<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, 2001

[ ]    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)

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


                  540 Sylvan Avenue, Englewood Cliffs, NJ 07632
                  ---------------------------------------------
                    (Address of principal executive offices)


Issuer's telephone number: 201-816-8900
                           ------------

     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 9, 2001, there were 9,243,390 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>
  PART I. FINANCIAL INFORMATION

  ITEM 1. Financial Statements

    Balance Sheet as of March 31, 2001..............................................................  3

    Statements of Operations for the Three Months and Six Months ended March 31, 2001 and 2000......  4

    Statements of Cash Flows for the Six Months ended March 31, 2001 and 2000.......................  5

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



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


PART II. OTHER INFORMATION

  ITEM 1.  Legal Proceedings........................................................................ 17
  ITEM 4.  Submission of Matters to a Vote of Security Holders...................................... 19
  ITEM 6.  Exhibits and Reports on Form 8-K......................................................... 20
</TABLE>




                                                                               2
<PAGE>

PART I - FINANCIAL INFORMATION
  ITEM 1. FINANCIAL STATEMENTS - BIOVEST INTERNATIONAL, INC.

<TABLE>
<CAPTION>

                                     BALANCE SHEET                                         MARCH 31, 2001
                                         ASSETS                                             (UNAUDITED)
                                         ------                                            ------------
<S>                                                                                        <C>
Current assets:
  Cash                                                                                     $    142,000
  Accounts receivable, net of $196,000 allowance for doubtful accounts                        1,959,000
  Costs and estimated earnings in excess of billings on uncompleted contracts                   376,000
  Inventories                                                                                 2,279,000
  Prepaid consulting                                                                            129,000
  Other                                                                                         167,000
                                                                                           ------------
    Total current assets                                                                      5,052,000
Property, plant and equipment, net                                                              893,000
Other assets:
  Inventories                                                                                   348,000
  Patents and trademarks, net                                                                   939,000
  Other assets                                                                                   21,000
  Reorganization value in excess of amounts allocable to identifiable assets, net             2,321,000
                                                                                           ------------
                                                                                           $  9,574,000
                                                                                           ============

                          LIABILITIES AND SHAREHOLDERS' EQUITY
                          ------------------------------------

Current liabilities:
  Current portion of long-term debt                                                        $    134,000
  Accounts payable                                                                            1,089,000
  Due to affiliates                                                                             455,000
  Customer deposits                                                                              70,000
  Deferred revenue                                                                               64,000
  Accrued liabilities:
     Reorganization costs                                                                        12,000
     Compensation and related taxes                                                             536,000
     Other                                                                                      384,000
  Billings in excess of costs and estimated earnings on uncompleted contracts                   359,000
                                                                                           ------------
     Total current liabilities                                                                3,103,000
Long-term debt                                                                                  410,000
Commitments and contingencies                                                                      --
Shareholders' equity:
   Preferred stock, $ .01 par value, 10,000,000 shares authorized; none issued and
     outstanding                                                                                   --
  Common stock, no par value, 50,000,000 shares authorized;
     9,243,390 shares issued and outstanding                                                 10,366,000
  Accumulated deficit (accumulated since July 31, 1999, the effective
    date of the Company's Amended Plan of Reorganization)                                    (4,074,000)
Stock subscription receivable                                                                  (231,000)
                                                                                           ------------
    Total shareholders' equity                                                                6,061,000
                                                                                           ------------
                                                                                           $  9,574,000
                                                                                           ============
</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, 2001        March 31, 2000        March 31, 2001         March 31, 2000
                                                  --------------        --------------        --------------        --------------
<S>                                               <C>                   <C>                   <C>                   <C>
Revenues:
  Contract production services                    $    1,365,000        $      602,000        $    3,034,000        $    1,069,000
  Consumable sales                                       457,000               295,000               914,000               682,000
  System sales                                           410,000                76,000               878,000               223,000
  Other                                                   90,000                45,000               234,000                90,000
                                                  --------------        --------------        --------------        --------------
  Total revenues                                       2,322,000             1,018,000             5,060,000             2,064,000

