8-K/A

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K/A

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report: August 17, 2007

INCENTRA SOLUTIONS, INC.

(Exact Name of Registrant as Specified in Its Charter)

NEVADA	7371	86-0793960
(State or Other Jurisdiction of Incorporation	(Primary Standard Industrial Classification Code Number)	(I.R.S.Employer Identification No.)

1140 PEARL STREET

BOULDER, COLORADO 80302

(303) 440-7930

(Address of Principal Executive Offices)

(303) 440-7930

(Registrant's telephone number, including area code)

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):

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

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

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

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

EXPLANATORY NOTE:

Incentra Solutions, Inc. filed a Current Report on Form 8-K, dated August 17, 2007, as filed on August 23, 2007 announcing that it had completed its acquisition of Helio Solutions, Inc., a California corporation, ("Helio") on August 17, 2007. The purpose of this amendment is to file various financial statements relating to the business of the acquired company.

SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

Paragraphs (a) and (b) of Item 9, "Financial Statements and Exhibits" are hereby amended to include the following:

(a)Financial Statements of Business Acquired (Helio Solutions, Inc.):

(1) Audited Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm	F-1
Balance Sheets as of December 31, 2006 and 2005	F-2
Statements of Operations for the years ended December 31, 2006 and 2005	F-3
Statements of Changes in Shareholders' Equity for the years ended December 31, 2006 and 2005	F-4
Statements of Cash Flows for the years ended December 31, 2006 and 2005	F-5
Notes to Financial Statements	F-6
(2) Unaudited Interim Condensed Consolidated Financial Statements
Balance Sheets as of June 30, 2007 and 2006	F-11
Statements of Operations for the six month periods ended June 30, 2007 and 2006	F-12
Statements of Cash Flows for the six month periods ended June 30, 2007 and 2006	F-13
Notes to Financial Statements	F-14

(b) Pro Forma Condensed Consolidated Financial Information (Unaudited):

Headnote to Pro Forma Financial Information	F-16
Pro Forma Balance Sheet as of June 30, 2007	F-17
Pro Forma Statement of Operations for the year ended December 31, 2006	F-18
Pro Forma Statement of Operations for the six months ended June 30, 2007	F-19
Notes to Pro Forma Condensed Financial Information	F-20

(c)  Exhibits. The exhibits required by this item are listed on the Exhibit Index hereto.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

Incentra Solutions, Inc.

We have audited the accompanying consolidated balance sheets of Helio Solutions, Inc. and subsidiary (the "Company") as of December 31, 2006 and 2005, and the related consolidated statements of operations, changes in shareholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2006. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Helio Solutions, Inc. and subsidiary as of December 31, 2006 and 2005, and the results of their operations and their cash flows for each of the years in the two-year period ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 8 to the consolidated financial statements, on August 17, 2007, the Company was acquired by an unrelated entity.

As discussed in Note 9 to the consolidated financial statements, the Company restated its consolidated financial statements as of December 31, 2006 and 2005, and for each of the years in the two-year period ended December 31, 2006, to reflect the correction of certain errors in previously issued financial statements.

/s/ GHP Horwath, P.C.

Denver, Colorado

November 8, 2007

F-1

Helio Solutions, Inc. and Subsidiary

Consolidated Balance Sheets

(As Restated, Note 9)

   

	December 31,
	2006		2005
ASSETS
Current Assets
Cash and cash equivalents	$	1,056,485	$	1,995,396
Accounts receivable, net of allowance for doubtful accounts of $144,131 (2006) and $110,562 (2005) (including related parties of $273,142 (2006) and 0 (2005)) (Note 6)		14,350,991		14,650,024
Inventory		818,974		874,105
Prepaid expenses and other current assets		1,709,304		2,514,702
Total current assets		17,935,754		20,034,227
Property and Equipment, net (Note 2)		2,979,688		3,109,413
Other Assets
Cash surrender value of life insurance contracts		709,954		573,112
Deposits and other		92,540		93,699
Total other assets		802,494		666,811
	$	21,717,936	$	23,810,451
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable (including related parties of $1,431,000 (2006) and $139,768 (2005)) (Note 6)	$	14,175,741	$	14,036,752
Accrued expenses (Note 3)		1,793,369		2,688,697
Current portion of notes payable and other obligations (Note 4)		67,407		306,636
Deferred revenue and other		141,990		638,486
Deferred income taxes (Note 5)		238,187		533,610
Total current liabilities		16,416,694		18,204,181
Long-term Liabilities
Deferred income taxes (Note 5)		110,000		119,000
Deposits				27,846
Notes payable and other obligations, less current portion (Note 4)		2,146,502		2,163,823
Total long-term liabilities		2,256,502		2,310,669
Total liabilities		18,673,196		20,514,850
Commitments and contingencies (Notes 3, 4 and 7)
Non-Controlling Interest (Note 1)		676,630		564,253
Shareholders' Equity:
Common stock, $0.15 par value; 8,000,000 shares authorized; 3,860,020 shares issued and outstanding at December 31, 2006 and 2005		568,628		568,628
Retained earnings		1,799,482		2,162,720
Total shareholders' equity		2,368,110		2,731,348
	$	21,717,936	$	23,810,451

See notes to consolidated financial statements.

F-2

Helio Solutions, Inc. and Subsidiary

Consolidated Statements of Operations

(As Restated, Note 9)

   

	Years Ended December 31,
	2006			2005
Revenue	$	87,293,579		$	100,283,398
Cost of revenue		72,948,966			83,013,713
Gross margin		14,344,613			17,269,685
Expenses:
Selling, general and administrative		14,348,293			14,863,097
Depreciation and amortization		176,880			182,261
		14,525,173			15,045,358
(Loss) income from operations		(180,560	)		2,224,327
Other income (expense):
Interest expense, net		(134,787	)		(117,477	)
Loss on disposal of equipment		(8,450	)		(102,227	)
Other income		72,704			27,665
Total other expense		(70,533	)		(192,039	)
(Loss) income before non-controlling interest and income taxes		(251,093	)		2,032,288
Non-controlling interest (Note 1)		309,175			344,575
(Loss) income before income taxes		(560,268	)		1,687,713
Income tax (benefit) expense (Note 5)		(197,030	)		757,192
Net (loss) income	$	(363,238	)	$	930,521

See notes to consolidated financial statements.

