U.S.
      SECURITIES AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





FORM
      10-QSB





x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934
                for the period ended September 30,
                2006





o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934
                for the transition period from _______ to
                _______





Commission
      File No. 000-50701





HOUSERAISING,
      INC.


(Exact
      name of small business issuer as specified in its charter)





TECHNOLOGY
      CONNECTIONS, INC.


(Former
      name of registrant)





North
                Carolina
            
            56-2253025(State
                or other jurisdiction of
            
            (IRS
                Employer identification No.)incorporation
                or organization)





4801
      East Independence Blvd., Suite 201, Charlotte, North Carolina
      28212


(Address
      of principal executive offices)





(704)
      532-2121


(Issuer's
      telephone number)





Securities
      registered under Section 12(b) of the Act:





NONE





Securities
      registered under Section 12(g) of the Act:





Common
      stock (par value $.001 per share)





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days. Yes x No o





**APPLICABLE
      ONLY TO CORPORATE ISSUERS**





State
      the
      number of shares outstanding of each of the issuers’ classes of common equity,
      as of the latest practicable date:





Class
                of Stock
            
            Outstanding
                October 31, 2006Common
                Stock ($.001 par value)
            
            
            50,769,282Preferred
                Stock Class A ($.001 par value)
            
            
            1,000,000Preferred
                Stock Class B ($.001 par value)
            
            
            800,000


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          1
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REPORTS
      TO SECURITY HOLDERS





We
      are a
      reporting company under the requirements of the Securities Exchange Act of
      1934
      and will file quarterly, annual and other reports with the Securities and
      Exchange Commission. This quarterly report contains the required audited
      financial statements. We are not required to deliver a quarterly report to
      security holders and will not voluntarily deliver a copy of the quarterly report
      to security holders, except in connection with our annual meeting of
      shareholders. The reports and other information filed by us will be available
      for inspection and copying at the public reference facilities of the Commission,
      100 F Street, N.E., Washington, D.C. 20549.





Copies
      of
      such material may be obtained by mail from the Public Reference Section of
      the
      Commission at 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates.
      Information on the operation of the Public Reference Room may be obtained by
      calling the SEC at 1-800-SEC-0330. In addition, the Commission maintains a
      World
      Wide Website on the Internet at http://www.sec.gov that contains reports, proxy
      and information statements and other information regarding registrants that
      file
      electronically with the Commission.




















The
      rest of this page is left intentionally blank





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          -


HOUSERAISING,
      INC.


FORM
      10-QSB





For
      the
      Quarter ended September 30, 2006





TABLE
      OF
      CONTENTS





PageCautionary
                Statement and Risk Factors that May Affect Future Results
            4PART
                IITEM
                1.
            Selected
                Financial Statements
            5Balance
                Sheet - September 30, 2006 (unaudited)
            5Statements
                of Operations - Three Months Ended September 30, 2006 and 2005
                (unaudited)
            6Statements
                of Operations - Nine Months Ended September 30, 2006 and 2005
                (unaudited)
            7Statements
                of Cash Flows - Nine Months Ended September 30, 2006 and 2005
                (unaudited)
            8Notes
                to Financial Statements (unaudited)
            9ITEM
                2.
            Management’s
                Discussion and Analysis of Financial Condition and Plan of
                Operations
            16ITEM
                3.
            Controls
                and Procedures
            24PART
                IIITEM
                1.
            Legal
                Proceedings
            25ITEM
                2.
            Changes
                in Securities
            25ITEM
                3.
            Default
                Upon Senior Securities
            26ITEM
                4.
            Submission
                of Matters to a Vote of Security Holders
            26ITEM
                5.
            Other
                Information
            26ITEM
                6.
            Exhibits
                and Reports on Form 8-K
            27Signatures
            28


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**Cautionary
      Statement and Risk Factors that May Affect Future Results**





This
      report and other presentations made by HouseRaising, Inc. (“HRI” or “Company”)
      and its subsidiaries contain “forward-looking statements,” which include
      statements that are predictive in nature, depend upon or refer to future events
      or conditions, and usually include words such as “expects,” “anticipates,”
“intends,” “plans,” “believes,” “will,” “predicts,” “estimates,” “we believe,”
“the Company believes,” “management believes” or similar expressions. In
      addition, any statements concerning future financial performance (including
      future revenues, expenses, earnings or losses or growth rates), ongoing business
      strategies or prospects and possible future actions are also forward-looking
      statements. Forward-looking statements are based on current expectations and
      projections about future events and are subject to risks, uncertainties and
      the
      accuracy of assumptions concerning HRI and its subsidiaries, the performance
      of
      the industries in which it does business and economic and market factors, among
      other things. **These
      forward-looking statements are not guarantees of future
      performance.**





Risks,
      uncertainties and other important factors that could cause actual results to
      differ materially from those in forward-looking statements and from historical
      results include, but are not limited to, the following:





·
            the
                effect of changes in international, national and local economic and
                market
                conditions, especially where our operations are conducted and where
                prospective purchasers of homes
                live;


·
            the
                effects of weather and natural disasters or global developments,
                including
                the effects of terrorist acts and war on terrorism, U.S. presence
                in Iraq
                and Afghanistan, potential conflict or crisis in North Korea or Middle
                East and potential avian flu pandemic, negatively affecting local
                homebuilding industry and adversely affecting new home installation
                market;


·
            the
                timing and extent of changes in interest rates and the shape of the
                yield
                curve;


·
            negative
                trends in residential homebuilding adversely affecting our
                business;


·
            actions
                by competitors that negatively affect us—the homebuilding market is
                extremely competitive, characterized by competition from a number
                of
                homebuilders in each market in which we operate, and there are few
                barriers to entry;


·
            no
                assurance that the Company will be able to recruit quality homebuilders
                and sales personnel in order to meet the goals set forth in its business
                plan and planned rollout of Zone operations, membership and disaster
                relief services;


·
            no
                assurance that anticipated acquisitions will materialize and/or be
                successfully integrated into
                operations;


·
            the
                risks of suffering losses that are uninsured—construction defect and home
                warranty claims arising in the ordinary course of business are common
                in
                the homebuilding industry and can be costly; if we are not able to
                obtain
                adequate insurance against these claims, we may experience losses
                that
                could hurt our business;


·
            the
                effects of changes in accounting principles applicable to HRI and
                its
                subsidiaries;


·
            given
                the prominence of the automated design/build system in HRI’s operations
                and business plan, there is a risk that the Company may not complete
                the
                automated design/build system or generate significant retail sales
                in the
                future;


·
            while
                the company has filed a patent registration to protect its intellectual
                property, until patent pending has been issued, HRI’s technology and
                software are at risk of being copied by
                competitors;


·
            HRI’s
                success is impacted by the continued participation of its President,
                Robert V. McLemore, and Executive
                team;


·
            our
                common stock trades on the over-the-counter market and is subject
                to high
                volatility; future sales of common stock could adversely affect the
                stock
                price;


·
            HRI
                provides S-8 shares as compensation for services rendered which could
                impact stock volatility and future
                issuance;


·
            principal
                stockholders control business affairs which means investors will
                have
                little or no participation in
                business;


·
            the
                risk that an investor in the Company will never see a return on investment
                and the stock may become worthless;


·
            the
                risk that the Company will be unable to obtain needed capital or
                unable to
                establish credit arrangements or extend existing arrangements on
                satisfactory terms, which would require it to curtail
                operations;


·
            to
                the extent additional capital is raised through the sale of equity
                and/or
                convertible debt securities, this could result in dilution to shareholders
                and/or increased debt service;


·
            we
                have never paid dividends and do not intend to pay dividends for
                the
                foreseeable future given need to retain earnings to finance the
                development and expansion of the
                business;


·
            federal
                and state governmental and regulatory actions, such as changes in
                laws,
                rules and regulations applicable to HRI and its subsidiaries (including
                changes in taxation, environmental laws and regulations, immigration
                laws,
                occupational safety and health acts, workmen’s compensation statutes,
                unemployment insurance and governmental fees and
                assessments);


·
            HRI
                is a development stage company that has an independent auditor’s report
                for fiscal 2005 that raises doubt about its ability to continue as
                a going
                concern (see independent auditor’s report and notes on management’s plan
                for more details);


·
            other
                risks or uncertainties described elsewhere in this report and in
                other
                periodic reports previously and subsequently filed by HRI or its
                predecessor company with the Securities and Exchange Commission
                (SEC).


Forward-looking
      statements speak only as of the date of the report, presentation or filing
      in
      which they are made. Except to the extent required by the federal securities
      laws, HRI and its subsidiaries undertake no obligation to publicly update or
      revise any forward-looking statements, whether as a result of new information,
      future events or otherwise.


