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

(Mark One)

[x] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2003.

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

Commission File Number:    0-20316
                        ------------
                                  Avitar, Inc.
-------------------------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)

Delaware                                                     06-1174053
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
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: 72,108,143
                                AS OF May 9, 2003

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



                               Page 1 of 22 pages
                        Exhibit Index appears on page 20
<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' Equity                                6
             Statements of Cash Flows                                         7
             Notes to Consolidated Financial Statements                       8


 Item 2   Management's Discussion and Analysis or Plan of Operation          11

 Item 3   Procedures and Controls                                            14

PART II: OTHER INFORMATION                                                   15

 Item 2  Changes in Securities                                               16

 Item 6  Exhibits and Reports on Form 8-K                                    16


SIGNATURES                                                                   16

CERTIFICATIONS                                                               18

EXHIBIT INDEX                                                                20
<PAGE>

                          PART I FINANCIAL INFORMATION
Item 1.     FINANCIAL STATEMENTS

                          Avitar, Inc. and Subsidiaries
                           Consolidated Balance Sheet
                                      03/31
                                   (Unaudited)
------------------------------------------------------------------------------

ASSETS
CURRENT ASSETS:
Cash and cash equivalents                                          $   93,012
Accounts receivable, net                                              813,934
  Inventories                                                         781,497
Prepaid expenses and other current assets                              60,580
                                                                   -----------
Total current assets                                                1,749,023

PROPERTY AND EQUIPMENT, net                                           337,296
GOODWILL, net                                                       1,489,555
 OTHER ASSETS                                                         425,379
                                                                   -----------
 Total Assets                                                      $4,001,253
                                                                   ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Notes payable                                                      $  682,113
Accounts payable                                                    1,477,807
Accrued expenses                                                    1,235,172
Deferred income                                                        65,500
Current portion of long-term debt                                      19,072
                                                                   -----------
Total current liabilities                                           3,479,664

LONG TERM DEBT, LESS CURRENT PORTION                                1,259,943
                                                                   -----------
Total liabilities                                                   4,739,607
                                                                   -----------

  COMMITMENTS

STOCKHOLDERS' DEFICIT:
Series B, C and D convertible preferred stock, $.01 par
 value; authorized 5,000,000 shares; 136,202 shares issued
 and outstanding                                                        1,361
Common Stock, $.01 par value; authorized 100,000,000 shares;
72,108,143 shares issued and outstanding                              721,081
Additional paid-in capital                                         43,384,592
Accumulated deficit                                               (44,845,388)
                                                                   -----------
Total stockholders' deficit                                          (738,354)
                                                                   -----------
Total Liabilities and Stockholders' Deficit                        $4,001,253
                                                                   ===========




See accompanying notes to consolidated financial statements.

<PAGE>
                          Avitar, Inc. and Subsidiaries
                      Consolidated Statements of Operations
                                   (Unaudited)
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------------
                                                      THREE MONTHS ENDED MARCH 31,               SIX MONTHS ENDED MARCH 31,
                                                  ---------------------------------------------------------------------------
                                                       2003               2002                    2003            2002
                                                  ---------------------------------------------------------------------------
<S>                                                <C>                <C>                     <C>                 <C>
SALES                                              $1,415,473         $2,231,119              $3,289,272          $5,473,533
                                                  ------------       ------------            ------------        ------------
OPERATING EXPENSES
Cost of sales                                         943,430          1,509,049               2,133,597           3,146,890
Selling, general and administrative expenses        1,190,048          1,599,040               2,534,296           3,107,958
Research and development expenses                     236,683            275,035                 509,811             667,190
Amortization of goodwill                                    -             77,498                       -             154,996
                                                  ------------       ------------            ------------        ------------

Total operating expenses                            2,370,161          3,460,622               5,177,704           7,077,034
                                                  ------------       ------------            ------------        ------------

LOSS FROM OPERATIONS                                 (954,688)        (1,229,503)             (1,888,432)         (1,603,501)
                                                  ------------       ------------            ------------        ------------

