EXHIBIT 99.1

                                  RISK FACTORS
This offering involves a high degree of risk. You should carefully consider the
risks described below and the other information contained in this Prospectus
before deciding to invest in shares of our common stock.

THE COMPANY MAY NOT HAVE SUFFICIENT CASH FOR ITS CURRENT OPERATIONS.

The Company has a working capital deficit, which was approximately $2.33 million
at June 30, 2003. 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 and the repayment of certain notes
payable. The Company is seeking additional capital and needs to raise $500,000
to $800,000 immediately with plans to raise an additional $3,000,000 during the
remainder of 2003. However, there can be no assurance that these financings will
be achieved. If these financings were achieved, the Company would be able to
fund current operations until profitability or cash flow breakeven, but only if
its projected sales are achieved. Thereafter it will need additional funds for
operations, product expansion and debt repayment.

In the event of unforeseen circumstances affecting the economy and/or the
Company, this cash flow projection may be proven inaccurate, and the Company
will need additional funds for current operations as well as for its outstanding
obligations sooner than currently anticipated. The Company can give no assurance
that sources of funds will be available to fund its operations and other
obligations. If financing is unavailable, it may default on its obligations,
curtail operations or cease business altogether.


WITH RECENTLY REDUCED PERSONNEL, THE COMPANY MAY NOT BE ABLE TO OPERATE AT AN
ADEQUATE LEVEL.

Current economic conditions have imposed significant constraints on capital
raising and have caused projections of operating revenues to remain at the
current lower level for the balance of Fiscal Year 2003. In response to such
economic conditions, the Company recently reduced personnel, including employees
in marketing and employees in research and development. The effect of these
recent personnel reductions on the Company's future sales and operations cannot
yet be determined at this time.

THE COMPANY HAS A SUBSTANTIAL LEVEL OF INDEBTEDNESS AND IF IT IS UNABLE TO RAISE
NEW CAPITAL OR GENERATE SUFFICIENT CASH FROM OPERATIONS IT WILL NOT BE ABLE TO
FULFILL ITS FINANCIAL OBLIGATIONS. The Company has approximately $1.6 million of
debt, some of which is classified as short term. If the Company is not able to
raise new capital or to generate enough cash from operations, it will not be
able to pay the interest on outstanding debt and repay any scheduled payments of
principal. In that event the Company may be in default and, as a consequence, it
may have to refinance some or all of the debt, obtain other sources of capital,
which may not be available at that time, or continue in default. Any refinancing
or additional capital, if available, might be on unfavorable terms in those
circumstances. Any default on the Company's financial obligations would likely
force curtailment or halting of operations or liquidation of assets.

WE HAVE SUSTAINED LOSSES IN THE PAST AND WE EXPECT TO REPORT LOSSES IN THE
FUTURE; GOING CONCERN QUALIFICATION IN REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS. We have incurred substantial losses that have reduced our
stockholders equity and at times depleted our working capital. We funded our
negative cash flows from 1999 to date primarily by the sale of additional equity
and the placement of debt. We incurred losses of approximately $4.15 million
during fiscal year 2002 and losses of $3.8 million during the first three
quarters of fiscal year 2003.

The losses in fiscal year 2002 were incurred primarily from expenses associated
with the marketing of the new drug-testing kits and the development of test kits
for diseases. Current economic conditions have imposed significant constraints
on capital raising and have caused actual and projected operating revenues to
remain at a lower than expected level for the balance of Fiscal Year 2003.

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 year 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). Currently, it is anticipated that this consideration will be reflected in
the report on the financial statements for the fiscal year ended September 30,
2003.

PRINCIPAL SUPPLIER RISK

Suppliers of two key components are, in each case, the current sole source for
the Company. The inability to obtain components will have an adverse effect on
the business, revenues and prospects of the Company. Although the Company has an
inventory of these components, it may not last sufficiently long while the
Company finds a new supplier. There is no assurance that a new supplier will be
found for these components on a timely basis, or at all, if the current supplier
ceases to sell to the Company.

Although some of the parts and components used to manufacture our products are
available from multiple sources, we currently purchase most of our components
from single sources in an effort to obtain volume discounts. Lack of
availability of any of these parts and components could result in production
delays, increased costs, or costly redesign of our products. Any loss of
availability of an essential system component could result in a material adverse
change to our business, financial condition and results of operations.