Operating costs and expenses:
  Cost of sales                                        1,789,000               578,000             3,518,000             1,211,000
  Research and development                               578,000               123,000               920,000               214,000
  Marketing, general and administrative                1,539,000               704,000             2,576,000             1,197,000
                                                  --------------        --------------        --------------        --------------

  Total operating costs and expenses                   3,906,000             1,405,000             7,014,000             2,622,000
                                                  --------------        --------------        --------------        --------------

Loss from operations                                  (1,584,000)             (387,000)           (1,954,000)             (558,000)

Other income (expense):

  Interest expense                                       (28,000)              (42,000)              (39,000)             (128,000)
  Other                                                     --                  32,000                  --                  32,000
                                                  --------------        --------------        --------------        --------------
                                                         (28,000)              (10,000)              (39,000)              (96,000)
                                                  --------------        --------------        --------------        --------------

Net loss                                          $   (1,612,000)       $     (397,000)       $   (1,993,000)       $     (654,000)
                                                  ==============        ==============        ==============        ==============

Net loss per common share-basic and diluted       $         (.18)       $         (.16)       $         (.22)       $         (.38)
                                                  ==============        ==============        ==============        ==============
Weighted average number of common shares
  outstanding- basic and diluted                       9,163,879             2,459,232             9,151,291             1,739,122
                                                  ==============        ==============        ==============        ==============

</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, 2001          MARCH 31, 2000
                                                                                       --------------         --------------
<S>                                                                                    <C>                    <C>
Cash flows from operating activities:
   Net loss                                                                            $   (1,993,000)        $     (654,000)
   Adjustments to reconcile net loss to net cash provided by (used in)
   operating  activities:
     Depreciation                                                                              59,000                 10,000
     Amortization                                                                             131,000                138,000
     Issuance of common stock and warrants for services                                       416,000                   --
     Changes in operating items:
         Accounts receivable                                                                 (290,000)               145,000
         Costs and estimated earnings in excess of billings on uncompleted contracts          163,000               (140,000)
         Inventories                                                                         (172,000)              (274,000)
         Other                                                                                 32,000               (395,000)
         Accounts payable and accrued liabilities                                             711,000                414,000
         Customer deposits                                                                      1,000                281,000
         Billings in excess of costs and estimated earnings on uncompleted contracts          323,000                (22,000)
                                                                                       --------------         --------------
           Net cash used in operating activities                                             (619,000)              (497,000)
Cash flows from investing activities:
   Capital expenditures                                                                      (184,000)               (42,000)
                                                                                       --------------         --------------
           Net cash used in investing activities                                             (184,000)               (42,000)
Cash flows from financing activities:
   Proceeds from short-term borrowings                                                           --                  255,000
   Repayment of short-term borrowings                                                            --                 (150,000)
   Stock subscription                                                                         (33,000)                  --
   Net proceeds from sale of common stock                                                        --                1,207,000
   Proceeds from short-term borrowings-affiliates                                             500,000                   --
   Principal payments on long-term debt                                                       (70,000)              (569,000)
                                                                                       --------------         --------------
          Net cash provided by financing activities                                           397,000                743,000
                                                                                       --------------         --------------
Net increase (decrease) in cash                                                              (406,000)               204,000
Cash at beginning of period                                                                   548,000                 28,000
                                                                                       --------------         --------------
Cash at end of period                                                                  $      142,000         $      232,000
                                                                                       --------------         --------------
Cash paid for interest                                                                 $       21,000         $       85,000
                                                                                       ==============         ==============
</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

     Except as indicated otherwise, the term the "Company" refers to BIOVEST
INTERNATIONAL, Inc., f/k/a CELLEX BIOSCIENCES, INC. The Company 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. The business focus of the Company had been on
instrument sales. While continuing this business, new management has chosen to
re-orient the Company's focus, assets and operations to increase contract cell
production and biologic drug development and ownership.

     On July 7, 1999, the United States Bankruptcy Court, District of Minnesota,
Third Division, entered the order confirming the Company's Modified First
Amended Plan of Reorganization dated June 28, 1999 (the "Plan") which became
effective July 30, 1999.

