Avitar Inc. announced that the its ORALscreen rapid test for drugs-of-abuse and electronic reader has been approved by the Egyptian Government to be initially deployed by the Ministry of Tourism. Avitar´s random on-site drug screening technology will be used to test all tour bus drivers, travel agents, and related personnel. The ORALscreen program is important to the Egyptian government´s expanding efforts to address substance abuse in its society. Avitar will seize upon this opportunity to increase its reach in overseas markets, which currently represent approximately 10% of sales revenue. Avitar´s positioning as a consultative drug-free workplace technology and services provider, plays a central role in the model for convergence and integration efforts of its Egyptian business partners, the Ministry of Health, the Ministry of Tourism and the Ministry of the Interior.

Avitar Inc. announced financial results for the three and twelve months ended September 30, 2007. For the year ended September 30, 2007, Avitar reported revenues of $3,106,000 from continuing operations compared to $4,519,000 from continuing operations for the year ended September 30, 2006. The net loss was $2,260,000, or $0.09 per basic and diluted share, for the year ending September 30, 2007 compared with a net loss of $3,703,000, or $0.80 per basic and diluted share, for the year ended September 30, 2006. The changes in net loss for Fiscal 2007 occurred primarily from an increase in non-cash income from the change in the fair value of derivative securities and warrants of $1,090,000, a decrease in operating expenses of $1,573,000 resulting from the reduced sales volume and an expense reduction program implemented in April 2007, lower interest and financing costs related to short-term and long-term borrowings of $96,000 and a decrease in the loss from discontinued operations of $97,000, offset in part by a reduction in sales of $1,413,000 due mainly to the transition to a new distributor for the Hydrasorb(R) wound dressing products. Revenues from continuing operations for the fourth quarter of fiscal 2007 were $666,000 compared to $1,357,000 from continuing operations in the prior year´s fourth fiscal quarter ended September 30, 2006. The net loss was $718,000, or $0.02 per basic and diluted share, for the quarter ended September 30, 2007 compared with net loss of $447,000, or $0.08 per basic and diluted share, for the quarter ended September 30, 2006. The net loss for the quarter ended September 30, 2007 reflected a reduction in sales of $691,000 due mainly to the transition to a new distributor for the Hydrasorb(R) wound dressing products, increases in interest and financing costs of $109,000 related to the long-term debt borrowings undertaken during fiscal 2007, a reduction in non-cash income of $360,000 resulting from changes in fair market value of derivative securities and warrants, offset in part by lower operating expenses of $696,000 resulting from the reduced sales volume and an expense reduction program implemented in April 2007 and a decrease in the loss from discontinued operations of $194,000.

Avitar Inc. filed its 10KSB on December 28,2007 for the period ending September 30,2007. In this report its auditor,Bdo Seidman,gave an unqualified opinion expressing doubt that the company can continue as a going concern.