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**PART
      I**





**ITEM
      1. SELECTED FINANCIAL STATEMENTS**





**HouseRaising,
                Inc. and Subsidiaries (A Development Stage
                Company)****Consolidated
                Condensed Balance Sheet (unaudited)****As
                of September 30, 2006**




**ASSETS**CURRENT
                ASSETSCash
                and Cash Equivalents
            
            
            202,272Excess
                costs over billings on uncompleted projects
            
            
            246,686Prepaid
                Expenses
            
            
            50,025Accounts
                Receivable
            
            
            23,075TOTAL
                CURRENT ASSETS
            
            
            522,058PROPERTY
                AND EQUIPMENTProperty
                and Equipment
            
            
            422,441Accumulated
                Depreciation
            
            
            (148,354
            )Net
                Property and Equipment
            
            
            274,087OTHER
                ASSETSOther
                Assets
            
            
            19,487Capitalized
                Software
            
            
            13,286,293Net
                Other Assets
            
            
            13,305,780TOTAL
                ASSETS
            
            
            14,101,925**LIABILITIES
                AND STOCKHOLDERS' EQUITY**LIABILITIESCurrent
                Liabilities:Accounts
                Payable and Accrued Expenses
            
            
            307,184Interest
                Payable
            
            
            89,504Notes
                Payable
            
            
            419,842Bank
                Loan
            
            
            3,248,109TOTAL
                LIABILITIES
            
            
            4,064,639STOCKHOLDERS'
                EQUITYPreferred
                Stock Class A Convertible ($.001 par value, 1,000,000
                authorized:1,000,000
                issued and outstanding)
            
            
            1,000Preferred
                Stock Class B Convertible ($.001 par value, 800,000
                authorized:800,000
                issued and outstanding)
            
            
            800Common
                Stock ($.001 par value, 100,000,000 shares authorized:49,991,380
                shares issued and outstanding)
            
            
            49,991Common
                Stock Subscribed but not Issued
            
            
            1,807,262Additional
                Paid-in-Capital
            
            
            16,782,601Retained
                Deficit
            
            
            (8,604,368
            )TOTAL
                STOCKHOLDERS' EQUITY
            
            
            10,037,286TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY
            
            
            14,101,925


The
      accompanying notes are an integral part of these consolidated financial
      statements.


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**HouseRaising,
                Inc. and Subsidiaries (A Development Stage
                Company)**Consolidated
                Statement of Operations (unaudited)For
                the quarter ended September 30, 2006 and
                2005




2006
            
            2005SALES
                AND COST OF SALES:Sales
            
            $
            185,450
            
            $
            0Gross
                Profit
            
            
            10,122
            
            
            0OTHER
                REVENUES:Sales
                and service fees
            
            
            97,027
            
            
            9,151Other
                income
            
            
            5,528
            
            
            47NET
                REVENUES
            
            
            112,677
            
            
            9,198OPERATING
                EXPENSES:Selling,
                general and administrative
            
            
            1,373,039
            
            
            684,246Consulting
                fees
            
            
            110,924
            
            
            215,6881,483,963
            
            
            899,934OTHER
                EXPENSE:Interest
                expense
            
            
            63,055
            
            
            26,186NET
                LOSS
            
            $
            (1,434,341
            )
            $
            (916,922
            )Net
                Loss Per Common ShareBasic
                & Fully Diluted
            
            
            *
            
            
            *Weighted
                Average CommonShares
                Outstanding (see Note G)
            
            
            49,983,066
            
            
            41,666,935*
                Less than ($.01)





The
      accompanying notes are an integral part of these consolidated financial
      statements.




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**HouseRaising,
                Inc. and Subsidiaries (A Development Stage
                Company)**Consolidated
                Statement of Operations (unaudited)For
                the nine months ended September 30, 2006 and
                2005




2006
            
            2005SALES
                AND COST OF SALES:Sales
            
            $
            636,791
            
            $
            1,590Gross
                Profit
            
            
            80,016
            
            
            342OTHER
                REVENUES:Sales
                and service fees
            
            
            156,652
            
            
            17,613Other
                income
            
            
            5,528
            
            
            188NET
                REVENUES
            
            
            242,196
            
            
            18,143OPERATING
                EXPENSES:Selling,
                general and administrative
            
            
            2,337,456
            
            
            1,558,230Consulting
                fees
            
            
            542,392
            
            
            1,878,8172,879,848
            
            
            3,437,047OTHER
                EXPENSE:Interest
                expense
            
            
            141,380
            
            
            51,959NET
                LOSS
            
            $
            (2,779,032
            )
            $
            (3,470,863
            )Net
                Loss Per Common ShareBasic
                & Fully Diluted
            
            
            *
            
            
            *Weighted
                Average CommonShares
                Outstanding (see Note G)
            
            
            47,983,066
            
            
            39,331,559*
                Less than ($.01)





The
      accompanying notes are an integral part of these consolidated financial
      statements.


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**HouseRaising,
                Inc. and Subsidiaries (A Development Stage
                Company)****Statements
                of Cash Flows (unaudited)****For
                the nine months ended September 30, 2006 and
                2005**




**2006**
            
            **2005**CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                loss
            
            $
            (2,779,032
            )
            $
            (3,470,863
            )Adjustments
                to reconcile net loss to netcash
                (used in) operating activities:Depreciation
            
            
            25,285
            
            
            22,674Common
                and Preferred stock issued for services and debt
                restructuring
            
            
            3,354,742
            
            
            4,488,354(Increase)
                decrease in operating assets:
            
            
            -
            
            
            -Accounts
                receivable
            
            
            (157
            )
            
            (2,237
            )Capitalized
                software
            
            
            (2,566,593
            )
            
            (1,720,387
            )Excess
                of costs over billings on uncompleted contracts
            
            
            (60,314
            )
            
            (69,371
            )Accounts
                payable and accrued expenses
            
            
            20,932
            
            
            69,507NET
                CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
            
            
            (2,005,137
            )
            
            (682,323
            )CASH
                FLOWS FROM INVESTMENT ACTIVITIES:Investment
                in subsidiary operations
            
            
            (7,500
            )
            
            (141,728
            )Purchase
                of property and equipment
            
            
            (59,564
            )
            
            (26,062
            )NET
                CASH (USED IN) INVESTMENT ACTIVITIES
            
            
            (67,064
            )
            
            (167,790
            )CASH
                FLOWS FROM FINANCING ACTIVITIES:Proceeds
                from sale of common stock
            
            
            525,946
            
            
            -Borrowings
                on notes payable
            
            
            1,456,144
            
            
            1,206,075NET
                CASH PROVIDED BY FINANCING ACTIVITIES
            
            
            1,982,090
            
            
            1,206,075NET
                INCREASE IN CASH ANDCASH
                EQUIVALENTS
            
            
            (90,111
            )
            
            355,962CASH
                AND CASH EQUIVALENTS:Beginning
                of period
            
            
            292,383
            
            
            24,767End
                of period
            
            $
            202,272
            
            $
            380,729





The
      accompanying notes are an integral part of these consolidated financial
      statements.


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          8
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**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**





**(1)
      Basis of presentation**





The
      accompanying unaudited consolidated financial statements have been prepared
      in
      conformity with Generally Accepted Accounting Principles (“GAAP”) for interim
      financial information and with the instructions to SEC Form 10-QSB and Article
      10 of Regulation S-X. Accordingly, they do not include all of the information
      and footnotes required by GAAP for complete financial statements. In preparing
      the financial statements, management is required 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 balance
      sheet
      and the reported amounts of revenues and expenses for the period. Actual results
      could differ significantly from those estimates. The accompanying unaudited
      consolidated financial statements should be read in conjunction with the audited
      consolidated financial statements and the notes thereto incorporated by
      reference in HRI’s Annual Report on SEC Form 10-KSB for the year ended December
      31, 2005.





In
      the
      opinion of HRI’s management, the accompanying unaudited consolidated financial
      statements contain all material adjustments required by GAAP to present fairly
      the financial position of HRI and its subsidiaries as of September 30, 2006
      and
      the results of their operations for the nine months ended September 30, 2006
      and
      2005 and their cash flows for the nine months ended September 30, 2006 and
      2005.
      All such adjustments are of a normal recurring nature, unless otherwise
      disclosed in this Form 10-QSB or other referenced material. Results of
      operations for interim periods are not necessarily indicative of results for
      the
      full year.





When
      required, certain reclassifications are made to the prior period’s consolidated
      financial statements to conform to the current presentation.





**(2)
      Summary of Significant Accounting Policies**





Business
      Activity —HouseRaising,
      Inc. (a Development Stage Company) and Subsidiaries is in the business of
      selling, designing and managing design/build and renovation projects and
      homebuilding solutions in the residential homebuilding market for homebuyers
      and
      homebuilders. HouseRaising, Inc. merged into Technology Connections, Inc. and
      changed the name to HouseRaising, Inc. (The Company).





