U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB/A-1

(Mark One)

[x] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended December 31, 2005.

[ ]  Transition  report  pursuant to Section 13 or 15(d) of the Exchange act for
the transition period from
                               to
-------------------------------  ------------------------------------------

Commission File Number:    1-15695
                        ------------

                                  Avitar, Inc.
-------------------------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)

        Delaware                                             06-1174053
(State or other jurisdiction                (I.R.S. Employer Identification No.)
of incorporation or organization)

65 Dan Road, Canton, Massachusetts                                    02021
-------------------------------------------------------------------------------
(Address of principal executive offices)                          (Zip Code)

                                 (781) 821-2440
 -------------------------------------------------------------------------------
                          (Issuer's telephone number)

(Former  name,  former  address and former  fiscal year,  if changed  since last
report)

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. [x]Yes [ ]No

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
                            COMMON STOCK: 220,662,935
                             AS OF FEBRUARY 10, 2006

Transitional Small Business Disclosure Format
(Check One):               [  ] Yes ;       [x] No



Transitional Small Business Disclosure Format
(Check One):               [  ] Yes ;       [x] No

                               Page 1 of 25 pages
                           Exhibit Index is on Page 21
<PAGE>

                                                           TABLE OF CONTENTS


                                                                            Page


PART I: FINANCIAL INFORMATION                                                 3


   Item 1  Consolidated Financial Statements
                       Balance Sheet                                          4
                       Statements of Operations                               5
                       Statement of Stockholders' Deficit                     6
                       Statements of Cash Flows                               7
                       Notes to Consolidated Financial Statements             8


   Item 2  Management's Discussion and Analysis or Plan of Operation         15


   Item 3  Controls and Procedures                                           17

PART II: OTHER INFORMATION                                                   18

   Item 2   Unregistered Sales of Equity Securities and Use of Proceeds      19

SIGNATURES                                                                   20

EXHIBIT INDEX                                                                21
CERTIFICATIONS                                                               22
<PAGE>



                          PART I FINANCIAL INFORMATION












<PAGE>
Item 1.     FINANCIAL STATEMENTS

                          Avitar, Inc. and Subsidiaries
                           Consolidated Balance Sheet
December 31, 2005
                                   (Unaudited)

------------------------------------------------------------------------------
                                     ASSETS
CURRENT ASSETS:
     Cash and cash equivalents                                       $ 55,587
     Accounts receivable                                              483,504
     Inventories                                                      636,781
     Prepaid expenses and other                                       117,692
                                                                  ------------
          Total current assets                                      1,293,564

PROPERTY AND EQUIPMENT, net                                           317,040
GOODWILL, net                                                         138,120
OTHER ASSETS                                                          512,823
                                                                  ------------
          Total                                                   $ 2,261,547
                                                                  ============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
     Notes payable (Note 5)                                         $ 141,076
     Convertible notes payable (Note 5)                             $ 632,937
     Accounts payable                                                 613,892
     Accrued expenses                                                 776,703
     Deferred revenue                                                  16,150
     Current portion of long-term capital leases                       15,213
     Current portion of deferred lessor incentive                      13,400
     Fair value of warrants (Note 11)                                  59,468
     Fair value of embedded drivatives (Note 11)                      799,450
                                                                  ------------

          Total current liabilities                                 3,068,289
                                                                  ------------

LONG-TERM DEBT, LESS CURRENT PORTION                                1,433,452
LONG-TERM CAPITAL LEASES, LESS CURRENT PORTION                         11,018
DEFERRED LESSOR INCENTIVE, LESS CURRENT PORTION                        46,900
                                                                  ------------
           Total Liabilities                                        4,559,659


CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED
     STOCK (Note 6)                                                 2,970,649

COMMITMENTS

STOCKHOLDERS' DEFICIT
     Series B convertible preferred stock, $.01 par value;
         authorized 5,000,000 shares; 5,689 shares issued and
         outstanding                                                       58
     Common Stock, $.01 par value; authorized 300,000,000 shares;
          216,117,480 shares issued and outstanding                 2,161,174
     Additional paid-in capital                                    46,971,877
     Accumulated deficit                                          (54,401,870)
                                                                  ------------
          Total stockholders' deficit                              (5,268,761)
                                                                  ------------
          Total                                                   $ 2,261,547
                                                                  ============

          See accompanying notes to consolidated financial statements.
<PAGE>
                          Avitar, Inc. and Subsidiaries
                      Consolidated Statements of Operations
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED DECEMBER 31,
                                                        -------------------------------
                                                          2005            2004
                                                         ------          ------
<S>                                                <C>              <C>
SALES                                              $     907,270    $   1,036,040
                                                   -------------    -------------

OPERATING EXPENSES
     Cost of sales                                       658,993          716,009
     Selling, general and administrative               1,038,607          932,662
     Research and development                            129,706          196,443
                                                   -------------    -------------
          Total operating expenses                     1,827,306        1,845,114
                                                   -------------    -------------

LOSS FROM OPERATIONS                                    (920,036)        (809,074)
                                                   -------------    -------------

OTHER INCOME (EXPENSE)
     Interest expense and financing costs               (213,235)         (13,186)
     Other income (expense), net                         121,342         (520,630)
                                                   -------------    -------------
          Total other expense, net                       (91,893)        (533,816)
                                                   -------------    -------------


LOSS FROM CONTINUING OPERATIONS                       (1,011,929)      (1,342,890)
                                                   -------------    -------------

DISCONTINUED OPERATIONS:
   Income from the disposal of USDTL (Note 3)            120,000                -
                                                   -------------    -------------
   Income from discontinued operations                   120,000                -
                                                   -------------    -------------

NET LOSS                                           $    (891,929)   $  (1,342,890)
                                                   =============    =============

BASIC AND DILUTED LOSS PER SHARE FROM CONTINUING
    OPERATIONS (Note 9)                            $       (0.01)   $       (0.01)
                                                   =============    =============

BASIC AND DILUTED NET LOSS PER SHARE (Note 9):     $       (0.01)   $       (0.01)
                                                   =============    =============

WEIGHTED AVERAGE
     NUMBER OF COMMON SHARES OUTSTANDING             202,270,171      130,174,135
                                                   =============    =============
</TABLE>





          See accompanying notes to consolidated financial statements.
<PAGE>
                           Avitar, Inc. and Subsidiaries
                  Consolidated Statement of Stockholders' Deficit
                       Three Months Ended December 31, 2005
                                    (Unaudited)
<TABLE>
<CAPTION>