F-3

Helio Solutions, Inc. and Subsidiary

Consolidated Statements of Changes in Shareholders' Equity

Years Ended December 31, 2006 and 2005

	Common Stock
	Shares		Amount		Retained  earnings			Total
Balance, December 31, 2004, as previously stated	3,860,020	$	568,628	$	597,193		$	1,165,821
Restatement for the correction of errors (Note 9)					656,237			656,237
Balance, December 31, 2004, as restated	3,860,020		568,628		1,253,430			1,822,058
Dividends declared					(21,231	)		(21,231	)
Net income					930,521			930,521
Balance, December 31, 2005, as restated	3,860,020		568,628		2,162,720			2,731,348
Net loss					(363,238	)		(363,238	)
Balance, December 31, 2006, as restated	3,860,020	$	568,628	$	1,799,482		$	2,368,110

See notes to consolidated financial statements.

F-4

Helio Solutions, Inc. and Subsidiary

Consolidated Statements of Cash Flows

(As Restated, Note 9)

	Years Ended December 31,
	2006			2005
Cash Flows from operating activities
Net (loss) income	$	(363,238	)	$	930,521
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities
Bad debt expense		142,554			41,966
Depreciation and amortization		176,880			182,261
Change in non-controlling interest		112,377			236,419
Loss on disposal of equipment		8,450			102,227
Deferred income taxes		(304,423	)		232,619
Changes in operating assets and liabilities
Accounts receivable		156,479			2,373,959
Inventory		55,131			179,127
Prepaid expenses and other		756,294			(1,588,323	)
Accounts payable		138,989			(2,250,349	)
Accrued expenses		(895,329	)		264,371
Deferred revenue and other		(503,111	)		617,256
Net cash (used in) provided by operating activities		(518,947	)		1,322,054
Cash flows from investing activities
Capital expenditures		(5,342	)		(171,185	)
Proceeds from sale of equipment					41,361
Deposits					51,664
Increase in cash surrender value of life insurance contracts		(136,842	)		(196,672	)
Net cash used in investing activities		(142,184	)		(274,832	)
Cash flows from financing activities
Payments on notes payable and other obligations		(256,549	)		(260,540	)
Dividends paid		(21,231	)
Net cash used in financing activities		(277,780	)		(260,540	)
(Decrease) increase in cash and cash equivalents		(938,911	)		786,682
Cash and cash equivalents at beginning of year		1,995,396			1,208,714
Cash and cash equivalents at end of year	$	1,056,485		$	1,995,396
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest	$	145,098		$	129,601
Income taxes	$	417,156		$	1,010,000
Non-cash investing and financing activities:
Dividend declared and recorded as a liability				$	21,231
Vehicle acquired under lease obligation	$	50,087

See notes to consolidated financial statements.

F-5

Helio Solutions, Inc. and Subsidiary

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2006 and 2005

Note 1. Business and Summary of Significant Accounting Policies

Company: Helio Solutions, Inc. (Helio) was incorporated on April 19, 2001 in the state of California. Helio is a San Jose, California based reseller of computer hardware, software and services. Helio also has a sales office in Scottsdale, Arizona. In August 2007, all of Helio’s outstanding stock was acquired by a publicly-traded company (Note 8).

Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Principles of Consolidation: The consolidated financial statements of Helio include the accounts of 3000 Lakeside LLC (“Lakeside”), a variable interest entity formed in 2004, for which Helio is the primary beneficiary. These consolidated entities are collectively referred to as the “Company”. All intercompany balances and transactions have been eliminated in consolidation.

The Company consolidates Lakeside in accordance with Financial Accounting Standards Board (“FASB”) Interpretation No. 46(R) (“FIN 46R”), Consolidation of Variable Interest Entities (“VIEs”), which addresses consolidation by a business enterprise of VIEs that either: (1) do not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support, or (2) will hold a significant variable interest in, or have significant involvement with, an existing VIE.

Lakeside owns land and a building which it leases to Helio for approximately $22,600 per month under an 11-year lease agreement expiring in 2017 (Note 2). The land and building are collateralized by mortgage notes which have been guaranteed by Helio (Note 4). All intercompany rental income and expense is eliminated upon consolidation.

Reflected in the December 31, 2006 and 2005, consolidated balance sheets are Lakeside assets of approximately $2.8 million, which primarily represent land and building. Lakeside liabilities consist of mortgage notes on that property which total approximately $2.1 million and $2.2 million at December 31, 2006 and 2005, respectively. Non-controlling interest as of and for the periods ended December 31, 2006 and 2005, represents other investors’ 100% claim to Lakeside’s net assets and net income.

Cash and cash equivalents: For purposes of the balance sheets and the statements of cash flows, the Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.

Inventory: Inventory is stated at the lower of cost or market basis, by the first-in, first-out method. Obsolete inventory is either written off or reduced to estimated net realizable values.

Impairment of long-lived assets: Management reviews the carrying value of property and equipment and other long-lived assets to determine whether there are any indications of impairment. Impairment of long-lived assets is assessed by a comparison of the carrying amount of an asset to expected future cash flows to be generated by the asset. If the assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. Management has determined that no impairment of long-lived assets exists at December 31, 2006 and 2005.

Property and equipment: Property and equipment is recorded at cost. Costs of maintenance and repairs which do not improve or extend the lives of respective assets are expensed currently. Depreciation for financial reporting purposes is computed on the straight-line method over the estimated useful lives of the assets which range from 3 to 7 years.

Concentration of credit risk: The Company performs continuing credit evaluations of its customers and historically the Company has not experienced significant losses related to receivables from individual customers in any particular geographic area or industry. At December 31, 2006 and 2005, three customers accounted for approximately 42% and 48%, respectively, of accounts receivable. Each accounted for 10% or more of total accounts receivable. The inability to collect amounts due from any of these customers could have an adverse effect on the Company’s operations.

