SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

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- --------------------------------------------------------------------------------
Avitar, Inc. (File Number 1-15695)
(Name of Registrant as Specified In Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Date Filed:

AVITAR, INC.
65 Dan Road
Canton, Massachusetts 02021

June 30, 2003

Dear Stockholder:

You are cordially invited to attend the Annual Meeting of the
Stockholders of Avitar, Inc., a Delaware corporation ("Avitar"), at Avitar's
offices at 65 Dan Road, Canton, Massachusetts 02021, on July 28, 2003 at 11:00
a.m.

At the meeting you will be asked to consider and vote upon (1) the
election of five Directors to Avitar's Board of Directors; (2) the ratification
and approval of the issuance and reservation of shares of common stock in
connection with the February 2003 Private Placement, as described in this Proxy
Statement; (3) the approval of the issuance and reservation of shares of common
stock in connection with the Modification Agreement, as described in this Proxy
Statement; (4) the approval of the issuance and reservation of shares of common
stock in connection with the New Private Placement, as described in this Proxy
Statement; (5) the adoption of an Amendment of the Certificate of Incorporation
to increase the authorized shares of common stock from 100,000,000 to
200,000,000; (6) the re-appointment of BDO Seidman, LLP as Avitar's independent
auditors for the fiscal year ending September 30, 2003; and (7) any other
business that properly comes before the meeting or any adjournments or
postponements thereof, including a shareholder proposal described in this Proxy
Statement.

The Board of Directors recommends that shareholders vote FOR Items 1,
2, 3, 4, 5 and 6 and AGAINST the proposal in Item 7.

Your vote is important. We urge you to complete, sign, date and return
the enclosed proxy card promptly in the accompanying prepaid envelope. You may,
of course, attend the Meeting and vote in person, even if you have previously
returned your proxy card.

Sincerely yours,

Peter P. Phildius,
Chairman and Chief Executive Officer

Avitar, Inc.
65 Dan Road
Canton, Massachusetts 02021

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on July 28, 2003.

To the Stockholders of Avitar, Inc.:

Notice is hereby given that the Annual Meeting of Stockholders of
Avitar, Inc., a Delaware corporation ("Avitar") will be held at 11:00 a.m.,
local time, on July 28, 2003 at Avitar's offices at 65 Dan Road, Canton,
Massachusetts, for the following purposes:

(1) To consider and vote upon the election of the Board of Directors consisting
of five persons to serve until the next annual meeting of the stockholders;

(2) To consider and vote upon the ratification and approval of the issuance and
reservation of all shares of Common Stock issued or issuable in connection with
the February 2003 Private Placement described in this Proxy Statement;

(3) To consider and vote upon the approval of the issuance and reservation of
all shares of Common Stock issued or issuable in connection with the
Modification Agreement described in this Proxy Statement;

(4) To consider and vote upon the approval of the issuance and reservation of
all shares of Common Stock issued or issuable in connection with the New Private
Placement described in this Proxy Statement;

(5) To consider and vote upon the Amendment of the Certificate of Incorporation
of Avitar to increase the authorized shares of Common Stock from 100,000,000 to
200,000,000;

(6) To consider and vote upon a proposal to ratify the selection of BDO Seidman,
LLP as Avitar's independent auditors for the fiscal year ending September 30,
2003; and

(7) To conduct such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof, including the shareholder
proposal described in this Proxy Statement.

Only record holders of Common Stock at the close of business on June
19, 2003 are entitled to notice of and to vote at the Annual Meeting and any
adjournments or postponements thereof. To ensure that your vote will be counted,
please complete, sign, date and return the Proxy in the enclosed prepaid
envelope whether or not you plan to attend the Annual Meeting. You may revoke
your proxy by notifying the Secretary of the Company in writing at any time
before it has been voted at the Annual Meeting.

June 30, 2003 By Order of the Board of Directors
Canton, Massachusetts Jay C. Leatherman,
Secretary, Avitar, Inc.

YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED
PROXY CARD PROMPTLY WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE ANNUAL MEETING.

Avitar, Inc.
-----------------------------------

PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 28, 2003
------------------------------------

THE ACCOMPANYING PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF AVITAR, INC.

If properly signed and returned and not revoked, the proxy will be
voted in accordance with the instructions it contains. The persons named in the
accompanying proxy will vote the proxy for the Board of Directors' slate of
directors and for the other matters listed on the proxy, but against Item 7, in
each case as recommended by the Board of Directors unless contrary instructions
are given. At any time before it is voted, each proxy granted may be revoked by
the stockholder by a later dated proxy, by written revocation addressed to the
Secretary of Avitar, Inc. at the address below or by voting by ballot at the
Annual Meeting.

The Company's principal executive offices are located at 65 Dan Road,
Canton, Massachusetts 02021. This proxy statement and the accompanying proxy are
being sent to stockholders on or about June 30, 2003. ANY PROXY MAY BE REVOKED
IN PERSON AT THE ANNUAL MEETING, BY SUBMITTING A PROXY DATED LATER THAN THE
PROXY TO BE REVOKED OR BY NOTIFYING THE SECRETARY OF THE COMPANY IN WRITING AT
ANY TIME PRIOR TO THE TIME THE PROXY IS VOTED.

VOTING SECURITIES

The Board has fixed the close of business on June 19, 2003 as the record
date (the "Record Date") for determination of stockholders entitled to receive
notice of and to vote at the Annual Meeting or any adjournment thereof. Only
stockholders of record at the close of business on the Record Date will be
entitled to notice of and to vote at the Annual Meeting. On the Record Date, the
Company had outstanding 73,063,197 shares of Common Stock and 136,202 shares of
Preferred Stock, of which 7,228 were shares of Series B Preferred Stock and
93,333 were shares of Series D Preferred Stock. Stockholders are entitled to one
vote for each share of Common Stock (including 10 shares underlying each share
of Series D Preferred Stock) and each share of Series B Preferred Stock on the
election of members of the Board of Directors and other business as may properly
come before the meeting or any adjournments thereof. The holders of a majority
of the outstanding voting shares constitute a quorum. Abstentions from voting
and broker non-votes on a particular Proposal will be counted for purposes of
determining the presence of a quorum but will not be counted as affirmative or
negative votes on the Proposals.

As of the Record Date, the directors and executive officers of Avitar as a
group held 5,623,522 voting shares, representing 7.6 % of the shares eligible to
vote at the Annual Meeting. (In addition, also as of the Record Date, beneficial
owners of approximately 5% or more of Common Stock, as listed in the table of
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT in this Proxy
Statement, held in the aggregate 16,201,765 voting shares, representing 21.9% of
the shares eligible to vote at the Annual Meeting.)

ACTION TO BE TAKEN UNDER PROXY

All proxies for stockholders in the accompanying form that are properly
executed and returned will be voted at the Annual Meeting and any adjournments
thereof in accordance with any specifications thereon or, if no specifications
are made, will be voted for the election of the five nominees described herein
and for Items 2, 3, 4, 5 and 6, but against Item 7.

SOLICITATION

Avitar will bear the entire cost of the solicitation of proxies from its
stockholders, including preparation, assembly, printing and mailing of this
Proxy Statement, the proxy card and any additional information furnished to
stockholders. Copies of solicitation materials will be furnished to banks,
brokerage houses, fiduciaries and custodians holding in their names shares
beneficially owned by others to forward to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone, facsimile,
telegram or personal solicitation by directors, officers or other regular
employees of Avitar. No additional compensation will be paid to such persons for
such services. Avitar may also employ the services of a professional
solicitation company to assist with solicitation of stockholders; but as of June
30, 2003 Avitar has not determined to retain a solicitation company. If such a
company were subsequently retained, Avitar would bear the entire cost.

ITEM NO. 1
ELECTION OF DIRECTORS

Five (5) directors will be elected to hold office until the next Annual
Meeting of Stockholders and until their successors have been elected and duly
qualified. The persons named on the accompanying proxy will vote all shares for
which they have received proxies for the election of the nominees named below
unless contrary instructions are given. In the event that any nominee should
become unavailable, shares will be voted for a substitute nominee unless the
number of directors constituting a full board is reduced. Directors are elected
by plurality vote.

NOMINEES

The name, age and position with Avitar of each nominee for director is
listed below, followed by summaries of their background and principal
occupations.