                                          Preferred Stock        Common Stock                                           Total
                                         ................    ....................      Additional    Accumulated    Stockholders'
                                          Shares   Amount   Shares         Amount    paid-in capital   deficit         Deficit
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>      <C>      <C>           <C>          <C>           <C>             <C>
Balance at September 30, 2005             5,689    $ 58     190,659,39    $1,906,59    $46,992,19    ($53,504,524)   $(4,605,677)

Conversion of Series E preferred stock        -       -     25,458,087      254,580       (20,318)              -        234,262

Payment of convertible preferred stock
    dividend for Series A preferred stock     -       -              -            -             -          (5,417)        (5,417)

Net loss                                      -       -              -            -             -        (891,929)      (891,929)
-----------------------------------------------     ----   -----------    ---------     ----------    ------------    -------------

Balance at December 31, 2005              5,689     $58    216,117,480   $2,161,174    $46,971,877   ($54,401,870    ($5,268,761)
===============================================     ====   ===========    =========     ==========    ============    =============
</TABLE>


           See accompanying notes to consolidated financial statements.
<PAGE>
                          Avitar, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED DECEMBER 31,
                                                               --------------------------------
                                                                    2005             2004
                                                               ---------------   --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                              <C>            <C>
     Net loss                                                    ($  891,929)   ($1,342,890)
     Adjustments to reconcile net loss to net cash used in
      operating activities:
          Depreciation and amortization                               43,666         39,669
          Amortization of debt discount and deferred financing       152,114              -
          Amortization of deferred rent expense                            -         31,192
          Amortization of deferred lessor incentive                    3,350              -
          (Income) expense from change in value of derivatives
           and warrants                                             (120,116)       521,067
          Changes in operating assets and liabilities:
          Accounts receivable                                         94,627        146,823
          Inventories                                               (261,865)      (152,278)
          Prepaid expenses and other current assets                   85,690         29,520
          Other assets                                                (4,737)          (201)
          Accounts payable and accrued expenses                      (16,959)      (231,448)
                    Net cash used in operating activities           (916,159)      (958,546)
                                                                 -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

    Purchases of property and equipment                              (51,496)       (20,482)
                                                                 -----------    -----------

                    Net cash used in investing activities            (51,496)       (20,482)
                                                                 -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:

     Repayment of notes payable and long-term debt                  (141,704)       (63,272)
     Sale of preferred stock and warrants                                  -      1,159,775
     Net proceeds from issuance of convertible long-term debt        920,000
     Redemption of Series A redeemable convertible
      preferred stock                                               (150,000)
     Payment of cash dividend on Series A redeemable
      convertible prefered stock                                      (5,417)             -
                                                               ---------------   --------------

               Net cash provided by financing activities             622,879      1,096,503
                                                               ---------------   --------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                (344,776)       117,475

CASH AND CASH EQUIVALENTS, beginning of the period                   400,363        508,876
                                                               ---------------   --------------

CASH AND CASH EQUIVALENTS, end of the period                         $55,587       $626,351
                                                               ===============   ==============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
     Cash paid during period:
          Income taxes                                              $      -        $     -
          Interest                                                  $ 18,484        $ 8,291
</TABLE>

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
    FINANCING ACTIVITIES:

  During the three months ended December 31, 2005,  224,712 shares of
     Series E redeemable convertible preferred stock were converted into
     25,458,087 shares of common stock.

  During the three months ended December 31, 2004, 958 shares of
     Series A redeemable convertible preferred stock were converted into
     13,205,882 shares of common stock.

  During the three months ended December 31, 2004, 250 shares of
     Series A convertible preferred stock were converted into
     2,520,251 shares of common stock.

  During the three months ended December 31, 2004, 311,500 shares of
     common were issued as payment of dividends for Series A
     convertible and redeemable convertible preferred stock.

          See accompanying notes to consolidated financial statements.


<PAGE>

                          AVITAR, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
================================================================================

1.   BASIS OF PRESENTATION

          Avitar,  Inc.  (the  "Company" or "Avitar")  through its  wholly-owned
     subsidiary  Avitar  Technologies,  Inc.  ("ATI")  develops,   manufactures,
     markets and sells  diagnostic  test  products and  proprietary  hydrophilic
     polyurethane foam disposables fabricated for medical,  diagnostics,  dental
     and consumer use. During the first quarter of FY2006, the Company continued
     the development and marketing of innovative  point of care oral fluid drugs
     of abuse tests,  which use the Company's  foam as the means for  collecting
     the oral fluid sample.  Through its wholly owned subsidiary,  BJR Security,
     Inc. (`BJR"),  the Company provides  specialized  contraband  detection and
     education services.

          In  December  2003,  the  Company  sold the  business  and net assets,
     excluding cash, of its wholly owned subsidiary,  United States Drug Testing
     Laboratories,  Inc.  ("USDTL")  which  operated a certified  laboratory and
     provided  specialized  drug testing services  primarily  utilizing hair and
     meconium as the  samples.  In November  2005,  the  Company  negotiated  an
     agreement  with the new owners of USDTL to settle all  outstanding  matters
     related to the sale of USDTL (see Note 3). Therefore, USDTL is considered a
     discontinued operation and this report reflects the continued operations of
     the Company.  Due to the current financial condition at Avitar, the Company
     may consider selling assets and/or operations,  including BJR. However,  at
     the present  time,  there can be no  assurances  that the Company  would be
     successful in these efforts.

          During the audit for  Fiscal  2005,  the  Company  was  advised by its
     independent  registered  public  accounting  firm that the  method  used to
     account for sales of certain  convertible  preferred  stock and convertible
     notes was not in accordance  with the  requirements of Emerging Issues Task
     Force  ("EITF")  Issue  No.  00-19  "Accounting  for  Derivative  Financial
     Instruments  Indexed To and Potentially Settled In, a Company's Own Stock".
     As a result, management determined that certain previously issued financial
     statements should not be relied upon. The consolidated financial statements
     included  herein  reflect the correct method to account for the issuance of
     various securities and the derivative features embedded therein.

