Incentra Solutions Announces Preliminary 2006 Second Quarter, Six-Month Revenues

Total Revenues from Continuing Operations Expected to Increase Year Over Year 32% to 35% for the Quarter and 56% to 59% for the First Six Months of This Year

August 15, 2006

Boulder, CO, August 15, 2006 – Incentra Solutions, Inc. (OTCBB: ICNS), a provider of complete IT and storage management solutions to enterprises and managed service providers in North America and Europe, today announced preliminary revenues for its second quarter and first six months ended June 30, 2006.  Driven by growth from acquisitions, total revenues from continuing operations for the 2006 second quarter are expected to have increased 32 percent to 35 percent to $17.9 million to $18.2 million, from $13.5 million in the second quarter of last year.  For the first six months of 2006, total revenues from continuing operations are expected to have increased 56 percent to 59 percent to $26.3 million to $26.6 million, up from $16.7 million in the first six months of 2005.   
 
The results from continuing operations for the 2006 second quarter and first six months exclude results of the Front Porch Digital Broadcast and Media Division, which Incentra sold in late July to Toronto-based Genuity Capital Partners in an all-cash transaction valued at $38 million. 
 
The Company also announced that it has filed a Form 12b-25 Notification of Late Filing with the Securities and Exchange Commission extending the deadline for filing its Quarterly Report on Form 10-QSB for the quarter ended June 30, 2006 up to five calendar days.  Incentra Solutions Chief Financial Officer Paul McKnight noted, “The delay in filing our 10-QSB and finalizing our financial results for the 2006 second quarter is primarily the result of our need to provide sufficient time for our independent accountants to review our financial information as a result of our sale of Front Porch Digital in late July, which is being reported historically as a discontinued operation.” 

Incentra Solutions plans to release its final 2006 second quarter and six-month results on or before August 21, 2006.  The Company will host a conference call to be broadcast live on the Internet at www.incentrasolutions.com on 11:30 am (Eastern), Tuesday, August 22, 2006.

During this year’s second quarter the Company continued to execute on its plan to grow through acquisition with the completion of the purchase of Lombard, IL-based NST, Inc. in mid-April.  NST is a leading solutions provider in the greater Chicago area and in the central region and markets storage, networking and security solutions, as well as professional services to customers in the financial services, healthcare, education, non-profit and manufacturing verticals.  In the past 18 months, Incentra’s strategy to acquire IT solution providers in key areas of the country has resulted in the opening of seven new markets in the past 18 months in the U.S. alone, including Seattle, Portland, Boise, San Diego, Orange County and Chicago.
 
Chairman and CEO Thomas P. Sweeney said that with the recently concluded sale of Front Porch Digital, Incentra now has additional resources to invest in the growth of its Enterprise business, both organically and through acquisitions. 

“We remain committed to achieving our goal of becoming the most comprehensive provider of complete IT solutions for enterprise customers in North America and Europe,” Sweeney added.  “To that end, we will continue to focus on four key initiatives:  Reaching cash flow break even by the end of 2006; increasing sales of our higher margin managed services and professional services; investing in organically growing our current operations; and considering strategic acquisitions that are accretive to our business and that will expand our market penetration.  Additionally, we believe we will exit this year with 2006 revenues increasing 40 percent to 50 percent over 2005 levels.”

Following the sale of Front Porch Digital in late July, and paying off virtually all of its secured long term and revolving debt, Incentra now has approximately $11 million in cash and cash equivalents, a substantially increased working capital balance, positive net tangible assets, and access to a $10 million revolving line of credit.  Sweeney noted that the Company would record a gain on the sale of Front Porch Digital in this year’s third quarter.

About Incentra Solutions, Inc.
Incentra Solutions, Inc. (www.incentrasolutions.com, OTCBB:ICNS) is a provider of complete IT & storage management solutions to enterprises and managed service providers in North America and Europe.  Incentra’s complete solution includes professional services, hardware & software products with first call support, IT outsourcing solutions and financing options. 

Incentra Solutions Forward Looking Statements
Certain information discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the federal securities laws.  Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, it can give no assurance that its expectations will be achieved.  Readers are cautioned not to place undue reliance on these forward-looking statements.  Forward-looking statements are inherently subject to unpredictable and unanticipated risks, trends and uncertainties such as the Company’s inability to accurately forecast its operating results; the Company’s potential inability to achieve profitability or generate positive cash flow; the availability of financing; and other risks associated with the Company’s business.  For further information on factors which could impact the Company and the statements contained herein, reference should be made to the Company’s filings with the Securities and Exchange Commission, including Annual Reports on Form 10-KSB, Quarterly Reports on Form 10-QSB and Current Reports on Form 8-K.  The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

Contacts:
Allen & Caron, Inc. 
Rene Caron (investors)
rene@allencaron.com

Len Hall (financial media)
len@allencaron.com
949-474-4300 

Incentra Solutions, Inc.
Paul McKnight, Chief Financial Officer
pmcknight@incentrasolutions.com
303-449-8279