     Effective as of the close of business on May 25, 2000, the Company acquired
certain assets and technology, and assumed certain liabilities from Unisyn
Technologies, Inc. ("Unisyn"), a wholly owned subsidiary of Medi-Cult A/S, a
Danish biotechnology corporation. Unisyn develops, manufactures and markets
products and contract services that produce antibodies. Unisyn also provides
research and development services related to these products.

(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. Certain
information and note disclosures normally included in annual 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.


                                                                               6
<PAGE>

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

     Operating results for the three and six months ended March 31, 2001 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/A for the fiscal
year ended September 30, 2000.

     As of July 31, 1999, the Company 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 ("SOP 90-7").

     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 Plan and valuation of equity based on the reorganization value
of the ongoing business.

     The Company has included in its financial statements the assets and
liabilities recorded in connection with the acquisition of certain assets and
assumption of certain liabilities of Unisyn Technologies, Inc. The results of
operations related to Unisyn since May 25, 2000, the effective date, have been
included in the Company's statement of operations.

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 month periods ended March 31, 2001 and 2000 no common share
equivalents would have been included in the computation of diluted net income
per share had net income been achieved. Options and warrants to purchase
2,800,000 shares of common stock with a weighted average exercise price of $2.03
were outstanding at March 31, 2001, and were not included in the computation of
common stock equivalents because their exercise price was higher than the
average market price of the common shares during the reporting period.


                                                                               7
<PAGE>


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

(3) LIQUIDITY

     The Company has incurred significant operating losses and cash flow
deficits in previous periods. During fiscal 2000 and the six months ended March
31, 2001 the Company experienced $2,216,000 and $619,000 of negative cash flow
from operations, respectively, and met its cash requirements through the sale of
equity securities and short-term loans from affiliates. Management expects the
Company's core business to improve, but to continue to utilize cash, though at a
significantly reduced level. The Company is currently in the process of
exploring various financing alternatives to meet its cash needs, including
additional short-term loans from its shareholders. Management believes that the
Company has sufficient cash and borrowing capacity to ensure the Company will
continue operations in the near term.

     On November 14, 2000 the Company received notice from the National Cancer
Institute ("NCI") that the Company had been invited to enter into a Cooperative
Research and Development Agreement ("CRADA") for the development of idiotype
tumor vaccines for the treatment of B-cell lymphomas. Successful negotiations
and development of this vaccine from Phase III clinical trials through
commercialization will likely commit the Company to several years of significant
expenditures before revenues, will be realized, if ever.

     However, if the Company is successful in entering into the Cooperative
Research and Development Agreement ("CRADA") for Phase-III clinical trials and
ultimate commercialization of a patient-specific vaccine for non-Hodgkin's low
grade follicular lymphoma, the Company would need to obtain significant
additional funding. Such additional financing could be sought from a number of
sources, including the sale of equity or debt securities, strategic
collaborations or recognized research funding programs. No assurance can be
given that the Company would be able to obtain such additional funds on terms
acceptable or favorable to the Company, if at all. Substantial delays in
obtaining such financing would have an adverse effect on the Company's ability
to perform under the CRADA.

(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.
One customer accounted for approximately 24% of the Company's trade accounts
receivable balance at March 31, 2001.


                                                                               8
<PAGE>


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

A significant amount of the Company's revenue has been derived from export
sales. The Company's export sales were 42% and 25% for the six months ended
March 31, 2001, and 2000, respectively.

INVENTORIES

          Inventories consist of the following:


                                                  MARCH 31, 2001
                                                  -------------
               Finished goods..........           $     790,000
               Work-in-process........                  281,000
               Raw materials...........               1,556,000
                                                  -------------
                                                      2,627,000
                    Less non-current portion          (348,000)
                                                  -------------
                                                  $   2,279,000
                                                  =============


     The Company has inventory quantities in excess of anticipated sales
requirements for the twelve months subsequent to March 31, 2001. 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, 2001:

<TABLE>
<CAPTION>
<S>                                                                                  <C>
         Promissory note payable to Internal Revenue
           Service, with interest of 8% per annum, payable in monthly
           installments of $11,095, including interest through February 1,
           2004 and $320 per month thereafter through February 1, 2005....               $ 348,000
        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............                         108,000
           Amounts payable to regulatory agencies (i)...........                            88,000
                                                                                      ------------
                                                                                           544,000
        Less current portion of long-term debt..........                                   134,000
                                                                                      ------------
                                                                                        $  410,000
                                                                                      ============
</TABLE>