          The accompanying consolidated financial statements of the Company have
     been prepared in accordance with generally accepted  accounting  principles
     for interim  financial  information,  the  instructions  to Form 10-QSB and
     Regulation S-B (including Item 310(b)  thereof).  Accordingly,  they do not
     include all of the information and footnotes required by generally accepted
     accounting principles for complete financial statements.  In the opinion of
     the  Company's  management,  all  adjustments  (consisting  only of  normal
     recurring accruals)  considered necessary for a fair presentation have been
     included.  Operating results for the three-month  period ended December 31,
     2005 are not necessarily indicative of the results that may be expected for
     the  full  fiscal  year  ending   September  30,  2006.  The   accompanying
     consolidated  financial  statements  should be read in conjunction with the
     audited  financial  statements  of the  Company  for the fiscal  year ended
     September 30, 2005. The Company's  consolidated  financial  statements have
     been presented on the basis that it is a going concern,  which contemplates
     the realization of assets and the satisfaction of liabilities in the normal
     course  of  business.  The  Company  has  suffered  recurring  losses  from
     operations  and has a  stockholders'  deficit as of  December  31,  2005 of
     $5,268,761.  The  Company  raised net  proceeds  aggregating  approximately
     $2,498,000  during the year ended September 30, 2005 from the sale of stock
     and warrants.  In addition,  the Company  raised gross proceeds of $900,000
     from short-term convertible notes and $1,000,000 from long-term convertible
     notes. During October 2005, the Company raised gross proceeds of $1,000,000
     from long-term  convertible notes and received $120,000 from the settlement
     agreement  related to the sale of USDTL  described above and in Note 3. The
     Company is working with  placement  agents and  investment  fund mangers to
     obtain additional equity financing.  Based upon cash flow projections,  the
     Company  believes  the  anticipated  cash  flow  from  operations  and most
     importantly,  the expected net proceeds from future equity  financings will
     be sufficient to finance the Company's operating needs until the operations
     achieve  profitability.  There can be no assurances that forecasted results
     will be  achieved  or that  additional  financing  will  be  obtained.  The
     financial  statements  do  not  include  any  adjustments  relating  to the
     recoverability  and  classification  of asset  amounts or the  amounts  and
     classification of liabilities that might be necessary should the Company be
     unable to continue as a going concern.

2.   INVENTORIES

          At December 31, 2005, inventories consist of the following:

                 Raw Materials                            $386,351
                 Work-in-Process                           102,295
                 Finished Goods                            148,135
                          Total                           $636,781

3.   DISCONTINUED OPERATIONS

          On  December  16,  2003,  the  Company  consummated  a sale of USDTL's
     business and net assets,  excluding cash. Under the terms of that sale, the
     buyer must pay the  Company  10% of certain  annual  revenues  in excess of
     $1,500,000,  less any  amounts  due from the  Company  for the  purchase of
     services  from the buyer.  In  November  2005,  the Company  negotiated  an
     agreement  with the new owners of USDTL to settle all  outstanding  matters
     related  to the sale of  USDTL.  Under the  terms of this  settlement,  the
     Company  received an  immediate  lump sum  payment of $120,000  rather than
     waiting for the 10 to 14 years that the  Company  believed it would take to
     collect the entire $500,000 from uncertain  future  revenues of USDTL.  The
     accompanying   financial   statements   reflect  USDTL  as  a  discontinued
     operation.  The following is a summary of the results of its operations for
     the three months ended December 31, 2005 and 2004:

          Three months ended December 31,            2005             2004
          --------------------------------------------------------------------
          Sales                                  $        -        $       -
          Operating expenses                              -                -
          Other income (expense)                    120,000                -
          --------------------------------------------------------------------
          Income from discontinued operations    $  120,000        $       -
          --------------------------------------------------------------------

<PAGE>

4.   MAJOR CUSTOMERS

         Customers in excess of 10% of total sales are:

                                   Three Months Ended December 31,
                                   -------------------------------------
                                         2005                 2004
                  Customer A        $   222,830          $   253,786
                  Customer B                  *              222,200



                  *Customer was not in excess of 10% of total sales.

          At December 31, 2005, accounts receivable from major customers totaled
     approximately $98,000.

5.   NOTES PAYABLE AND SHORT AND LONG-TERM CONVERTIBLE NOTES PAYABLE

          In September and October 2005, the Company executed notes payable with
     AJW Partners, LLC, AJW Offshore,  Ltd., AJW Qualified Partners, LLC and New
     Millennium  Capital  Partners  II,  LLC in the  total  principal  amount of
     $2,000,000  which is payable at maturity  in  September  and October  2008.
     Interest  on these  notes  is 8% and is  payable  quarterly  in cash or the
     Company's  common  stock at the option of the Company.  The Company  issued
     warrants to purchase 4,000,000 shares of common stock at $.25 per share for
     five  years in  connection  with  these  notes.  In  addition,  the  entire
     principal plus any accrued and unpaid interest  associated with these notes
     is convertible,  at the holder's option, into the Company's common stock at
     a  conversion  price of 65% of the  average  of the three  lowest  intraday
     trading  prices of the common stock for the twenty  trading days  preceding
     the date that the  holders  elect to convert.  A discount to debt  totaling
     $616,800  ($567,000 for the fair value of the  conversion  feature of these
     notes and $49,800 for the fair value of the warrants  issued in  connection
     with  these  notes) was  recorded  during  FY2005 and the first  quarter of
     FY2006 and is being  amortized over the term of the notes.  The unamortized
     discount  was  $566,548  as of December  31,  2005.  Fees of  approximately
     $290,000  incurred in connection with securing these loans were recorded as
     a deferred  financing  charge.  The  collateral  pledged by the  Company to
     secure  these notes  includes  all assets of the  Company.  A liability  of
     approximately  $617,000  was  recorded  for the fair value of the  warrants
     issued  in  connection  with the  $2,000,000  of notes  and the  conversion
     feature which was increased to its market value of  approximately  $650,000
     at December 31, 2005.

          From April to August 2005, the Company executed convertible notes with
     an  individual in the total  principal  amount of $650,000 with interest at
     10%.  Each note has a maturity date of six months from the date of the note
     and is payable in ten monthly installments plus accrued interest commencing
     on the maturity date of the note. The Company  issued  warrants to purchase
     650,000  shares of  common  stock at $.033 to $.099 per share for three (3)
     years in connection  with these notes.  In addition,  the entire  principal
     plus accrued  interest  associated with these notes is convertible into the
     Company's  common stock at a conversion  price of the lesser of the closing
     price of the  common  stock  on the date of the loan or 85% of the  average
     closing  price of the common stock for the five (5) trading days  preceding
     the notice of conversion.  In no event shall the conversion  price be lower
     than 50% of the closing  price of the common stock on the date of the loan.
     A  discount  to debt  totaling  $172,930  ($156,800  for the  value  of the
     conversion feature of these notes and $16,130 for the value of the warrants
     issued in  connection  with these notes) was recorded  during FY2005 and is
     being amortized over the term of the notes.  The  unamortized  discount was
     $17,063 as of December 31, 2005. A liability of approximately  $173,000 was
     recorded for the fair value of the warrants  issued in connection  with the
     $650,000  of notes and the  conversion  feature  which was  reduced  to its
     market value of $4,045 at December 31, 2005.