The
      Company provides a proprietary turnkey home design and build management system
      that it markets to regional homebuilders. Its customers are principally located
      in the Southeast USA with a current concentration in North and South Carolina.





The
      following is a list of all subsidiaries of the Company:





HouseRaisingAcademy,
                LLC
            owned
                100% by HouseRaising, Inc.HouseRaisingManagement,
                LLC
            owned
                100% by HouseRaising, Inc.HouseRaisingUSA,
                LLC
            owned
                100% by HouseRaising, Inc.HouseRaisingMembership,
                LLC (2006)
            owned
                100% by HouseRaising, Inc.HouseRaising
                Disaster Relief, LLC (2006)
            owned
                100% by HouseRaising, Inc.HouseRaising
                of Greater Charlotte, LLC
            owned
                100% by HouseRaisingUSA, LLCHouseRaising
                of Greenville, LLC
            owned
                100% by HouseRaisingUSA, LLCHouseRaising
                of Columbia, LLC
            owned
                100% by HouseRaisingUSA, LLCHouseRaising
                of Asheville, LLC
            owned
                100% by HouseRaisingUSA, LLCHouseRaising
                of Wilmington, LLC
            owned
                100% by HouseRaisingUSA, LLCHouseRaising
                of Myrtle Beach, LLC
            owned
                100% by HouseRaisingUSA, LLCHouseRaising
                of Charleston, LLC
            owned
                100% by HouseRaisingUSA, LLCHouseRaising
                of the Gulf Coast, LLC (zone operation) (2006)
            owned
                100% by HouseRaisingUSA, LLCHouseRaising
                of the Carolinas, LLC (zone operation) (2006)
            owned
                100% by HouseRaisingUSA, LLC





These
      limited liability companies provide managerial services to the Company’s
      homebuilding operations. These limited liability companies operate within
      specific guidelines and operating procedures established by HouseRaising, Inc.
      documents. The Company enters into a fee based management contract with each
      homebuilder that is required to be properly licensed. Each custom, design and
      built home is financed in the name of the homebuyer.





In
      July
      2003, the Company formed 2 subsidiaries, HouseRaisingAcademy, LLC and
      HouseRaisingUSA, LLC. HouseRaisingAcademy, LLC develops and manages the
      Company’s internet based E-Learning and Homebuilder Management System (named
      System C) currently in final development. HouseRaisingUSA, LLC is responsible
      for organizing and owning the zone and regional limited liability companies.





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          9
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**(2)
      Summary of Significant Accounting Policies (continued)**





In
      2006,
      the Company established four new limited liability companies (LLC) with the
      names HouseRaising of the Gulf Coast, LLC and HouseRaising of the Carolinas,
      LLC
      (which are 100% owned by HouseRaisingUSA, LLC and serve as the zone operations
      for the Company) and HouseRaising Disaster Relief, LLC and
      HouseRaisingMembership, LLC (which are 100% owned by HouseRaising, Inc.) The
      Company has also signed four separate agreements with independent homebuilders
      to form regional homebuilding operations in the Carolinas and Gulf Coast zones
      whereby HouseRaising of the Carolinas, LLC and HouseRaising of the Gulf Coast,
      LLC will own 50% of the new limited liability companies.





Cash
      and Cash Equivalents —For
      purposes of the Consolidated Statement of Cash Flows, the Company considers
      liquid investments with an original maturity of three months or less to be
      cash
      equivalents.





Management’s
      Use of Estimates —The
      preparation of consolidated financial statements in conformity with accounting
      principles generally accepted in the United States of America requires
      management to make estimates and assumptions that affect the reported amounts
      of
      assets and liabilities and disclosures of contingent assets and liabilities
      at
      the date of consolidated financial statements and the reported amounts of
      revenues and expenses during the reporting period. Actual results could differ
      from those estimates.





Revenue
      Recognition —The
      Company’s revenue is derived primarily from 1) providing general management of
      construction for new homes and renovation projects which reflect the home’s
      contract price, and 2) design and build management services (sales and service
      fee) to homebuilders and homebuyers on a percentage of such home’s contract
      price. In no event would the company record more than the home’s contract price
      for consolidation purposes in the event the company provides both general
      management and design/build services to the same project. Approximately 60%
      of
      the sales and service fee (which is typically 10% of the home’s contract price)
      is recognized in the initial construction stage. The balance of the Company’s
      management fee, approximately 40% of the sales and service fee is recognized
      at
      closing. Revenues and profits from general management of construction contracts
      are recognized on the completed-contract method and therefore when the project
      is completed (or closed). This method is used because financial position and
      results of operations do not vary significantly from those which would result
      from use of percentage-of-completion method and is conservative. A contract
      is
      considered complete when all costs except insignificant items have been incurred
      and the installation is operating according to specifications or has been
      accepted by the customer. Contract costs include all direct materials and labor
      costs and those indirect costs related to contract performance, such as indirect
      labor, supplies, tools, repairs, and depreciation costs. General and
      administrative costs are charged to expense as incurred. Costs in excess of
      amounts billed are classified as current assets under costs in excess of
      billings on uncompleted contracts. Billings in excess of costs are classified
      under current liabilities as billings in excess of costs on uncompleted
      contracts.





Comprehensive
      Income (Loss) —The
      Company adopted Financial Accounting Standards Board Statement of Financial
      Accounting Standards (SFAS) No. 130, *“Reporting
      Comprehensive Income”* ,
      which
      establishes standards for the reporting and display of comprehensive income
      and
      its components in the consolidated financial statements. There were no items
      of
      comprehensive income (loss) applicable to the Company during the periods covered
      in the consolidated financial statements.





Capitalized
      Software —Certain
      capitalized software assets have been contributed to the Company from related
      entities under common ownership and control. The capitalized software assets
      include certain external direct costs of materials and services consumed in
      developing internal-use software (System C) for home plans and designs, and
      operating systems and policies for homebuilders. These costs include payroll
      and
      payroll-related costs for employees and contractors who are directly associated
      with and who devote time to the internal-use computer software project (to
      the
      extent of the item spent directly on the project) during the application
      development stage. Training costs, data conversion costs, internal costs for
      upgrades and enhancements, and internal costs incurred for maintenance are
      all
      expensed as incurred. General and administrative costs and overhead costs are
      also expensed as incurred. The assets will commence amortization when the asset
      is considered to be in the post-implementation phase (i.e. when the development
      of internal use software is completed) which was originally projected to be
      in
      2005, but has been changed to 2006. At such time, the capitalized software
      costs
      will be amortized on a straight-line basis over the estimated economic life
      of
      the asset to be determined.





S-8
      Share Payments —The
      Company currently provides S-8 registered shares as compensation for some
      services rendered as a means of conserving cash until it obtains adequate debt
      or equity financing. The Company accrues the value of services rendered as
      an
      expense or capital expenditure (when it is readily determinable and meets the
      tests under FASB No. 123) instead of the stock price at the time the shares
      are
      transferred. Contract personnel, consultants and vendors that receive such
      shares understand that there is risk associated with the volatility of the
      share
      price. In some cases there are “true-up” provisions which would result in more
      or less shares to be issued; however, the expense or capital expenditure would
      have already been reflected on the company’s financial statements at the time
      services were rendered.





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          10
          -


**(2)
      Summary of Significant Accounting Policies (continued)**





Advertising
      Costs —Advertising
      costs are expensed as incurred. The Company does not incur any direct-response
      advertising costs.





Net
      Loss per Common Share —Statement
      of Financial Accounting Standard (SFAS) No. 128 requires dual presentation
      of
      basic and diluted earnings per share (EPS) with a reconciliation of the
      numerator and denominator of the EPS computations. Basic earnings per share
      amounts are based on the weighted average shares of common stock outstanding.
      If
      applicable, diluted earnings per share would assume the conversion, exercise
      or
      issuance of all potential common stock instruments such as options, warrants
      and
      convertible securities, unless the effect is to reduce a loss or increase
      earnings per share. This presentation has been adopted for the period presented.
      There were no adjustments required to net loss for the period presented in
      the
      computation of diluted earnings per share.





Income
      Taxes —Income
      taxes are provided in accordance with Statement of Financial Accounting
      Standards (SFAS) No. 109, *“Accounting
      for Income Taxes.”* A
      deferred tax asset or liability is recorded for all temporary differences
      between financial and tax reporting and net operating
      loss-carryforwards.





Deferred
      tax assets are reduced by a valuation allowance when, in the opinion of
      management, it is more likely than not that, and some portion or the entire
      deferred tax asset will not be realized. Deferred tax assets and liabilities
      are
      adjusted for the effect of changes in tax laws and rates on the date of
      enactment.





Fair
      Value of Financial Instruments —The
      carrying amounts reported in the consolidated balance sheet for cash, accounts
      receivable and payable approximate fair value based on the short-term maturity
      of these instruments.





