Avitar Reports First Quarter Financial Results for Fiscal 2006

CANTON, Mass., Feb. 15 /PRNewswire-FirstCall/ -- Avitar, Inc. (BULLETIN BOARD: AVRN) today announced financial results for the three months ended December 31, 2005.

For the quarter ended December 31, 2005, Avitar reported revenues of $907,000 from continuing operations compared to $1,036,000 from continuing operations for the quarter ended December 31, 2004.

The net loss was $892,000, or $0.01 per share, for the quarter ended December 31, 2005 compared with net loss of $1,343,000, or $0.01 per share for the quarter ended December 31, 2004. The net loss for the three months ended December 31, 2005 reflects income from discontinued operations of $120,000, a decrease in non-cash expense of approximately $640,000 resulting from changes in fair market value of derivative securities and warrants and a decrease in operating expenses of approximately $18,000; offset in part by decreases in revenue of approximately $129,000, increases in interest and financing expenses of approximately $152,000.

Peter P. Phildius, Chairman and CEO, commented, "Although revenues were lower for the quarter, we expect them to increase during the remainder of Fiscal 2006. Our oral fluid products are beginning to gain traction in the marketplace as more employers realize the net cost saving that accrue to them by using Avitar's oral fluid technology. We have reorganized our direct sales department to include a combination of inside and regional sales representatives and have been successful in attracting new national and international customers."

About Avitar, Inc.

Avitar, Inc. develops, manufactures, and markets innovative and proprietary products. Their field includes the oral fluid diagnostic market, the disease and clinical testing market, and customized polyurethane applications used in the wound dressing industry. Avitar manufactures ORALscreen(TM), the world's first non-invasive, rapid, onsite oral fluid test for drugs-of-abuse, as well as HYDRASORB(TM), an absorbent topical dressing for moderate to heavy exudating wounds. Avitar is also developing diagnostic strategies for disease and clinical testing in the estimated $25 billion in- vitro diagnostics market. Conditions targeted include influenza, diabetes, and pregnancy. For more information, see Avitar's website at http://www.avitarinc.com/.

Safe Harbor Statement. This release contains forward looking statements that are subject to risks and uncertainties including financing risks and 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. In view of such risks and uncertainties, the Company's actual results could differ materially from those anticipated in such forward looking statements.

Company Contact: Jay C. Leatherman Avitar, Inc. [e-mail]://www.avitarinc.com/ Chart Follows Avitar, Inc. Summary of Financial Results (in thousands, except per share amounts) Quarter Ended December 31, 2005 2004 Sales $907 $1,036 Operating Expenses: Cost of Sales 659 716 Selling, General and Administrative 1,038 933 Research and Development 130 196 Total Operating Expenses 1,827 1,845 Operating Loss (920) (809) Other Expenses (92) (534) Loss from Continuing Operations (1,012) (1,343) Discontinued Operations: Income from the Disposal of USDTL 120 - Loss from Discontinued Operations 120 - Net Loss $ (892) $ (1,343) Basic and Diluted Loss Per Share From Continuing Operations $ (0.01) $ (0.01) Basic and Diluted Net Loss Per Share $ (0.01) $ (0.01) Weighted Average Number of Shares and Common Equivalent Shares Outstanding 202,270,171 130,174,135 Selected Balance Sheet Items: 12/31/2005 Cash $ 56 Total Assets 2,262 Total Liabilities 3,068 Convertible and Redeemable Convertible Preferred Stock 2,971 Stockholders' Deficit (5,269)

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