         (i)   Pursuant to the Plan, the Company is obligated to repay certain
               regulatory agencies an aggregate amount of $95,000 in equal
               monthly installments for six years from the date of assessment
               with interest at the rate of 8% per annum. For the quarter ended
               March 31, 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, 2001, the aggregate maturities of long-term debt by fiscal
year are as follows: remainder of 2001-$66,000; 2002-$139,000; 2003-$151,000;
2004-$86,000; 2005-$14,000 and subsequent years- $88,000.

(5) SHAREHOLDERS' EQUITY

COMMON STOCK

     At the Annual Meeting of Shareholders held on March 13, 2001 the
shareholders approved, among other things, an increase in the number of
authorized shares of common stock and a new class of stock. Authorized


                                                                              10
<PAGE>

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

common stock was increased from 10,000,000 shares to 50,000,000 shares. A class
of preferred stock, having $.01 par value, was also approved at 10,000,000
shares. The principal purpose of increasing the number of authorized shares of
Common Stock is to provide a sufficient number of shares of authorized shares of
Common Stock to permit the Company to conduct equity financing in 2001.

     During the six months ended March 31, 2001 the Company issued 113,000 and
30,000 shares of common stock as compensation for several employees and payment
for services rendered by an outside consultant. The shares were valued at $1.25
per share, which resulted in approximately $141,000 and $38,000 of expense,
respectively.

STOCK OPTIONS

     At the Annual Meeting of Shareholders held on March 13, 2001 the
shareholders also approved the 2000 Stock Option Plan under which the Board of
Directors may grant to employees, officers, directors, consultants and advisors
incentive stock options and non-qualified stock options to purchase up to
7,000,000 shares of the Company's Common Stock.

     During 2000, the Company's Board of Directors approved the granting of
2,200,000 stock options to its executive officers and directors. The options
have an exercise price of $1.50 per share and have a five year term; half are
exercisable six months from the date of grant and the remaining options are
exercisable one year from the date of grant. The stock option grants were
subject to shareholder approval of a stock option plan for the Company.

     The Board also approved the issuance of 140,000 stock options to an outside
advisor for services rendered at the market price at the time of shareholder
approval of an option plan for the Company. The stock option plan was approved
by the Company's shareholders on March 13, 2001. Compensation expense for
services rendered was recognized in the amount of $64,000 based upon the
estimated fair value of the options at that date. The options were valued using
the Black-Scholes pricing model with the following assumptions: zero dividend
yield; risk-free interest rate of 4.49%; expected volatility of 48%; and
expected life of three years.


                                                                              11
<PAGE>

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

FINANCIAL ADVISOR AGREEMENT

     During 2000, the Company entered into an agreement with a group of
investment advisors under which the advisors purchased 400,000 shares of the
Company's stock at $1.25 per share and agreed to provide financial consulting
services in exchange for equity interests in the Company. On January 5, 2001, a
new agreement was entered into that defined the equity interests to be provided
in exchange for the consulting services to be rendered. Under the terms of the
new agreement, the advisors are to provide consulting services to the Company
for a one-year period from August 15, 2000 to August 15, 2001 in exchange for
800,000 irrevocable warrants. The warrants are exercisable at any time within
five years from January 5, 2001; 550,000 warrants have an exercise price of
$1.25 per share and 250,000 warrants have an exercise price of $2.00.

     The warrants have been valued at approximately $345,000 using the
Black-Scholes pricing model. This amount is being recognized ratably over the
twelve months of service being provided by the investment advisors, which
resulted in $173,000 of expense for the six months ended March 31, 2001. In
valuing the warrants issued under the Black-Scholes pricing model, the following
assumptions were used: zero dividend yield; risk-free interest rate of 6.98%;
expected volatility of 48%; and expected life of three years.