6.   CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK

          In the April  and June  2005,  the  Company  raised  net  proceeds  of
     approximately  $1,335,000  from the sale of  1,500,000  shares  of Series E
     Redeemable  Convertible Preferred Stock with a face value of $1,500,000 and
     Warrants to purchase  150,000  shares of the Company's  common  stock.  The
     $1,500,000 of Series E Preferred Stock are convertible into Common Stock at
     the  lesser of $.08 per  share or 80% of the  average  of the three  lowest
     closing bid prices for the ten trading days immediately prior to the notice
     of conversion, subject to adjustments and limitations, and the Warrants are
     exercisable  at $.084 per share for a period of three  years.  The warrants
     issued in connection  with the sale of 1,500,000  shares of preferred stock
     and the  conversion  feature  resulted in a deemed  dividend of  $1,087,000
     being recorded and included in the earnings per share  calculation  for the
     year ended September 30, 2005. A liability of approximately  $1,087,000 was
     recorded for the original  fair value of the warrants  issued in connection
     with the sale of the 1,500,000 shares of preferred stock and the conversion
     feature which was reduced to its market value of approximately  $165,000 at
     December  31,  2005.  As of  December  31,  2005,  724,351  shares  of this
     preferred stock had been converted into  36,777,767  shares of common stock
     and 775,649 were outstanding.  Upon the occurrence of specific events,  the
     holders of the Series E Redeemable Convertible Preferred Stock are entitled
     to redeem these shares under certain  provisions of the agreement  covering
     the purchase of the  preferred  stock.  Accordingly,  this security was not
     classified as permanent equity.

          In December 2004, the Company sold 1,285 shares of Series A Redeemable
     Convertible  Preferred  Stock and  Warrants to purchase  600,000  shares of
     common  stock  for  which  it  received   net  proceeds  of   approximately
     $1,160,000.  The Series A Redeemable  Convertible  Preferred Stock,  with a
     face value of $1,285,000, is convertible into common stock at the lesser of
     $.12 per  share or 85% of the  average  of the  three  lowest  closing  bid
     prices,  as reported by  Bloomberg,  for the ten trading  days  immediately
     prior to the notice of conversion  subject to adjustments and floor prices.
     The Warrants are  exercisable  at $.126 per share.  The warrants  issued in
     connection  with the sale of 1,285  shares of  preferred  stock and the put
     right  and  the  conversion  feature  resulted  in  a  deemed  dividend  of
     $1,058,260   being   recorded  and  included  in  the  earnings  per  share
     calculation  for  the  year  ended  September  30,  2005.  A  liability  of
     approximately  $1,058,260  was recorded for the original  fair value of the
     warrants  issued  in  connection  with  the  sale of the  1,285  shares  of
     preferred stock and the conversion feature which was $3,000 at December 31,
     2005.  As of December 31, 2005,  1,135 shares of this  preferred  stock had
     been converted into 22,607,777 shares of common stock and the remaining 150
     shares of Series A  redeemable  convertible  preferred  stock,  with a face
     value of  $150,000,  were  redeemed  by the  Company  in  October  2005 for
     $155,415 which included accrued dividends of $5,417.

          36,941 shares of the Series C convertible  preferred stock with a face
     value of $195,000 and 2,000 shares of the 6%  Convertible  preferred  stock
     with a face value of  $2,000,000  are  carried at face value on the balance
     sheet  outside  permanent  equity  as the  Company  cannot  be  sure it has
     adequate authorized shares for their conversion as of December 31, 2005.


7.   COMMON AND PREFERRED STOCK

          During the  quarter  ended  December  31,  2005,  the  Company  issued
     25,458,087  shares of common stock to holders who converted  224,351 shares
     of Series E  redeemable  convertible  preferred  stock.  Dividends  for all
     preferred stock amounted to $42,435 for the three months ended December 31,
     2005 and the total amount of unpaid and undeclared dividends was $284,321.

8.   GOODWILL

          As of  September  30,  2005,  the  Company's  goodwill was composed of
     $138,120 associated with the acquisition of BJR in 2001. In accordance with
     SFAS No.  142,  the  Company  evaluated  the  goodwill  related  to the BJR
     acquisition  and determined  that no adjustment to the goodwill  balance of
     $138,120 was deemed necessary since September 30, 2005.

9.   LOSS PER SHARE

       The following data show the amounts used in computing earnings per share:

<TABLE>
<CAPTION>

         Three Months Ended December 31,                         2005                  2004
         --------------------------------------------------------------------------------------
<S>                                                          <C>                   <C>
         Loss from continuing operations                     $ (1,011,929)         $(1,342,890)
         Less:
             Deemed dividends in connection with
                  Series A preferred stock sales                       (-)          (1,058,260)
                Preferred stock dividends                         (42,435)             (50,264)
                                                              ------------          -----------
          Loss attributable to common stockholders
                 from continuing operations                    (1,054,364)          (2,451,414)

             Add:
              Income from discontinued operations                 120,000                   (-)
                                                              ------------          -----------
          Net loss attributable to common
              stockholders used in basic and
                diluted EPS                                  $   (934,364)         $(2,451,414)
                                                              ============          ===========
          Weighted average number of
                 common shares outstanding                    202,270,171          130,174,135
                                                              ------------         ------------
           Loss per share attributable to common
                 stockholders before discontinued
                 operations                                        $(0.01)              $(0.01)

           Impact of discontinued operations                            -                    -
                                                                   -------              -------
              Basic and diluted loss per share
                  attributable to common stockholders              $(0.01)              $(0.01)
                                                                   =======              =======
</TABLE>

10.  STOCK OPTIONS

          The Company accounts for its stock-based  compensation plans using the
     intrinsic value method in accordance with the provisions of APB Opinion No.
     25,  Accounting  for  Stock  Issued to  Employees,  and  complies  with the
     disclosure  provisions  of  SFAS  No.  123,  Accounting  for  Stock-  Based
     Compensation,  and SFAS No. 148,  Accounting for Stock-Based  Compensation-
     Transition and Disclosure.  No stock-based  employee  compensation cost was
     reflected in net loss for the quarters  ended December 31, 2004 or 2003, as
     all options  granted  under those plans had an exercise  price equal to the
     fair market value of the underlying common stock on the date of grant.

The following table  illustrates,  in accordance with the provisions of SFAS No.
148,  Accounting for Stock-Based  Compensation - Transition and Disclosure,  the
effect on net loss and loss per share if the  Company had applied the fair value
recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation,
to stock-based employee compensation.


