresh-start reporting resulted in material changes to our balance
sheet, including valuation of assets at fair value in accordance with principles
of the purchase method of accounting, valuation of liabilities pursuant to
provisions of the Plan and valuation of equity based on the reorganization value
of the ongoing business. In addition, our capital structure was recast in
conformity with the Plan.

         Our ability to continue our present operations and meet our obligations
under the CRADA is dependent upon our ability to obtain significant additional
funding. We are currently in the process of exploring various financing
alternatives to meet our cash needs, including additional short-term loans from
shareholders and others and the sale of equity securities. Our management
believes we will be able to raise the necessary funds to continue operations in
the near term.

         There is no assurance that the additional required funds can be
obtained on terms acceptable or favorable to the Company, if at all. The net
losses we have incurred and the need for additional funding raise substantial
doubt about our ability to continue as a going concern. Our financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         Our financial statements have been prepared in accordance with
accounting principles generally accepted in the United States. The preparation
of these financial statements requires the Company to make significant estimates
and judgments that affect the reported amounts of assets, liabilities, revenues,
expenses and related disclosure of contingent assets and liabilities. The
Company evaluates its estimates, including those related to bad debts,
inventories, intangible assets, contingencies and litigation on an ongoing
basis. The Company bases its estimates on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different
assumptions or conditions.

         The Company believes the following critical accounting policies, among
others, involve the more significant judgments and estimates used in the
preparation of our consolidated financial statements:

         The Company maintains allowances for doubtful accounts for estimated
losses resulting from the


                                                                              14
<PAGE>

inability of its customers to make required payments. If the condition of our
customers were to deteriorate, resulting in an impairment of their ability to
make payments, additional allowances may be required.

         Inventories are recorded at the lower of cost or market. Write-downs of
inventories to market value are based upon contractual provisions and
obsolescence, as well as assumptions about future demand and market conditions.
If assumptions about future demand change and/or actual market conditions are
less favorable than those projected by management, additional write-downs of
inventories may be required.

         In assessing the recoverability of the Company's amounts recorded as
reorganization value in excess of amounts allocable to identifiable assets,
significant assumptions regarding the estimated future cash flows and other
factors to determine the fair value of the respective assets must be made, as
well as the related estimated useful lives. If these estimates or their related
assumptions change in the future as a result of changes in strategy and/or
market conditions, the Company may be required to record impairment charges for
these assets.

INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS

         This report includes forward-looking statements that are subject to
certain risks and uncertainties which could cause actual results or facts to
differ materially from such statements for a variety of reasons, including, but
not limited to: industry conditions, changes in product supply, pricing and
consumer demand, competition, other uncertainties in the markets for
biotechnology products and changes in relationships with key suppliers.
Shareholders and other readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date on which they
are made. The Company undertakes no obligation to update publicly or revise any
forward-looking statements.

RESULTS OF OPERATIONS

         REVENUES. Revenues for the three and six months ended March 31, 2003 of
$1,795,000 and $3,339,000 decreased 37% and 39% from $2,845,000 and $5,511,000
for the three and six months ended March 31, 2002. Contract cell culture
production services for the three and six months ended March 31, 2003 decreased
21% and 39% from $1,232,000 and $3,049,000 to $968,000 and $1,873,000. The
decreases are primarily due to a reduction in volume of the number and size of
orders booked. Sales of both consumables and systems for the three and six
months ended March 31, 2003 were also lower than the comparable periods for last
year. Consumable sales for the three and six months ended March 31, 2003
decreased 61% and 34% from $1,041,000 and $1,332,000 to $410,000 and $878,000,
respectively. Instrument sales for the three and six months ended March 31, 2003
decreased 41% and 61% from $486,000 and $950,000 to $285,000 and $367,000,
respectively.

         GROSS MARGIN. The overall gross margin for the second quarter of fiscal
year 2003 increased


                                                                              15
<PAGE>

versus the comparable quarter last year from 23% to 25%. The increase is due to
the reduction in fixed costs associated with the consolidation of facilities in
early January, 2003. The overall gross margin for the six months of fiscal year
2003 decreased versus the comparable period last year from 25% to 15%. The
decrease is primarily the result of the relatively low volumes in the quarter
ended December 31, 2002.

         OPERATING EXPENSES. Research and development expenses for the three
months ended March 31, 2003 increased $48,000, but decreased $579,000 for the
six months ended March 31, 2003 versus the comparable period last year. CRADA
expenses for the three and six months ended March 31, 2003 were approximately
$301,000 and $169,000, respectively. These expenses are associated primarily
with vaccine production supporting the on-going clinical trial and design
engineering expense associated with designing a more efficient bioreactor for
vaccine production. Last year, expenses included approximately $500,000 in the
first fiscal quarter for NCI payments. Marketing, general and administrative
expenses decreased $48,000 and $351,000 in the three and six months ended March
31, 2003 versus the same period in fiscal 2002. The decrease is attributed
largely to decreased compensation costs and corporate expenses and expenses
related to the Company's financing activities and litigation proceedings.