Name Age Title
- ---- --- -----
Peter P. Phildius 73 Chairman of the Board/Chief Executive Officer
Douglas W. Scott 56 President and Chief Operating Officer/Director
Neil R. Gordon (1)(2) 55 Director
James Groth (1)(2) 64 Director
Charles R. McCarthy, Jr. 64 Director
(1)(2)

1. Member of Audit Committee.
2. Member of Compensation Committee.

PETER P. PHILDIUS

Mr. Phildius has been Chairman of the Board of Directors since October 1990
and Chief Executive Officer since July 1996. He has been a general partner in
Phildius Kenyon & Scott, a partnership ("PKS"), since that firm's founding in
1985. Prior to 1985, Mr. Phildius was an independent consultant and Chairman and
co-founder of Nutritional Management, Inc., a company that operated weight loss
clinics (1983 - 1985), President and Chief Operating Officer of Delmed, Inc., a
medical products company (1982 - 1983), President and Chief Operating Officer of
National Medical Care, Inc., a dialysis and medical products company (1979-1981)
and held a variety of senior management positions with Baxter Laboratories, Inc.
("Baxter"), a hospital supply company and the predecessor of Baxter Healthcare
Corporation. During the last eight years of his 18 year career at Baxter (1961 -
1979), Mr. Phildius was Group Vice President and President of the Parenteral
Division, President of the Artificial Organs Division and President of the
Fenwal Division.

DOUGLAS W. SCOTT

Mr. Scott has been the Chief Operating Officer since July 1996, was the
Chief Executive Officer from August 1989 until July 1996 and has been a director
since August 1989. Mr. Scott has been a general partner in PK&S since its
founding in 1985. Prior to 1985, Mr. Scott was Executive Vice President of
Nutritional Management, Inc. (1983 - 1985); Senior Vice President, Operations of
Delmed, Inc. (1982 - 1983); Vice President, Quality Assurance of Frito-Lay,
Inc., a consumer products company (1980 - 1982); and held several senior
positions at Baxter from 1970 to 1980. The last two of these senior positions at
Baxter were General Manager of the Vicra Division and General Manager of Irish
Operations. Mr. Scott is also a director of Candela Corporation, a
publicly-traded company in the business of manufacturing and marketing medical
lasers. Mr. Scott received an M.B.A. from the Harvard Business School.

JAMES GROTH

Mr. Groth has served as a director since January 1990. Mr. Groth has been
President of Mountainside Corporation, a provider of corporate sponsored
functions, for over the past 15 years.

NEIL R. GORDON

Mr. Gordon has served as a director since June 1997. He has been President
of N.R. Gordon & Company, Inc., a company that provides a broad range of
financial consulting services, since 1995. From 1981 to 1995, he was associated
with Ekco Group, Inc. and served as its Treasurer from 1987 to 1995. Mr. Gordon
has also served as Director of Financing and Accounting for Empire of Carolina,
Inc. He received a Bachelor of Science Degree from the Pennsylvania State
University.

CHARLES R. McCARTHY, JR.

Mr. McCarthy was elected as a director in February 1999. He has been a
counsel in the Washington D.C. law firm, O'Connor & Hannan, since 1993.
Previously, Mr. McCarthy was General Counsel to the National Association of
Corporate Directors, served as a trial attorney with the Securities and Exchange
Commission, was Blue Sky Securities Commissioner for the District of Columbia
and was a law professor teaching securities law topics and served as a Board
member of and counsel to a number of public companies over the last 30 years.

NUMBER OF DIRECTORS

The Company's Bylaws allow the Board to fix the number of Board members
between 3 and 7. The number has been fixed, at present, at 5. The Board can
increase the number to 7 at any time without stockholder approval. There are no
family relationships between any Director or Executive Officer of Avitar and any
other Director or Executive Officer of Avitar.

TERM

Directors hold office for a period of one year from the Annual Meeting
of Stockholders at which they are elected or until their successors are duly
elected and qualified. Officers are appointed by the Board of Directors and hold
office at the will of the Board.

BOARD MEETINGS AND COMMITTEES

The Board held 4 meetings during the fiscal year ended September 30,
2002.

The Board has two standing committees: the Audit Committee and the
Compensation Committee. The Board does not have a standing nominating committee
or any committee performing the function of such a committee. During fiscal year
2002, each Board member attended at least 75% of the aggregate number of
meetings of the Board and the Committee of the Board on which he served.

AUDIT COMMITTEE.

The Audit Committee meets with the independent auditors, at a minimum
annually, to review the results of the annual audit and discuss the financial
statements; recommends to the Board the independent auditors to be retained; and
receives and considers the accountants' comments as to controls, adequacy of
staff and management performance and procedures in connection with audit and
financial records. Management has primary responsibility for financial
statements and the reporting process, including the systems of internal
controls, and has represented to the Audit Committee that Avitar's 2002
consolidated financial statements are in accordance with generally accepted
accounting principles. The Audit Committee, comprised of Mr. Gordon, Mr. Groth
and Mr. McCarthy, held 2 telephone meetings concerning fiscal year 2002
(although both meetings were held during the first quarter after fiscal year
2002). In addition, the Audit Committee reviewed and approved the financial
statements that were included in each of the quarterly reports on Form 10-QSB
during the year ended September 30, 2002.

AUDIT COMMITTEE REPORT

In connection with the fiscal 2002 audit, the Audit Committee has:

- - reviewed and discussed with management Avitar's audited consolidated
financial statements included in our annual report on Form 10-KSB for the
year ended September 30, 2002,

- - discussed with BDO Seidman, LLP the matters required to be discussed by
Statement of Auditing Standards No. 61,

- - discussed with BDO Seidman, LLP whether various other services performed
for Avitar during 2002 were compatible with BDO Seidman, LLP maintaining
its independence, and

- - received from and discussed with BDO Seidman, LLP the written disclosures
and the letter from BDO Seidman, LLP required by the Independence Standards
Board Standard No. 1 and discussed with BDO Seidman, LLP its independence.

Based on the review and the discussions described above, the Audit
Committee recommended to the Board of Directors that the audited consolidated
financial statements be included in our annual report on Form 10-KSB for the
year ended September 30, 2002 for filing with the Securities and Exchange
Commission.

The Board of Directors has approved a written charter, a copy of which was
attached to the 2001 Proxy Statement. Two members of the Audit Committee have
been determined to be independent in accordance with the requirements of Section
121(A) of the American Stock Exchange listing standards.

Fiscal 2002 Audit Firm Fee Summary. During fiscal year 2002, Avitar
retained its principal auditor, BDO Seidman, LLP to provide services in the
following categories and amounts:

Audit Fees, including review of quarterly 10-QSB filings............$106,290
All Other Fees................................................... ...$18,100

The Audit Committee has considered whether the provision of non-audit
services by the Company's principal auditor was compatible with maintaining
auditor independence and has determined such services were not incompatible with
maintaining auditor independence.

THE AUDIT COMMITTEE
Neil R. Gordon
James Groth
Charles R. McCarthy, Jr.

The Audit Committee Report shall not be deemed incorporated by reference by
any general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934 (together, the "Acts"), except to the extent Avitar specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.

COMPENSATION COMMITTEE. The Compensation Committee makes recommendations to the
Board concerning salaries and incentive compensation, awards stock options to
employees and consultants and otherwise determines compensation levels and
performs such other functions regarding compensation as the Board may delegate.
The Compensation Committee, comprised of Mr. Gordon, Mr. Groth and Mr. McCarthy,
held no meetings in fiscal year 2002.

DIRECTOR COMPENSATION

During Fiscal 2002, in accordance with a plan approved by the Company
on September 25, 2001, the Company compensated its non-management directors with
a $5,000 annual retainer, $1,000 for each board meeting attended and $500 for
each committee meeting attended. In addition, this plan provides for each
non-management director to be granted options covering 100,000 shares of the
Company's common stock upon initial election to the Board and 30,000 shares of
the Company's common stock for each year in which he/she was selected to serve
as a director. Under the plan approved by the Company on September 25, 2001,
non-management directors received option grants covering 90,000 shares of the
Company's common stock on March 31, 2002. These options have an exercise price
of $.76 per share, vest over three years and will expire in March 31, 2012.

For information on compensation to management directors, see
"Management-Executive Compensation" below.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the number of shares of the Common Stock
beneficially owned as of June 19, 2003 by (i) each person believed by Avitar to
be the beneficial owner of more than 5% of the Common Stock; (ii) each director;
(iii) the Chief Executive Officer and its four most highly compensated executive
officers (other than the Chief Executive Officer) who earn over $100,000 a year;
and (iv) all directors and executive officers as a group. Beneficial ownership
by the stockholders has been determined in accordance with the rules promulgated
under Section 13(d) of the Securities Exchange Act of 1934, as amended. All
shares of the Common Stock are owned both of record and beneficially, unless
otherwise indicated.