OTHER INCOME (EXPENSE)
Interest expense and financing costs                 (128,921)           (19,218)               (205,044)            (39,793)
Other income (expense), net                              (223)             3,536                     872              19,703
                                                  ------------                               ------------        ------------
                                                                     ------------
Total other expense, net                             (129,144)           (15,682)               (204,172)            (20,090)
                                                  ------------       ------------            ------------        ------------

LOSS BEFORE CUMULATIVE EFFECT OF A
CHANGE IN ACCOUNTING PRINCIPLE (Note 7)           (1,083,832)        (1,245,185)             (2,092,604)         (1,623,591)

CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
    PRINCIPLE                                        (650,000)                 -                (650,000)                  -

                                                  ------------       ------------            ------------        ------------
     NET LOSS                                     $(1,733,832)       $(1,245,185)            $(2,742,604)        $(1,623,591)
                                                  ============       ============            ============        ============
BASIC AND DILUTED LOSS PER SHARE BEFORE
 CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
 PRINCIPLE                                             $(0.02)            $(0.03)                 $(0.04)             $(0.04)
                                                  ============       ============            ============        ============

BASIC AND DILUTED LOSS PER SHARE AFTER
CUMMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE                                              $(0.03)            $(0.03)                 $(0.05)             $(0.04)
                                                  ============       ============            ============        ============

WEIGHTED AVERAGE
NUMBER OF COMMON SHARES OUTSTANDING                67,938,589         42,638,768              57,721,739          40,706,019
                                                  ============       ============            ============        ============

</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>

                          Avitar, Inc. and Subsidiaries
                 Consolidated Statement of Stockholders' Deficit
                         Six Months Ended March 31, 2003
                                   (Unaudited)
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
                                                                    Preferred Stock

                                                         Shares          Amount            Shares         Amount
--------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>                <C>            <C>              <C>
Balance at September 30, 2002                         1,775,330          $17,752        44,674,215       $446,742

Sale of common stock and warrants                             -                -           662,364          6,624

Issuance of common stock for services                         -                -           833,246          8,332

Issuance of common stock for interest on
long-term debt                                                                             490,627          4,906

Conversion of Series B and Series C
preferred stock into common stock                    (1,639,133)         (16,391)       17,701,101        177,011

Payment of preferred stock dividend, Series
B preferred stock                                             5                -                 -              -

Discount and beneficial conversion
 related to issuance of common stock in
 connection with  convertible notes                                                      5,730,000         57,300

Issuance of common stock and warrants
for settlement of financial consultant fees                                              2,016,590         20,166

     Net loss                                                 -                -                 -              -
----------------------------------------------------------------   --------------  ----------------  -------------

Balance at March 31, 2003                               136,202           $1,361        72,108,143       $721,081
----------------------------------------------------------------   --------------  ----------------  -------------
</TABLE>


See accompanying notes to consolidated financial statements.
<PAGE>

                          Avitar, Inc. and Subsidiaries
                 Consolidated Statement of Stockholders' Deficit
                         Six Months Ended March 31, 2003
                                   (Unaudited)
                                   (Continued)
<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------
                                                                          Common Stock
                                                           Additional      Accumulated
                                                      paid-in capital          deficit
---------------------------------------------------------------------------------------
<S>                                                    <C>                <C>
Balance at September 30, 2002                          $41,769,112        ($42,102,770)

Sale of common stock and warrants                          125,680                   -

Issuance of common stock for services                      170,278                   -

Issuance of common stock for interest on
long-term debt                                              82,594

Conversion of Series B and Series C
preferred stock into common stock                         (160,620)                  -

Payment of preferred stock dividend, Series
B preferred stock                                               14                 (14)

Discount and beneficial conversion
 related to issuance of common stock in
 connection with  convertible notes                        897,700

Issuance of common stock and warrants
for settlement of financial consultant fees                499,834

     Net loss                                                    -          (2,742,604)
-------------------------------------------------------------------  ------------------