For the year ended December 31, 2006, three customers accounted for 50% of revenue, and each accounted for more than 10% of revenue. For the year ended December 31, 2005, two customers accounted for 34% of revenue and each accounted for more than 10% of revenue. The loss of any one or a group of these customers could have a material adverse effect on the Company’s statement of financial position, results of operations or cash flows.

The Company primarily sells products acquired from one distributor. Purchases from this distributor were in excess of 90% of cost of revenues for 2006 and 2005. This vendor accounted for approximately 81% and 92% of accounts payable at December 31, 2006 and 2005, respectively. The loss of this distributor could have an adverse effect on the Company’s operations.

Revenue recognition: The Company applies the provisions of Emerging Issues Task Force (“EITF) Issue No. 99-19, “Reporting Revenue Gross as a Principal versus Net as an Agent.” The Company’s application of EITF 99-19 includes evaluation of the terms of customer contracts relative to a number criteria that management considers in making its determination with respect to gross versus net reporting of revenue for transactions with customers. Management’s criteria for making these judgments place particular emphasis on determining the primary obligor in a transaction and which party bears general inventory risk. The Company purchases and resells hardware, software and third-party maintenance contracts. In these transactions, the Company (i) acts as principal; (ii) take title to the products; and (iii) has the risks and rewards of ownership, including the risk of loss for collection, delivery or returns (which have not been significant). For these transactions, the Company recognizes revenues based on the gross amounts due from customers.

Revenue is recognized when all of the following criteria are met: persuasive evidence of an agreement exists, delivery has occurred or services have been rendered, the sales price is fixed or determinable, and collectibility is reasonably assured.

Financial instruments: The carrying amounts of financial instruments held by us, which include cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their short duration. The carrying values of notes payable and other obligations approximate fair values based upon market rates currently available to the Company. The fair values of accounts receivable from related parties and accounts payable to related parties are not practicable to estimate, due to the related party nature of the underlying transactions.

Recently issued accounting pronouncements: In February 2007, FASB issued Statement of Financial Accounting Standard (SFAS) No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment to FASB Statement No. 115. This statement permits companies to choose to measure many financial instruments and other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This statement is expected to expand the use of fair value measurement of accounting for financial instruments. This statement applies to all entities, including not for profit. The fair value option established by this statement permits all entities to measure eligible items at fair value at specified election dates. This statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Management does not expect that the adoption of this statement will have a significant immediate impact on the Company’s consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurement. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect that the adoption of this statement will have a significant immediate impact on the Company’s consolidated financial statements.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections, which changes the requirements for the accounting and reporting of a change in accounting principle and applies to all voluntary changes in accounting principle. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. When a pronouncement includes specific transition provisions, those provisions should be followed. Accounting Principles Board Opinion No. 20, Accounting Changes previously required that most voluntary changes in accounting principle be recognized by including in net income of the period of the change the cumulative effect of changing to the new accounting principle. SFAS 154 requires retrospective application to prior period financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. The provisions of SFAS 154 were effective for fiscal years beginning after December 15, 2005. The adoption of this statement did not have an impact on the Company’s consolidated financial statements.

F-6

Helio Solutions, Inc. and Subsidiary

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2006 and 2005

Note 2.  Property and equipment

Property and equipment consists of the following:

	December 31,
	2006			2005
Land (owned by Lakeside)	$	1,100,000		$	1,100,000
Building (owned by Lakeside)		1,340,755			1,340,755
Leasehold improvements		280,844			280,844
Automobiles		178,220			128,134
Furniture and fixtures		80,561			80,561
Equipment		333,511			357,913
Computer software		94,689			94,689
		3,408,580			3,382,896
Less accumulated depreciation		(428,892	)		(273,483	)
	$	2,979,688		$	3,109,413

The amounts above include assets under capital leases with a gross carrying value of $155,475 and $105,389 at December 31, 2006 and 2005, and accumulated depreciation of $53,620 and $31,707 at December 31, 2006 and 2005, respectively.

Note 3.  Accrued expenses

Accrued expenses consist of the following:

	December 31,
	2006		2005
Commissions	$	647,356	$	1,037,910
Payroll taxes		50,808		55,230
Salaries and wages		293,230		650,136
Sales taxes and other		632,242		700,234
Vacation		169,733		245,187
	$	1,793,369	$	2,688,697

Note 4.  Notes payable and other obligations

Notes payable and other obligations are as follows:

	December 31,
	2006		2005
Note payable by Lakeside to a finance company; interest at prime rate less .125% (8.375% and 7.375% at December 31, 2006 and 2005, respectively); due in monthly payments of principal and interest of approximately $10,000; matures in 2019; collateralized by Landmark land and building	$	1,527,893	$	1,544,026
Note payable by Lakeside to a finance company; interest at 5.25%; due in monthly payments of principal and interest of approximately $4,800; matures in 2024; collateralized by Landmark land and building		580,693		600,572
Borrowing under $1 million line of credit; variable interest rate (10.5% and 9.5% at December 31, 2006 and 2005 respectively); expired September, 2007				250,000
Obligations under capital leases; implicit interest rates ranging from 4.95% to 5.9%; leases maturing through December 2011; collateralized by vehicles		105,323		75,861
		2,213,909		2,470,459
Less current portion		67,407		306,636
Non-current	$	2,146,502	$	2,163,823

Notes payable and other obligations mature over the next five years and thereafter as follows:

2007	$	67,407
2008		71,606
2009		62,348
2010		55,271
2011		78,930
Thereafter		1,878,347
	$	2,213,909

F-7

Helio Solutions, Inc. and Subsidiary

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2006 and 2005

Note 5.  Income taxes

The provision for income tax (benefit) expense consists of the following:

	2006			2005
Current	$	107,393		$	524,573
Deferred		(304,423	)		232,619
	$	(197,030	)	$	757,192