Name and Address of Beneficial Owner (1) No. Owned %
- ---------------------------------- --------- ----

Peter P. Phildius (2)(3)(10)(14) 4,877,811 6.6
Douglas W. Scott (2)(4)(10)(15) 3,454,200 4.7
Phildius, Kenyon & Scott("PK&S") (2)(10) 1,792,595 2.5
Jay C. Leatherman, Jr.(2)(5) 289,380 *
Carl Good (2) (18) 284,708 *
Douglas Lewis (2)(6)(16) 1,019,017 1.4
James Groth (2)(7)(17) 207,199 *
Neil R.Gordon (2)(8) 289,097 *
Charles R. McCarthy (2)(9) 233,489 *
GIN99 LLC (11) 6,462,515 8.9
David Brown (12) 8,682,056 11.7
Alan Aker (13) 3,557,194 4.8
All directors and executive officers
as a group (3)(4)(5)(6)(7)(8)(9)(10)
(14)(15)(16)(17)(18) 8,862,306 11.7

* Indicates beneficial ownership of less than one (1%) percent.

(1) Information with respect to holders of more than five (5%) percent of the
outstanding shares of the Company's Common Stock was derived from, to the extent
available, Schedules 13D and the amendments thereto on file with the Commission
and the Company's records regarding stock issuances.

(2) The business address of such persons, for the purpose hereof, is c/o Avitar,
Inc., 65 Dan Road, Canton, MA 02021.

(3) Includes 1,668,120 shares of the Company's Common Stock, options and
warrants to purchase 1,417,096 shares of the Company's Common Stock. Also
includes the securities of the Company beneficially owned by PK&S as described
below in Note 10.

(4) Includes 715,501 shares of the Company's Common Stock and options to
purchase 946,104 shares of the Company's Common Stock. Also includes the
securities of the Company beneficially owned by PK&S as described below in Note
10.

(5) Includes 5,630 shares of the Company's Common Stock, and options to purchase
283,750 shares of the Company's Common Stock.

(6) Includes 919,017 shares of the Company's Common Stock, and options to
purchase 100,000 shares of the Company's Common Stock.

(7) Includes 74,699 shares of the Company's Common Stock and options to purchase
132,500 shares of the Company's Common Stock.

(8) Includes 90,597 shares of the Company's Common Stock, warrants to purchase
90,000 shares of the Company's Common Stock granted to such director under a
consulting agreement to provide services to the Company and options to purchase
108,500 shares of the Company's Common Stock.

(9) Includes 172,655 shares of the Common Stock and options to purchase 60,834
shares of the Common Stock.

(10) Represents ownership of 1,732,595 shares of the Company's Common Stock,
options and warrants to purchase 60,000 shares of the Company's Common Stock.
PK&S is a partnership of which Mr. Phildius and Mr. Scott are general partners.

(11) The address for such entity is c/o Clifford Chance, Rogers & Wells LLP, 200
Park Avenue, New York, NY 10166. Represents 6,462,515 shares of the Company's
Common Stock.

(12) The business address for such person is 4101 Evans Avenue, Fort Meyers, FL
33901. Represents 7,432,056 shares of the Company's Common Stock and warrants to
purchase 1,250,000 shares of the Common Stock.

(13) The business address for such person is 1445 Northwest Boca Raton, Boca
Raton, FL 33432. Represents ownership of 2,307,194 shares of the Company's
common stock and warrants to purchase 1,250,000 shares of the Common Stock.

(14) Does not include 33,600 shares of the Common Stock owned by Mr. Phildius'
wife, all of which he disclaims beneficial ownership.

(15) Does not include 15,000 shares of the Common Stock owned by Mr. Scott's
children, all of which he disclaims beneficial ownership.

(16) Does not include 1,035,983 shares of the Common Stock owned by Mr. Lewis'
wife, all of which he disclaims beneficial ownership.

(17) Does not include 10,929 shares of the Company's Common Stock owned by a
trust established for Mr. Groth's children, all of which he disclaims beneficial
ownership

(18) Includes 244,708 shares of the Company's Common Stock, and options to
purchase 40,000 shares of the Company's Common Stock.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the
officers and directors, and persons who own more than 10% of a registered class
of equity securities to file reports of ownership and changes in ownership with
the Securities and Exchange Commission ("SEC"). Officers, directors and greater
than 10% stockholders are required by SEC regulation to furnish Avitar with
copies of all Section 16(a) forms they file.

Based on its review of the copies of such forms received by it or its
written representations from certain reporting persons, the Company believes
that, during Fiscal 2002, all filing requirements applicable to its officers,
directors and greater than ten-percent shareholders were met except the
following failures to file timely reports by Section 16(a):

o One report (Form 4) covering 1 transaction was filed late by Neil Gordon
o One report (Form 4) covering 1 transaction was filed late by Charles McCarthy
o One report (Form 4) covering 1 transaction was filed late by James Groth
o One report (Form 4) covering 1 transaction was filed late by Peter Phildius
o One report (Form 4) covering 1 transaction was filed late by Douglas Scott
o One report (Form 4) covering 1 transaction was filed late by Jay Leatherman

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

PK&S, a 2.5 % beneficial owner of the Company, provided consulting services
to the Company from September 1989 to May 1995. On May 28, 1992, the Company
entered into a written consulting agreement with PK&S, which reflected the
provisions of a previous oral agreement approved by the Company's Board of
Directors in October 1990. Pursuant to its arrangement with the Company, PK&S
provided the services of each of Messrs. Phildius and Scott to the Company for
approximately 20 hours per week.

On May 19, 1995, the Company's Consulting Agreement ended and was replaced
by the Employment Agreements with Messrs. Phildius and Scott (See "Employment
Agreements"). As requested by Messrs. Phildius and Scott and approved by the
Company's Board of Directors, the salary and benefits provided under the
Employment Agreements will be paid directly to PK&S. Under the terms of the
current employment agreements with Peter Phildius and Douglas Scott described
above, the Company pays their salaries and related expenses directly to PK&S.
The aggregate of salaries, fringe benefits and reimbursement of expenses paid to
PK&S by the Company on behalf of Messrs. Phildius and Scott for fiscal years
2002 and 2001 totaled $448,727 and $467,344 respectively. Since the commencement
of the Employment Agreements in 1995 and to date, Messrs Phildius and Scott
provided full-time services to the Company.

In October 1996, the Company entered into a consulting agreement with N.R.
Gordon & Company, Inc. Neil Gordon, a member of the Company's Board of
Directors, is the President of N.R. Gordon and Company, Inc. Under this
agreement, N.R. Gordon & Company, Inc. provided financial consulting services
for which it received 50,000 warrants at an exercise price of $0.93 per share
and was paid $100.00 per hour for all services performed. In addition, N.R.
Gordon & Company, Inc. was entitled to receive commissions for certain capital
raising services. During Fiscal 1998, the Company canceled the 50,000 warrants
granted to N.R. Gordon & Company in 1996 and replaced them with 100,000 warrants
(of which 50,000 where exercised in October 2001 and the remaining 50,000 do not
expire until 2003) to purchase the Company's Common Stock for $.25 per share. No
services were provided to the Company under this Agreement during Fiscal 1999
and Fiscal 2000. In March 2001, the Company entered into a new consulting
agreement with N.R. Gordon & Company, Inc. for financial consulting services.
Under this new agreement, N.R. Gordon and Company, Inc. received warrants to
purchase 40,000 shares of the Company's common stock at an exercise price of
$.79 per share (exercisable until February 2006) and it is to be paid $100.00
per hour for services rendered to the Company. Expenses incurred for N.R. Gordon
& Company, Inc. amounted to $4,082 in Fiscal 2002 and $3,617 in Fiscal 2001.

Management believes each of the foregoing transactions was entered into on
terms at least as favorable to the Company as could be obtained from unrelated
parties negotiating at arms-length.

MANAGEMENT

The executive officers of the Company and their respective ages and
positions with the Company, as of May 9, 2003, along with certain biographical
information (based solely on information supplied by them), are as follows:

Name Age Title

Peter P. Phildius 73 Chairman of the Board/Chief Executive Officer
Douglas W. Scott 56 President and Chief Operating Officer
Jay C. Leatherman Jr. 59 Vice President, Chief Financial Officer and
Secretary
Carl M. Good, III 59 Vice President of Research and Development
Douglas Lewis 59 Vice President, President of USDTL

PETER P. PHILDIUS

Biographical information of Mr. Phildius is included under "Proposal No. 1,
Election of Directors -- Nominees" in this Proxy Statement.

DOUGLAS W. SCOTT

Biological information of Mr. Scott is included under "Proposal No. 1,
Election of Directors -- Nominees" in this Proxy Statement.

JAY C. LEATHERMAN, JR.

Mr. Leatherman has served as the Company's Chief Financial Officer since
October 1992 and its Secretary since July 1994. He has over 26 years experience
in financial management in the health care, medical products and medical
diagnostic fields. Mr. Leatherman served as Vice President and Chief Financial
Officer of 3030 Park, Inc. and 3030 Park Management Company from 1985 to 1992,
responsible for financial, management information services and business
development functions for this continuing care retirement community and
management company. He served as Director of Finance and Business Services for
the Visiting Nurses Association of New Haven, Inc. from 1977 to 1985. In
addition, he served in a variety of accounting and financial positions with
Westinghouse Electric Corporation from 1969 to 1977. Mr. Leatherman has a B.B.A
in accounting from the University of Hawaii.