Accounts
      Receivable —Accounts
      deemed uncollectible are written off in the year they become uncollectible.





Impairment
      of Long-Lived Assets —The
      Company evaluated the recoverability of its property and equipment, and other
      assets in accordance with Statements of Financial Accounting Standards (SFAS)
      No. 121, *“Accounting
      for the Impairment of Long-Lived Assets to be Disposed of”* which
      requires recognition of impairment of long-lived assets in the event the net
      book value of such assets exceeds the estimated future undiscounted cash flows
      attributable to such assets or the business to which such intangible assets
      relate.





Property
      and Equipment —Property
      and equipment is stated at cost. Depreciation is provided by the straight-line
      method over the estimated economic life of the property and equipment remaining
      from five to seven years.





**(3)
      Recent Accounting Pronouncements**





Recent
      Accounting Pronouncements —In
      January 2003, the EITF released Issue No. 00-21, (EITF 00-21), *“Revenue
      Arrangements with Multiple Deliveries”* ,
      which
      addressed certain aspects of the accounting by a vendor for arrangement under
      which it will perform multiple revenue-generating activities. Specifically,
      EITF
      00-21 addresses whether an arrangement contains more than one unit of accounting
      and the measurement and allocation to the separate units of accounting in the
      arrangement. EITF 00-21 is effective for revenue arrangements entered into
      in
      fiscal periods beginning after June 15, 2003. The adoption of this standard
      will
      not have an impact on the Company’s financial statements.





In
      May
      2003, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards (SFAS) No. 149, *“Amendment
      of Statement 133 on Derivative Instruments and Hedging
      Activities.”* SFAS No.
      149 amends and clarifies accounting for derivative instruments, including
      certain derivative instruments embedded in other contracts, and for hedging
      activities under SFAS No. 133. SFAS No. 149 is effective for contracts entered
      into or modified after June 30, 2003 and for hedging relationships designated
      after June 30, 2003. The Company does not believe that there will be any impact
      on its financial statements.





In
      May
      2003, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards (SFAS) No. 150, *“Accounting
      for Certain Financial Instruments with Characteristics of both Liabilities
      and
      Equity.”* SFAS No.
      150 establishes standards for how companies classify and measure certain
      financial with characteristics of both liabilities and equity. It requires
      companies to classify a financial instrument that is within its scope as a
      liability (or an asset in some characteristics). SFAS No. 150 is effective
      for
      financial instruments entered into or modified after May 31, 2003. The standard
      will not impact the Company’s financial statements.





In
      November 2004, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards (SFAS) No. 151, *“Inventory
      Costs”* ,
      which
      clarifies the accounting for abnormal amounts of idle facility expense, freight,
      handling costs, and wasted material. SFAS No. 151 will be effective for
      inventory costs incurred during fiscal years beginning after June 15, 2005.
      The
      standard will not impact the Company’s financial statements.


-
          11
          -


**(3)** **Recent
      Accounting Pronouncements (continued)**





In
      December 2004, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards (SFAS) No. 153, *“Exchanges
      of Nonmonetary Assets”* ,
      which
      eliminates the exception for nonmonetary exchanges of similar productive assets
      and replaces it with a general exception for exchanges of nonmonetary assets
      that do not have commercial substance. SFAS No. 153 will be effective for
      nonmonetary asset exchanges occurring in fiscal periods beginning after June
      15,
      2005. The standard will not impact the Company’s financial
      statements.





In
      December 2004, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards ( SFAS ) No.
      123(R), *“Share-Based
      Payment”* ,
      which
      establishes standards for transactions in which an entity exchanges its equity
      instruments for goods or services. This standard requires an issuer to measure
      the cost of employee services received in exchange for an award of equity
      instruments based on the grant-date fair value of the award. This eliminates
      the
      exception to account for such awards using the intrinsic method previously
      allowable under Accounting Principles Board (APB) Opinion No. 25. We do not
      believe the adoption of SFAS No. 123 (R) will have a material impact on our
      financial statements.





In
      May
      2005, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards ( SFAS ) No. 154 *“Accounting
      Changes and Error Corrections - a replacement of APB Opinion No. 20 and FASB
      Statement No. 3.”* This
      Statement replaces APB Opinion No. 20, “Accounting Changes”, and FASB Statement
      No. 3, “Reporting Accounting Changes in Interim Financial Statements” and
      changes the requirements for the accounting for and reporting of a change in
      accounting principle. This Statement 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 provision. When a pronouncement includes specific transition
      provisions, those provisions should be followed. The Company has no transactions
      that would be subject to SFAS 154.





In
      February 2006, the Financial Accounting Standards Board (FASB) issued Statement
      of Financial Accounting Standards ( SFAS ) No. 155,
      Accounting for Certain Hybrid Instruments-an amendment of FASB Statements No.
      133 and 140. SFAS 155 allows financial instruments that have embedded
      derivatives to be accounted for as a whole if the holder elects to account
      for
      the whole instrument on a fair value basis. SFAS 155 eliminates the need to
      bifurcate the derivative from its host, as previously required under Statement
      of Financial Accounting Standards No. 133, Accounting for Derivative Instruments
      and Hedge Accounting. SFAS 155 also amends SFAS 133 by establishing a
      requirement to evaluate interests in securitized financial assets to determine
      whether they are free standing derivatives or whether they contain embedded
      derivatives that require bifurcation. SFAS 155 is effective for all hybrid
      financial instruments acquired or issued by the Company on or after January
      1,
      2007. The Company does not anticipate any material impact to its financial
      condition or results of operations as a result of the adoption of SFAS
      155.





In
      March
      2006, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards ( SFAS ) No. 156, *“Accounting
      for Servicing of Financial Assets”* .
      SFAS
      156 addresses the accounting for recognized servicing assets and servicing
      liabilities related to certain transfers of the servicer’s financial assets and
      for acquisitions or assumptions of obligations to service financial assets
      that
      do not relate to the financial assets of the servicer and its related parties.
      SFAS 156 requires that all recognized servicing assets and servicing liabilities
      are initially measured at fair value, and subsequently measured at either fair
      value or by applying an amortization method for each class of recognized
      servicing assets and servicing liabilities. SFAS 156 is effective in fiscal
      years beginning after September 15, 2006. The adoption of SFAS 156 is not
      expected to have a material impact on our consolidated financial
      statements.





**(4)
      Income Taxes**





Due
      to
      the operating loss and the inability to recognize an income tax benefit
      therefrom, there is no provision for current or deferred federal or state income
      taxes for the years ended December 31, 2005 and 2004.





Deferred
      income taxes reflect the net tax effects of temporary differences between the
      carrying amounts of assets and liabilities for financial reporting purposes
      and
      the amount used for federal and state income tax purposes.





The
      Company’s total deferred tax asset, calculated using federal and state effective
      tax rates, as of December 31, 2005 is as follows:





Total
                deferred tax assets
            
            $
            2,200,000Valuation
                allowance
            
            
            (2,200,000
            )Net
                deferred tax asset
            
            $
            ----


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          12
          -


**(4)
      Income Taxes (continued)**





The
      reconciliation of income taxes computed at the federal statutory income tax
      rate
      to total income taxes for the years ended December 31, 2005 and 2004 is as
      follows:





2005
            
            2004Income
                tax computed at the federal statutory rate
            
            
            34
            %
            
            34
            %State
                income taxes, net of federal tax benefit
            
            
            4
            %
            
            4
            %Valuation
                allowance
            
            
            (38
            %)
            
            (38
            %)Total
                deferred tax asset
            
            
            0
            %
            
            0
            %





Because
      of the Company’s lack of earnings history, the deferred tax asset has been fully
      offset by a valuation allowance. The valuation allowance increased (decreased)
      by $1,550,000 and $351,000 in 2005 and 2004, respectively.





As
      of
      December 31, 2005, the Company had federal and state net operating loss
      carryforwards in the amount of approximately $5,800,000, which expire at various
      times through the year 2025.





**(5)
      Going Concern**





As
      shown
      in the accompanying financial statements, the Company has recurring losses
      from
      operations to date. During 2005, the Company had a net loss of $4,120,994,
      a net
      deficiency of $5,828,863 and a net working capital deficit of $2,035,865. In
      the
      Company’s Annual Report on Form 10-KSB for the year ended December 31, 2005, the
      Company’s independent auditor noted in her opinion that ‘the Company has
      recurring losses and has yet to generate an internal cash flow that raises
      substantial doubt about its ability to continue as a going concern.” This is
      commonly known as a “going concern” qualification to an audit
      opinion.





Management
      believes that actions presently being taken to raise equity capital, seek
      strategic relationships and alliances, and build its marketing efforts to
      generate positive cash flow provide the means for the Company to continue as
      a
      going concern. The financial statements do not include any adjustments that
      might result from the outcome of this uncertainty.