The provision for income taxes differs from the amount of income tax determined by applying the applicable US Federal income tax rate to pre-tax income. The differences are primarily due to certain nondeductible expenses including meals and entertainment and officers' life insurance expenses and state taxes.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below.:

	December 31,
	2006			2005
Deferred tax assets, current
Accrued liabilities	$	124,000		$	315,000
Inventory		15,000			14,000
		139,000			329,000
Deferred tax liabilities, current
Deferred revenue		(377,187	)		(862,610	)
Net deferred tax liabilities, current	$	(238,187	)	$	(533,610	)
Deferred tax liabilities, long term
Property and Equipment, principally
due to differences in depreciation	$	(110,000	)	$	(119,000	)
Total deferred tax liabilities	$	(348,187	)	$	(652,610	)

F-8

Helio Solutions, Inc. and Subsidiary

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2006 and 2005

Note 6.  Related party transactions

A shareholder of the Company holds a substantial owneership interest in an entity that leases vehicles to the Company under operating leases expiring through July 2008. Future annual lease payments for 2007 and 2008 are $70,290 and $10,200, respectively. During the years ended December 31, 2006 and 2005, vehicle lease expense was $154,130 and $133,315, respectively.

The Company also purchases inventory from two other companies in which certain shareholders hold substantial ownership interests. During the years ended December 31, 2006 and December 31, 2005, purchases from these companies totaled $154,046 and $543,530, respectively. At December 31, 2006, the Company had accounts payable to these two companies totaling $1,431,000. At December 31, 2005, the Company had accounts payable to one of these companies totaling $139,768.

During the years ended December 31, 2006 and 2005, the Company had equipment sales of $273,142 and $200,000 respectively to a company in which a shareholder held substantial ownership interests. Accounts receivable from this company was $273,142 at December 31, 2006. At December 31, 2005, the Company had no receivables from this company.

Note 7.  Commitments

Leases

The Company leases its San Jose and Scottsdale facilities under non-cancellable operating lease agreements that have more than one year remaining. Certain leases contain options to renew. In addition, the Company is required to pay utilities, insurance, property taxes, and common area maintenance costs. Annual lease payments are as follows as of December 31, 2006:

	San Jose		Scottsdale		Total
2007	$	181,975	$	21,840	$	203,815
2008		186,732		-		186,732
2009		192,150		-		192,150
	$	560,857	$	21,840	$	582,697

Facility rent expense was $178,850 and $200,638 for the years ended December 31, 2006 and 2005, respectively.

401(k) Plan

The Company sponsors a 401(k) Savings Plan (the “Plan”). The Plan is a defined contribution plan for all regular employees. Participants may elect to make contributions ranging from 1% to 100% of their eligible compensation, subject to limitations based on the tax law. The Company matches employee contributions up to the first 4% contributed, and employee contributions are 100% vested when made. Contributions made by the Company vest ratably over two years. The Company’s total contribution expense for the years ended December 31, 2006 and 2005 was approximately $8,800 and $8,400, respectively.

F-9

Helio Solutions, Inc. and Subsidiary

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2006 and 2005

Note 8. Subsequent event

On August 17, 2007, the Company was acquired by Incentra Solutions, Inc., a publicly-traded company. The purchase price was approximately $10.3 million and was paid in cash ($5,000,000), shares of Incentra Solutions, Inc. common stock (6,000,000 shares) and a three-year term note ($770,000). Additionally, the purchase agreement includes an earn-out provision whereby the Company shareholders can earn up to an additional $15 million based on achieving certain levels of operating performance over the next three years.

Note 9. Restatements

The accompanying consolidated financial statements as of December 31, 2006 and 2005 and for the two years ended December 31, 2006 have been restated to reflect adjustments made to the Company’s previously issued 2006 and 2005 financial statements.The following table summarizes the impact of the restatements on balances previously reported:

As of and for the year ended December 31, 2006:

	As reported		Adjustments			As restated
Current assets	$	16,988,311	$	947,443	(a)	$	17,935,754
Property and equipment, net		370,607		2,609,081	(b)		2,979,688
Other assets		1,076,049		(273,555)	(c)		802,494
Total assets	$	18,434,967	$	3,282,969		$	21,717,936
Current liabilities	$	15,985,082	$	431,612	(d)	$	16,416,694
Long-term liabilities		375,673		1,880,829	(b)		2,256,502
Non-controlling interest				676,630	(b)		676,630
Shareholders' equity		2,074,212		293,898			2,368,110
Total liabilities and shareholders' equity	$	18,434,967	$	3,282,969		$	21,717,936
Revenue	$	90,079,102	$	(2,785,523)	(a)	$	87,293,579
Cost of revenue		74,489,531		(1,540,565)	(a)		72,948,966
Gross margin		15,589,571		(1,244,958	)		14,344,613
Expenses		15,033,907		(508,734	) (e)		14,525,173
Income (loss) from operations		555,664		(736,224	)		(180,560	)
Other income (expense)		80,036		(150,569	) (b)		(70,533	)
Income (loss) before non-controlling interest		635,700		(886,793	)		(251,093	)
Non-controlling interest				309,175	(b)		309,175
Income (loss) before income taxes		635,700		(1,195,968	)		(560,268	)
Income tax expense (benefit)		337,393		(534,423	) (d)		(197,030	)
Net income (loss)	$	298,307	$	(661,545	)	$	(363,238	)

As of and for the year ended December 31, 2005:

	As reported		Adjustments					As restated
Current assets	$	18,153,103	$	1,881,124		(a	)	$	20,034,227
Property and equipment, net		458,754		2,650,659		(b	)		3,109,413
Other assets		964,349		(297,538	)	(c	)		666,811
Total assets	$	19,576,206	$	4,234,245				$	23,810,451
Current liabilities	$	17,003,578	$	1,200,603		(d	)	$	18,204,181
Long-term liabilities		796,723		1,513,946		(b	)		2,310,669
Non-controlling interest				564,253		(b	)		564,253
Shareholders' equity		1,775,905		955,443					2,731,348
Total liabilities and shareholders' equity	$	19,576,206	$	4,234,245				$	23,810,451
Revenue	$	104,059,298	$	(3,775,900	)	(a	)	$	100,283,398
Cost of revenue		86,504,294		(3,490,581	)	(a	)		83,013,713
Gross margin		17,555,004		(285,319	)				17,269,685
Expenses		16,508,469		(1,463,111	)	(e	)		15,045,358
Income from operations		1,046,535		1,177,792					2,224,327
Other income (expense)		41,353		(233,392	)	(b	)		(192,039	)
Income before non-controlling interest		1,087,888		944,400					2,032,288
Non-controlling interest				344,575		(b	)		344,575
Income before income taxes		1,087,888		599,825					1,687,713
Income tax expense		456,573		300,619		(d	)		757,192
Net income	$	631,315	$	299,206				$	930,521

(a)	Adjustments primarily resulting from recording rebates received on the accrual basis and reclassifying rebates received from revenue to a reduction of cost of revenue.
(b)	Adjustments primarily resulting from the consolidation of Lakeside in accordance with FIN 46R.
(c)	Adjustments primarily resulting from the write off of intangible assets.
(d)	Adjustments primarily resulting from changes in deferred taxes due to the adjustments recorded.
(e)	Adjustments primarily resulting from reclassifying certain rebates received from a reduction in advertising expense to a reduction of cost of revenue.

F-10

Helio Solutions, Inc. and Subsidiary

Condensed Consolidated Balance Sheets

(Unaudited)

	June 30,
	2007		2006
ASSETS
Current Assets
Cash and cash equivalents	$	537,250	$	1,776,454
Accounts receivable net of allowance for doubtful accounts of $40,000 (2007) and $108,913 (2006)		10,448,570		14,452,163
Inventory		1,114,986		1,442,029
Prepaid expenses and other current assets		1,229,074		1,807,032
Total current assets		13,329,880		19,477,678
Property and Equipment, net (Note 2)		2,878,356		3,020,842
Other Assets
Cash surrender value of life insurance contracts		826,731		676,694
Deposits and other		74,887		93,120
Total other assets		901,618		769,814
	$	17,109,854	$	23,268,334
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable (including related parties of $450,000 (2007) and 0 (2006))	$	9,797,252	$	13,268,103
Accrued expenses (Note 3)		1,091,666		1,932,303
Current portion of notes payable and other obligations		47,117		100,317
Deferred income taxes		238,187		533,610
Deferred revenue and other		490,798		837,429
Total current liabilities		11,665,020		16,671,762
Long-term Liabilities
Deferred income taxes		110,000		119,000
Notes payable and other obligations, less current portion		2,088,820		2,090,223
Total long-term liabilities		2,198,820		2,209,223
Total liabilities		13,863,840		18,880,985
Non-Controlling Interest (Note 1)		725,635		686,850
Shareholders’ Equity:
Common Stock, $0.15 par value; 8,000,000 shares authorized; 3,860,020 shares issued and outstanding at June 30, 2007 and 2006		568,628		568,628
Retained earnings		1,951,751		3,131,871
Total shareholders’ equity		2,520,379		3,700,499
	$	17,109,854	$	23,268,334

See notes to condensed consolidated financial statements.

F-11

Helio Solutions, Inc. and Subsidiary

Condensed Consolidated Statements of Operations

(Unaudited)

	Six Months Ended June 30,
	2007			2006
Revenues	$	32,840,300		$	45,888,539
Cost of revenue		27,295,097			38,708,694
Gross margin		5,545,203			7,179,845
Expenses:
Selling , general and administrative		5,026,355			5,108,672
Depreciation and amortization		88,020			89,152
		5,114,375			5,197,824
Income from operations		430,828			1,982,021
Other income (expense)
Interest expense, net		(69,085	)		(69,570	)
Loss on disposal of equipment		(22,029	)
Other income		78,718			3,850
Total other expense		(12,396	)		(65,720	)
Income before non - controlling interest and income taxes		418,432			1,916,301
Non - controlling interest		160,352			273,674
Income before income taxes		258,080			1,642,627
Income tax expense		105,813			673,477
Net income	$	152,267		$	969,150

See notes to condensed consolidated financial statements.

F-12

Helio Solutions, Inc. and Subidiary

Condensed Consolidated Statements of Cash Flows

( Unaudited)

	Six Months Ended June 30,
	2007			2006
Cash Flows from operating activities
Net income	$	152,267		$	969,150
Adjustments to reconcile net income to net cash (used in) provided by operating activities
Bad debt expense		40,000			3,897
Depreciation and amortization		88,020			89,152
Change in non-controlling interest		49,006			122,596
Loss on disposal of equipment		22,029
Changes in operating assets and liabilities
Accounts receivable		3,862,421			193,964
Inventory		(296,012	)		(567,924	)
Prepaid expenses and other		480,229			707,670
Accounts payable		(4,378,489	)		(768,649	)
Accrued expenses		(701,703	)		(756,394	)
Deferred revenue		270,840			(453,305	)
Other current liabilities		105,813			673,478
Net cash (used in) provided by operating activities		(305,579	)		213,635
Cash flows from investing activities
Capital expenditures		(8,135	)
Deposits		(10,772	)		(27,846	)
Increase in cash surrender value of life insurance contracts		(116,777	)		(103,582	)
Net cash used in investing activities		(135,684	)		(131,428	)
Cash flows from financing activities
Payments on notes payable and other obligations		(77,972	)		(279,918	)
Dividends paid					(21,231	)
Net cash used in financing activities		(77,972	)		(301,149	)
Decrease in cash and cash equivalents		(519,235	)		(218,942	)
Cash and cash equivalents at beginning of period		1,056,485			1,995,396
Cash and cash equivalents at end of period	$	537,250		$	1,776,454
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest	$	72,651		$	71,484
Income taxes				$	140,000

See notes to condensed consolidated financial statements.