CARL M. GOOD, III

Dr. Good has served as the Company's Vice President of Research and
Development since February 1997 and as a consultant and member of the Company's
Scientific Board since October 1996. He has over 30 years of experience in
product development and operating management experience in the medical
diagnostics industry. Dr. Good has held technology management positions with
Millipore Corporation and most recently, worked in the development of
sophisticated medical diagnostic products at Cambridge Biotech Corporation. He
has received a Ph. D. in Microbial Genetics from Iowa State University and has
completed Postdoctoral Study in Enzymology at the University of Wisconsin
Medical School and the University of Massachusetts.

DOUGLAS LEWIS

Mr. Lewis had been the President of USDTL since 1990 and was appointed Vice
President of the Company upon the acquisition of USDTL by the Company. He has
over 25 years experience in the operation and management of laboratories, which
specialize in diagnostic testing for drugs of abuse. Mr. Lewis has held senior
level management and consulting positions with various hospital and private
laboratories in the Chicago, Illinois area. He received a Bachelor of Arts
Degree in Chemistry from Grinnell College and was a Pre-Doctoral Fellow at the
University of Illinois.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE.

The following table sets forth compensation earned by or paid to the
Chief Executive Officer, Chief Operating Officer and other executive officers
for fiscal year 2002 and, to the extent required by applicable Commission rules,
the preceding two fiscal years. All of the compensation in the table below for
the Chief Executive Officer and Chief Operating Officer represents management
consulting fees and salary paid by Avitar to PK&S for the services of Mr.
Phildius and Mr. Scott.

Annual Compensation Long-Term
Name/Position Year Salary(1) Bonus Compensation Options
- ------------- ---- --------- ----- ---------------------

Peter P. Phildius 2002 $200,000 0 126,000(2)
(Chairman of the Board/ 2001 $200,000 0 252,000(3)
Chief Executive Officer) 2000 $170,833 0 0
Douglas W. Scott 2002 $180,000 0 66,000(2)
(President/ 2001 $180,000 0 132,000(3)
Chief Operating Officer) 2000 $162,500 0 0
Jay C. Leatherman, Jr. 2002 $131,230 0 43,250(2)
(Chief Financial Officer) 2001 $125,000 0 87,500(3)
2000 $108,239 0 0
Carl M. Good, III 2002 (5) 0 400,000(4)
(Vice President of 2001 (5) 0 0
Research & Development) 2000 $117,981 0 0
Douglas Lewis 2002 $126,000 0 0
(Vice President/President 2001 $126,000 0 0
of USDTL) 2000 $126,000 0 0

(1) Does not include amounts reimbursed for business-related expenses incurred
by the executive officers on behalf of the Company.

(2) Reflects additional stock options granted to executive officers by the
Company's Board of Directors in January 2002.

(3) Reflects additional stock options granted to executive officers by the
Company's Board of Directors in September 2001.

(4) Reflects stock options granted to executive officer by the Company's Board
of Directors in June 2002.

(5) Compensation did not equal or exceed $100,000.

PK&S is a partnership, two of whose general partners are Messrs. Phildius
and Scott. PK&S provided management consulting services to the Company through
May 18, 1995 pursuant to a written consulting agreement effective May 28, 1992.
Under this agreement, Messrs. Phildius and Scott each devoted approximately 20
hours per week to the Company's affairs for which the Company paid a monthly
consulting fee of $14,500 and reimbursed expenses. Since May 19, 1995, the
Company has paid PK&S the salary and employee benefit amounts provided for their
full-time services under the terms of the Company's employment agreements with
Messrs. Phildius and Scott. See "Employment Agreements" below and "Certain
Relationships and Related Transactions" above.

STOCK OPTION GRANTS IN LAST FISCAL YEAR.

Individual Grants

% of Total
Number of Options
Securities Granted to
Underlying Employees
Options in Fiscal Exercise Expiration
Name Granted Year Price ($/sh) Date
----------------------------------------------------------------------------------------------------

Peter Phildius, CEO 126,000 7.8% $ 1.34 01/18/2012
Douglas Scott 66,000 4.1% 1.34 01/18/2012
Jay Leatherman 43,250 2.7% 1.34 01/18/2012
Carl M.Good 400,000 25.0% 0.46 06/03/2012

In January 2002, the Outside Directors of the Company's Board of Directors
granted options to purchase the Company's common stock as described in the above
table to Peter Phildius, Douglas Scott and Jay Leatherman. Such options, which
have an exercise price of $1.34 per share, will become exercisable at the rate
of 20% per year for five years and will expire on January 18, 2012. In June
2002, the Company's Board of Directors granted options to purchase the Company's
common stock to Carl M.Good as described in the above table. Mr. Good's options
will become exercisable as follows: 200,000 shares at the rate of 20% per year
for five years and 200,000 shares at the earlier of nine and one-half years or
upon achieving certain performance objectives established for managers and
executive officers.

OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES.

No stock options or stock appreciation rights were exercised by the
executive officers in fiscal year 2002.

As of September 30, 2002, the executive officers held options as follows, of
which 52,500 were in the money:

Value of Options
Options ----------------------------
Total Options Exercisable Exercisable Not Exercisable

Peter Phildius 2,178,000 968,400 $ 0 $ 0
Douglas Scott 1,398,000 764,400 0 0
Jay Leatherman 651,250 231,250 1,575 0
Carl Good 400,000 0 0 0
Douglas Lewis 250,000 75,000 0 0

EMPLOYMENT AGREEMENTS.

Messrs. Phildius and Scott are covered by Employment Agreements (the
"Employment Agreements") that commenced on May 19, 1995. Pursuant to the
Employment Agreements, if Messrs. Phildius and/or Scott are terminated without
"Cause" (as such term is defined in the Employment Agreements) by the Company or
if Messrs. Phildius and/or Scott terminate their employment as a result of a
breach by the Company of its obligations under such Agreements, he will be
entitled to receive his annual base salary ($200,000 for Mr. Phildius and
$180,000 for Mr. Scott) for a period of up to 18 months following such
termination. In addition, if there is a "Change of Control" of the Company (as
such term is defined in the Employment Agreements) and, within two years
following such "Change of Control", either of Messrs. Phildius or Scott is
terminated without cause by the Company or terminates his employment as a result
of a breach by the Company, such executive will be entitled to certain payments
and benefits, including the payment, in a lump sum, of an amount equal to up to
two times the sum of (i) the executive's annual base salary and (ii) the
executive's most recent annual bonus (if any). In addition, pursuant to the
Employment Agreements, which have a three-year term (subject to extension),
Messrs. Phildius and Scott are each entitled to annual bonus payments of up to
$150,000 if the Company achieves certain levels of pre-tax income (as such term
is defined in such Agreements) or alternative net income objectives established
by the Board of Directors.

REQUIRED VOTE

Election of each of the five nominees for director requires, under Avitar's
Bylaws, the affirmative vote of the holders of a majority of the Avitar Common
Stock and Series B and D Preferred Stock present in person or by proxy at the
Avitar Annual Meeting (assuming a quorum exists) and entitled to vote thereon.

BOARD RECOMMENDATION

The Avitar Board of Directors unanimously recommends a vote FOR election of
all of the five nominees for director.

ITEM NO. 2

RATIFICATION AND APPROVAL OF THE ISSUANCE OF THE MAXIMUM NUMBER OF SHARES OF THE
COMPANY'S COMMON STOCK ISSUED OR ISSUABLE IN CONNECTION WITH THE PRIVATE
PLACEMENT COMMENCED IN FEBRUARY 2003, INCLUDING SHARES ISSUABLE UPON CONVERSION
OF OUTSTANDING SUBORDINATED NOTES.

The Board of Directors has unanimously approved, and is hereby soliciting
stockholder ratification and approval of, the issuance and reservation of the
maximum number of shares of common stock issued and issuable in connection with
the private placement commenced in February 2003 described below.

BACKGROUND

In February 2003, the Company through a Placement Agent commenced a
private placement, which was a best efforts offering with a minimum of $850,000
and a maximum of $1,850,000 (the "February 2003 Private Placement"). During that
month, the Company entered into Subscription Agreements with accredited
investors (collectively, the "Purchasers") raising gross proceeds of $955,000
and the February 2003 Private Placement terminated without further subscriptions
on April 15, 2003. The Purchasers acquired units (or fractions thereof) at a
price per unit of $50,000. Each "Unit" consisted of (a) a $50,000 15% Senior
Subordinated Promissory Note ("Subordinated Note") and (b) 300,000 shares of
common stock. The Company sold and issued an aggregate of $955,000 Subordinated
Notes and 5,730,000 shares of common stock. The net proceeds were used to make
scheduled principal repayments on outstanding debt, to pay debt interest when
due, to pay accounts payable and otherwise to provide working capital.