Balance at March 31, 2003                              $43,384,592        ($44,845,388)
-------------------------------------------------------------------  ------------------
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>
                          Avitar, Inc. and Subsidiaries
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------
                                                                      SIX MONTHS ENDED MARCH 31,
                                                                  ----------------------------------
                                                                      2003                  2002
                                                                  ----------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                <C>                  <C>
Net loss                                                           $(2,742,604)         $(1,623,591)
Adjustments to reconcile net loss to
 net cash used in operating activities:
  Cumulative effect of a change in accounting principle                650,000                    0
  Depreciation and amortization                                        116,948              107,729
  Amortization of goodwill                                                   0              154,996
  Gain from sale of equity investment and equipment                          0              (18,943)
  Common stock for services                                             60,000               26,900
  Common stock for interest on long-term debt                           87,500                    0
  Changes in operating assets and liabilities:
     Accounts receivable                                               330,062              125,135
     Inventories                                                      (259,063)             (19,982)
     Prepaid expenses and other current assets                         113,182                1,535
     Other assets                                                       48,329               18,227
     Accounts payable and accrued expenses                               1,142             (181,558)
     Deferred revenue                                                   30,500             (385,000)
                                                                   ------------         ------------
       Net cash used in operating activities                        (1,564,004)          (1,794,552)
                                                                   ------------         ------------

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment                                     (6,459)            (114,043)
Proceeds from sale of equity investment                                      0               24,391
Proceeds from sale of equipment                                              0                7,500
                                                                   ------------         ------------
       Net cash used in investing activities                            (6,459)             (82,152)
                                                                   ------------         ------------

CASH FLOWS FROM FINANCING ACTIVITIES:

Sales of common stock, preferred stock and warrants                    132,304            1,306,000
Exercise of warrants and stock options                                       0            1,257,423
Stock subscription receivable                                                0               35,000
Proceeds from (repayment of) notes payable and long-term debt        1,027,967              (36,745)

                                                                   ------------         ------------
       Net cash provided by financing activities                     1,160,271            2,561,678
                                                                   ------------         ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                  (410,192)             684,974

CASH AND CASH EQUIVALENTS, beginning of the period                     503,204              245,409
                                                                   ------------         ------------

CASH AND CASH EQUIVALENTS, end of the period                       $    93,012          $   930,383
                                                                   ============         ============
NON CASH TRANSACTIONS:
Common stock issued for deferred financing                            $118,610                   $-
Common stock and warrants issued for settlement of
 financial consultant fees                                            $520,000                   $-

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during period:
      Interest                                                     $    21,303          $    12,734

</TABLE>

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  half of Fiscal  2003,  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.  United
States Drug Testing Laboratories,  Inc. ("USDTL"), a wholly-owned  subsidiary of
Avitar,  operates a certified  laboratory and provides  specialized drug testing
services  primarily  utilizing  hair and  meconium as the  samples.  Through its
wholly-owned  subsidiary,  BJR  Security,  Inc.  (`BJR"),  the Company  provides
specialized contraband detection and education services.

     The accompanying consolidated financial statements of the Company have been
prepared in accordance with generally accepted accounting principles for interim
financial  reporting,  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 and six month periods ended March 31, 2003 are not necessarily  indicative
of the results  that may be expected  for the full fiscal year ending  September
30, 2003. 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, 2002.

     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 working capital
deficit of  $1,730,639  as of March 31,  2002.  The Company  raised net proceeds
aggregating  approximately $2,590,000 during the fiscal year ended September 30,
2002  from the sale of stock  and the  exercise  of  options  and  warrants.  In
addition,  the Company received net proceeds of approximately  $1,127,000 from a
long-term note payable.  During the six months ended March 31, 2003, the Company
raised  approximately  $132,000  from the sale of common  stock and received net
proceeds of approximately $817,000 from long-term notes payable. Based upon cash
flow projections, the Company believes the anticipated cash flow from operations
and most importantly,  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 March 31, 2003, inventories consist of the following:

         Raw Materials                                         $210,778
         Work-in-Process                                        247,460
         Finished Goods                                         323,259
                                                              ---------
                  Total                                        $781,497
                                                               ========

3.   MAJOR CUSTOMERS

     Customers in excess of 10% of total sales are:

                     Three Months Ended March 31,     Six Months Ended March 31,
                     ----------------------------     --------------------------
                        2003         2002                2003             2002
                        ----         ----                ----             ----
     Customer A     $183,332      $339,360             $513,697               *
     Customer B        *                 *                    *      $1,977,910
     Customer C        *           263,165              418,790               *