WITH ALL OF OUR ASSETS PLEDGED TO PRIOR SENIOR LENDERS, THE COMPANY MAY NOT BE
ABLE TO BORROW FUNDS AND HAVE TO CURTAIL OR CEASE OPERATIONS.

The Company has pledged substantially all of its assets as security to Senior
Lenders for currently outstanding debt of approximately $1.4 million. If the
Company falls into default to the Senior Lenders, there likely will be no assets
available for the repayment of the outstanding Notes issued in February 2003 or
any subsequent debt. In addition, the Company has no other assets to pledge for
additional debt and requires the consent of the Senior Lenders for a further
security interest to be placed on any of the pledged assets. The inability of
the Company to borrow in the future may cause the Company to cut back on its
operations.

No assurance future capital will be available to us; additional capital will
dilute the holdings of our stockholders.

If we need additional financing, we cannot give any assurance that it will be
available, or if available, that it will be available on terms favorable to our
stockholders. If funds are not available to satisfy any of our short-term and
long-term operating requirements, we may limit or suspend our operations in the
entirety or, under certain circumstances, seek protection from creditors. Our
recent equity offerings resulted in the dilution of our then existing
stockholders. It is possible that future financings may contain terms that could
result in similar or more substantial dilution than has already been incurred by
our stockholders from the sales of equity with warrants since fiscal year 1998.

A SIGNIFICANT NUMBER OF OUR SHARES ARE ELIGIBLE FOR SALE AND THEIR SALE COULD
FURTHER DEPRESS THE MARKET PRICE OF OUR STOCK.

Sales of substantial amounts of our common stock (including shares issued upon
exercise of outstanding options and warrants and shares issued upon conversion
of convertible preferred shares and debt) in the public market could depress the
market price of our common stock. As of August 12, 2003, we had approximately 85
million shares outstanding and approximately 25 million shares committed or
reserved for issuance upon exercise of options and warrants or conversion of
convertible preferred shares.

WE DEPEND ON THE DRUG OF ABUSE SCREEN SYSTEMS AND MARKET ACCEPTANCE OF THOSE
SYSTEMS IS UNCLEAR.

We intend to continue to concentrate our efforts primarily on the development of
the ORALscreen drug of abuse detection systems and we will be dependent upon the
successful development and marketing of those systems to generate revenues.
Acceptance of our systems may be adversely affected by:

- -    costs,
- -    concerns related to accuracy or false positive reports,
- -    a cultural resistance to the use of drug of abuse screening tests,
- -    the effectiveness of competing drug of abuse screening tests.

Any failure to achieve greater market acceptance of our systems will have a
material adverse effect on our business, financial condition and results of
operations.

THE SUCCESS OF COMPETITIVE PRODUCTS COULD HAVE AN ADVERSE EFFECT ON OUR
BUSINESS.

The Drug of Abuse Testing industry is intensely competitive, although at present
we have encountered only minimal direct competition in the rapid on-site (as
opposed to laboratory) oral fluid drug testing market. The significant
competitive factors in the industry include:

- -    price,
- -    convenience,
- -    accuracy,
- -    acceptance of new technologies,
- -    user satisfaction, and
- -    when applicable, government approval.

We believe our ORALscreen systems offer several distinct advantages over the use
of blood or urine samples, including net cost savings, ease of use and
non-invasiveness. However, the success of any competing alternative to the
ORALscreen systems for screening for drugs of abuse could have a material
adverse effect on our business, financial condition and results of operations.
Most of our competitors have substantially greater financial capabilities for
product development and marketing than we currently do. These financial
capabilities enable our competitors to market their systems in a more effective
manner.

SUBSTANTIAL REGULATION BY GOVERNMENT AGENCIES.

Many of our products are subject to regulation by the Food and Drug
Administration (the "FDA") and comparable agencies in various states and foreign
countries requiring, among other things, pre-market approval or clearance of new
medical or dental devices. In November 2000, the FDA proposed regulations that,
although still not in effect, in the future may require a pre-market approval or
clearance of our ORALscreen products for sale to employers. In addition, Avitar
is subject to inspections by the FDA at all times, and may be subject to
inspections by state and foreign agencies. If the FDA believes that its legal
requirements have not been fulfilled, it has extensive enforcement powers,
including the ability to initiate action to physically seize products and/or to
enjoin their manufacture and distribution, to require recalls of certain types
of products, and to impose or seek to impose civil or criminal sanctions against
individuals or companies. Such submissions and review by the FDA could take
several years, after which there could be no assurance that approval would be
granted.