         OTHER EXPENSE. Interest expense, net consists of interest expense on
the Company's long-term and short-term loans from affiliates. Interest expense
for the three and six month periods ended March 31, 2003 was $187,000 and
$299,000 versus $146,000 and $252,000 for the same period last year. Financing
expense was $286,000 for the three and six month period ended March 31, 2003
versus 30,000 for the same period in fiscal 2002.


LIQUIDITY AND CAPITAL RESOURCES

         On March 31, 2003 the Company had a working capital deficit of
$2,933,000 compared to a working capital deficit of $1,055,000 at September 30,
2002.

     During the six months ended March 31, 2003 and 2002, we utilized zero and
$243,000 of cash for capital expenditures.

     We have incurred significant losses and cash flow deficits in previous
years. During fiscal year 2002 and 2001 we incurred losses of $4,200,000 and
$5,832,000. During fiscal year 2002 and 2001, we used $297,000 and $2,070,000 of
cash flow for operations. During the six months ended March 31, 2003 we incurred
a loss of $2,721,000 and used $614,000 of cash flow for operations. We have been
meeting our cash requirements through the use of cash on hand and long and
short-term borrowings, primarily from affiliates.

     During the three months ended December 31, 2002 the Company obtained
$50,000 in additional loans and extended approximately $2,400,000 of the
existing loans for two years. The new loans bear



                                                                              16

<PAGE>

interest at 7.0%, are due in November 2004 and are also convertible into shares
of the Company's common stock at $1.00 per share, at the holder's option, if the
Company wishes to pay amounts under the loans before maturity. The Company also
issued to the holders of each of these new loans 25,000 additional warrants with
an exercise price of $1.25 per share and a term of five years. All extended
loans were renewed at the same interest rate, conversion was reduced to $1.00
per share and 500,000 additional five-year warrants, exercisable at $1.25 per
share, were issued.

     During the quarter ended March 31, 2003, the Company obtained three loans
totaling $710,000 from two investors. The new loans bear interest at 7.0%,
mature in two years and are also convertible into shares of the Company's common
stock at $1.00 per share, at the holder's option, if the Company wishes to pay
amounts under the loans before maturity. The Company also issued to the holders
of each of these new loans 25,000 additional warrants with an exercise price of
$1.25 per share and a term of five years.

     In January and in February 2003, a stockholder and member of the Board of
Directors loaned the Company $300,000 and $160,000, respectively. The January
loan was advanced in three equal weekly tranches and is fully secured by a
receivable due to Biovest in the amount of $500,000 from the National Institutes
of Health. This loan includes an interest rate of 1% simple interest for two
months and is convertible into the Company's common stock at $0.50 per share. In
addition, the Company issued warrants to purchase 200,000
shares of common stock at $0.50 per share. This note was subsequently extended
until the earlier of July 1, 2003 or the closing of the investment agreement
with Accentia. (See Note 9 - Subsequent Events).

     The February loan for $160,000 is for a term of two years and accrues
interest at 7% per year. The loan is convertible into shares of the Company's
common stock at $0.50 per share at the holder's option and includes warrants to
purchase up to 160,000 shares of common stock at a purchase price of $0.50 per
share exercisable over the next five years.

     In March 2003, the Company borrowed $250,000 from an individual at 7%
interest for two years. The loan is convertible into shares of the Company's
common stock at $0.50 per share at the holder's option and includes warrants to
purchase up to 250,000 shares of common stock at a purchase price of $0.50 per
share exercisable over the next five years.

     In September 2001 the Company successfully entered into a definitive
Cooperative Research and Development Agreement ("CRADA") with the National
Cancer Institute ("NCI") for the development and ultimate commercialization of
patient-specific vaccines for the treatment of non-Hodgkin's low-grade
follicular lymphoma. The terms of the CRADA included, among other things, a
requirement for us to pay $530,000 quarterly to NCI for expenses incurred in
connection with the ongoing Phase III clinical trials. The Company made the
first payment in the quarter ended September 30, 2001. On May 8, 2002 the
Company and the NCI executed an amendment to the CRADA, which require a single
payment of $350,000, due on September 30, 2002, in lieu of the quarterly
payments of the original agreement. Under the amendment, quarterly payments of
$530,000 were to resume on October 1, 2002. On October 15, 2002 a new amendment
to the CRADA was executed under which the Company is not required to make the
$350,000 payment due to the NCI on September 30, 2002 nor the $530,000 payment
due on October



                                                                              17
<PAGE>

1, 2002. The next payment due from the Company is $530,000 within 30 days of the
April 1, 2003 due date. In April 2003, the Company made the required payment.
Failure to remit this payment would have constituted the Company's unilateral
termination of the CRADA and the loss of the rights to commercialize the results
of our research with the NCI. Successful development of the vaccine, if approved
by the FDA, from Phase III clinical trials through commercialization will commit
the Company to several years of significant expenditures before revenues will be
realized, if ever.