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

4.   LONG-TERM DEBT

     In  February  2003,  the  Company   executed  notes  payable  with  private
individuals in the principal amount of $955,000 which are payable at maturity in
February 2008.  These notes are senior  subordinated  obligations of the Company
bearing  interest  at the rate of 15% per  annum.  Interest  on the  outstanding
principal amount at the rate of 10% is payable quarterly in cash. The balance of
5% per annum will accrue until  maturity.  Each note holder received 6 shares of
the Company's  common stock for each dollar of principal in the note for a total
of  5,730,000  shares.  These  notes and any  accrued  and unpaid  interest  due
thereon,  are  convertible  into the common stock of the Company at a conversion
price of $.207 per  share,  subject  to  adjustments.  In  conjunction  with the
issuance of these  notes,  the Company paid a placement  agent  $87,000 in cash,
issued  573,000  shares of the  Company's  common stock and warrants to purchase
461,353  shares of the Company's  common stock at an exercise price of $.207 per
share,  subject to adjustments,  which have been recorded as deferred  financing
costs of deferred financing costs of approximately  $162,400.  The fair value of
the shares issued to the note holders and the beneficial  conversion  feature of
the convertible  notes was accounted for in accordance with Emerging Issues Task
Force  ("EITF")  No.  00-27 which  resulted  in a discount  of $955,000  and was
recorded  as a discount on the notes.  Accordingly,  the face value of the notes
was  discounted  to $0. As of March 31,  2003,  $19,767 of the discount has been
amortized and the carrying  value of the debt was $19,967.  The discount will be
amortized to interest  expense over the five-year  life of the debt.  The shares
issuable upon  conversion of the notes are subject to shareholder  approval.  If
shareholder  approval  is  not  obtained,  the  notes  can be  called  requiring
immediate  repayment with the remaining  discount on the notes expensed in full.
Placement fees of  approximately  $251,000  incurred in connection with securing
these loans were recorded as a deferred financing charge.

5.   SETTLEMENT AGREEMENT

     As of September 30, 2002, the Company recorded a liability of $520,000 with
a  corresponding  charge  to  equity  to  reflect  the  fair  value  of the cost
associated  with a  Settlement  Agreement  for  compensation  to the  Estate and
successors of a financial advisor who provided services to the Company from 1998
to 2001 directly  related to the raising of capital  through  issuance of equity
instruments. On December 11, 2002, the Company settled this liability and issued
2,016,590  shares of common stock and warrants to purchase  1,176,679  shares of
common  stock at  exercise  prices  ranging  from  $0.23 to $0.35 per share with
expiration  dates in October 2003 and  December  2003.  The Company  recorded an
offsetting  increase of $520,000 to  stockholders'  equity for the fair value of
the shares and warrants issued.


6.   COMMON AND PREFERRED STOCK

     During the six months ended March 31, 2003, the Company sold 662,364 shares
of the Company's common stock and received  proceeds of approximately  $132,000.
In  connection  with the sale of the common  stock,  the  Company  issued to the
holders of the common stock warrants to purchase 625,000 shares of the Company's
common  stock at an  exercise  price of $.30 per  share,  which  expire in three
years.  For the six months ended March 31, 2003,  the Company  issued  2,849,836
shares of the Company's common stock for services, including the placement agent
services  described in Note 4, and the settlement of the liability  described in
Note 5. As  payment of the  $87,500 of  interest  due on the  long-term  note to
Global  Capital  Funding  Group,  LP, the Company  issued  490,627 shares of the
Company's  common  stock.  In  addition,  the  Company  issued  common  stock in
connection with the long-term notes discussed in Note 4.

     For the six  months  ended  March 31,  2003,  holders  of Series A, B and C
convertible  preferred stock converted  1,639,133 shares of preferred stock into
17,701,101  shares of the Company's common stock thereby  eliminating a majority
of the Series B preferred stock. Preferred stock dividends related to the Series
B convertible  preferred  stock for the six months ended March 31, 2003 amounted
to $14.  As of March 31,  2003,  the  total  amount  of  unpaid  and  undeclared
dividends  was $1,940.  The decrease  was a result of the  reduction of Series B
preferred stock from the conversion.