**(6)
      Acquisition and related reorganization**





On
      August
      4, 2005, the Company, LearnBytes, LLC, a North Carolina limited liability
      company (“LearnBytes”), and Grant Neerings, a resident of the state of North
      Carolina and sole member of LearnBytes (“Neerings”), simultaneously executed and
      closed the transactions contemplated by an Asset Purchase Agreement, dated
      as of
      August 1, 2005 (the “Agreement”), pursuant to which the Company acquired
      substantially all of the assets used and useful in the business of LearnBytes
      and assumed certain of its liabilities. LearnBytes was engaged in the Learning
      System Design and Implementation Business (the “Business”), and was an
      independent contractor of the Company whose responsibilities included the
      development and implementation of the Company’s System C software system that
      was designed to manage the homebuilding process for the Company’s customers.





The
      aggregate purchase price (the “Purchase Price”) for the Business under the
      Agreement was 500,000 shares of restricted common stock of the Company, payable
      to LearnBytes as soon as practicable following the Closing. These shares are
      subject to complete forfeiture by LearnBytes in the event that Neerings does
      not
      remain a full-time consultant or an employee of the Company for a one-year
      period of time from the date of issuance. The shares are entitled to piggy-back
      registration rights that commence one year from the date of Closing. As
      additional consideration for the purchase of the Business, the Company assumed
      $6,490 in accounts payable of LearnBytes and a total of $5,260 in accounts
      receivable of LearnBytes.





As
      part
      of the Agreement, Neerings and the Company entered into a Consultant Agreement,
      dated as of August 1, 2005 (the “Consultant Agreement”), pursuant to which
      Neerings agreed to provide the services outlined in Exhibit A to the Consultant
      Agreement for a five-year period of time commencing on the date of the
      Consultant Agreement. In consideration for such services, Neerings will be
      compensated at a rate of $120,000 per year in cash or S-8 stock. When the
      Company obtains and closes on a Qualified Financing (as defined), Neerings’
compensation will increase to $200,000 per year. In addition, among other
      things, Neerings will be entitled to warrants to purchase 2,000,000 shares
      of
      common stock of the Company exercisable for a ten year term, 1,000,000 of which
      are exercisable at $0.50 per share, and 1,000,000 of which are exercisable
      at
      $1.00 per share. The warrants will be earned and vested in an amount equal
      to
      one-fifth on each anniversary date of the Agreement.


-
          13
          -


**(7)
      Segment Reporting**





In
      June
      1997, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards No. 131, *“Disclosures
      about Segments of an Enterprise and Related Information.”* This
      statement requires companies to report information about operating segments
      in
      interim and annual consolidated financial statements. It also requires segment
      disclosures about products and services, geographic areas and major customers.
      The Company determined that it did not have any separately reportable operating
      segments as of September 30, 2006 and 2005.





**(8)
      Equity**





During
      2005, the Company issued 8,125,652 common shares for services (consulting,
      marketing, legal fees, salaries, capitalized software system). During 2004,
      the
      Company issued 19,299,064 common shares—7,512,034 for cash, services and debt to
      equity conversions and 11,787,030 pertaining to the merger.





**(9)
      Non-Qualified Stock Compensation Plan**





On
      July
      20, 2006, the Company adopted 2006 Non-qualified Stock Compensation Plan (Stock
      Plan) where the Company may compensate key employees, advisors, and consultants
      by issuing them shares of its capital stock or options to purchase shares of
      its
      capital stock in exchange for services rendered and to be rendered and thereby
      conserve the Company’s cash resources. The Company has reserved 2,000,000 shares
      of its $.001 par value Common Stock for these purposes. The Stock Plan will
      not
      exceed 30% of its outstanding common stock at any given time.





**(10)
      Development Stage Company**





The
      Company is in the development stage as of September 30, 2006 and to date has
      had
      no significant operations. Recovery of the Company’s assets is dependent on
      future events, the outcome of which is indeterminable. In addition, successful
      completion of the Company’s development program and its transition, ultimately,
      to attaining profitable operations is dependent upon obtaining adequate
      financing to fulfill its development activities and achieving a level of sales
      adequate to support the Company’s cost structure.





**(11)
      Commitments/Leases**





On
      November 1, 2005, HouseRaising entered
      into a Lease Agreement (“Lease”), extendable by the Company, whereby the Company
      agreed to lease the entire second floor at Independence Tower (approximately
      11,000 square feet) located at 4801 E. Independence Boulevard, Charlotte, NC
      for
      an annual rent obligation of approximately $100,000. HouseRaising will utilize
      this additional space for estimators and designers recruited to support the
      Company’s Gulf Coast initiative and a sales and product display center to
      support operations in North and South Carolina. The space will continue to
      serve
      as corporate headquarters for HouseRaising, Inc. and HouseRaisingAcademy, which
      include the Company’s recent consolidation of its acquisition of LearnBytes,
      LLC. HouseRaising of the Gulf Coast, LLC has established a small business office
      location in Gulfport, MS and is negotiating to establish an office and
      design-center in New Orleans, LA.





The
      Company also has one vehicle under leases that has been classified as an
      operating lease expiring in March 2007 as extended. Payment due under the lease is
      $1,384 per month. In
      December 2005, the Company entered into a lease agreement for computer
      equipment. The monthly payments are $2,227.03 per month for 48 months starting
      June, 2006. In October 2005, the Company entered into a lease agreement for
      computer hardware and software. The monthly payments are $560.68 per month
      for
      24 months beginning December, 2005. In September 2005, the Company entered
      into
      a lease agreement for computer hardware and software. The monthly payments
      are
      $248.53 per month for 24 months beginning November, 2005. In May, 2006, the
      company entered into a lease agreement for computer hardware and software.
      The
      monthly payments are $107.20 per month for 48 months beginning June,
      2006.





**(12)
      Notes Payable**





**Notes
      payable at September 30, 2006 consist of the
      following:**





Unsecured
                note payable to an unrelated party.Bearing
                8% interest.
            
            $
            5,640Unsecured
                note payable to an unrelated party.Bearing
                8% interest.
            
            $
            13,177





-
          14
          -


**(12)
      Notes Payable (continued)**





Secured
                note payable to an unrelated party.Bearing
                15% interest.
            
            $
            155,000
            **Unsecured
                note payable to an unrelated party.Bearing
                0% interest.
            
            $
            1,851
            **Secured
                demand note payable to a related party.Bearing
                6% interest.
            
            $
            244,174Total
                Current Portion
            
            $
            419,842





**
      On the
      0% interest bearing notes, the Company imputed interest on the notes using
      a
      rate of 6%. The effects of these notes are included in the consolidated
      financial statements therein. In
      March,
      2006 the Registrant offered its bridge lenders the opportunity to convert their
      outstanding notes payable into shares of common stock and warrants on the same
      terms as the Registrant’s private placement offering.  In
      late
      March, 2006, the Registrant came to an agreement to this conversion with four
      bridge lenders, which resulted in the issuance of 425,000 shares of common
      stock
      and an equal amount of warrants under this offering in exchange for a reduction
      of $212,500 in bridge loans and accumulated interest. In the second quarter,
      the
      Registrant came to an agreement with a fifth bridge lender, which called for
      the
      issuance of 226,892 shares of common stock and an equal amount of warrants
      under
      this offering in exchange for a reduction of $113,446 in bridge loans and
      accumulated interest. (See Part II, Item 2: “Changes in Securities” for further
      details on this transaction.)





**(13)
      Line Of Credit**





The
      Company has three separate lines of credit with Wachovia Bank, NA which total
      $4,100,000. The Company obtained a line of credit in the amount of $1,350,000
      with Wachovia Bank, NA. The line of credit has been secured with 6,704,040
      shares of the Company’s stock as collateral. The shares being used as collateral
      are owned by the trust of one of the Company’s officers and major shareholders.
      The interest rate on the line of credit is equal to 1-month LIBOR plus 2.75%.
      All interest and principal are due on demand. In addition, the Company obtained
      a line of credit in the amount of $1,000,000 with Wachovia Bank, NA with an
      interest rate equal to 1-month LIBOR plus 2.50% with all interest and principal
      due on May 31, 2007. In addition, the Company obtained a line of credit in
      the
      amount of $500,000 with Wachovia Bank, NA with an interest rate of 1-month
      LIBOR
      plus 2.35% with all interest and principal due on July 31, 2007. In addition,
      the Company obtained a line of credit in the amount of $1,250,000 with Wachovia
      Bank, NA with an interest rate of 1-month LIBOR plus 2.35% with all interest
      and
      principal due on September 30, 2007.