For the Three Months Ended December 31,             2005             2004
Net loss                                         $(891,929)       $(1,342,890)
Add: stock based employee compensation
  expense included in reported net loss,
  net of tax                                             -                  -
Deduct: total stock based employee
  compensation expense determined
  under the fair value based method for
  all awards, net of tax                           (30,595)           (32,395)
                                                  ---------        -----------
Pro forma net loss                               $(922,524)       $(1,375,285)
                                                  =========        ===========
Pro forma loss per share:
  Basic and diluted - as reported                    $(.01)             $(.01)
  Basic and diluted - pro forma                       (.01)              (.01)



In determining the pro forma amounts above, the Company estimated the fair value
of each option  granted using the  Black-Scholes  option  pricing model with the
following weighted-average assumptions:


        December 31                               2005                   2004
        Risk free interest rate              4.0%                   3.8%
        Expected dividend yield              -                         -
        Expected lives                     5-9 years              5-9 years
        Expected volatility                 80%                   80%

No options were  granted  during the quarter  ended  December 31, 2005 while the
options  granted  for the three  months  ended  December  31,  2004  amounted to
1,663,700.  The weighted  average fair value of options granted during the three
months ended December 31, 2004 was $0.07.

11.  DERIVATIVES

          The Company has issued and  outstanding  convertible  debt and certain
     convertible  equity  instruments  with embedded  derivative  features.  The
     Company  analyzes these  financial  instruments in accordance with SFAS No.
     133 and EITF  Issue  Nos.  00-19 and  05-02 to  determine  if these  hybrid
     contracts have embedded derivatives which must be bifurcated.  In addition,
     free-standing  warrants  are  accounted  for as  equity or  liabilities  in
     accordance  with the provisions of EITF Issue No. 00-19. As of December 31,
     2005, the Company could not be sure it had adequate  authorized  shares for
     the conversion of all  outstanding  instruments  due to certain  conversion
     rates  which vary with the fair  value of the  Company's  common  stock and
     therefore all embedded  derivatives and freestanding  warrants are recorded
     at fair value,  marked-to-market  at each reporting period, and are carried
     on separate lines of the accompanying  balance sheet. If there is more than
     one embedded derivative, their value is considered in the aggregate.

12.  SUBSEQUENT EVENTS

          Since  December 31, 2005,  holders of Series C  convertible  preferred
     stock  converted  8,333  shares of  preferred  stock  with a face  value of
     $50,000 into  4,545,455  shares of common  stock.  Also since  December 31,
     2005,  the Company filed a Certificate  of Amendment of its  Certificate of
     Incorporation  that at 5 P.M.  (Delaware  Time) on  February  17, 2006 will
     effect a  one-for-fifty  (1 for 50) reverse  stock  split of the  Company's
     outstanding  common stock. When the reverse stock split becomes  effective,
     each  outstanding  fifty shares of common  stock will be combined  into and
     become one share of common stock.
<PAGE>

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

     The following  discussion and analysis  should be read in conjunction  with
the Company's  consolidated financial statements and the notes thereto appearing
elsewhere in this report.


RESULTS OF OPERATIONS

Revenues

     Sales for the three months ended  December 31, 2005  decreased  $128,770 or
approximately 12 %, to $907,270 from $1,036,040 for the corresponding  period of
the prior  year.  The  change  for the three  months  ended  December  31,  2005
primarily reflects decrease in volume of sales of $138,000 for its OralScreen(R)
products  and $5,000 for its Foam  Products,  offset in part by an  increase  of
$14,000 in revenue from contraband detection services.

Operating Expenses

     Cost  of  sales  for  the  three  months  ended   December  31,  2005  were
approximately 73% of sales compared to the cost of sales of approximately 69% of
sales for the three  months ended  December  31, 2004.  The change for the first
quarter of Fiscal 2006 resulted from the reduction in sales  described above and
a shift in the product mix to the lower margin foam products which accounted for
49% of revenue in Fiscal 2006 versus 44% in Fiscal 2005.

     Selling,  general and  administrative  expenses  for the three months ended
December 31, 2005 increased  $105,945,  or approximately 11%, to $1,038,607 from
$932,662  for the  corresponding  period of the prior  year.  The change for the
three-month  period ended December 31, 2005 primarily  resulted from an increase
of approximately  $80,000 for the addition of sales and marketing resources.  In
order to achieve  revenue  growth,  the Company will continue to incur increased
expenses to hire  additional  direct sales staff and expand  marketing  programs
during the remainder of FY2006 and beyond.

     Research and  development  expenses for the three months ended December 31,
2005  amounted to  $129,706  compared to  $196,443  for the three  months  ended
December 31, 2004.  The  decrease  for the quarter  ended  December 31, 2005 was
primarily  attributable  to lower  consulting  expense.  Although  research  and
development expense were lower for the first quarter of Fiscal 2006, the Company
must continue  developing and enhancing its  ORALscreen  products and therefore,
will most likely incur increased  expenses for research and  development  during
the remainder of FY2006 and beyond.

     Other Income and Expense

     Interest  expense and  financing  costs were  $213,235 for the three months
ended  December 31, 2005  compared to $13,186  incurred  during the three months
ended December 31, 2004. The increase  resulted  primarily from interest expense
of approximately  $50,000 and amortization of deferred  financing costs and debt
discount of  approximately  $152,000  associated  with the short-term  notes and
convertible  short and long-term  notes totaling  approximately  $2,900,000 that
were executed by the Company in FY2005 and the first quarter of FY2006.

     For the three months ended  December  31,  2005,  other income  amounted to
$121,342  compared  to other  expense of  $520,630  for the three  months  ended
December 31, 2004.  The change for the quarter ended  December 31, 2005 resulted
primarily  from changes in the fair market value of  derivative  securities  and
warrants.

     Discontinued Operations

     On December 16, 2003, the Company  consummated the sale of the business and
net assets, excluding cash, of its USDTL subsidiary.  For the three months ended
December 31, 2005, other income amounted to $120,000 compared to no activity for
the  corresponding  period of the prior year.  The income for the quarter  ended
December  31,  2005  resulted  from the  settlement  described  in Note 3 of the
Consolidated Financial Statements.

         Net Loss

     Primarily as a result of the factors described above, the Company had a net
loss of $891,929 for the three months  ended  December 31, 2005,  as compared to
net loss of $1,342,890  for the three months ended  December 31, 2004.  The loss
per  share  was $.01 per basic and  diluted  share  for the three  months  ended
December 31, 2005.  The loss per share was $.01 per basic and diluted  share for
the three months ended December 31, 2004.