The securities offered in the February 2003 Private Placement described
in this Proxy Statement have not been registered under the Securities Act and
may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements.

REASONS FOR THIS PROPOSAL

As part of the February 2003 Private Placement, and to comply with
applicable rules of The American Stock Exchange (AMEX), the Company has agreed
to seek the approval of its shareholders for both (a) the issuance and
reservation of all shares of common stock issued or issuable in connection with
the February 2003 Private Placement and (b) the increase in its authorized
shares of common stock from 100,000,000 to at least 200,000,000 ("Shareholder
Approval"). (The proposed increase of authorized shares is discussed in Item
No.5 below.)

The Company's common stock trades on AMEX. According to AMEX Listing
Standard Section 713, the Company is required to obtain stockholder approval of
the sale, issuance or potential issuance of the Company's common stock, or
securities convertible into the Company's common stock, if the aggregate number
of shares to be issued or could be issued in the transaction and related
transactions equals or exceeds 20% of the Company's then outstanding shares of
common stock on the date of issuance (the "Share Limit") and the purchase price
for such securities is less than the greater of the book value or market value
of the common stock on the date of issuance (the "Value Limit").

As of the commencement and closing of the February 2003 Private Placement,
the aggregate number of shares of common stock that may be issuable in the
February 2003 Private Placement, including upon conversion of the Subordinated
Notes, exceeded the Share Limit and the purchase price was less than the Value
Limit. Therefore, in accordance with AMEX Listing Standard Section 713, the
Company is asking its stockholders to ratify and approve the issuance and
reservation of the maximum number of shares of Common Stock issuable in the
February 2003 Private Placement.

TOTAL SHARES ISSUED AND COULD BE ISSUED IN THE FEBRUARY 2003 PRIVATE PLACEMENT

Compensation shares issued to Placement Agent 200,000
in November 2002

Shares issued to investors (February 2003) 5,730,000

Shares underlying Subordinated Notes (February 2003) 10,611,111
convertible after Shareholder Approval and as adjusted for
subsequent issuances at prices less than the initial
conversion price

Shares issued to Placement Agent as compensation 573,000
on February 2003 Private Placement

Shares underlying warrants issued to Placement Agent 461,353
as compensation on February 2003 Private Placement
and as adjusted to conversion price

Penalty Shares if Registration Statement for 1,814,500
February 2003 Private Placement is not effective by
target date (July 30, 2003) and remaining not effective
over 19-month period (estimate based on average recent
market prices)
-------------
Total Shares issued/issuable in February 2003 Private Placement: 19,389,964

The aggregate number of shares that were issued and could be issued in
the February 2003 Private Placement is 19,389,964 or 29.7% of the approximate
65.3 million shares that were outstanding before the February 2003 Private
Placement. If all the shares issuable in the February 2003 Private Placement
(19,389,964) were issued, the cash received by the Company for all such shares
would be $955,000 or approximately $0.05 per share, which is approximately $0.14
per share less than the average $0.19 closing price on the AMEX during the10
trading days preceding the closing of the February 2003 Private Placement.

The 200,000 compensation shares issued to the Placement Agent in
November 2002 had market value of approximately $62,000 based upon average
closing prices on the AMEX during November 2002 of $0.31 per share. The 573,000
shares issued to the Placement Agent in the closing of the February 2003 Private
Placement had market value of approximately $109,000 based upon the average
$0.19 closing price on the AMEX during the10 trading days preceding the closing
of the February 2003 Private Placement. The Warrants issued to the Placement
Agent for the purchase of 461,353 shares have an adjusted exercise price of
$0.09 per share and the closing price on the AMEX was $0.19 per share on June
18, 2003.

KEY TERMS OF THE FEBRUARY 2003 PRIVATE PLACEMENT AND SUBORDINATED NOTES

Registration of Shares of Common Stock. The Company has agreed to
register the shares of common stock issued or issuable in connection with the
February 2003 Private Placement, including shares issuable upon conversion of
the Subordinated Notes. As part of its compensation in the February 2003 Private
Placement, the Placement Agent received (a) 10% of the shares of common stock
issued and (b) Warrants to purchase 10% of the common stock issuable on
conversion of the Subordinated Notes, exercisable at the conversion price of the
Subordinated Notes. All of these shares are to be registered. If the
Registration Statement, which was filed on June 11, 2003, does not become
effective by the agreed Target Date, July 30, 2003, the Company will be
obligated to issue additional shares as liquidated damages. If the Registration
Statement is not declared effective by the SEC by the Target Date, then, on the
Target Date and on each monthly anniversary of the Target Date thereafter until
the earlier of the date the Registration Statement is declared effective by the
SEC or the 19th monthly anniversary of the Target Date, the Company will issue
to each Subordinated Note holder, as liquidated damages, a number of shares
equal to (a) 1% of the then outstanding principal amount of the holder's Note,
divided by (b) the average of the last sales price of the common stock of the
Company for the ten trading days ending on each monthly anniversary date of the
Target Date for which the Registration Statement was not declared effective
("Penalty Shares"). Penalty shares equal to 10 % of any Penalty Shares issued to
the holders of the Subordinated Notes will also be issued to the Placement
Agent.

Optional Conversion of Subordinated Notes. Subject to Shareholder
Approval, the Subordinated Notes, including accrued but unpaid interest, will be
convertible, at the option of the holders, into shares of common stock at $0.09
per share. The conversion price will be subject to standard adjustments and, in
addition, if shares (or derivative securities) are issued at a price (or with
exercise or conversion prices) less than the conversion price, the conversion
price will be automatically reduced to that lower price. If all the Subordinated
Notes were converted at the present conversion price, an estimated 10.6 million
shares would be issued for the principal amount alone. While the Subordinated
Notes bear 15% per annum, 10% is payable quarterly and 5% accrues until
maturity.

Subordination. The Subordinated Notes are subordinate only to the
senior indebtedness in the amount of approximately $1.5 million outstanding at
the time of issuance, but senior to all other debt of the Company.

Holders of Subordinated Notes Right to Demand Prepayment if Shareholder
Approval is Not Obtained. If Shareholder Approval is not obtained by July 28,
2003, the holders of the Subordinated Notes then outstanding will have the right
to demand pre-payment of the Subordinated Notes. At present, the principal
amount outstanding on the Subordinated Notes is $955,000. Upon a demand for
pre-payment by the holders of all the outstanding Subordinated Notes, the
Company would owe $955,000 plus accrued and unpaid interest. There can be no
assurance that the Company will be able to repay upon such demand.

CONSEQUENCES IF SHAREHOLDERS DO NOT RATIFY AND APPROVE THE FEBRUARY 2003 PRIVATE
PLACEMENT

If ratification and approval of the February 2003 Private Placement is not
obtained, with Penalty Shares, it is possible that the Company may exceed the
Share Limit and therefore be subject to delisting. Further, if Shareholder
Approval is not obtained for any of Items 2, 3 or 4, the Company may exceed the
Share Limit and therefore be subject to delisting. Finally, if Shareholder
Approval, which includes both this Item 2, as well as Items 3 and 4, and Item 5
for the increase of authorized shares, is not obtained, the Subordinated Notes
cannot be converted into common stock and if it is not obtained by July 28,
2003, the holders of the Subordinated Notes then outstanding will have the right
to demand pre-payment of the Subordinated Notes.

REQUIRED VOTE

Ratification and approval of the issuance and reservation of the
maximum number of shares of common stock issued or issuable in connection with
the February 2003 Private Placement requires the affirmative vote of the holders
of a majority of the Avitar Common Stock and Series B and D Preferred Stock
present in person or by proxy at the Avitar Annual Meeting (assuming a quorum
exists) and entitled to vote thereon. (The holders of the 6,303,000 shares of
Common Stock previously issued in the February 2003 Private Placement, if
present in person or by proxy at the duly convened Annual Meeting, will be
entitled to vote on all matters that properly come before the meeting, including
this Item No. 2.)

BOARD RECOMMENDATION

The Board of Directors of Avitar unanimously recommends a vote FOR ratification
and approval of the issuance and reservation of the maximum number of shares
issued or issuable in connection with the February 2003 Private Placement.

ITEM NO. 3

APPROVAL OF THE ISSUANCE OF THE MAXIMUM NUMBER OF SHARES OF THE COMPANY'S COMMON
STOCK ISSUED OR ISSUABLE IN CONNECTION WITH THE MODIFICATION AGREEMENT.

The Board of Directors has unanimously approved, and is hereby soliciting
stockholder approval of, the issuance and reservation of the maximum number of
shares of common stock issued and issuable in connection with the Modification
Agreement described below.