-
          15
          -


**ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
      OPERATIONS.**





**Management’s
      Discussion and Analysis of Financial Condition and Results of Operations for
      September 30, 2006**





*(The
      following discussion should be read in conjunction with the Financial Statements
      and related notes thereto included elsewhere in this section.)*





**HIGHLIGHTS
      OF RECENT ACTIVITIES**





·
            Year-to-date
                home and renovation project sales for our customers of $636,791,
                which
                exceeds all of last year;


·
            Year-to-date
                net revenues to HouseRaising, Inc. of $242,196 which is thirteen
                times
                year-to-date last year;


·
            Signed
                agreements for $5.1 million in custom homes expected to be built
                over the
                next 12 months, which is $3.1 million higher than year-end last year
                (the
                Company also several interested prospective home buyers from various
                marketing efforts that are not included in this figure as they have
                not
                yet signed an agreement nor is there any guarantee they
                will);


·
            Signed
                four operating agreements (series 200) with independent builders
                to build
                approximately 10-20 homes in total per each builder per year, whereby
                the
                builder operates a new jointly-owned limited liability company that
                uses
                our System-C technology and processes on which HouseRaising receives
                service fees and share equally profits on completed projects (these
                home
                sales are not included in the $5.1 million figure noted
                above);


·
            In
                past quarter the Company has cultivated a number of interested prospective
                Builder Associates or Builder-Partner relationships totaling more
                than 80
                individuals which are at various stages of discussions with the Company
                on
                establishing a relationship (there is no guarantee, however, these
                individuals will sign agreements);


·
            Established
                business office in Gulfport, Mississippi and negotiating on office
                space
                in New Orleans, Louisiana for our disaster relief initiative.





**EXECUTIVE
      OVERVIEW & STRATEGY**





HouseRaising,
      Inc. is a fully operational company in the business of selling, designing and
      managing design/build and renovation projects and homebuilding solutions in
      the
      residential homebuilding market for homebuyers and homebuilders. HouseRaising’s
      core business is to create revenues and profits from use of its proprietary
      software functioning exclusively within the custom homebuilding arena. The
      Company owns a proprietary invention created to alter and improve the way custom
      homes are designed and built. The invention serves to connect hundreds of small
      builders and thousands of vendors to homebuyers in a revolutionary process.
      The
      invention has been developed into internal-use software. This management
      software is used as a tool to define 3,400 tasks in the designing and building
      process and as a school to cause precise steps to be performed in each task.
      In
      early 2005, the company filed patent applications on its invention and started
      producing revenues utilizing the software in 2006.





On
      February 19, 2004, HouseRaising executed an Agreement and Plan of Merger (“the
      Merger”) to which HRI agreed to merge with and into Technology Connections, Inc.
      This transaction was structured as a reverse acquisition whereby the existing
      shareholders of HouseRaising obtained control of Technology Connections, Inc.
      and the resulting entity agreed to change its name to HouseRaising, Inc.. On
      August 31, 2004, the Merger was consummated when Articles of Merger were filed
      by the parties with the Secretary of State of North Carolina.





HouseRaising’s
      principal focus is implementing its business plan. Beginning in 2004,
      HouseRaising commenced sales of new home and renovation projects utilizing
      a
      manual version of the system through an operating subsidiary which confirmed
      its
      business model. In 2005, the Company focused its attention on completing its
      management software system, starting to use the system to manage new home and
      renovation projects and develop an operating team to implement its business
      plan.





In
      2006,
      the Company has commenced rolling out its Custom Homebuilding Operations in
      the
      Carolinas and Gulf Coast region, started marketing Builder-memberships and
      affiliated Homebuilding Services. In addition, the Company customized a version
      of its software to facilitate managing disaster relief projects for the Gulf
      Coast region. The Company has established an office in Gulfport, Mississippi
      and
      engaged executives to implement its programs in this region. The Company is
      rapidly increasing home sales in these areas and has signed four operating
      agreements to establish regional operations with experienced homebuilders which
      is expected to rapidly increase custom homes sales in these regions. The Company
      fully expects to continue engaging homebuilders in this capacity as its
      marketing efforts with homebuilders expand.


-
          16
          -


**How
      We Do It:**





HouseRaising
      was created to take advantage of the invention its founder designed to
      revolutionize the way custom homebuilding conducts business. Custom homebuilding
      is where homeowners purchase a lot and later design and build their dream home
      utilizing custom builders. It
      is a
      generally accepted that about 9 out of every 10 companies that build custom
      homes eventually suffer financial losses and most of them fail. It is also
      commonly known that most homebuyers call the custom homebuilding experience
      a
      nightmare. Despite these terrible statistics, over 500,000 families design
      and
      build custom homes each year, selecting a builder from a pool of approximately
      250,000 builders nationally.





The
      old
      way homebuilders and buyers operate within the design/build industry is flawed.
      Extensive research into the design build industry has exposed that during the
      designing and building stages, each and every custom home project confronts
      1,269 critical problem points. HouseRaising owns these proprietary research
      materials. The issue is that builders and buyers are not aware of the critical
      problem areas and thus do little to nothing to prepare for handling them.
      Operating independently and on their own, experience has shown that builders
      and
      homebuyers cannot effectively solve these problems.





At
      a cost
      of over $11 million,
      HouseRaising developed 4 decades and thousands of custom homebuilding
      experiences into a management system and support process. The HouseRaising
      system represents a tried and proven method that provides users a way to manage
      the 1,269 critical problem points and emotional issues faced in every
      design/build project. Regardless of the price, style or location of the home
      under contract, the management process is the same. Through contracts, forms,
      reports and online educational components, the software automatically assigns
      precise steps and procedures that each party will follow. The 3,400 task process
      functions behind the scenes to address and solve issues that caused the
      problems, thus allowing homebuyers and builders to build homes in a financially
      sound manner and as an enjoyable experience. HouseRaising’s system helps builders
      and homebuyers work together to build a home without the normal
      misunderstandings and conflicts created by unaddressed problems.





**Customer
      Value Proposition:**





HouseRaising
      reduces the cost of unique homes through its patent-pending Design & Price
      ModuleTM and management system. Additional savings occur from HouseRaising’s
      network of affiliated vendors on the national, zone and local levels. By
      combining the needs of thousands of small builders and homebuyers, HRI produces
      economies of scale that reduce direct and indirect costs of the project.
      Depending on the design structure selected by the homeowners, System C can
      lower
      the home’s total costs by up to 10%.





**HRI
      Revenue Streams:**





Due
      to
      technological advantages designed into its software, HouseRaising is a
      multi-faceted company with operating revenues from four separate sources and
      marketing strategies. Each revenue source serves the design/build segment of
      the
      homebuilding industry.





At
      the
      end of the day, HouseRaising creates revenues from managing custom home and
      renovation projects and those revenues are part of and included in the sales
      price of the homes. Portions of those revenues come from design/build and
      renovation projects, where we earn profits as the builder of the home. In
      projects where we act as general manager of the project and not the builder,
      we
      earn a set fee for providing management services. Additionally, we earn
      consulting fees on disaster relief projects. In addition to the revenues
      described above, our management platform vendors provide technical services
      such
      as sales and design consulting, architectural services, vendor coordinating
      services, financing and cash flow management services and managing construction
      and closing related issues. These platform vendors are compensated separately
      and are direct costs to the project. In providing these in-house vendors,
      HouseRaising is able to improve the quality of those services at lower costs
      compared to outside vendors.





(1) ***Revenues
      from Custom Homebuilding Operations:*** Operating within zone territories through a wholly-owned subsidiary,
      HouseRaisingUSA, LLC, HRI designs and builds custom homes and renovations for
      homeowners. The company has sales efforts underway in the Carolinas and the
      Gulf
      Coast. HouseRaising has identified an additional 30 potential zone locations
      nationally. Revenues represent the sales price of these projects as completed. Operating
      outside of established zone territories, HouseRaising performs the role of
      general manager of projects through associate or independent builder
      relationships. On a national basis, associate and independent builders contract
      to have HouseRaising design, price and manage home projects with its system.
      The
      Company has established several operating programs that allow homebuilders
      to
      serve as builder partners as described below:


·
            Series
                100: Builder Associate Relationships (3-5 custom homes
                annually);


·
            Series
                200: Local Builder-Partner Relationships (5-20 custom homes
                annually);


·
            Series
                300: Regional Builder-Partner Relationships (30-50 custom homes
                annually);


·
            Series
                400: Zone Builder-Partner Relationships (100-300 custom homes
                annually).


The
      Company has recently signed four agreements with independent builders to develop
      local operations in Charlotte, NC, Wilmington, NC, Beaufort and Bluffton (near
      Charleston), SC and Gulfport, MS.





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          17
          -


(2) ***Revenues
      from Disaster Relief Services:***  HouseRaising
      creates revenues by offering consulting services to governing agencies, as
      well
      as directly to families and builders involved in disaster rebuilding efforts.
      For a fee, our consultants develop sketches of workable plans, create detailed
      specifications, determine new building code requirements and assist in arranging
      financing for rebuilding homes. It is
      expected that a percentage of the consulting engagements will then become
      project management engagements whereby HouseRaising performs the role of general
      manager. This revenue stream represents consulting fees and fees charged as
      a
      percentage of the sales price of the project.