     There is no assurance that the additional funds, which are required, can be
obtained on terms acceptable or favorable to us, if at all. Substantial delays
in obtaining such financing would have an adverse effect on our ability to
perform under the CRADA.

FLUCTUATIONS IN OPERATING RESULTS

         The Company's operating results may vary significantly from quarter to
quarter or year to year, depending on factors such as timing of
biopharmaceutical development and commercialization of products by the Company's
customers, the timing of increased research and development and sales and
marketing expenditures, the timing and size of orders and the introduction of
new products or processes by the Company. Consequently, revenues, profits or
losses may vary significantly from quarter to quarter or year to year, and
revenue or profits in any period will not necessarily be indicative of results
in subsequent periods.

ITEM 4.     CONTROLS AND PROCEDURES

            Within 90 days prior to the date of this report, we carried out an
evaluation, under the supervision and with the participation of our management,
including our chief executive officer and chief financial officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on this evaluation, our chief executive officer and chief
financial officer concluded that our disclosure controls and procedures are
effective in timely accumulating and communicating to them material information
required to be disclosed in our reports filed with the Securities and Exchange
Commission. As of the date of this report there have been no significant changes
in our internal controls or in other factors that could significantly affect
those controls subsequent to the date of their last evaluation.



                                                                              18
<PAGE>













PART II.     OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

       (a)   Exhibits

             99.1 Certification of Chief Executive Officer

             99.2 Certification of Chief Financial Officer

       (b)   Reports on Form 8-K.

         On April 15, 2003 the Company announced that it had entered into an
investment agreement with Accentia, Inc.


SIGNATURES


In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereto duly
authorized.



                             BIOVEST INTERNATIONAL, INC.
                             ---------------------------
                             (Registrant)



Date: May 20, 2003                   /s/ Dr. Christopher Kyriakides
      ------------                  -------------------------------
                                      Dr. Christopher Kyriakides
                                      Chief Executive Officer and Director




Date: May 20, 2003                  /s/ Thomas F. Belleau
      ------------                 ----------------------
                                      Thomas F. Belleau
                                      Chief Financial Officer


                                                                              19
<PAGE>





I, Christopher Kyriakides, certify that:

      1. I have reviewed this quarterly report on Form 10-QSB of Biovest
International, Inc.;

      2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

      3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

      4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

              a) designed such disclosure controls and procedures to ensure that
       material information relating to the registrant, including its
       consolidated subsidiaries, is made known to us by others within those
       entities, particularly during the period in which this quarterly report
       is being prepared;

              b) evaluated the effectiveness of the registrant's disclosure
       controls and procedures as of a date within 90 days prior to the filing
       date of this quarterly report (the "Evaluation Date"); and

              c) presented in this quarterly report our conclusions about the
       effectiveness of the disclosure controls and procedures based on our
       evaluation as of the Evaluation Date;

      5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

              a) all significant deficiencies in the design or operation of
       internal controls which could adversely affect the registrant's ability
       to record, process, summarize and report financial data and have
       identified for the registrant's auditors any material weaknesses in
       internal controls; and

              b) any fraud, whether or not material, that involves management or
       other employees who have a significant role in the registrant's internal
       controls; and

      6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Dated: May 20, 2003                        By: /s/Christopher Kyriakides
      -------------                            -------------------------
                                           Christopher Kyriakides
                                           Chief Executive Officer



                                                                              20
<PAGE>



I, Thomas F. Belleau, certify that:


      1. I have reviewed this quarterly report on Form 10-QSB of Biovest
International, Inc.;

      2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

      3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

      4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

              a) designed such disclosure controls and procedures to ensure that
       material information relating to the registrant, including its
       consolidated subsidiaries, is made known to us by others within those
       entities, particularly during the period in which this quarterly report
       is being prepared;

              b) evaluated the effectiveness of the registrant's disclosure
       controls and procedures as of a date within 90 days prior to the filing
       date of this quarterly report (the "Evaluation Date"); and

              c) presented in this quarterly report our conclusions about the
       effectiveness of the disclosure controls and procedures based on our
       evaluation as of the Evaluation Date;

      5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

              a) all significant deficiencies in the design or operation of
       internal controls which could adversely affect the registrant's ability
       to record, process, summarize and report financial data and have
       identified for the registrant's auditors any material weaknesses in
       internal controls; and

              b) any fraud, whether or not material, that involves management or
       other employees who have a significant role in the registrant's internal
       controls; and

       6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Dated: May 20, 2003                              By: /s/Thomas F. Belleau
      -------------                                  --------------------
                                                    Thomas F. Belleau
                                                    Chief Financial Officer



                                                                              21