BACKGROUND

In February 2003, the Company through a Placement Agent commenced the
February 2003 Private Placement, which was a best efforts offering with a
minimum of $850,000 and a maximum of $1,850,000. During that month, the Company
entered into Subscription Agreements with accredited investors (collectively,
the "Purchasers") raising gross proceeds of $955,000 and the February 2003
Private Placement terminated without further subscriptions on April 15, 2003.
The Purchasers acquired units (or fractions thereof) at a price per unit of
$50,000. Each "Unit" consisted of (a) a $50,000 15% Senior Subordinated
Promissory Note ("Subordinated Note") and (b) 300,000 shares of common stock.
The Company sold and issued an aggregate of $955,000 Subordinated Notes and
5,730,000 shares of common stock. The net proceeds were used to make scheduled
principal repayments on outstanding debt, to pay debt interest when due, to pay
accounts payable and otherwise to provide working capital.

In May 2003, the Company through the Placement Agent commenced a new
private placement, which is a best efforts offering with a minimum of $250,000
and a maximum of $1,000,000, offering "New Units," each consisting of (a) a
$50,000 Subordinated Note and (b) 500,000 shares of common stock (the "New
Private Placement"). The New Private Placement is conditioned upon receipt of
the prior agreement ("Modification Agreement") of all the holders of the
outstanding Subordinated Notes. The Modification Agreement will provide among
other things (a) that the new Subordinated Notes will be ranked on the same
level of debt as the then outstanding Subordinated Notes and have substantially
identical terms, (b) that the holders of the outstanding Subordinated Notes will
under certain circumstances be entitled to Penalty Shares if a Registration
Statement, which was filed on June 11, 2003, is not effective by July 30, 2003
(a deferral from an earlier date in the original documents) and (c) defer
interest accrued through May 2003 until November 2003.

There will be no closing in the New Private Placement until the
Modification Agreements have been received and accepted by the Company. In
consideration for the Modification Agreements, the Company will agree, subject
to the "Shareholder Approval" (hereinafter defined), to issue 200,000 shares of
common stock to the holder of each outstanding $50,000 Subordinated Note (or pro
rata for fractions thereof) or an aggregate of 3,820,000 shares of common stock
to the holders of all the then outstanding Subordinated Notes. The Company will
also issue 382,000 shares of common stock to the Placement Agent as compensation
for obtaining the Modification Agreements. In addition, as compensation for the
deferral of interest from May 2003 until November 2003, the holders will receive
Warrants to purchase in the aggregate 358,161 shares at $0.10 per share subject
to adjustments.

The securities offered in connection with the Modification Agreement
described in this Proxy Statement have not been registered under the Securities
Act and may not be offered or sold in the United States absent registration or
an applicable exemption from registration requirements.

REASONS FOR THIS PROPOSAL

To comply with applicable rules of The American Stock Exchange (AMEX) and
as part of the Modification Agreement, the Company is seeking the approval of
its shareholders for both (a) the issuance and reservation of all shares of
common stock issued or issuable in connection with the Modification Agreement
and (b) the increase in its authorized shares of common stock from 100,000,000
to at least 200,000,000 ("Shareholder Approval"). (The proposed increase of
authorized shares is discussed in Item No.5 below.)

The aggregate number of shares of common stock that may be issuable in
the February 2003 Private Placement and related transactions, including the
Modification Agreement, exceed the Share Limit. The purchase price in the
Modification Agreement is less than the Value Limit. Therefore, in accordance
with AMEX Listing Standard Section 713, the Company is asking its stockholders
to ratify and approve the issuance and reservation of the maximum number of
shares of Common Stock issuable pursuant to the Modification Agreement.

TOTAL SHARES TO BE ISSUED AND COULD BE ISSUED IN CONNECTION WITH MODIFICATION
AGREEMENT

Shares to be issued to holders of Subordinated Notes for 3,820,000
Modification Agreements ("Consideration Shares")

Shares to be issued to Placement Agent as compensation 382,000
for obtaining Modification Agreements

Shares underlying Warrants for deferred interest 358,161

Penalty Shares if Registration Statement for 1,814,500
Consideration Shares is not effective by
Target Date (December 15, 2003) and remaining not effective
over 19-month period (estimate based on
average recent market prices) ----------
Total Shares issued and issuable in connection with
Modification Agreement 6,374,661

The aggregate number of shares to be issued and could be issued in
connection with the Modification Agreement is 6,374,661 shares or 8.4% of the
approximate 75.8 million shares that are now outstanding. The 3,820,000 shares
to be issued to the holders of the outstanding Subordinated Notes would have
market value of approximately $725,000 and the 382,000 shares to be issued to
the Placement Agent would have market value of approximately $72,500, in each
case based upon the closing price on the AMEX of $0.19 per share on June 18,
2003.

The Warrants issued to the holders of the outstanding Subordinated
Notes for the purchase of 358,161 shares have an exercise price of $0.10 per
share, subject to adjustments, and the closing price on the AMEX was $0.19 per
share on June 18, 2003.

REGISTRATION RIGHTS UNDER THE MODIFICATION AGREEMENT

The Company has agreed to register all the shares of common stock
issued or issuable in connection with the Modification Agreements. If the
Registration Statement, which is to be filed on or before October 15, 2003, does
not become effective by the agreed Target Date, December 15, 2003, the Company
will be obligated to issue additional shares as liquidated damages. If the
Registration Statement is not declared effective by the SEC by the Target Date,
then, on the Target Date and on each monthly anniversary of the Target Date
thereafter until the earlier of the date the Registration Statement is declared
effective by the SEC or the 19th monthly anniversary of the Target Date, the
Company will issue to each Subordinated Note holder, as liquidated damages, a
number of shares equal to (a) 1% of the then outstanding principal amount of the
holder's Note, divided by (b) the average of the last sales price of the common
stock of the Company for the ten trading days ending on each monthly anniversary
date of the Target Date for which the Registration Statement was not declared
effective ("Penalty Shares"). Penalty shares equal to 10 % of any Penalty Shares
issued to the holders of the Notes will also be issued to the Placement Agent.

CONSEQUENCES IF SHAREHOLDERS DO NOT APPROVE THE MODIFICATION AGREEMENT

If approval of the Modification Agreement is not obtained, it is possible
that the Company may exceed the Share Limit and therefore be subject to
delisting. Further, if Shareholder Approval is not obtained for any of Items 2,
3 or 4, the Company may exceed the Share Limit and therefore be subject to
delisting. Finally, if Shareholder Approval, which includes both this Item 3, as
well as Items 2 and 4, and Item 5 for the increase of authorized shares, is not
obtained, the Subordinated Notes cannot be converted into common stock and if it
is not obtained, the Subordinated Notes cannot be converted into common stock
and if it is not obtained by July 28, 2003, the holders of the Subordinated
Notes then outstanding will have the right to demand pre-payment of the
Subordinated Notes.

REQUIRED VOTE

Approval of the issuance and reservation of the maximum number of
shares of common stock issued or issuable in connection with the Modification
Agreement requires the affirmative vote of the holders of a majority of the
Avitar Common Stock and Series B and D Preferred Stock present in person or by
proxy at the Avitar Annual Meeting (assuming a quorum exists) and entitled to
vote thereon.

BOARD RECOMMENDATION

The Board of Directors of Avitar unanimously recommends a vote FOR approval of
the issuance and reservation of the maximum number of shares issued or issuable
in connection with the Modification Agreement.

ITEM NO. 4

APPROVAL OF THE ISSUANCE OF THE MAXIMUM NUMBER OF SHARES OF THE COMPANY'S COMMON
STOCK ISSUED OR ISSUABLE IN CONNECTION WITH THE NEW PRIVATE PLACEMENT, INCLUDING
SHARES ISSUABLE UPON CONVERSION OF NEW SUBORDINATED NOTES.

BACKGROUND

The securities offered in the New Private Placement described in this
Proxy Statement have not been registered under the Securities Act and may not be
offered or sold in the United States absent registration or an applicable
exemption from registration requirements.

REASONS FOR THIS PROPOSAL

To comply with applicable rules of The American Stock Exchange (AMEX)
and as part of the New Private Placement, the Company is seeking the approval of
its shareholders for both (a) the issuance and reservation of all shares of
common stock issued or issuable in connection with the New Private Placement and
(b) the increase in its authorized shares of common stock from 100,000,000 to at
least 200,000,000 ("Shareholder Approval"). (The proposed increase of authorized
shares is discussed in Item No.5 below.)

The aggregate number of shares of common stock that may be issuable in
the February 2003 Private Placement and related transactions, including the New
Private Placement, exceed the Share Limit. The purchase price in the New Private
Placement is less than the Value Limit. Therefore, in accordance with AMEX
Listing Standard Section 713, the Company is asking its stockholders to ratify
and approve the issuance and reservation of the maximum number of shares of
Common Stock issuable pursuant to the New Private Placement.