(3) ***Revenues
      from Builder-Memberships:*** HouseRaising creates revenues by offering membership opportunities to the
      approximate 250,000 licensed homebuilders operating in the United States through
      a wholly-owned subsidiary, HouseRaisingMembership, LLC. HouseRaising believes
      that 25,000 homebuilders could reasonably become members and benefit from
      educational materials and financial advantages. Members receive savings through
      insurance programs and from economies of scale created by HouseRaising’s vendor
      relationships. This Internet-based revenue stream represents the price builders
      pay HouseRaising for memberships.





(4) ***Revenues
      from HouseRaisingAcademy (“HRA”):*** HRA is a
      wholly-owned subsidiary that was formed through the acquisition of assets and
      intellectual capital of LearnBytes, LLC in mid-2005. HRA is focused on
      developing and managing HouseRaising’s unique managed service software. The
      Academy’s team of specialists and IT experts manage the Academy as a “tool” and
      a “school” utilized by HouseRaising entities on all projects. HRA receives a
      service fee on the price of all design/build projects. There will also be
      opportunities to earn fees through certifying builders and through seminar
      fees
      from both homebuyers and homebuilders who want to learn more about the custom
      homebuilding industry via the Internet.





**HRI
      Market Potential:**





Management
      estimates that there is a substantial market for its design/build services,
      which will be accessed through affiliated relationships with small, hands-on
      builders who commit to conduct the business of building homes the HouseRaising
      way. The dsign/build sector of the homebuilding market represents about 500,000
      of the 1.6 million single-family homes built annually in the U.S. While the
      total number of single-family homes does fluctuate year-to-year depending on
      economic conditions, the design/build sector has remained very stable. Of the
      500,000 custom-home projects built by approximately 250,000 small builders
      in
      America each year, every one of them could benefit from HouseRaising’s managed
      services. A 1% share of this market equals approximately $2.5 billion in home
      sales. HouseRaising’s software system was built to serve at least a 1% market
      share of custom home projects.





**The
      HR Builder Story:**





Throughout
      the country, custom homebuyers will continue to purchase lots and build primary
      and secondary homes. They are building in resort areas, on special lots
      purchased in the mountains and in coastal areas where they design and build
      the
      home of their dreams. Additionally, families living in urban and suburban areas
      throughout America will continue to locate further and further away from large
      metropolitan areas. Developers are finding customers to purchase lots in golf
      course communities developed in rural areas, which entail drives of close to
      an
      hour from the city.





If
      you
      help a builder of custom homes save money on purchasing materials, you assist
      him in reducing the costs of a project. However, in addition to those savings,
      if you help him learn how to embrace and overcome the many obstacles in the
      custom-home business you have provided the builder a pathway to success. By
      combining the needs of many small builders into a national membership
      organization, business opportunities occur that were never available before.
      When these things occur, HouseRaising has helped a small builder create a career
      that can last a lifetime.





**A
      Builder’s Home:**





HouseRaising
      is a place where builders go to find solutions, to get support, to share ideas
      and to gain knowledge. Creative builders seeking to build special homes for
      caring families come to HouseRaising for support and assistance. Today,
      HouseRaising is that team leader- operating as a 21st Century Company focused
      on
      recreating the proud tradition of organizing groups of experts helping customers
      design and build unique homes “for all the right reasons.”





**Is
      HouseRaising a Technology Company or a Homebuilding
      Company?:**





HouseRaising
      is the combination of a technology company and a homebuilding company that
      has
      developed into a service company that provides and manages projects through
      a
      proprietary process. In return for allowing HouseRaising to manage their
      projects, owners receive a home completed at a fair price...HR Economies of
      ScaleTM, designed and built to a higher degree of excellence...HR PowerHouse
      SpecsTM, and an experience that can be enjoyed by both the buyers and the
      builder...HRI Seal of Excellence AwardTM. Regardless of the price, style or
      location of the home under contract, the management process and quality demands
      are the same. Turning custom homebuilding into organized and manageable projects
      is aided by HouseRaising’s management platform vendors providing expert products
      and services.


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          18
          -


**Who
      Pays HRI?:**





HouseRaising
      creates revenues from managing custom home and renovation projects and those
      revenues are part of and are included in the sales price of the homes. As
      builders and HR-USA join to co-manage pre-sold projects, HRI is paid by the
      homebuyers as part of the total price due the builder as specified in the
      design/build or renovation contract. All vendors operating in Management
      Platforms or providing products or service to the project are paid from the
      construction loan and down payment provided by homebuyers.





**HouseRaising’s
      Business is its trademark “Straight, Level &
Square®”** **:**





HouseRaising,
      Inc.’s Trademark, “Straight, Level & Square®” stands for both the way the
      company deals with homebuyers, builders and vendors, and the quality of the
      products and services it provides. HouseRaising improves the quality of the
      home
      and provides better services. This combination reduces the cost of designing
      and
      building unique homes by up to 10%.





**RESULTS
      OF OPERATIONS FOR QUARTER ENDED SEPTEMBER 30, 2006**


**COMPARED
      TO SEPTEMBER 30, 2005**





**Sales**





The
      Company reports total project sales based on the contract amount due to design
      and build project, in the q uarter
      in
      which the sale is completed and closed. HouseRaising had new home and renovation
      sales of $185,450 for the period ended September 30, 2006, compared to $0 for
      the same period in 2005. Sales increased due to closing on a new construction
      project in the greater Charlotte area started in late 2005. All sales were
      from
      unrelated third parties and were made primarily to new home buyers and
      remodeling work. As of the end of the third quarter of 2006, the Company has
      new
      agreements totaling approximately $5,100,000 in sales that are projected to
      be
      completed over the next 12 months, which reflects a $3,100,000 increase from
      the
      number reported in our Annual Report on 10-KSB for the period ending December
      31, 2005 as filed on March 31, 2006. In addition, the Company has signed four
      operating agreements to establish regional operations with experienced
      homebuilders in Charlotte, North Carolina, Wilmington, North Carolina, Beaufort
      and Bluffton (near Charleston), South Carolina and Gulfport, Mississippi which
      is expected to rapidly increase custom homes sales in these regions and
      consistent with implementing our business plan. On average new home construction
      projects are completed within 9 months and remodeling projects are completed
      within 3 months.





**Gross
      Profits**





The
      Company earns profits as the net difference of project’s sales price and total
      costs including fees. The company conducts design/build projects with various
      affiliated builder relationships. Costs associated with in-house builder
      relationships are part of the projects total costs and HouseRaising’s profit is
      the difference in the sales price and all direct costs and fees. In a builder
      partnership relationship the company divides profits with the builder, which
      is
      accounted as a cost to the project. HRI’s profit represents the sales price less
      all costs, with the builder share of the profits listed as a cost to the
      project. House Raising
      had gross profits of $10,122 for the period ended September 30, 2006 compared
      to
      $0 for the same period in 2005. The increase is principally due to the higher
      sales volume. We expect gross profits will continue to increase commensurate
      with new contract sales.





**Sales
      and Service Fee Revenues**





Sales
      and
      service fee revenues from pre-sold projects consist of sales commissions,
      architectural design fees, engineering fees, and a series of project
      coordinating expenses charged to each design/build project. These fees are
      built
      into the projects total price with homebuyers
      paying these charges at the beginning of construction. The fees are a direct
      cost to the project. The sales and service fees of $97,027 recorded in the
      third
      quarter of 2006 associated with new and on-going projects that are expected
      to
      be completed in the next 12 months. These projects are included in the
      $5,100,000 in new agreements previously reported. There were $9,151 in sales
      and
      service fees recorded in the third quarter of 2005. Going forward we would
      expect sales and service fee revenue to continue to grow commensurate with
      increases in new contract sales.


-
          19
          -


**Other
      Income**





The
      Company earned $ 5,528
      in
      other income for the period ending September 30, 2006, principally from
      marketing fees associated with the Company’s contractual relationship with
      SunTrust Mortgage and membership fees from new Builder-members that have decided
      to work with HouseRaising, compared to $47 for the same period in 2005. The
      Company will earn approximately $12,000 a year from its agreement with SunTrust
      and does expect membership fees will increase substantially as the company
      continues to implement its Builder-Membership program as part of its business
      plan.





**Net
      Revenues**





Hous eRaising’s
      net revenues were $112,677 for the third quarter ended September 30, 2006
      compared to $9,198 for 2005. The net revenues generated in 2006 were due to
      profits from new home construction and renovation projects that were completed
      in the year and also sales and service fees for new projects that have been
      started. We would expect our net revenues to continue to grow as we obtain
      new
      construction and remodeling work in 2006 and commence roll-out of the Company’s
      membership, independent builder operations and disaster relief
      operations.