7. GOODWILL

     Effective  October 1, 2002, the Company adopted SFAS No. 142,  Goodwill and
Other Intangible  Assets,  during Fiscal 2003. SFAS No. 142 requires among other
things,  that  companies  no longer  amortize  goodwill,  but test  goodwill for
impairment at least  annually.  In addition,  SFAS 142 requires that the Company
identify  reporting  units  for  the  purpose  of  assessing   potential  future
impairments of goodwill,  reassess the useful lives of other existing recognized
intangible   assets,  and  cease  amortization  of  intangible  assets  with  an
indefinite  useful life.  An  intangible  asset with an  indefinite  useful life
should be tested for impairment in accordance  with guidelines in SFAS 142. SFAS
142 is  required  to be  applied to all  goodwill  and other  intangible  assets
regardless  of when those  assets were  initially  recognized.  As of October 1,
2002, the Company's goodwill of $2,139,555 was composed of $1,901,435 associated
with  the  acquisition  of  USDTL  in 1999  and  $238,120  associated  with  the
acquisition of BJR in 2001. As a result of the  transitional  impairment  tests,
the  USDTL   acquisition  was  determined  to  be  impaired  by  an  independent
evaluations  which relied on present value of future cash flows  contained in an
offer to purchase  USDTL and market price  comparisons  of sales  multiples  for
companies  engaged in a similar  business to USDTL.  The  difference in value of
$650,000 is being  reported  as the  cumulative  effect of change in  accounting
principle  for the period ended March 31, 2003.  No  adjustment  to the $238,120
balance of goodwill  associated with the BJR acquisition was deemed necessary as
of March 31, 2003.

         The effect on reported net loss due to the cumulative effect of change
      in accounting principle and discontinuance of goodwill amortization is as
      follows:
<TABLE>
<CAPTION>

 Six months ended March 31,                                     2003                2002
 -------------------------------------------------------------------------------------------
<S>                                                        <C>                  <C>
  Reported Net Loss                                        $(2,742,604)         $(1,623,591)
  Cumulative effect of change in accounting
   principle                                                   650,000                    -
  Goodwill amortization                                              -              154,996
                                                            -------------        ----------
  Adjusted net loss before cumulative effect
   of change in accounting principle and
   excluding 2002 goodwill amortization                    $(2,092,604)         $(1,468,595)
                                                           =============       =============
Basic and diluted earnings per share as reported              $(.05)                $(.04)
  Cumulative effect of change in accounting
   principle                                                    .01                     -
  Goodwill amortization                                           -                     -
                                                             ------------         ---------
Basic and diluted earnings per share before
  cumulative effect of change in accounting
  principle and excluding 2002 goodwill
  amortization                                                $(.04)                $(.04)
                                                             ========             ========
</TABLE>


8.  EARNINGS PER SHARE

     The following data show the amounts used in computing earnings per share:
<TABLE>
<CAPTION>

                                            Three Months Ended March 31,             Six Months Ended March 31,
                                                2003                2002                 2003           2002
                                        --------------------- ----------------  ---------------- ------------------
<S>                                          <C>                 <C>                  <C>           <C>
         Net loss                            $(1,733,832)        $(1,245,185)         $(2,742,604)  $(1,623,591)
         Less:Preferred Stock
            dividends                         (      406)         (   92,475)          (      854)   (  186,091)
                                              -----------         -----------          -----------    ----------
         Loss available to
               common
               stockholders  used
               in basic and
               diluted EPS                   $(1,734,238)        $(1,337,660)         $(2,743,458)  $(1,809,682)
                                              ===========       =============        =============   ============

         Weighted average
             number of
             common shares
             outstanding                      67,938,589          42,638,768           57,721,739    40,706,019
                                              ==========         ===========          ============   ==========
</TABLE>


 9.  STOCK OPTIONS

     We account for our 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 comply 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, 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 we had  applied  the fair  value
recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation,
to stock-based employee compensation.

