8-K/A

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report: May 30, 2006

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))

INFORMATION TO BE INCLUDED IN THE REPORT

Item 1.01 Entry into a Material Definitive Agreement.

(a) On May 30, 2006, Avatech Solutions, Inc. (“Registrant”) and Avatech Solutions Subsidiary, Inc., a controlled subsidiary of the Registrant, (“Subsidiary”), entered into a $6.5 million term loan with Mercantile – Safe Deposit and Trust Company (the “Lender”) to finance its acquisition of Sterling Systems and Consulting, Inc. (a Michigan corporation) and its affiliates (“Sterling”). The loan provides for monthly interest payments at the prime rate plus 2.0% with full principal repayment in ninety days and is secured by all of the assets of the Registrant and Subsidiary. The Registrant secured the loan in order to complete its acquisition of Sterling while it proceeds towards the closing of a previously-disclosed equity transaction. Upon the closing of the equity transaction, the term loan will be repaid without penalty.

Item 2.01 Completion of Acquisition of Assets.

On May 30, 2006, the Registrant simultaneously executed and closed Stock and Membership Interest Purchase Agreements with Sterling. Under the terms of the Agreements, the Registrant acquired all of the outstanding stock and membership interests of Sterling for $6.5 million in cash and $1.5 million of its common stock.

Reference is made to the press release issued by the Registrant on May 31, 2006, the text of which is attached hereto as Exhibit 99.1.

Item 2.03 Creation of a Direct Financial Obligation of a Registrant.

The disclosure required by this item is included in Item 1.01 and is incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities

In connection with its purchase of Sterling, the Registrant issued a total of 694,445 shares of its common stock to the owners of Sterling.

These securities were issued in reliance on the exemption from registration set forth in Section 4(2) of the Securities Act and Regulation D promulgated thereunder.

Item 9.01 Financial Statements and Exhibits

Item 9.01(a)(4)

Audited financial statements of Sterling Systems & Consulting, Inc. and its affiliates, required by this Item, are not included in this report. Such financial statements will be filed not later than 71 calendar days after the required filing date of the Form 8-K report amended by this Form 8-K/A.

Item 9.01(b)(2)

At the time of filing an amendment to this report containing the audited financial information described in Item 9.01(a)(4) above, the registrant will also file pro forma financial information relative to the acquired business.

Item 9.01(c) Exhibits. The following exhibit is furnished with this report:

Exhibit 99.1 — Press release dated May 31, 2006

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 thereunto duly authorized.

	AVATECH SOLUTIONS, INC.
	(Registrant)
Date: June 8, 2006	By:	/s/ Christopher Olander
		Christopher Olander
		Executive Vice President

EX-99.1

Exhibit 99.1

[AVATECH LOGO OMITTED]	Avatech Solutions, Inc. - Corporate Headquarters
	10715 Red Run Blvd, Ste 101
	Owings Mills, MD 21117
	phone: 410-902-6900
	fax: 410-902-8324
	www.avatechsolutions.com

FOR IMMEDIATE RELEASE

Avatech Solutions Finalizes Acquisition of Sterling Systems

Acquisition Extends Market Reach, Boosts Revenues & Net Income

BALTIMORE, MARYLAND – May 31, 2006 – Avatech Solutions, Inc. (OTCBB: AVSO.OB), the U.S. leader in design automation solutions, announced today it has completed the acquisition of Sterling Systems and Consulting.

Sterling Systems and Consulting is one of the largest providers of Autodesk design technology solutions and consulting services in the Midwest and is one of the largest civil engineering solution providers worldwide. Sterling has offices in Detroit, Indianapolis, Chicago, and Cleveland providing Avatech with four new locations in the upper Midwest, bringing the total number of Avatech offices to twenty across the nation.

“The addition of Sterling Systems extends our ability to serve clients in some of the larger markets in the upper Midwest,” said Scotty Walsh, Avatech’s CEO. “This acquisition fits with our current growth strategy and we welcome the 36 seasoned professionals from Sterling to our team.”

With extensive industry experience leading the company for over 15 years, Sterling founder Bruce White, will become Avatech Solutions’ Infrastructure Solutions Group Vice President.

“This move shows our continued commitment to building a comprehensive, nationwide design automation and technology services company dedicated to helping our customers achieve competitive advantage.” said Walsh. “From a financial point of view, this acquisition will add approximately $11 million in revenues and be immediately accretive to earnings.”

This transaction was financed with a loan from Mercantile – Safe Deposit and Trust Company.

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 www.avatech.com for more information.

About Sterling Systems

Founded in 1990, Sterling Systems & Consulting, Inc. is a leading provider for CAD and design technologies in the United States. Sterling Systems is known for delivering complete technology solutions including training, implementation, customization as well as software and hardware solutions. The company is headquartered in Madison Heights, MI with several regional offices.

Visit http://www.sterling-systems.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.

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

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Media Contacts:

Jean Schaeffer	Cyrus Mavalwala
Avatech Solutions, Inc.	Cross Border Communications
Phone +1 (410) 581-8080	Phone +1(416) 226-6551
Fax +1 (410) 753-1591
jean.schaeffer@avatech.com	cyrus@crossborderpr.com