TOTAL SHARES THAT COULD BE ISSUED IN THE NEW PRIVATE PLACEMENT

Shares that may be issued in the New Private Placement 10,000,000
(2,500,000 at the initial closing) after
receipt of Modification Agreements

Shares underlying Subordinated Notes that may be issued 11,111,111
in the New Private Placement convertible
after Shareholder Approval

Shares that may be issued to Placement Agent as 1,000,000
compensation on New Private Placement (250,000 at the
initial closing) after receipt of Modification Agreements

Shares underlying warrants that may be issued to 1,111,111
Placement Agent as compensation on the
New Private Placement

Penalty Shares if Registration Statement for
Shares in the New Private Placement is not effective by
Target Date (December 15, 2003) and remaining not
effective over 19-month period (estimate based on
average recent market prices) 1,900,000
---------

Total Shares To Be Issued and Issuable In Connection With
The New Private Placement 25,122,222

The aggregate number of shares to be issued and could be issued in connection
with to the New Private Placement is 25,122,222 shares or 33.2% of the
approximate 75.8 million shares that are now outstanding. If all the shares
issuable in the New Private Placement (25,122,222) were issued, the cash
received by the Company for all such shares would be $1,000,000 or approximately
$0.04 per share, which is approximately $0.15 per share less than the average
$0.19 closing price on the AMEX on June 18, 2003.

If the New Private Placement closed at the maximum offering of
$1,000,000, both 1,000,000 shares and Warrants to purchase 1,111,111 shares
would be issued to the Placement Agent. The 1,000,000 shares would have an
estimated market value of approximately $190,000 based upon the closing price on
the AMEX of $0.19 per share on June 18, 2003. The Warrants would have an
exercise price of $0.09 per share, subject to adjustment, and as noted above the
closing price on the AMEX was $0.19 per share on June 18, 2003.

KEY TERMS OF THE NEW PRIVATE PLACEMENT AND SUBORDINATED NOTES

Registration of Shares of Common Stock. The Company has agreed
to register all the shares of common stock issued or issuable in connection with
the New Private Placement, including shares issuable upon conversion of the
Subordinated Notes. If the Registration Statement, which is to be filed on or
before October 15, 2003, does not become effective by the agreed Target Date,
December 15, 2003, the Company will be obligated to issue additional shares as
liquidated damages. If the Registration Statement is not declared effective by
the SEC by the Target Date, then, on the Target Date and on each monthly
anniversary of the Target Date thereafter until the earlier of the date the
Registration Statement is declared effective by the SEC or the 19th monthly
anniversary of the Target Date, the Company will issue to each Subordinated Note
holder, as liquidated damages, a number of shares equal to (a) 1% of the then
outstanding principal amount of the holder's Note, divided by (b) the average of
the last sales price of the common stock of the Company for the ten trading days
ending on each monthly anniversary date of the Target Date for which the
Registration Statement was not declared effective ("Penalty Shares"). Penalty
shares equal to 10 % of any Penalty Shares issued to the holders of the
Subordinated Notes will also be issued to the Placement Agent.

Optional Conversion of Subordinated Notes. Subject to Shareholder
Approval, the new Subordinated Notes, including accrued but unpaid interest,
will be convertible, at the option of the holders, into shares of common stock
at $0.09 per share. The conversion price will be subject to standard adjustments
and, in addition, if shares (or derivative securities) are issued at a price (or
with exercise or conversion prices) less than the conversion price, the
conversion price will be automatically reduced to that lower price. If the New
Private Placement closed at the maximum $1,000,000, the new Subordinated Notes,
subject to Shareholder Approval, would be convertible in the aggregate into
approximately 11.1 million shares for the principal amount alone. While the
Subordinated Notes bear 15% per annum, 10% is payable quarterly and 5% accrues
until maturity.

Subordination. The new Subordinated Notes, like the currently
outstanding Subordinated Notes, will be subordinate only to the senior
indebtedness in the amount of approximately $1.5 million now outstanding, but
senior to all other debt of the Company.

Holders of Subordinated Notes Right to Demand Prepayment if Shareholder
Approval is Not Obtained. If Shareholder Approval is not obtained by July 28,
2003, the holders of the Subordinated Notes then outstanding will have the right
to demand pre-payment of the Subordinated Notes. At present, the principal
amount outstanding on the Subordinated Notes is $955,000. However, if the
maximum amount of the New Private Placement were issued, the principal amount
outstanding on the Subordinated Notes would be $1,955,000. Upon a demand for
pre-payment by the holders of all the outstanding Subordinated Notes, the
Company would owe $1,955,000 plus accrued and unpaid interest. There can be no
assurance that the Company will be able to repay upon such demand.

CONSEQUENCES IF SHAREHOLDERS DO NOT APPROVE THE NEW PRIVATE PLACEMENT

If approval of the New Private Placement is not obtained, it is
possible that the Company may exceed the Share Limit and therefore be subject to
delisting. Further, if Shareholder Approval is not obtained for any of Items 2,
3 or 4, the Company may exceed the Share Limit and therefore be subject to
delisting. Finally, if Shareholder Approval, which includes both this Item 4, as
well as Items 2 and 3, and Item 5 for the increase of authorized shares, is not
obtained, the Subordinated Notes cannot be converted into common stock and if it
is not obtained by July 28, 2003, the holders of the Subordinated Notes then
outstanding will have the right to demand pre-payment of the Subordinated Notes.

REQUIRED VOTE

Approval of the issuance and reservation of the maximum number of
shares of common stock issued or issuable in connection with the New Private
Placement requires the affirmative vote of the holders of a majority of the
Avitar Common Stock and Series B and D Preferred Stock present in person or by
proxy at the Avitar Annual Meeting (assuming a quorum exists) and entitled to
vote thereon.

BOARD RECOMMENDATION

ITEM NO. 5

APPROVAL OF AMENDMENT OF CERTIFICATE OF INCORPORATION TO EFFECT AN INCREASE OF
AUTHORIZED SHARES OF COMMON STOCK FROM 100,000,000 TO 200,000,000

The Board of Directors has unanimously approved, and is hereby
soliciting stockholder approval of, an amendment to the Certificate of
Incorporation (the "Amendment"), effecting an increase in the number of
authorized shares of Common Stock from 100,000,000 to 200,000,000.

The Certificate of Incorporation now provides for 100,000,000
authorized shares of Common Stock, par value $.01 per share, of which 73,063,197
were issued and outstanding as of the Record Date; and 5,000,000 shares of
Preferred Stock, par value $.01, of which 136,202 were issued and outstanding as
of the Record Date. The Amendment would increase the number of authorized shares
of Common Stock to 200,000,000.

REASONS FOR THE INCREASE

In the February 2003 Private Placement, and to comply with applicable
rules of The American Stock Exchange (AMEX), the Company agreed to seek the
approval of its shareholders for both (a) the issuance and reservation of all
shares of common stock issued or issuable in connection with the February 2003
Private Placement and (b) the increase in its authorized shares of common stock,
as determined by the Board of Directors in view of the New Private Placement,
from 100,000,000 to 200,000,000 ("Shareholder Approval").

Subject to Shareholder Approval and in view of adjustments, the
outstanding Subordinated Notes will be convertible in the aggregate into
approximately 10.6 million shares of common stock for the principal amount
alone. If the maximum amount of the New Private Placement were closed, the new
Subordinated Notes would be convertible into approximately an additional 11.1
million shares of common stock. In addition, outstanding shares of Preferred
Stock are now convertible in the aggregate into approximately 2.5 million shares
of common stock. Further, holders of outstanding warrants are entitled to
purchase approximately 14 million shares of common stock at prices ranging from
$.01 to $3.83 and subject to a limited-time offer at $.09 per share. Finally,
there are outstanding employee stock options (approximately 45% vested) to
purchase approximately 10.5 million shares of common stock at prices ranging
primarily from $.20 to $3.11 and an additional 1.5 million shares have been
reserved for future employee stock options and an additional approximately
950,000 shares of common stock are reserved for the 2001 Employee Stock Purchase
Plan. Therefore, on a fully diluted basis and in view of adjustments and the New
Private Placement, the Company may require approximately 150 million shares.

The majority of the proposed increase to 200,000,000 authorized shares
of Common Stock will be shares reserved for the conversion of the outstanding
Subordinated Notes, the New Private Placement, conversions of Preferred Stock,
exercises of the outstanding warrants and options, future financings to grow the
business and completion of acquisitions as described below. After Shareholder
Approval, approximately 45 million to 50 million shares should be available for
future financings and acquisitions.

Proceeds from both any exercises of outstanding warrants and options
and the New Private Placement are anticipated to be used primarily to provide
the necessary working capital to operate Avitar. For the balance of fiscal year
2003, Avitar's cash requirements are expected to include primarily the funding
of operating losses, the payment of outstanding accounts payable and the payment
of principal and interest due on existing debt and, to the extent available, the
funding of operating capital to grow Avitar's rapid diagnostic testing and other
lines of business.