<TABLE>
<CAPTION>

                                                                  Six Months Ended March 31,
                                                                    2003             2002
------------------------------------------------------------ ----------------  ------------------------
<S>                                                          <C>              <C>
Loss available to common shareholders                        $ (2,743,458)    $ (1,809,682)
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                                    (  591,914)       ( 573,279)
Pro forma net loss                                          $  (3,335,372)     $(2,382,961)
Loss per share:
Basic - as reported                                         $        (0.5)     $      (.04)
Basic - pro forma                                                    (0.6)            (.06)
Diluted - as reported                                                (0.5)            (.04)
Diluted - pro forma                                                  (0.6)            (.06)
</TABLE>

The fair value of the  Company's  stock-based  option  awards to  employees  was
estimated  assuming no expected  dividends  and the  following  weighted-average
assumptions:

                                          March 31,                 March 31,
                                           2003                      2002
                                      ------------------       ---------------
Risk free interest rate                3.3 - 5.3 %                3.3-5.3%
Expected dividend yield                    -                         -
Expected lives                           3 - 10 years              3 - 10 years
Expected volatility                        85%                      85%





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.  This report may contain  forward-looking  statements.
For a description of risks and  uncertainties  relating to such  forward-looking
statements,  see the  Forward-Looking  Statements and  Associated  Risks section
later in this Item.

RESULTS OF OPERATIONS

Revenues

     Sales for the three  months  ended March 31, 2003  decreased  $815,646,  or
approximately 37%, to $1,415,473 from $2,231,119 for the corresponding period of
the prior  year.  For the six  months  ended  March 31,  2003,  sales  decreased
$2,184,261,  or approximately 40%, to $3,289,272 from $5,473,533.  The reduction
for the  three and six  months  ended  March 31,  2003  primarily  reflects  the
decrease  in  sales  of its  ORALscreen(TM)  products  especially  to one  major
customer that purchased  inventory during the quarter and six months ended March
31, 2002 of approximately $200,000 and $1,978,000, respectively.

Operating Expenses

     Cost of sales for the three months ended March 31, 2003 were  approximately
67% of sales  which  compares  to the cost of sales of 68% for the three  months
ended March 31, 2002. For the six months ended March 31, 2003, the cost of sales
were 65% compared to 57% of sales for the same period of Fiscal 2002. The change
for the six months  ended March 31, 2003 is mainly the result of the decrease in
sales of the higher margin ORALscreen products.

     Selling,  general and  administrative  expenses  for the three months ended
March 31, 2003 decreased  $408,992,  or  approximately  26%, to $1,190,048  from
$1,599,040  for the  corresponding  period of the prior year. For the six months
ended March 31, 2003,  selling,  general and  administrative  expenses decreased
$573,662 or approximately  18%, to $2,534,296 from $3,107,958 for the six months
ended March 31, 2002.  The decrease for the three and six months ended March 31,
2002  reflected  an overall cost  reduction  effort to adjust to the decrease in
revenues described above.

     Expenses for research and  development for the three months ended March 31,
2003 amounted to $236,683 compared to $275,035 for the  corresponding  period of
the prior year.  For the six months ended March 31, 2003,  expenses for research
and development were $509,811 versus $667,190 for the six months ended March 31,
2002.  The change for the three and six months ended March 31,2003 was primarily
attributable to the reduction in development costs of the reading instrument for
the Company's OralScreen products.

     For the three months and six months ended March 31, 2003,  no  amortization
of goodwill was recorded compared to $77,498 and $154,996, for the three and six
months ended March 31, 2002, respectively. The Company implemented FAS 142 which
called  for  ceasing  amortization  on  assets  with  indefinite  lives.  Assets
determined to have  indefinite  lives are subject to impairment  test  annually.
Refer to Note 7 for the  cumulative  effect of a change in accounting  principle
for a description of impairment of goodwill.

     Other Income and Expense

     No interest  income was earned for the three and six months ended March 31,
2003 or March 31, 2002.

     Interest  expense and  financing  costs were  $128,921 for the three months
ended March 31, 2003 compared to $19,218  incurred during the three months ended
March 31, 2002.  For the six months ended March 31, 2003,  interest  expense and
financing  costs were $205,044  versus  $39,793 for the same period in the prior
year.  The change for the three and six months  ended March 31,  2003  primarily
reflects the interest expense and financing costs associated with the short-term
note issued in June 2002,  a  long-term  loan  completed  in August 2002 and the
long-term notes issued in February 2003.