F-13

Helio Solutions, Inc. and Subsidiary

Notes to Condensed Consolidated Financial Statements

For the Six Month Periods Ended June 30, 2007 and 2006

(Unaudited)

Note 1.  Summary of Significant Accounting Policies

Company: Helio Solutions, Inc. (Helio) was incorporated on April 19, 2001 in the state of California. Helio is a San Jose, California-based reseller of computer hardware, software and services. Helio also has a sales office in Scottsdale, Arizona. In August 2007, all of Helio’s outstanding stock was acquired by a publicly-traded company. 

Principles of consolidation: The consolidated financial statements of Helio include the accounts of 3000 Lakeside LLC (“Lakeside”), a variable interest entity formed in 2004, for which Helio is the primary beneficiary. These consolidated entities are collectively referred to as the “Company”. All intercompany balances and transactions have been eliminated in consolidation.

The Company consolidates Lakeside in accordance with Financial Accounting Standards Board (“FASB”) Interpretation No. 46(R) (“FIN 46R”), Consolidation of Variable Interest Entities (“VIEs”), which addresses consolidation by a business enterprise of variable interest entities that either: (1) do not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support, or (2) will hold a significant variable interest in, or have significant involvement with, an existing VIE.

Lakeside owns land and a building which it leases to Helio for approximately $22,600 per month under an 11-year lease agreement expiring in 2017 (Note 2). The land and building are collateralized by mortgage notes which have been guaranteed by Helio. All intercompany rent income and expense is eliminated upon consolidation.

Reflected in the June 30, 2007 and 2006, condensed consolidated balance sheets are Lakeside assets of approximately $2.8 million, which primarily represent land and building. Lakeside liabilities consist of mortgage notes on that property which total approximately $2.1 million at June 30, 2007 and 2006. Non-controlling interest as of and for the periods ended June 30, 2007 and 2006, represents other investors’ 100% claim to Lakeside’s net assets and net income.

Interim Financial Statements: The accompanying balance sheet as of June 30, 2007, and the statements of operations and the statements of cash flows for the six months ended June 30, 2007 and 2006, have been prepared by the Company without audit. In the opinion of management, all adjustments (which included normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for such periods have been made. The results of operations for the six months ended June 30, 2007, are not necessarily indicative of operating results for the full year. These interim unaudited financial statements should be read in conjunction with the Company’s audited December 31, 2006 and 2005 consolidated financial statements, presented elsewhere within this Form 8-K/A.

Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liablilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Estimates made by us include those related to fair values of acquired goodwill and intangible assets, as well as property and equipment (including assumptions and estimates used in evaluating these assets for impairment), and the establishment of an allowance of uncollectible accounts receivable.

F-14

Helio Solutions, Inc. and Subsidiary

Notes to Condensed Consolidated Financial Statements

For the Six Month Periods Ended June 30, 2007 and 2006

(Unaudited)

Note 2. Property and equipment

Property and equipment consists of the following:

	2007			2006
Land (owned by Lakeside)	$	1,100,000		$	1,100,000
Building (owned by Lakeside)		1,340,755			1,340,755
Leasehold improvements		280,844			280,844
Automobiles		178,220			128,134
Furniture and fixtures		38,506			80,561
Equipment		341,648			357,913
Computer software		94,689			94,689
		3,374,662			3,382,896
Less accumulated depreciation		(496,306	)		(362,054	)
	$	2,878,356		$	3,020,842

Note 3. Accrued expenses

Accrued expenses consist of the following:

	2007		2006
Commissions	$	315,613	$	895,027
Payroll taxes		14,518		14,645
Salaries and wages		267,714		374,625
Sales taxes and other		340,427		438,884
Vacation		153,394		209,122
	$	1,091,666	$	1,932,303

Note 4. Related party transactions

A shareholder of the Company holds a substantial interest in an entity that leases vehicles under operating leases. During the six months ended June 30, 2007 and 2006, rent expense recorded under these operating leases was $76,185 and $166,497, respectively.

The Company also purchases inventory from two other companies in which certain shareholders hold substantial interests. During the six month periods ended June 30, 2007, and June 30, 2006, purchases from these companies totaled $981,000 and $139,768, respectively. At June 30, 2007, the Company had accounts payable to these companies totaling $450,000. At June 30, 2006, the Company had no amounts payable to related parties.

There were no sales to related parties for the six month periods ended June 30, 2007 and June 30, 2006.

Note 5. Subsequent event

On August 17, 2007, the Company was acquired by Incentra Solutions, Inc., a publicly-traded company. The purchase price was approximately $10.3 million and was paid in cash ($5,000,000), shares of Incentra Solutions, Inc. common stock (6,000,000 shares) and a three-year term note ($770,000). Additionally, the purchase agreement includes an earn-out provision whereby the Company shareholders can earn up to an additional $15 million based on achieving certain levels of operating performance over the next three years.

F-15

ITEM 9.01(b) HEADNOTE TO PRO FORMA FINANCIAL INFORMATION

The pro forma financial information presented below reflects the acquisition of Helio Solutions, Inc., a California corporation acquired on August 17, 2007. The initial purchase price for the acquisition was approximately $10.3 million in cash and common stock. The acquisition agreement includes earn-out provisions that provide for up to $15 million in additional consideration that can be earned over the next three years based on the attainment of certain levels of financial performance. The transaction is described in more detail in our filing on Form 8-K dated August 17, 2007.

A preliminary allocation of the purchase price has been made to major categories of assets and liabilities in the accompanying pro forma condensed consolidated financial statements. The actual allocation of the purchase price and the resulting effect on income (loss) from operations is not expected to differ significantly from the pro forma amounts included herein. The pro forma adjustments represent the Company's preliminary determination of purchase accounting adjustments and are based upon available information and certain assumptions that the Company believes to be reasonable. Consequently, the amounts reflected in the unaudited pro forma condensed consolidated financial statements are subject to change; however, the final amounts are not expected to differ substantially.

The historical financial information on which the pro forma statements are based is included in our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, which was filed on April 2, 2007, and our Quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2007 filed on August 7, 2007.

The accompanying pro forma condensed consolidated balance sheet as of June 30, 2007 gives effect to the acquisition as if it had been consummated on that date. The accompanying pro forma condensed consolidated statements of operations for the six months ended June 30, 2007, and the year ended December 31, 2006, give effect to the acquisition as if it had been consummated at the beginning of the periods presented.