FINANCIAL CONDITION AND LIQUIDITY

     At December 31, 2005, the Company had a stockholders'deficit  of $5,268,761
and cash  and cash  equivalents  of  $55,587.  Our  cash  flows  from  financing
activities  provided  the primary  source of funding  during the  quarter  ended
December 31, 2005 and the Company will  continue to rely on this type of funding
until profitability is reached. The following is a summary of cash flows for the
three month period ended December 31, 2005:

                                                        December 31,
         Sources (use) of cash flows                         2005
         -----------------------------------------------------------
         Operating activities                           $ (916,159)
         Investing activities                              (51,496)
         Financing activities                              622,879
         Net decrease in cash and equivalents           $ (344,776)

          Operating Activities.  The net loss of $891,929 (comprised of expenses
          totaling   $1,919,199  less  revenues  and  income  from  discontinued
          operations  of  $1,027,270)  was the major use of cash by  operations.
          When  the  net  loss  is  adjusted  for  non-cash   expenses  such  as
          depreciation  and   amortization,   amortization  of  debt  discounts,
          deferred financing costs, deferred rent and income from the changes in
          the fair market value of derivative securities and warrants,  the cash
          needed  to  finance  the  net  loss  was  $812,915.   Working  capital
          requirements  necessitated  the use of $16,959  to pay aging  accounts
          payable and reduce accrued expenses and $261,865 to increase inventory
          levels to meet anticipated demand for our products during the next six
          months. A decrease in accounts  receivable of $94,627 due to the lower
          billings for ORALscreen  products  during the quarter and decreases in
          prepaid  expenses and other current assets of $85,690 lessened working
          capital  needs by  $180,317.  The  addition of $4,737 of other  assets
          further increased the operating cash needs.

          Investing and Financing  Activities.  Cash used in investing consisted
          of  cash  paid  of  $51,496  for  additions  to  property,  plant  and
          equipment.  To finance the  business,  long-term  notes (as  described
          below) were executed and approximated  $920,000; of which $141,704 was
          used to repay various  short and long-term  debt and $155,417 was used
          to redeem  remaining  shares of the  Series A  redeemable  convertible
          preferred stock and the accrued dividends for these shares. .

     During FY 2006,  the Company's  cash  requirements  are expected to include
primarily the funding of operating losses,  the payment of outstanding  accounts
payable,  the  repayment  of certain  notes  payable,  the funding of  operating
capital to grow the Company's drugs of abuse testing products and services,  and
the continued  funding for the  development of its  ORALscreen  product line. In
September  and  October  2005,  the  Company  executed  notes  payable  with AJW
Partners,  LLC,  AJW  Offshore,  Ltd.,  AJW  Qualified  Partners,  LLC  and  New
Millennium  Capital Partners II, LLC in the total principal amount of $2,000,000
which is payable at maturity in September  and October  2008.  Interest on these
notes is 8% and is payable  quarterly in cash or the  Company's  common stock at
the option of the Company.  The Company  issued  warrants to purchase  4,000,000
shares of common stock at $.25 per share for five years in connection with these
notes.  In addition,  the entire  principal plus any accrued and unpaid interest
associated with these notes is  convertible,  at the holder's  option,  into the
Company's  common stock at a conversion price of 65% of the average of the three
lowest  intraday  trading prices of the common stock for the twenty trading days
preceding  the date  that the  holders  elect to  convert.  A  discount  to debt
totaling  $616,800  ($567,000  for the fair value of the  conversion  feature of
these notes and $49,800 for the fair value of the warrants  issued in connection
with these notes) was recorded during FY2005 and the first quarter of FY2006 and
is being  amortized  over the term of the notes.  The  unamortized  discount was
$566,548 as of December 31, 2005.  Fees of  approximately  $290,000  incurred in
connection  with  securing  these loans were  recorded  as a deferred  financing
charge. The collateral pledged by the Company to secure these notes includes all
assets of the Company.  A liability of  approximately  $617,000 was recorded for
the fair value of the warrants issued in connection with the $2,000,000 of notes
and  the  conversion  feature  which  was  increased  to  its  market  value  of
approximately $650,000 at December 31, 2005.

     From April to August 2005, the Company executed  convertible  notes with an
individual in the total principal  amount of $650,000 with interest at 10%. Each
note has a maturity  date of six months from the date of the note and is payable
in ten monthly  installments  plus accrued  interest  commencing on the maturity
date of the note.  The Company  issued  warrants to purchase  650,000  shares of
common stock at $.033 to $.099 per share for three (3) years in connection  with
these notes. In addition,  the entire principal plus accrued interest associated
with these notes is convertible  into the Company's common stock at a conversion
price of the lesser of the closing  price of the common stock on the date of the
loan or 85% of the average  closing  price of the common  stock for the five (5)
trading  days  preceding  the  notice  of  conversion.  In no  event  shall  the
conversion  price be lower than 50% of the closing  price of the common stock on
the date of the loan. A discount to debt  totaling  $172,930  ($156,800  for the
value of the conversion  feature of these notes and $16,130 for the value of the
warrants  issued in connection  with these notes) was recorded during FY2005 and
is being  amortized  over the term of the notes.  The  unamortized  discount was
$17,063 as of December  31,  2005.  A liability  of  approximately  $173,000 was
recorded  for the fair  value of the  warrants  issued  in  connection  with the
$650,000  of notes and the  conversion  feature  which was reduced to its market
value of $4,045 at December 31, 2005.

     In  the  April  and  June  2005,   the  Company   raised  net  proceeds  of
approximately  $1,335,000  from  the  sale  of  1,500,000  shares  of  Series  E
Redeemable  Convertible  Preferred  Stock  with a face value of  $1,500,000  and
Warrants  to  purchase  150,000  shares  of  the  Company's  common  stock.  The
$1,500,000 of Series E Preferred Stock are convertible  into Common Stock at the
lesser of $.08 per share or 80% of the average of the three  lowest  closing bid
prices for the ten trading days  immediately  prior to the notice of conversion,
subject to  adjustments  and  limitations,  and the Warrants are  exercisable at
$.084 per share for a period of three years.  The warrants  issued in connection
with the sale of 1,500,000 shares of preferred stock and the conversion  feature
resulted in a deemed  dividend of $1,087,000  being recorded and included in the
earnings  per  share  calculation  for the year  ended  September  30,  2005.  A
liability of  approximately  $1,087,000 was recorded for the original fair value
of the warrants  issued in connection  with the sale of the 1,500,000  shares of
preferred stock and the conversion feature which was reduced to its market value
of approximately $165,000 at December 31, 2005. As of December 31, 2005, 724,351
shares of this  preferred  stock had been converted  into  36,777,767  shares of
common  stock and 775,649  were  outstanding.  Upon the  occurrence  of specific
events, the holders of the Series E Redeemable  Convertible  Preferred Stock are
entitled to redeem  these  shares  under  certain  provisions  of the  agreement
covering the purchase of the preferred stock. Accordingly, this security was not
classified as permanent equity.