     For the three months ended March 31, 2003,  other expense  amounted to $223
as compared to other income of $3,536 for the three months ended March 31, 2002.
Other  income for the six months  ended  March 31,  2003 was $872  versus  other
income of $19,703 for the corresponding period of the prior year. The six months
ended  March 31, 2002  included  approximately  $18,000  from the sale of excess
equipment and an equity investment.


     Cumulative Effect of a Change in Accounting Principle

     For the quarter ended March 31, 2003, the Company,  in accordance  with its
adoption  of SFAS 142 on  October 1, 2002,  recorded  a $650,000  impairment  of
goodwill  associated with the  acquisition of USDTL in 1999.  Refer to Note 7 of
the  financial  statements  for a complete  description  of this  adjustment  to
goodwill.

     Net Loss

     Primarily as a result of the factors described above, the Company had a net
loss of  $1,733,832,  $ .03 per basic and diluted  share,  for the quarter ended
March 31,  2003,  as compared to a net loss of  $1,245,185,  $ .03 per basic and
diluted  share,  for the quarter ended March 31, 2002.  For the six months ended
March 31,  2003,  the Company had a net loss of  $2,742,604,  $.05 per basic and
diluted  share,  versus a net loss of  $1,623,591,  $.04 per basic  and  diluted
share, for the six months ended March 31, 2002.


FINANCIAL CONDITION AND LIQUIDITY

     At March 31, 2003, the Company had a working  capital deficit of $1,730,639
and cash and cash equivalents of $93,012.  Net cash used in operating activities
during the six months  ended March 31, 2003  amounted  to  $1,564,004  resulting
primarily  from a net loss of  $2,742,604  and an  increase  in  inventories  of
$259,063;  partially  offset  by  depreciation  and  amortization  of  $116,948,
impairment  of goodwill of  $650,000,  a payment of common stock for services of
$60,000,  a payment of common  stock for  interest  of  $87,500,  a decrease  in
accounts  receivable  of  $330,062,  a decrease  in prepaid  expenses  and other
current  assets of  $113,182  and a  decrease  in other  assets of  $48,329,  an
increase in accounts  payable and accrued  expenses of $1,142 and an increase in
deferred  income of  $30,500.  Net cash  provided  by  financing  and  investing
activities  during the six months  ended March 31, 2003  amounted to  $1,153,812
which included  proceeds from the sale of common stock and warrants of $132,304,
proceeds from the notes payable and long-term debt of $1,027,967; offset in part
by purchases of property and equipment of $6,459.

     Since October 2002, the Company received proceeds of approximately $132,000
from the sale of 662,364  shares of the  Company's  common stock and warrants to
purchase 625,000 shares of the Company's common stock at exercise prices of $.30
per share for a period of three years.  In February 2003,  the Company  received
net proceeds of approximately  $817,000 from the issuance of convertible  notes.
These notes are senior subordinated  obligations of the Company bearing interest
at the rate of 15% per annum.  Interest on the outstanding  principal  amount at
the rate of 10% is payable  quarterly in cash.  The balance of 5% per annum will
accrue  until  maturity.  Each note  holder  received 6 shares of the  Company's
common  stock for each  dollar of  principal  in the note.  These  notes and any
accrued and unpaid interest due thereon,  are convertible  into the common stock
of the Company at a conversion price of $.207 per share, subject to adjustments.
In  conjunction  with the issuance of these notes,  the Company paid a placement
agent $87,000 in cash, 573,000 shares of the Company's common stock and warrants
to purchase 461,353 shares of the Company's common stock at an exercise price of
$.207 per share,  subject to adjustments.  The value of the shares issued to the
note  holders was  approximately  $955,000 and was recorded as a discount on the
notes.  Placement fees of  approximately  $251,000  incurred in connection  with
securing these loans were recorded as a deferred financing charge.

     The Company is aggressively  seeking  additional capital and needs to raise
$1,000,000  immediately with plans to raise an additional  $3,000,000 during the
remainder of 2003 from the sales of equity and/or debt  securities.  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  explore  applications  for its oral  fluid  technology  in the  in-vitro
diagnostic  testing  market.  However,  there  can be no  assurance  that  these
financings will be achieved.

