Coretec Inc.
TSX : CYY

Coretec Inc.

November 28, 2006 13:28 ET

Coretec Inc. to Revise Reported Sales and Cost of Sales for First Three Quarters of 2006

TORONTO, ONTARIO--(CCNMatthews - Nov. 28, 2006) - Coretec Inc. (TSX:CYY) announced today that it is restating its sales and cost of sales upwards by $1.1 million for the nine month period ended September 30, 2006. The understatement in sales and cost of sales occurred as a result of certain inter-company sales, transacted at cost, being eliminated twice during the preparation of the consolidated financial statements. There is no change to the gross profit dollars reported during the period however, with the higher sales, the gross margin percentage was overstated by 0.4% for the nine month period ended September 30, 2006. There is no impact on the gross profit, net income or earnings per share reported for the period. Management has implemented new month end processes to prevent this type of event from recurring.

The revised balances for each quarter and the year to date up to September 30, 2006, compared to the previously reported amounts, are shown below.



Q1 2006 (in thousands of dollars)
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Revised Previously reported
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Sales $24,570 $24,116
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Cost of Sales 18,340 17,886
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Gross Profit $ 6,230 6,230
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Gross Margin % 25.4% 25.8%
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Q2 2006 (in thousands of dollars)
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Revised Previously reported
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Sales $22,852 $22,402
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Cost of Sales 17,661 17,211
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Gross Profit $ 5,191 5,191
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Gross Margin % 22.7% 23.2%
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Q3 2006 (in thousands of dollars)
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Revised Previously reported
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Sales $21,465 $21,257
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Cost of Sales 16,430 16,222
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Gross Profit $ 5,035 5,035
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Gross Margin % 23.5% 23.7%
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Year to date September 30, 2006 (in thousands of dollars)
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Revised Previously reported
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Sales $68,887 $67,775
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Cost of Sales 52,431 51,319
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Gross Profit $ 16,456 16,456
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Gross Margin % 23.9% 24.3%
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The decision to announce the matter referred to above was made by the Audit Committee of Coretec Inc.'s Board of Directors, upon the recommendation of management. The fourth quarter fiscal 2006 financial statements will reflect the adjustments and changes referred to above on a cumulative basis. The Company will provide its restated selected financial information for the first three quarters of 2006 in its management's discussion and analysis for fiscal 2006.

The financial information included in this press release is preliminary and unaudited. It is subject to change as a result of any adjustments arising from subsequent events and the completion of the audit of Coretec Inc.'s 2006 financial statements.

Forward Looking Statements

This news release includes forward-looking statements related to Coretec's financial and operational results, including with respect to expected adjustments to previously reported financial results. Such forward-looking statements are based on assumptions and expectations and involve significant risks and uncertainties which would cause actual results to vary materially from those contained in the forward-looking statements. Actual restated amounts could differ materially from those projected in this release due to a number of factors, including changes arising from further review of Coretec's financial statements, subsequent events and the completion of Coretec's financial statements for the fiscal year ended December 31, 2006. Other risks and uncertainties that may affect Coretec are listed in Coretec's various public filings at www.sedar.com including Coretec's most recent AIF and MD&A. These and other factors should be considered carefully and undue reliance should not be placed on Coretec's forward-looking statements. Coretec does not undertake to update any forward-looking statement that is contained in this press release or other communications.

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