DEPENDENCE ON INTELLECTUAL PROPERTY; NO ASSURANCE AS TO PROTECTION OF
INTELLECTUAL PROPERTY.

Our ability to compete effectively with other companies will depend, in part, on
our ability to maintain the proprietary nature of our technologies. We intend to
rely substantially on unpatented proprietary information and know-how, and there
can be no assurance that others will not develop such information and know-how
independently or otherwise obtain access to our technology. Similarly, there can
be no assurance that our proprietary technology will not infringe patents or
other rights owned by others. If we are unable to adequately safeguard and
exploit our methods and technologies, our ability to compete with other
companies, a majority of which have greater financial, technological, human and
other resources than the Company, our business would be materially adversely
affected.

RISK OF PRODUCT LIABILITY; LIMITED INSURANCE COVERAGE.

The testing, marketing and sale of medical and dental products entails a risk of
product liability claims by consumers and others. Avitar has maintained product
liability insurance coverage and currently has such insurance in the amount of
up to $5,000,000. This insurance will not cover liabilities caused by events
occurring after such policy is terminated or claims made after 60 days following
termination of the policy or in respect of events excluded from coverage. In the
event of a successful suit against Avitar, lack or insufficiency of insurance
coverage would have a material adverse effect on Avitar. Further, certain
distributors of medical and dental products require minimum product liability
insurance coverage as a condition precedent to purchasing or accepting products
for distribution. Failure to satisfy such insurance requirements could impede
the ability of Avitar to achieve broad distribution of its products, which would
have a material adverse effect on Avitar.

WE ARE DEPENDENT ON OUR MANAGEMENT AND KEY PERSONNEL TO SUCCEED.

Our principal executive officers and key personnel have extensive knowledge of
and experience with our products, the research and development efforts needed to
improve them and the development of marketing and sales programs to increase
their market penetration. The loss of the services of any of our executive
officers or other key personnel, or our failure to attract and retain other
skilled and experienced personnel, could have a material adverse effect on our
ability to manufacture, sell and market our products. Such events would probably
have a negative impact on our business and financial condition.

BARRIERS TO TAKEOVER

The Company is governed by the provisions of Section 203 of the Delaware General
Corporation Law, an anti-takeover law. In general, the law prohibits a public
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. "Business combination"
is defined to include mergers, asset sales and certain other transactions
resulting in a financial benefit to the stockholders. An "interested
stockholder" is defined as a person who, together with affiliates and
associates, owns (or within the prior three years, did own) 15% or more of a
corporation's voting stock. As a result of the application of Section 203,
potential acquirers of the Company may be discouraged from attempting to effect
an acquisition transaction with the Company, thereby possibly depriving holders
of the Company's securities of certain opportunities to sell or otherwise
dispose of such securities at above market prices pursuant to such transactions.
In addition, in the event of certain changes of control of the Company (as
defined in the Company's Equity Plan) outstanding options granted pursuant to
the Company's Equity Plan will become immediately exercisable in full. Such
acceleration of exercisability may also discourage potential acquirers of the
Company.

THE MARKET PRICE OF OUR STOCK HAS HISTORICALLY BEEN VOLATILE.

The volatility of our common stock imposes a greater risk of capital losses on
stockholders as compared to less volatile stocks. In addition, such volatility
makes it difficult to ascribe a stable valuation to a stockholder's holdings of
our common stock. Factors such as announcements of technological innovations,
changes in marketing, product pricing and sales strategies or new products by
our competitors, changes in 2domestic or foreign governmental regulations or
regulatory approval processes, developments or disputes relating to patent or
proprietary rights and public concern as to the reliability of the OralScreen
systems or drug tests in general may have a significant impact on the market
price of our common stock. Moreover, the possibility exists that the stock
market (and in particular the securities of technology companies such as ours)
could experience extreme price and volume fluctuations unrelated to operating
performance.