The pro forma financial information should be read in conjunction with our historical consolidated financial statements used in the presentation of the pro forma financial information. THE PRO FORMA INFORMATION PRESENTED IS NOT NECESSARILY INDICATIVE OF THAT WHICH WOULD HAVE BEEN ATTAINED HAD THE TRANSACTION OCCURRED AT THE DATES INCLUDED IN THE PRO FORMA FINANCIAL INFORMATION.

F-16

Incentra Solutions, Inc. and Subsidiaries

Pro Forma Condensed Consolidated Balance Sheets

(Unaudited)

	Historical June 30, 2007 Incentra Solutions, Inc.			Historical June 30, 2007 Helio Solutions, Inc.		Pro Forma Adjustments			Notes	Pro Forma June 30, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	596,582		$	537,250	$	(235,340	)	4	$	898,492
Accounts receivable, net of allowance for doubtful accounts of $373,000		22,153,750			10,448,570						32,602,320
Other current assets		4,517,771			2,344,060						6,861,831
Total current assets		27,268,103			13,329,880		(235,340	)			40,362,643
Property and equipment, net		2,866,521			2,878,356		(2,588,292	)	2,4		3,156,585
Capitalized software development costs, net		966,192									966,192
Intangible assets, net		2,022,989									2,022,989
Goodwill		16,870,862					9,366,534		2		26,237,396
Other assets		338,003			901,618		(414,753	)	2, 4		824,868
TOTAL ASSETS	$	50,332,670		$	17,109,854	$	6,128,149			$	73,570,673
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Current portion of notes payable, capital leases and other long-term obligations	$	12,756,992		$	47,117	$	313,564		1, 2, 4	$	13,117,673
Accounts payable		18,205,436			9,797,252		(1,128	)	2, 4		28,001,560
Accrued expenses		4,680,754			1,091,666		258,668		2, 4		6,031,088
Deferred income taxes					238,187		(238,187	)	2
Current portion of deferred revenue		3,566,831			490,798						4,057,629
Total current liabilities		39,210,013			11,665,020		332,917				51,207,950
Notes payable, capital leases and other long-term obligations, net of current portion		392,330			2,088,820		2,745,468		1, 2, 4		5,226,618
Deferred income taxes					110,000		(110,000	)	2
Deferred revenue, net of current portion		102,244									102,244
TOTAL LIABILITIES		39,704,587			13,863,840		2,829,385				56,536,812
Series A convertible redeemable preferred stock, $.001 par value, $31,500,000 liquidation preference, 2,500,000 shares authorized, 2,466,971 shares issued and outstanding		28,544,683									28,544,683
Non-controlling Interest					725,635		(725,635	)
Shareholders' deficit:
Preferred stock, nonvoting, $.001 par value, 2,500,000 shares authorized, none issued
Common stock, $.001 par value, 200,000,000 shares authorized		13,087			568,628		(562,628	)	2		19,087
Additional paid-in capital		122,515,987					6,538,778		2		129,054,765
Accumulated deficit		(140,445,675	)		1,951,751		(1,951,751	)	2		(140,445,675	)
TOTAL SHAREHOLDERS' DEFICIT		(17,916,601	)		2,520,379		4,024,399				(11,371,823	)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT	$	50,332,670		$	17,109,854	$	6,128,149			$	73,570,673

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

F-17

Incentra Solutions, Inc. and Subsidiaries

Pro Forma Condensed Consolidated Statements of Operations

(Unaudited)

	Historical For Year Ended December 31, 2006  Incentra Solutions, Inc.			Historical For Year Ended December 31, 2006  Helio Solutions, Inc.			Pro Forma Adjustments			Notes	Pro Forma Year Ended December 31, 2006
Revenue	$	66,632,154		$	87,293,579		$				$	153,925,733
Cost of revenue		52,374,437			72,948,966							125,323,403
GROSS MARGIN		14,257,717			14,344,613							28,602,330
Selling, general and administrative		26,550,751			14,348,293			494,031		4		41,393,075
Depreciation and amortization		767,342			176,880			(42,737	)	4		901,485
		27,318,093			14,525,173			451,294				42,294,560
OPERATING LOSS FROM CONTINUING OPERATIONS		(13,060,376	)		(180,560	)		(451,294	)			(13,692,230	)
Other income (expense)
Interest expense, net		(2,884,977	)		(134,787	)		(475,034	)	3, 4		(3,494,798	)
Loss on disposal of equipment					(8,450	)						(8,450	)
Loss on early extinguishment of debt		(2,956,606	)									(2,956,606	)
Other income		42,426			72,704							115,130
Foreign currency transaction gain		21,897										21,897
		(5,777,260	)		(70,533	)		(475,034	)			(6,322,827	)
LOSS FROM CONTINUING OPERATIONS		(18,837,636	)		(251,093	)		(926,328	)			(20,015,057	)
Non-controlling interest					309,175			(309,175	)	4
Accretion of convertible redeemable preferred stock to redemption amount		(2,617,566	)									(2,617,566	)
Income taxes					(197,030	)		197,030		5
NET LOSS FROM CONTINUING OPERATIONS BEFORE NONRECURRING CHARGES OR CREDITS DIRECTLY ATTRIBUTABLE TO THE TRANSACTION	$	(21,455,202	)	$	(363,238	)	$	(814,183	)		$	(22,632,623	)
Weighted average number of common shares outstanding - basic and diluted		13,643,447						6,000,000		6		19,643,447
Basic and diluted loss from continuing operations per share applicable to common shareholders	$	(1.57	)								$	(1.15	)

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

F-18

Incentra Solutions, Inc. and Subsidiaries

Pro Forma Condensed Consolidated Statements of Operations

(Unaudited)