     In December  2004,  the Company  sold 1,285  shares of Series A  Redeemable
Convertible  Preferred  Stock and Warrants to purchase  600,000 shares of common
stock for which it received net proceeds of approximately $1,160,000. The Series
A Redeemable  Convertible  Preferred Stock, with a face value of $1,285,000,  is
convertible  into  common  stock at the  lesser  of $.12 per share or 85% of the
average of the three lowest  closing bid prices,  as reported by Bloomberg,  for
the ten trading days  immediately  prior to the notice of conversion  subject to
adjustments  and floor prices.  The Warrants are exercisable at $.126 per share.
The  warrants  issued in  connection  with the sale of 1,285 shares of preferred
stock and the put right and the conversion feature resulted in a deemed dividend
of $1,058,260 being recorded and included in the earnings per share  calculation
for the year ended September 30, 2005. A liability of  approximately  $1,058,260
was recorded for the original  fair value of the warrants  issued in  connection
with the sale of the 1,285 shares of preferred stock and the conversion  feature
which was $3,000 at December 31, 2005. As of December 31, 2005,  1,135 shares of
this preferred stock had been converted into  22,607,777  shares of common stock
and the remaining 150 shares of Series A redeemable convertible preferred stock,
with a face value of $150,000,  were redeemed by the Company in October 2005 for
$155,415 which included accrued dividends of $5,417.

     The cash available at December 31, 2005, the anticipated  customer receipts
and  the  proceeds   expected  from  the  last  installment  of  the  $3,000,000
convertible  note financing are expected to be sufficient to fund the operations
of the Company  through April 2006.  Beyond that time,  the Company will require
significant  additional  financing from outside  sources to fund its operations.
The Company plans to continue  working with placement  agents and/or  investment
fund managers in order to raise additional  capital during FY2006 from the sales
of equity and/or debt  securities.  The investors  involved in the September and
October 2005  convertible  note financing  described  above have expressed their
intent  to  provide  an  additional  $2,000,000  of  financing  on  terms  to be
negotiated.  The Company  plans to use the  proceeds  from these  financings  to
provide working capital and capital equipment funding to operate the Company, to
expand the Company's  business,  to further  develop and enhance the  ORALscreen
drug  screening  systems and to pursue the  development  of in-vitro  oral fluid
diagnostic  testing  products.  However,  there can be no  assurance  that these
financings  will be  achieved.  In addition,  the Company may  consider  selling
assets and/or operations, including BJR. However, at the present time, there can
be no assurances that the Company would be successful in these efforts.

     Operating  revenues are expected to grow during  Fiscal 2006 as  increasing
number  of  employers  in the  United  States  and  overseas  convert  to  using
ORALscreen,  Avitar's oral fluid drug testing products.  In order to achieve the
revenue  growth,  the Company  will need to increase  its direct sales force and
implement an expanded,  targeted  marketing program.  ORALscreen,  as an instant
on-site  diagnostic  test,  is  part  of  the  fastest  growing  segment  of the
diagnostic  test market.  Inventories  are currently at  appropriate  levels for
anticipated sales volumes and the Company,  with its production capacity and the
arrangements with its current contract manufacturing sources, expects to be able
to maintain  inventories at optimal levels.  Based on current sales, expense and
cash flow  projections,  the Company believes that the current level of cash and
cash-equivalents on hand and, most importantly, a portion of the anticipated net
proceeds  from  the  financing  mentioned  above  would  be  sufficient  to fund
operations until the Company achieves  profitability.  There can be no assurance
that the Company will consummate the above-mentioned  financing,  or that any or
all of the net proceeds sought thereby will be obtained.  Furthermore, there can
be no assurance that the Company will have  sufficient  resources to achieve the
anticipated  growth.  Once the Company achieves  profitability,  the longer-term
cash requirements of the Company to fund operating activities,  purchase capital
equipment, expand the existing business and develop new products are expected to
be met by the  anticipated  cash  flow from  operations  and  proceeds  from the
financings  described  above.  However,  because there can be no assurances that
sales will  materialize  as  forecasted,  management  will  continue  to closely
monitor  and  attempt to  control  costs at the  Company  and will  continue  to
actively seek the needed additional capital.

     As a result of the Company's  recurring  losses from operations and working
capital deficit, the report of its independent registered public accounting firm
relating to the financial  statements  for Fiscal 2005  contains an  explanatory
paragraph  expressing  substantial doubt about the Company's ability to continue
as a going concern.  Such report states that the ultimate outcome of this matter
could not be  determined  as the date of such report  (January  20,  2006).  The
Company's plans to address the situation are presented above. However, there are
no assurances that these endeavors will be successful or sufficient.

RECENT ACCOUNTING PRONOUNCEMENTS

     In December  2004,  the FASB issued SFAS No.  123R,  "Share-Based  Payment"
("SFAS  123R"),   which   replaces  SFAS  123,   "Accounting   for   Stock-Based
Compensation,"  and supersedes APB Opinion no. 25,  "Accounting for Stock Issued
to  Employees."  SFAS 123R  requires  all  share-based  payments  to  employees,
including  grants of employee stock  options,  to be recognized in the financial
statements based on their fair values. The effective date for entities that file
as a small business issuer is as of the beginning of the first annual  reporting
period that begins on or after  December 15, 2005  Therefore,  under the current
rules,  the Company will be required to adopt SFAS 123R in the first  quarter of
fiscal 2007.

     Under SFAS 123R, pro forma disclosures  previously permitted will no longer
be an alternative to financial statement recognition. The Company must determine
the appropriate fair value model to be used for valuing share-based  payments to
employees,  the  amortization  method for  compensation  cost and the transition
method  to be used at the  date of  adoption.  The  transition  methods  include
modified prospective and retrospective adoption options. Additionally, SFAS 123R
clarifies the timing for recognizing  compensation expense for awards subject to
acceleration of vesting on retirement and also specifies the treatment of excess
tax benefits associated with stock compensation.

     In March 2005, the SEC issued Staff Accounting Bulletin No. 107 ("SAB 107")
regarding the SEC's interpretation of SFAS 123R and the valuation of share-based
payments for public  companies.  Avitar is evaluating the  requirements  of SFAS
123R and SAB 107 and expects that the adoption of SFAS 123R will have a material
impact on Avitar's  consolidated  results of operations  and earnings per share.
The  Company  has not yet  determined  the method of  adoption  or the effect of
adopting SFAS 123R, and it has not  determined  whether the adoption will result
in amounts that are similar to the current pro forma disclosures under SFAS 123.