(6) INCOME TAXES

     No provision for income taxes has been recorded for the three and six
months ended March 31, 2001 and 2000 due to the losses incurred during the
periods. At March 31, 2001, the Company has net operating loss carryforwards of
approximately $41,000,000 (expiring 2002 to 2019) 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.

(7) RELATED PARTY TRANSACTIONS

     During the six months ended March 31, 2001, five shareholders each loaned
the Company $100,000 as part of a plan to finance operations until substantial
outside financing can be completed. The notes are payable at any time on or
before September 1, 2001 at the Company's option, with interest at 10% per
annum. In connection with the issuance of the debt, the Company issued 25,000
warrants with an exercise price of $2.50 per share and


                                                                              12
<PAGE>

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

25,000 warrants with an exercise price of $5.00 per share to each of the
creditors. The warrants are exercisable immediately and have a term of five
years. The aggregate value of the 250,000 warrants using the Black-Scholes
pricing model, assuming zero dividend yield; risk free interest rates ranging
from 4.60% to 5.06%; expected volatility of 48%; and term of five years, was
estimated to be $64,000, and is being amortized over the life of the loans which
results in a higher effective interest rate.

(8) SUBSEQUENT EVENT

     Effective on May 15, 2001 the State of Minnesota approved a change in the
name of the Company, from Cellex Biosciences, Inc. to Biovest International,
Inc., pursuant to the terms of the Company's Modified First Amended Plan of
Reorganization dated June 28, 1999.






                                                                              13
<PAGE>

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

     The Company emerged from Chapter 11 Bankruptcy Reorganization on July 31,
1999 with new management, officers and directors.

     As of July 31, 1999, the Company 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." SOP 90-7 calls for the adoption of "fresh-start
reporting" if the reorganization value of the emerging entity immediately before
the effective date is less than the total of all post-petition liabilities and
pre-petition allowed claims and if holders of existing voting shares immediately
before confirmation receive less than 50% of the voting shares of the emerging
entity, both conditions of which were satisfied by the Company.

     Due to the Company's emergence from Chapter 11 Reorganization and
implementation of fresh-start reporting, the financial statements for the
reorganized company as of September 30, 2000, and for the two-month period ended
September 30, 1999 and for the year ended September 30, 2000 (the "Reorganized
Company") will not be comparable to those of the Company for the periods prior
to July 31, 1999 (the "Predecessor Company").

     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 Plan and valuation of equity based on the reorganization value
of the ongoing business. In accordance with fresh-start reporting, the gain on
discharge of debt resulting from the reorganization proceedings was reflected on
the financial statements of the Predecessor Company during July 1999. In
addition, the accumulated deficit of the Predecessor Company was eliminated at
July 31, 1999. The Reorganized Company's financial statements do not reflect
beginning retained earnings or deficit as of July 31, 1999. In addition, the
Company's capital structure was recast in conformity with the Plan.

RESULTS OF OPERATIONS

     The Company has included in its financial statements the assets and
liabilities recorded in connection with the acquisition of certain assets and
assumption of certain liabilities of Unisyn Technologies, Inc. The results of
operations related to Unisyn since May 25, 2000, the effective date, have been
included in the Company's statement of operations.

     REVENUES. Revenues for the three and six months ended March 31, 2001 of
$2,322,000 and $5,060,000 were up 128% and 145% from $1,018,000 and $2,064,000
for the three and six months ended March 31, 2000. Contract cell culture
production services for the three and six months ended March 31, 2001 increased
127% and


                                                                              14
<PAGE>

184% from $602,000 and $1,069,000 to $1,365,000 and $3,034,000. The increases
are primarily due to the inclusion of $907,000 and $2,241,000 of Unisyn contract
production sales in the respective periods of fiscal 2001. The other components
of revenues for the three and six months ended March 31, 2001were higher than
the comparable periods for last year. Instrument sales for the three and six
months ended March 31, 2001 increased 439% and 294% from $76,000 and $223,000 to
$410,000 and $878,000, respectively.

