Coretec Inc. Considering Facility Consolidation.

TORONTO -- Coretec Inc. (TSX:CYY) announced today that it is in the process of considering the consolidation of its three Toronto facilities into a single site. The Company is examining a range of alternatives, which includes reconsidering plans to sell its 95,000 square foot Sheppard facility, originally listed for sale in August of 2003. Along with the Sheppard facility, which is non-operational except for the portion used for administration and engineering offices, the Toronto operations also include the leased 60,000 sq. ft. Ellesmere facility and the 38,000 sq. ft. Lawrence facility, which is owned.

Contemporaneously with this process, Coretec has received an unsolicited offer to purchase the property upon which the Lawrence facility is located and has now entered into an agreement of purchase and sale with respect to this offer. The agreement is contingent upon  a number of conditions, including, in addition to standard real estate conditions, the neighbouring properties also agreeing to be sold and the satisfaction of due diligence by the purchaser. There is no assurance that the transaction will be completed, or, if completed, on the terms outlined herein.

"We believe that the consolidation of our operating activities in Toronto from three sites to one would provide meaningful economies, optimize production flow and facilitate further enhancements to our technological capabilities. The opportunity to sell our Lawrence facility has served to accelerate the time line for our consolidation objective. While the Sheppard facility has the potential to be expanded to approximately 140,000 square feet, providing ample room for both consolidation and future growth of operations, we are still in the process of investigating the total costs of such a proposal. We are also investigating other alternatives including existing and build-to-suit sites for lease. We believe our remaining term in the Lawrence facility will provide us with the appropriate time to finish our analysis and coordinate the optimal reconfiguration" said Paul Langston, Coretec's Chairman and CEO.

If the sale of the Lawrence property proceeds on the basis currently contemplated the result would be that approximately one-half of the $2.2 million purchase price would be paid at closing and the balance would be subject to a 30-month vendor take back mortgage at an interest rate of 5%, paid annually. Coretec will be permitted to occupy and operate the Lawrence facility on a rent free basis for a period of 18 months subsequent to the closing.

This news release includes statements about future expectations, plans and prospects that constitute forward-looking statements. Please be cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties. Actual results or developments may vary materially from those projected or implied in the forward-looking statements as a result of any number of factors, including, in addition to the factors described above, interest rate fluctuations, real estate market conditions, the ability of the proposed purchaser to finance, develop and market the proposed real estate development, and general factors affecting the business of Coretec generally and the economy such as currency exchange rate fluctuations; variability of operating results; dependence on certain industries; management growth and expansion; ability to attract and retain key personnel; nature of sales; product complexity and product defects; international operations; material cost fluctuations and limited availability of raw materials; potential loss of customers; competition; industry contraction and slow economic growth; technological change and process development; environmental liability; need for additional financing; product liability; pricing pressure; ability to reduce costs; and other risks listed in Coretec's public disclosure documents and other filings with securities regulatory authorities  found at www.sedar.com.

Coretec Inc. (TSX:CYY)