Coretec Inc., a leading designer and fabricator of PCBs for the prototype and quick turnaround production markets, announces that it is proposing to complete a non-brokered private placement (the Private Placement) of up to 1,000 units of the company (the Units), each Unit consisting of one convertible debenture of the company in the principal amount of $1,000 (a Convertible Debenture) and 10,000 common share purchase warrants of the company (the Warrants) constituting, in aggregate, $1,000,000 principal amount of Convertible Debentures and 10,000,000 Warrants, with the proceeds thereof to be used for general working capital purposes.

The Convertible Debentures will mature on the date (the Maturity Date) that is three years following the closing date of the Private Placement (the Closing Date). The rate of interest per annum payable on the outstanding Convertible Debentures will be 12% from the date of issue, payable semi-annually in arrears. The company will satisfy the interest payments, in cash, or half (6%) in cash and half (6%) in common shares of the company, where the share price will be based on the weighted average trading price for the five trading days prior to the date any such interest becomes due and payable, on December 31 and June 30 of each year, commencing December 31, 2009. The December 31, 2009 interest payment will represent accrued interest for the period from the Closing Date to, but excluding, December 31, 2009.

It is anticipated that insiders of the company may subscribe for the entire Private Placement. For greater certainty, Paul Langston, Chief Executive Officer, and Robert Morrison, a Director of the company, have indicated that they may subscribe for up to $500,000 principal amount of Convertible Debentures (and 5,000,000 Warrants) and up to $500,000 principal amount of Convertible Debentures (and 5,000,000 Warrants), respectively. The balance of the Convertible Debentures and Warrants to be issued pursuant to the Private Placement may be subscribed for by management and directors of the company.

The Convertible Debentures will be convertible at the holder's option into common shares of the company (the Common Shares) at any time prior to the Maturity Date, at a conversion price of $0.10 per Common Share, being at a rate of 10,000 Common Shares per $1,000 principal amount of Convertible Debentures, subject to standard anti-dilution provisions.

Each Warrant shall be exercisable for one Common Share at a price of $0.13 per Common Share at any time prior to 5:00 p.m. (Toronto time) on the date that is three years following the Closing Date.

Pursuant to the Private Placement, up to an aggregate of: (i) 10,000,000 Common Shares are issuable upon conversion of the Convertible Debentures; (ii) 6,000,000 Common Shares are issuable to satisfy future interest payments on the Convertible Debentures; and (iii) 10,000,000 Common Shares are issuable upon exercise of the Warrants, representing approximately 144% of the issued and outstanding common shares of the company, on a non-diluted basis, prior to issuance. A total of 18,021,807 Common Shares are currently issued and outstanding.

Langston is currently the registered and beneficial holder of approximately 24% of the outstanding Common Shares. Following completion of the Private Placement, if only the Convertible Debentures and Warrants issued to Langston (assuming he elects to participate and at the aforementioned $500,000 maximum level) are converted and exercised, Langston will be the registered and beneficial holder of approximately 52% of the outstanding Common Shares.

Morrison is currently the registered and beneficial holder of approximately 20% of the outstanding Common Shares.

Following completion of the Private Placement, if only the Convertible Debentures and Warrants issued to Morrison (assuming he elects to participate and at the aforementioned $500,000 maximum level) are converted and exercised, Morrison will be the registered and beneficial holder of approximately 48% of the outstanding Common Shares.

The Private Placement is subject to the approval of the Toronto Stock Exchange (the TSX) and since the Private Placement will: (i) provide for the issuance to insiders of the Company of greater than 10% of the number of outstanding Common Shares; (ii) be deemed under the rules of the TSX to materially affect control of the Company; and (iii) provide for the issuance of greater than 25% of the currently outstanding Common Shares, the rules of the TSX require that the company obtain approval of the Private Placement from the holders of a majority of the Common Shares, excluding the votes attached to the Common Shares held by the insiders of the company who are subscribing to the Private Placement and their associates and affiliates. Such approval may be obtained in writing from shareholders without the requirement to convene a shareholders meeting for such purposes. However, the rules of the TSX also allow for exemptions to the shareholder approval requirement in certain circumstances.