     GROSS MARGIN. The overall gross margin for the second quarter of fiscal
year 2001 decreased versus the comparable quarter last year from 43% to 23%. The
decrease is due to the change in product mix for the second quarter of fiscal
2001 compared to a year ago, and inventory adjustments associated with
consumable and instrument inventories. The overall gross margin for the six
months of fiscal year 2001 decreased versus the comparable period last year from
41% to 30%. The decrease is primarily the result of the effects experienced in
the quarter ended March 31, 2001.

     OPERATING EXPENSES. Research and development expenses for the three and six
months ended March 31, 2001 increased approximately $455,000 and $706,000 or
approximately 370% and 330% over last year, reflecting increased expenses for
the CRADA and the inclusion of Unisyn. CRADA expenses for the three and six
months ended March 31, 2001 were approximately $596,000 and $818,000,
respectively. These expenses are associated primarily with initial manufacturing
start up and design engineering expense associated with designing a more
efficient bioreactor for vaccine production. Marketing, general and
administrative expenses increased $835,000 and $1,379,000 in the the three and
six months ended March 31, 2001 versus the same period in fiscal 2000. The
increase is attributed largely to the inclusion of Unisyn expenses in fiscal
2001, increased compensation costs and corporate expenses and expenses related
to the Company's financing activities and litigation proceedings.

     OTHER EXPENSE, NET. Other Expense, Net consists of interest expense on the
Company's long-term debt that was assumed pursuant to the Company's
reorganization and interest on the short-term loans from affiliates. Interest
expense for the first half of fiscal 2001 was $89,000 lower than for the first
half of fiscal 2000 due to the significant amount of debt converted to equity
and debt repaid between the periods.

LIQUIDITY AND CAPITAL RESOURCES

     On March 31, 2001 the Company had working capital of $1,949,000 compared to
$3,945,000 at September 30, 2000.

     The Company has incurred significant operating losses and cash flow
deficits in previous periods. During fiscal 2000 and the six months ended March
31, 2001 the Company experienced $2,216,000 and $619,000 of negative cash flow
from operations, respectively, and met its cash requirements through the sale of
equity securities and short-term loans from affiliates. Management expects the
Company's core business to improve, but to continue to utilize cash, though at a
significantly reduced level. The Company is currently in the process of
exploring various



                                                                              15
<PAGE>

financing alternatives to meet its cash needs, including additional short-term
loans from its shareholders. Management believes that the Company has sufficient
cash and borrowing capacity to ensure the Company will continue operations in
the near term.

     However, if the Company is successful in entering into the CRADA for
Phase-III clinical trials and ultimate commercialization of a patient-specific
vaccine for non-Hodgkin's low-grade follicular lymphoma, the Company would need
to obtain significant additional funding. Such additional financing could be
sought from a number of sources, including the sale of equity or debt
securities, strategic collaborations or recognized research funding programs. No
assurance can be given that the Company would be able to obtain such additional
funds on terms acceptable or favorable to the Company, if at all. Substantial
delays in obtaining such financing would have an adverse effect on the Company's
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.





                                                                              16
<PAGE>

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS


     EXCORP MEDICAL ET AL

     On May 4, 1997, the Company and Regenerex, Inc. ("Regenerex") filed a
complaint in the Hennepin County District Court, Fourth Judicial District in the
State of Minnesota against defendants Daniel G. Miller; Bruce Amiot; Excorp
Medical Inc.; James F. Scheuppert; Gerald A. Okerman; Stephen E. Smith; Doherty
Rumble & Butler, Professional Association; Ross Strehlow and John G. Kinnard and
Co., Inc.

     During the quarter ended June 30, 1998, in exchange for certain
consideration, the Predecessor Company agreed to accept all of the existing
assets of Regenerex, an affiliate of the Predecessor Company with officers and
directors in common with the Predecessor Company, which was developing a
bioartificial liver technology, in complete satisfaction of the amounts owed to
the Predecessor Company by Regenerex. The assets assumed by the Predecessor
Company included Regenerex's claim in this legal proceeding against Excorp and
other parties.

