Avitar, Inc. Reports Third Quarter Results for Fiscal Year 2000

Company sales increased 110 percent

August 15, 2000

CANTON, MA, August 15, 2000 - Avitar, Inc. (AMEX: AVR) today reported that revenues for the third quarter ended June 30, 2000 were $1,306,039, compared to revenues of $621,105 in the same period last year, representing an increase of $684,934, or approximately 110 percent. The Company also reported a net loss of $1,701,864, or $.06 per share, compared with a net loss of $745,432, or $.05 per share for the previous year’s third quarter.

For the nine months ended June 30, 2000, sales revenues increased $1,339,627, or approximately 84 percent, to $2,926,248 from $1,586,621 for the corresponding period of last year. The Company had a net loss of $4,701,320, or $.19 per share versus a net loss of $1,700,332, or $.12 per share in the nine months ended June 30, 1999.

In both the third quarter and the nine months ended June 30, 2000, increases in revenues over prior year amounts were primarily due to sales of ORALscreen™, sales of wound dressing products as well as sales of laboratory services by United States Drug Testing Laboratory (USDTL), the laboratory drug testing company acquired by Avitar in July, 1999.

"During the third quarter, we continued to experience significant revenue growth based on sales of ORALscreen, our oral fluid-based substance abuse testing device that detects results in minutes, and Hydrasorb™, our polyurethane foam wound dressing product line. We also launched our ORALadvantage™ program, ideal for enabling smaller-sized businesses to initiate an on-site drug detection testing program," said Peter P. Phildius, Chairman and Chief Executive Officer of Avitar. "Since introducing ORALscreen 4 (TCOM) in April, 2000, we have received an outstanding response that has resulted in a number of large companies beginning to implement our ORALscreen products in their employee drug testing programs. We expect the current enthusiasm for our products and services to continue as our market penetration grows."

Avitar, Inc. (AMEX:AVR) headquartered in Canton, Massachusetts, develops, manufactures and markets innovative medical devices based on core technologies in oral fluid diagnostics and customized polyurethane applications. The Company markets a unique portfolio of substance abuse testing products and services that include ORALscreen^TM, the world’s first rapid point-of-contact oral fluid test for drugs of abuse, HAIRscreen^TM, a laboratory-based test for long term drug abuse using hair, and several other specialized tests for drugs of abuse. Avitar also markets an oral fluid collection system for DNA testing as well as a proprietary line of polyurethane-based high tech medical devices. For more information, see Avitar’s website at avitarinc.com.

This release forward looking statements that are subject to risks and uncertainties, including the development and marketing of new applications and other risks that are detailed from time to time in the Company’s filings with the Securities and Exchange Commission.