     For the balance of fiscal year 2003,  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  and
enhancement of the ORALscreen product line.

     Operating  revenues are  expected to remain  level  during  Fiscal 2003 due
primarily to current economic  conditions.  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.  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  certified  public  accountants
relating to the financial  statements  for Fiscal 2002  contains an  explanatory
paragraph stating 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 of the  date of such  report  (November  26,  2002).  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

     At March 31, 2003, the Company has two stock based  compensation plans (one
employee and one non-employee  director's  plan). The Company accounts for those
plans under the recognition  and  measurement  principles of APB Opinion No. 25,
Accounting  for Stock  Issued to  Employees,  and  related  interpretations.  No
stock-based employee  compensation cost is reflected in net loss, as the options
granted under those plans had an exercise  price equal to, or greater than,  the
market  value  of the  underlying  common  stock on the  date of the  grant.  In
accordance with FASB Statement No. 148, Accounting for Stock-Based  Compensation
- Transition and Disclosure,  beginning in the quarter ended March 31, 2003, the
Company adopted the disclosure requirements of FASB No. 148.

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

Based on their evaluation of our disclosure controls and procedures conducted
within 90 days of the date of filing this report on Form 10-QSB, our Chief
Executive Officer and the Chief Financial Officer have concluded that our
disclosure controls and procedures (as defined in Rules 13a - 14(c) and 15(d)
promulgated under the Securities Exchange Act of 1934) are effective.

(b)  Changes in Internal Controls

There were no significant  changes in our internal  controls or in other factors
that could  significantly  affect these controls subsequent to the date of their
evaluation.



                            PART II OTHER INFORMATION

ITEM 2.           CHANGE IN SECURITIES

     During the quarter  ended March 31, 2003,  the Company  sold to  accredited
investors  notes in the  principal  amount  of  $955,000  which are  payable  at
maturity in February 2008.  These notes are senior  subordinated  obligations of
the  Company  bearing  interest  at the rate of 15% per annum.  Interest  on the
outstanding  principal  amount at the rate of 10% is payable  quarterly in cash.
The balance of 5% per annum will accrue  until  maturity.  In  conjunction  with
these notes,  the Company issued  6,303,000 shares of the Company's common stock
to the note holders and placement  agent. The placement agent received a 7% cash
commission  and a 2% unallocated  expense  allowance for a total cash payment of
$87,000.  These notes and any  accrued  and unpaid  interest  due  thereon,  are
convertible  into the common stock of the Company at a conversion price of $.207
per share,  subject to  adjustments.  The  exemption for  registration  of these
securities is based upon Section 4(2) of the Securities Act.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:

 Exhibit No.                    Document
 4.1    Form of Senior Subordinated Promissory Note Issued in February 2003

 4.2    Form of Subscription Agreement Dated February 6, 2003

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



(b) Reports on Form 8-K:

     On March 3, 2003, the Company filed a current report on Form 8-K concerning
a press release issued in reliance on Rule 135c.

<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:  May 14, 2003              /S/ Peter P. Phildius
                                  -----------------------------------
                                  Peter P. Phildius
                                  Chairman and Chief
                                  Executive Officer
                                  (Principal Executive Officer)



Dated:  May 14, 2003              /S/ J.C. Leatherman, Jr.
                                  ---------------------------
                                  J.C. Leatherman, Jr.
                                  Chief Financial Officer
                                  (Principal Accounting and
                                  Financial Officer)


<PAGE>

                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

                             AS ADOPTED PURSUANT TO

                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


    The undersigned, Peter P. Phildius, Chief  Executive Officer, and  Jay
C. Leatherman, Jr., Chief Financial Officer of Avitar, Inc each certify that:

1. We have reviewed this quarterly report on Form 10-QSB of Avitar, Inc.;

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

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

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

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

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

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

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

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

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

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly report whether there were significant  changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.

Date: May 14, 2003

/s/ Peter P.Phildius
---------------------
Peter P. Phildius
Chief Executive Officer

/s/ Jay C. Leatherman, Jr
--------------------------
Jay C. Leatherman, Jr.
Chief Financial Officer (Principal Financial and
   Accounting Officer), Secretary