     Mr. Miller is a former officer and employee of Regenerex and Mr. Amiot is a
former employee of the Company ("Former Employees"). The complaint alleges that,
unknown to the Company and Regenerex, the Former Employees began a course of
conduct with the goal of convincing the University of Minnesota to terminate its
license agreement with the Company and Regenerex relating to the development of
bioartificial liver technology ("BAL") and to grant that license instead to a
company in which Miller and Amiot would have an interest. The complaint also
alleges that the other defendants supported and assisted Miller and Amiot to
accomplish their improper and illegal goal of interfering with the current and
prospective contractual relationships of the Company and Regenerex. The
complaint further alleges that Miller and Amiot breached their employment
contracts and wrongfully acquired and used trade secrets of the Company and
Regenerex in setting up a competing company. The complaint contains counts
alleging breach of contract; breach of fiduciary duties; aiding and abetting
breach of fiduciary duties; tortious interference with the contractual
relationship; tortious interference with prospective contractual relationships;
defamation; civil conspiracy and; misappropriation of trade secrets. The
complaint alleges substantial damages to the Company and Regenerex.

     On October 29, 1999, an involuntary Chapter 7 bankruptcy case commenced
against defendant Doherty Rumble & Butler P.A. Consequently, the Company and
Regenerex are stayed from pursuing their claims against this defendant is state
court. Absent relief from the automatic stay, the Company and Regenerex must
pursue their claims against this defendant in bankruptcy court.

     A scheduling conference was held on November 29, 1999 for the remaining
parties during which the Court set trial to begin the first week of January
2001. On September 1, 2000, certain of the defendants moved for


                                       17
<PAGE>

summary judgement. On January 9, 2001, the Court granted such motion. On January
9, 2001, the Court granted such motion. On January 17, 2001, the Court approved
a settlement agreement entered into by and between the Company, Regenerex, Inc.,
Daniel Miller, Bruce Amiot and Excorp Medical, Inc. On February 5, 2001, the
Court entered judgement dismissing the remaining claims asserted against the
non-settling defendants. As of April 3, 2001 the documents embodying the
agreement between the parties were signed by the Company. Final agreements from
all other parties are pending.








                                                                              18
<PAGE>


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

     On March 13, 2001 the Annual Meeting of the shareholders was held with the
results of voting as follows:

1.   To approve the merger of the Company into Biovest International, Inc., a
     merger which would change the Company's state of incorporation from
     Minnesota to Delaware.*

                Votes For            Votes Against             Abstentions
                ---------            -------------             -----------
                5,526,908                -0-                       -0-


2.   To approve the increase of authorized Capital stock to 50,000,000 shares of
     common stock, and 10,000,000 shares of preferred stock.

                Votes For            Votes Against             Abstentions
                ---------            -------------             -----------
                5,526,802                95                         11


3.   To approve the establishment of a classified board of directors such that
     less than all of the directors of the Company are elected at each annual
     meeting of shareholders.

                Votes For            Votes Against             Abstentions
                ---------            -------------             -----------
                5,526,797                 100                      11


4.   Election of three directors

                                     Votes For     Votes Against   Abstentions
                                     ---------     -------------   -----------
     Dr. Christopher Kyriakides      5,526,813           95            -0-
     David DeFouw                    5,526,908          -0-            -0-
     Othon Mourkakos                 5,526,813           95            -0-

5.   To approve the Company's 2000 Stock Option Plan

                Votes For            Votes Against             Abstentions
                ---------            -------------             -----------
                5,526,813                  95                      -0-


* On March 15, 2001 the board of directors voted to terminate the merger as not
being in the best interests of the Company or its shareholders.



                                                                              19
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

3.1.1    Second Amended and Restated Articles of Incorporation.
10.5     2000 Stock Option Plan.

(b) Reports on Form 8-K.

     Report on Form 8-KA filed on April 27, 2001, amending the filing dated
August 14, 2000, incorporating 1999 audited financial statements of Unisyn
Technologies, Inc. and adjusting proforma schedules as a result.











                                                                              20
<PAGE>


SIGNATURES
----------


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


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



Date: May 21, 2001                         /s/ Dr. Christopher Kyriakides
      ------------                         -------------------------------------
                                           Dr. Christopher Kyriakides
                                           Chief Executive Officer and Director




Date: May 21, 2001                         /s/ Thomas F. Belleau
      ------------                         -------------------------------------
                                           Thomas F. Belleau
                                           Chief Financial Officer