The Board of Directors determined to increase the authorized Common
Stock to 200,000,000 shares both as required pursuant to the Subscription
Agreements to increase the authorized shares to at least 125,000,000 and to
ensure that sufficient shares of Common Stock were authorized and available to
cover the outstanding convertible Subordinated Notes ($955,000 in principal
amount), Preferred Stock, warrants and options and the New Private Placement and
any additional shares of Common or Preferred Stock and warrants or options,
which it may determine to issue or grant in the future.

Further, Avitar may explore possible acquisitions, which would likely
involve the issuance of some or all of the additional authorized shares of
common stock as all or a portion of the purchase prices of any acquisitions of
companies, businesses and/or assets it may effect in the future. In such an
event, Avitar's stockholders may not need to be solicited for any specific
acquisitions if they approve the current proposal to increase Avitar's
authorized common stock. Accordingly, Avitar's stockholders' only opportunity to
specifically vote on and approve any such acquisitions could be their vote on
the current proposal to increase Avitar's authorized common stock. Except as
disclosed above, Avitar does not believe that the increase in its authorized
common stock will have any significant effects on the stockholders of Avitar,
nor does it believe that such increase will have any significant benefits to the
officers, directors or affiliates of Avitar.

In order to effect the increase, the stockholders are being asked to
approve the Amendment. The Board of Directors believes that the increase is in
the best interests of Avitar and has unanimously approved the increase. The
Board of Directors may make any and all changes to the Amendment that it deems
necessary in order to file the Amendment with the Delaware Secretary of State
and give effect to the increase.

NO DISSENTERS' RIGHTS

Dissenting stockholders have no appraisal rights under Delaware law or
under the Company's Certificate of Incorporation or Bylaws in connection with
the increase.

REQUIRED VOTE

Pursuant to the Delaware General Corporation Law, the approval of the
Amendment to Avitar's Certificate of Incorporation to provide for the increase
in number of authorized shares of Common Stock requires the affirmative vote of
the holders of a majority of the outstanding shares of Avitar Common Stock and
Series B and D Preferred Stock.

BOARD RECOMMENDATION

The Board of Directors of Avitar unanimously recommends a vote FOR the
Amendment to the Company's Certificate of Incorporation to increase the number
of authorized shares of Common Stock from 100,000,000 to 200,000,000.

ITEM NO. 6
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

The Board of Directors of Avitar selected BDO Seidman, LLP as auditors
for the fiscal year ending September 30, 2003, subject to stockholder approval
by ratification. BDO Seidman, LLP has been the independent auditors for Avitar
since December 1992. A representative of BDO Seidman, LLP is expected to be
present at the Annual Meeting, at which time he or she will be afforded an
opportunity to make a statement, and will be available to respond to questions.

The Board of Directors of Avitar may, in its discretion, direct
appointment of new independent auditors at any time during the fiscal year if
the Board believes such change would be in the best interests of Avitar and its
stockholders. No such change is anticipated.

REQUIRED VOTE

Approval of ratification of BDO Seidman, LLP requires the affirmative
vote of the holders of a majority of the Avitar Common Stock and Series B and D
Preferred Stock present in person or by proxy at the Avitar Annual Meeting
(assuming a quorum exists) and entitled to vote thereon.

BOARD RECOMMENDATION

The Board of Directors of Avitar unanimously recommends a vote FOR the
ratification of BDO Seidman, LLP as auditors for the fiscal year ending
September 30, 2003.

SHAREHOLDER PROPOSAL
ITEM NO. 7 ON PROXY CARD

The shareholder named below has told us that it intends to have the following
proposal presented at the Annual Meeting. Approval of the shareholder proposal
requires the affirmative vote of a majority of eligible shares present at the
Annual Meeting, in person or by proxy, and voting on the matter. The Board of
Directors has concluded that it cannot support this proposal for the reasons
given.

Item 7 on Proxy Card

GIN99, LLC, 668 North Coast Highway, #225, Laguna Beach, CA 92651, owner of
6,462,515 shares of the Company's common stock, proposes the following:

"Proposal

RESOLVED: In an effort to address the serious concerns raised by the
Sarbanes-Oxley Act of 2002 (the "Act") and the corporate governance and
compliance issues attendant thereto, the shareholders have determined that:

The positions of Chief Executive Officer and Chairman of the Board be
segregated so that these positions are from this time forward held by two
different individuals."

BOARD OF DIRECTORS' POSITION:

The Board of Directors believes that the establishment of a Chairman of the
Board different from the Chief Executive Officer will create another personnel
requirement without sufficient corresponding benefit to the Company. In the
Board's opinion, the segregation of the positions of Chairman and Chief
Executive Officer is impractical and excessively expensive for Avitar or any
company similar in size and nature to Avitar.

The Board of Directors believes that segregation of the Chairman and CEO is not
in the best interests of Avitar and its shareholders.

The Board of Directors recommends a vote AGAINST this proposal.

OTHER BUSINESS

The proxy confers discretionary authority on the proxies with respect to
any other business, which may come before the Annual Meeting. The Board of
Directors of Avitar knows of no other matters to be presented at the Annual
Meeting. The persons named in the proxy will vote the shares for which they hold
proxies according to their best judgment if any matters not included in this
Proxy Statement properly come before the meeting.

INCORPORATION OF ANNUAL REPORT ON FORM 10-KSB

We are incorporating by reference the information contained in the Annual
Report on Form 10-KSB for the year ended September 30, 2002, including our most
recent audited financial statements and management's discussion and analysis of
financial condition and results of operations. The Annual Report was filed with
the SEC under the Exchange Act and will be delivered to our shareholders with
this Proxy Statement.

STOCKHOLDER PROPOSALS

Any stockholder proposal to be included in the proxy statement and form of
proxy relating to the 2004 Annual Meeting of Avitar Stockholders must be
received by the close of business on March 1, 2004 and must comply in all other
respects with the rules and regulations of the Securities and Exchange
Commission. Proposals should be addressed to: Corporate Secretary, Avitar, Inc.,
65 Dan Road, Canton, Massachusetts 02021.

SHARES AVITAR, INC. PROXY NO.
65 Dan Road, Canton, Massachusetts 02021

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Peter P. Phildius and Douglas W. Scott as
Proxies, each with the power to appoint his substitute and hereby authorizes
them to represent and to vote, as designated below and on the reverse hereof,
all shares of common stock of Avitar, Inc. ("Avitar") or shares of Series B, C
or D Preferred Stock of Avitar held of record by the undersigned on June 19,
2003 at the Annual Meeting of stockholders of Avitar to be held on July 28, 2003
or any adjournments thereof.

The undersigned hereby revokes any proxies heretofore given to vote said
shares.

The undersigned hereby acknowledges receipt of Avitar's Annual Report for
2002 and of the Notice of Annual Meeting of Stockholders and attached Proxy
Statement dated June 30, 2003.

This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR Items 1, 2, 3, 4, 5 and 6, and against Item 7. Please sign exactly
as your name appears to the left hereof. When signing as corporate officer,
partner, attorney, administrator, trustee or guardian, please give your full
title as such.

Dated , 2003

Authorized Signature
Title

Please mark boxes on reverse hereof in blue or black ink. Please date, sign and
return this Proxy Card promptly using the enclosed envelope.

1. Election of Directors.

For all nominees listed below (except as marked to the contrary listed below)
[_ ]

Withhold Authority to vote for all nominees marked to the contrary below [ _ ]

(Instruction: To withhold authority to vote for any individual nominee strike a
line through the nominee's name below.)

Peter P. Phildius Douglas W. Scott Neil R.Gordon
James Groth Charles R. McCarthy, Jr.

2. To ratify and approve the issuance and reservation of shares of common
stock issuable in connection with the February 2003 Private Placement
as described in the Proxy Statement.

For Against Abstain
---------------- ---------------- -------------

3. To approve the issuance and reservation of shares of common stock
issuable in connection with the Modification Agreement as described in
the Proxy Statement.

For Against Abstain
---------------- ---------------- -------------

4. To approve the issuance and reservation of shares of common stock
issuable in connection with the New Private Placement as described in
the Proxy Statement.

For Against Abstain
---------------- ---------------- -------------

5. To adopt the Amendment to the Certificate of Incorporation to increase
the number of authorized shares of common stock from 100,000,000 to
200,000,000.

For Against Abstain
-------------- ----------------- --------------

6. To ratify the appointment of BDO Seidman, LLP as independent public
accountants for Avitar for the fiscal year ending September 30, 2003.

For Against Abstain
---------------- ---------------- -------------

7. To approve the Shareholder Proposal described in the Proxy Statement.

For Against Abstain
---------------- ----------------- --------------