8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report: September 30, 2005

AVATECH SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-31265	84-1035353
(State of Incorporation)	(Commission File No.)	(IRS Employer Identification Number)

10715 Red Run Boulevard, Suite 101, Owings Mills, Maryland 21117

(Address of principal executive offices, including Zip Code)

Registrant’s telephone number, including area code: (410) 581-8080

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On September 28, 2005, Avatech Solutions, Inc. issued a press release setting forth its results for its quarter and fiscal year ended June 30, 2005. A copy of the press release is attached hereto as Exhibit 99. The information contained in this Item 2.02 and the attached exhibit are furnished to, but not filed with, the Securities and Exchange Commission (“SEC”) and shall not be deemed to be incorporated by reference into any of the Company’s filings with the SEC under the Securities Act of 1933.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits. The following exhibit is furnished with this report:

Exhibit 99— Press release dated September 28, 2005.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized on September 30, 2005.

AVATECH SOLUTIONS, INC.
By:	/s/ Lawrence Rychlak
	Lawrence Rychlak
	Vice President & Chief Financial Officer

EX-99

Exhibit 99

Avatech Solutions Announces Record Revenue and Earnings

for Fiscal Year 2005, and Strong Fourth Quarter Results

BALTIMORE—(BUSINESS WIRE)—Avatech Solutions, Inc. (OTCBB:AVSO.OB), the recognized leader in design and engineering solutions, product lifecycle management, and facilities management, today announced earnings for its fourth quarter and fiscal year ended June 30, 2005.

Earnings for the fourth quarter of fiscal 2005 were approximately $714,000, or $0.06 per share — a dramatic turnaround from Avatech’s 2004 fourth quarter loss of $598,000 or ($0.06) per share. Revenue was up 37% over the same period last year.

For the fiscal year ended June 30, 2005, the Company reported net income of $1,934,000, or $0.18 per share — an almost $2,900,000 million improvement over the $927,000 loss reported for the fiscal year ended June 30, 2004.

Avatech’s CEO, Scotty Walsh, said, “The last three quarters of profitable operations and a profitable year-end are further proof that our business strategy is working. Overall, we enhanced our position as a leading design and engineering systems integrator, and expect our growth and profitability will continue to gain momentum. We are adding more customer-facing experts, continuing to diversify our solutions offerings, and increasing services revenue.”

Mr. Walsh added, “We are looking at a number of acquisition opportunities that would substantially increase revenues, be accretive to earnings, and further our diversification strategy.”

During the 2005 fiscal year, the Company experienced double-digit increases in product sales, service revenue, and commission revenue as the result of an increased sales focus in its existing offices as well as the acquisition of the assets of Comtrex Corporation in North Carolina. In addition, Avatech also increased revenues through the $1,900,000 million sale of a software product to Autodesk.

“During fiscal 2005, the Company focused on increasing the productivity of its sales and service professionals, and reallocating our resources to our offices around the country and within the market segments that we felt would provide us with the best long-term opportunities while reducing overall costs. Anyone who looks at our balance sheet will see a much stronger company than they saw a year ago — a trend we intend to continue,” added Walsh.

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.avatechsolutions.com for more information.

Avatech Solutions, Inc.

Summary Consolidated Financial Data

	Three Months Ended June 30,					Twelve Months Ended June 30,
	2004			2005		2004			2005
Revenues	$	6,381,064		$	8,768,786	$	27,950,494		$	34,144,428
Cost of revenue		3,826,796			4,769,592		16,733,715			17,894,448
Gross margin		2,554,268			3,998,194		11,216,779			16,249,980
Operating income (loss)		(483,186	)		844,343		(187,269	)		2,491,529
Net income (loss)		(598,376	)		713,514		(926,765	)		1,934,077
Earnings (loss) per share:
Basic	$	(0.06	)	$	0.06	$	(0.11	)	$	0.18
Diluted	$	(0.06	)	$	0.05	$	(0.11	)	$	0.14
Weighted average common shares outstanding:
Basic		9,396,846			10,868,326		9,341,785			10,355,150
Diluted		9,396,846			14,112,125		9,341,785			13,947,055

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.

All brand names, product names, or trademarks belong to their respective holders.

CONTACT :

Avatech Solutions, Inc.

Jean Schaeffer, 410-581-8080

Fax: 410-753-1591

jean.schaeffer@avat.com