	Historical For the Six Months Ended June 30, 2007 Incentra Solutions, Inc.			Historical For the Six Months Ended June 30, 2007 Helio Solutions, Inc.			Pro Forma Adjustments			Notes	Pro Forma Six Months Ended June 30,  2007
Revenue	$	55,781,631		$	32,840,300		$				$	88,621,931
Cost of revenue		44,055,560			27,295,097							71,350,657
GROSS MARGIN		11,726,071			5,545,203							17,271,274
Selling, general and administrative		13,852,416			5,026,355			252,284		4		19,131,055
Stock-based compensation expense		822,994										822,994
Depreciation and amortization		604,570			88,020			(21,368	)	4		671,222
		15,279,980			5,114,375			230,916				20,625,271
OPERATING (LOSS) INCOME FROM CONTINUING OPERATIONS		(3,553,909	)		430,828			(230,916	)			(3,353,997	)
Other income (expense):
Interest expense, net		(1,445,393	)		(69,085	)		(238,013	)	3, 4		(1,752,491	)
Loss on disposal of equipment					(22,029	)						(22,029	)
Other income		(36,437	)		78,718							42,281
Foreign currency transaction gain		48,957										48,957
		(1,432,873	)		(12,396	)		(238,013	)			(1,683,282	)
(LOSS) INCOME FROM CONTINUING OPERATIONS		(4,986,781	)		418,432			(468,930	)			(5,037,279	)
Non-controlling interest					160,352			(160,352	)	4		-
Accretion of convertible redeemable preferred stock to redemption amount		(1,308,784	)									(1,308,784	)
Income taxes					105,813			(105,813	)	5
NET (LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE NONRECURRING CHARGES OR CREDITS DIRECTLY ATTRIBUTABLE TO THE TRANSACTION	$	(6,295,565	)	$	152,267		$	(202,765	)		$	(6,346,063	)
Weighted average number of common shares outstanding - basic and diluted		13,162,751						6,000,000		6		19,162,751
Basic and diluted loss from continuing operations per share applicable to common shareholders:	$	(0.48	)								$	(0.33	)

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

F-19

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED

BALANCE SHEET AND STATEMENTS OF OPERATIONS

BALANCE SHEET AS OF JUNE 30, 2007, AND STATEMENTS OF

OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2007, AND THE

YEAR ENDED DECEMBER 31, 2006

On August 17, 2007, Incentra Solutions, Inc. (“Incentra”) acquired all of the common stock of Helio Solutions, Inc. (“Helio”). The acquisition was accounted for as a purchase. The total acquisition price was $10.3 million, subject to certain post-closing adjustments, as defined. The purchase price consisted of $5.0 million cash, six million shares of Incentra restricted common shares valued at $4,560,000 (based on an average of the closing prices of Incentra’s common stock during the seven-day periods before and after the acquisition date), and an unsecured, 8% convertible three-year promissory note for $770,000 (the “Convertible Note”). The Convertible Note is convertible into shares of Incentra common stock at $1.00 per share, at the option of the holder.

Of the $5.0 million paid in cash, $750,000 was placed into escrow to secure certain working capital and indemnification obligations of Helio, which funds are to be released one year after the closing data of the transaction.

The cash  paid at closing was funded with proceeds from a financing entered into with a third party lender in August 2007 under a new $12 million, prime plus 2.0% interest term note (the “Term Note”). In addition, investment banking fees incurred by Incentra which were directly attributable to the acquisition included cash paid to third parties of $602,500 and a five-year warrant issued to a third party to purchase 600,000 shares of Incentra’s common stock. The warrant was determined to have an estimated fair value of $333,000, which was included in the purchase price.

Note 1:This entry is recorded to reflect the proceeds received under the Term Note, of which $6.95 million was used to acquire Helio. The entry is net of a discount of approximately $1.7 million, which represents the amount allocated to the detachable warrant issued along with the Term Note.

Note 2:This entry is recorded to reflect Incentra’s acquisition of substantially all assets of Helio, and the assumption of certain liabilities. Incentra did not assume Helio’s notes payable and long-term debt, nor did it acquire any assets or assume any liabilities of Lakeside 3000, LLC, (“Lakeside,” a variable interest entity consolidated by Helio). Based on the preliminary allocation of the acquisition price to the assets acquired and liabilities assumed, the Company has recorded goodwill of approximately $9.4 million.

A preliminary allocation of the purchase price was made to major categories of assets and liabilities. The actual allocation of the purchase price and the resulting effect on income (loss) from operations may differ significantly from the pro forma amounts included herein. The pro forma adjustments represent the Company's preliminary determination of the purchase accounting adjustments and are based upon available information and certain assumptions that the Company believes to be reasonable. Consequently, the amounts reflected in the unaudited pro forma condensed consolidated statements of operations are subject to change, and the final amounts may differ substantially.

Note 3:This entry is recorded to reflect interest expense under the Term Note and Convertible Note.

Note 4: This entry is recorded to reflect the elimination of Lakeside.

Note 5:This entry is recorded to reduce income tax expense (benefit) to $0 based on the pretax loss of Incentra, utilized to offset Helio income.

Note 6:This entry is recorded to reflect the pro forma, weighted average number of common shares outstanding, to include six million shares issued upon the acquisition of Helio.

F-20

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	INCENTRA SOLUTIONS, INC.
Date: November 13, 2007	By:	/s/ Thomas P. Sweeney III
		Thomas P. Sweeney III
		Chief Executive Officer

F-21

Exhibit Index

Exhibit No. Description

23.1 Consent of Independent Registered Public Accounting Firm

F-22

EX-23.1

EX 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements on Form S-8 (File No.’s 333-135625, 333-135624, 333-114634, 333-84270, 333-72410 and 333-63844) of Incentra Solutions, Inc. (“Incentra”) of our report dated November 8, 2007, which expresses an unqualified opinion on the consolidated financial statements of Helio Solutions, Inc. and subsidiary (“Helio”) and includes an emphasis paragraph relating to Helio’s restated financial statements, and an emphasis paragraph relating to Helio’s acquisition by Incentra, and which appears on page F-1 of this Form 8-K/A.

/s/ GHP Horwath, P.C.

Denver, Colorado

November 8, 2007