     In November  2004, the FASB issued SFAS No. 151,  "Inventory  Costs" ("SFAS
151"), an amendment of Accounting  Research  Bulletin ("ARB") No. 43, Chapter 4,
"Inventory  Pricing".  SFAS 151 amends previous guidance regarding  treatment of
abnormal  amounts  of  idle  facility  expense,  freight,  handling  costs,  and
spoilage.  This  statement  requires  that those items be  recognized as current
period  charges  regardless  of whether they meet the criterion of "so abnormal"
which was the  criterion  specified in ARB No. 43. In addition,  this  Statement
requires  that  allocation  of  fixed  production  overheads  to the cost of the
production  be based on  normal  capacity  of the  production  facilities.  This
pronouncement  is effective for the Company for fiscal periods  beginning  after
October 1,  2005.  The  Company  is  currently  evaluating  the effect  that the
adoption of SFAS 151 will have on its  consolidated  results of  operations  and
financial condition, but it is not expected to have a material impact.

     In May 2005,  the FASB issued SFAS No. 154,  "Accounting  Changes and Error
Corrections"  ("SFAS  154")  which  replaces  APB  Opinions  No. 20  "Accounting
Changes"  and SFAS No. 3,  "Reporting  Accounting  Changes in Interim  Financial
Statements"  An Amendment  of APB Opinion No. 28. SFAS 154 provides  guidance on
the accounting for and reporting of accounting changes and error corrections. It
establishes  retrospective  application,  or the latest practicable date, as the
required method for reporting a change in accounting principle and the reporting
of a correction of an error.  SFAS 154 is effective for  accounting  changes and
corrections of errors made in fiscal years beginning after December 15, 2005 and
is required  to be adopted by Avitar in the first  quarter of fiscal  2007.  The
Company is  currently  evaluating  the effect that the adoption of SFAS 154 will
have on its consolidated results of operations and financial condition, but does
not expect it will have a material impact.

FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

     Except for the historical  information  contained  herein,  the matters set
forth herein are "forward-looking  statements" within the meaning of Section 27A
of the  Securities Act of 1933,  Section 21E of the  Securities  Exchange Act of
1934 and the Private  Securities  Litigation  Reform Act of 1995. We intend that
such forward-looking statements be subject to the safe harbors created thereby.

     Such   forward-looking   statements   involve  known  and  unknown   risks,
uncertainties and other factors which may cause our actual results,  performance
or achievements to be materially different from any future results,  performance
or achievement  expressed or implied by such  forward-looking  statements.  Such
factors include, but are not limited to the following: product demand and market
acceptance  risks,  the  effect of  economic  conditions,  results of pending or
future  litigation,  the impact of  competitive  products and  pricing,  product
development  and  commercialization,   technological  difficulties,   government
regulatory  environment  and  actions,  trade  environment,  capacity and supply
constraints or difficulties,  the result of financing efforts,  actual purchases
under agreements and the effect of the Company's accounting policies.

ITEM 3.           CONTROLS AND PROCEDURES

     (a) Evaluation of Disclosure Controls and Procedures

     Our management,  including our chief executive  officer and chief financial
officer,  have carried out an evaluation of the  effectiveness of our disclosure
controls and procedures as of December 31, 2005,  pursuant to Exchange Act Rules
13a-15(e)  and  15(d)-15(e).  Based upon that  evaluation,  our chief  executive
officer and chief  financial  officer have  concluded  that as of such date, our
disclosure controls and procedures in place are adequate and effective to ensure
material  information and other information  requiring  disclosure is identified
and  communicated  on a timely  basis.

     (b) Changes in Internal Control Over Financial Reporting

     During the period  covered by this  report,  we have  improved our internal
control  over  financial  reporting  by  correcting  the  historical  accounting
problems  to  appropriately  account  for  equity and debt  issuances  including
freestanding  warrants and embedded  derivatives.  There have been no changes in
our other  internal  controls  over  financial  reporting  that have  materially
affected or are reasonably likely to materially affect our internal control over
financial reporting.

<PAGE>


                            PART II OTHER INFORMATION

<PAGE>



ITEM 2.           UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     During the quarter ended December 31, 2005 the Company issued to holders of
the Series E preferred  stock  25,458,087  shares of the Company's  common stock
upon the conversion of 224,712 shares of their  preferred  stock.  The exemption
for  registration  of  these  securities  is  based  upon  Section  4(2)  of the
Securities  Act because  the  issuances  were made to  accredited  investors  in
private placements.


ITEM 6.           EXHIBITS

(a)  Exhibits:

Exhibit No.                                       Document

3.1  Certificate of Amendment of Certificate of  Incorporation  previously filed
     with  the  Securities   and  Exchange   Commission  on  February  13,  2006
     (Commission File No. 333-131797), and incorporated herein by reference.

31.1 Certification  Pursuant to 18 U.S.C.  Section 1350, as Adopted  Pursuant to
     Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification  Pursuant to 18 U.S.C.  Section 1350, as Adopted  Pursuant to
     Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification  Pursuant to 18 U.S.C.  Section 1350, as Adopted  Pursuant to
     Section 906 of the Sarbanes-Oxley Act of 2002

32.2 Certification  Pursuant to 18 U.S.C.  Section 1350, as Adopted  Pursuant to
     Section 906 of the Sarbanes-Oxley Act of 2002

<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, thereunto duly
authorized.


                                        AVITAR, INC.
                                        (Registrant)




Dated:  February 14, 2006               /S/ Peter P. Phildius
                                        ----------------------------
                                        Peter P. Phildius
                                        Chairman and Chief
                                        Executive Officer
                                        (Principal Executive Officer)




Dated:  February 14, 2006               /S/ J.C. Leatherman, Jr.
                                        ----------------------------
                                        J.C. Leatherman, Jr.
                                        Chief Financial Officer
                                        (Principal Accounting and
                                        Financial Officer)

<PAGE>

                                  EXHIBIT INDEX

Exhibit No.                                       Document

3.1  Certificate of Amendment of Certificate of  Incorporation  previously filed
     with  the  Securities   and  Exchange   Commission  on  February  13,  2006
     (Commission File No. 333-131797), and incorporated herein by reference.

31.1 Certification  Pursuant to 18 U.S.C.  Section 1350, as Adopted  Pursuant to
     Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification  Pursuant to 18 U.S.C.  Section 1350, as Adopted  Pursuant to
     Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification  Pursuant to 18 U.S.C.  Section 1350, as Adopted  Pursuant to
     Section 906 of the Sarbanes-Oxley Act of 2002

32.2 Certification  Pursuant to 18 U.S.C.  Section 1350, as Adopted  Pursuant to
     Section 906 of the Sarbanes-Oxley Act of 2002