Avatech Solutions Secures Expanded Financing From Mercantile Bank & Trust Company; $5 Million Credit Facility Increases Working Capital to Fuel Growth.

BALTIMORE -- Avatech Solutions, Inc. (OTCBB:AVSO.OB), the recognized leader in design and engineering solutions, product lifecycle management, and facilities management, today announced that it entered into a new $5 million line of credit with Mercantile Bank & Trust Company, a unit of Mercantile-Safe Deposit and Trust Company of Baltimore, Maryland. The expanded credit facility replaces Avatech's existing $3 million line of credit with K Bank and will provide the Company with increased borrowing capacity to support the continued growth of its operations. On execution of the new credit facility, Avatech prepaid a loan to a previous supplier, saving $233,000 from the outstanding principal balance on the loan.

"This new financing arrangement is an important piece of our plans for the future," said Scotty Walsh, CEO of Avatech Solutions. "Avatech continues to grow at a very healthy rate and we are pleased to be doing business with a larger financial institution that can provide us with greater access to capital and a full range of financial services to support our future needs. Our current lender has served us well, but we need new levels of support for our growth requirements."

Avatech's revenues have increased significantly over the last three years as demand for its products and services have increased and the Company has expanded into new markets. For its fiscal year ended June 30, 2005, Avatech reported revenues of $34.1 million compared with $22.5 million in fiscal year 2003. That growth continued through the most recently reported quarter as the Company's revenues for the three months ended September 30, 2005 increased approximately 37% over the same period in 2004.

About Avatech Solutions

Avatech Solutions, Inc. (OTCBB:AVSO.OB) is the recognized leader in design and engineering technology with unparalleled expertise in design automation, data management and process optimization for the manufacturing, engineering, building design and facilities management markets. Headquartered in Owings Mills, Maryland, the company specializes in consulting, software systems integration and implementation, standards development and deployment, education, and technical support. Avatech is one of the largest integrators of Autodesk software worldwide and a leading provider of PLM solutions. The company's clients include industry leaders from Fortune 500 and Engineering News Record's Top 100 companies. Visit http://www.avatech.com for more information.

This press release contains forward-looking statements about the expectations, beliefs, plans, intentions, and strategies of Avatech Solutions, Inc. There are a number of important factors that could cause actual results to differ materially from those anticipated by any forward-looking information. A description of risks and uncertainties attendant to Avatech and its industry, and other factors that could affect the Company's financial results, are included in its Securities and Exchange Commission filings, including, but not limited to, the annual report on Form 10-K for the fiscal year ending June 30, 2005 and other Securities and Exchange Commission filings. Investors and shareholders may obtain a free copy of the documents filed by Avatech Solutions, Inc. with the Commission at the Commission's web site at www.sec.gov.

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