**Expenses**





Total
      expenses for the
      quarter ended September 30, 2006 was $1,483,963 compared to $899,934 for the
      same period in 2005. Selling, general and administrative expenses were higher
      for the period ending September 30, 2006 versus 2005, increasing from $684,246
      in the third quarter of 2005 to $1,373,039 for the third quarter of 2006. The
      increase in expenses was due principally to a one time administrative cost
      associated with the issuance of 200,000 preferred stock shares to Management
      as
      described under Part II Item 2: Changes in Securities. Selling, General and
      Administrative expenses reflect costs related to developing HouseRaising’s
      Carolinas and Gulf Coast zone operations, the Company membership program and
      disaster relief operations, including advertising, costs for personnel and
      contractors who are directly associated with and who devote time to selling,
      designing and building pre-sold homes and renovation projects in the Greater
      Charlotte and Gulf Coast regions, builder-memberships nationally and disaster
      relief services in the Gulf Coast region. These expenses also include general
      business and executive management to raise capital for implementation of its
      business plan as well as previously committed payments for services provided
      to
      the company. Consulting fees reflect business consulting services and investor
      relations expenses which decreased to $110,924 in the third quarter 2006 from
      $215,688 in the third quarter 2005.





Due
      to
      our start up efforts, we have previously issued shares of common stock to
      professionals and consultants for their marketing, investor relations, and
      general business consulting. All of our accounts payable and accrued expenses
      are trade payables in connection within the course of business. We expect to
      develop additional revenue sources consistent with these expense levels as
      we
      continue to roll out our business plan in 2006, including the Company’s new
      builder membership and disaster relief services.





**Other
      Expense**





HouseRaising
      had interest expense
      of $63,055 for the quarter ended September 30, 2006 compared to $26,186 for
      the
      same period in 2005. The interest recorded in the third quarter of 2006 was
      principally for the company’s line of credit with Wachovia Bank and some
      interest associated with the bridge lenders. The interest recorded in 2005
      was
      principally to reimburse bridge lenders of HouseRaising as well as to the
      Technology Connections predecessor entity. The Company has offered bridge
      lenders an opportunity to enter into an equity-for-debt swap as part of the
      company’s private placement offering and several bridge lenders have agreed to
      do this. Going forward we would expect this level of interest expense to subside
      as those debt obligations are retired, unless the company cannot obtain
      additional equity financing and must resort to borrowing additional funds.





**Income
      / Losses**





The
      net
      loss for the quarter
      ended September 30, 2006 was $1,434,341 versus a net loss of $916,922 in the
      same period in 2005, an increase of $517,419. The increase in net losses is
      directly attributable to a one time administrative expense, offset by an
      increase in sales associated with new construction and remodeling projects
      and a
      decrease in consulting fees. Future income/losses will depend on the success
      of
      implementing the company’s business plan in 2006. The company does already have
      approximately $5,100,000 of new home construction work in process for 2006
      which
      is a $3,100,000 increase from year-end and has signed four operating agreements
      to establish regional operations with experienced homebuilders in Charlotte,
      North Carolina, Wilmington, North Carolina, Beaufort and Bluffton (near
      Charleston), South Carolina and Gulfport, Mississippi which is expected to
      rapidly increase custom homes sales in these regions and consistent with
      implementing our business plan. The actual sales will be recorded upon
      completion of each project while sales and service revenue will be recorded
      as
      earned.





-
          20
          -


**RESULTS
      OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30,
      2006**


**COMPARED
      TO SEPTEMBER 30, 2005**





**Sales**





HouseRaising
      had new
      home
      and renovation sales of $636,791 for the nine month period ended September
      30,
      2006, compared to $1,590 for the same period in 2005. The sales for the first
      nine months of 2006 have surpassed the same sales level for all of 2005. Sales
      increased due to closing on new construction and remodeling projects in the
      greater Charlotte area started in late 2005 or early 2006. All sales were from
      unrelated third parties and were made primarily to new home buyers and
      remodeling work. As of the end of the third quarter of 2006, the Company has
      new
      contracts totaling approximately $5,100,000 in sales that are projected to
      be
      completed over the next 12 months, which reflects a $3,100,000 increase from
      the
      number reported in our Annual Report on 10-KSB for the period ending December
      31, 2005 as filed on March 31, 2006. In addition, the Company has signed four
      operating agreements to establish regional operations with experienced
      homebuilders in Charlotte, North Carolina, Wilmington, North Carolina, Beaufort
      and Bluffton (near Charleston), South Carolina and Gulfport, Mississippi which
      is expected to rapidly increase custom homes sales in these regions and
      consistent with implementing our business plan. On average new home construction
      projects are completed within 9 months and remodeling projects are completed
      within 3 months.





**Gross
      Profits**





The
      Company earns profits as the net difference of project’s sales price and total
      costs including fee s
      (see
      third quarter results for further details). HouseRaising had gross profits
      of
      $80,016 for the nine month period ended September 30, 2006 compared to $342
      for
      the same period in 2005. The gross profits for the first nine months of 2006
      are
      more than double the gross profits incurred in all of 2005. The increase is
      principally due to the higher sales volume. We expect gross profits will
      continue to increase commensurate with new contract sales.





**Sales
      and Service Fee Revenues**





Sales
      and
      service fee revenues from pre-sold projects consist of sales commissions,
      architectural design fees, engineering fees, and a series of project
      coordinating expenses charged to each design/build project. These fees are
      built
      into the projects total price with homebuyers
      paying these charges at the beginning of construction. The fees are a direct
      cost to the project. The sales and service fees of $156,652 recorded in the
      first nine months of 2006 associated with new and on-going projects that are
      expected to be completed in next 12 months. These projects are included in
      the
      $5,100,000 in new agreements noted earlier. There were sales and service fees
      of
      $17,613 recorded for the first nine months of 2005. The substantial increase
      reflects the increase in sales volume and expected sales over the next 12
      months. Going forward we would expect sales and service fee revenue to continue
      to grow commensurate with increases in new contract sales.





**Other
      Income**





The
      Company earned $ 5,528
      in
      other income for the nine months ended September 30, 2006, principally from
      marketing fees associated with the Company’s contractual relationship with
      SunTrust Mortgage and membership fees from new Builder-members that have decided
      to work with HouseRaising compared to $188 for the same period in 2005. The
      Company will earn approximately $12,000 a year from its agreement with SunTrust
      and does expect membership fees will increase substantially as the company
      continues to implement its Builder-Membership program as part of its business
      plan.





**Net
      Revenues**





Hous eRaising’s
      net revenues were $242,196 for the nine months ended September 30, 2006 compared
      to $18,143 for 2005. The substantial increase in net revenues for the first
      nine
      months of 2006 compared to the same period in 2005 (more than 13 fold increase)
      reflects the substantial increase in new home construction and renovation
      projects and on-going marketing efforts the past year. We would expect our
      net
      revenues to continue to grow as we obtain new construction and remodeling work
      in 2006 and continue the roll-out of the Company’s membership and disaster
      relief operations.





**Expenses**





Total
      expenses for the
      nine
      months ended September 30, 2006 was $2,879,848 compared to $3,437,047 for the
      same period in 2005. The decrease in expenses was due to a substantial decrease
      in consulting fees from the second quarter of 2005 to 2006. Consulting fees
      reflects business consulting services and investor relations expenses which
      decreased to $289,519 in the second quarter, 2006 and $542,392 for the first
      nine months of 2006 from $1,149,180 in the second quarter 2005 and $1,878,817
      for the first nine months of 2005. This is principally because the company
      incurred consulting
      fees in the second quarter, 2005 in an effort to maintain our stock price in
      response to what we believe was a “wave of coordinated naked short selling”
which we reported to the NASD as described in our filing with the SEC on Form
      8-K on May 9, 2005. These fees were principally investor relations and related
      consulting services which was substantially funded through the issuance of
      restricted shares of common stock. The Company does not expect such expenses
      to
      reoccur as its expenditures since that time period has been substantially less.





-
          21
          -


Selling,
      general and administrative expenses were higher for the nine months period
      ending September 30, 2006 versus 2005, increasing from $1,558,230 in 2005 to
      $2,337,456 in 2006. These expenses reflect costs related to developing
      HouseRaising’s Carolinas and Gulf Coast zone operations, the Company membership
      program and disaster relief operations, including advertising, costs for
      personnel and contractors who are directly associated with and who devote time
      to selling, designing and building pre-sold homes and renovation projects in
      the
      Greater Charlotte and Gulf Coast regions, builder-memberships nationally and
      disaster relief services in the Gulf Coast region. These expenses also include
      general business and executive management to raise capital for implementation
      of
      its business plan, a one time issuance of Preferred Stock Shares to management
      and previously committed payments for services provided to the
      company.





**Other
      Expense**





HouseRaising
      had interest expense
      of $141,380 for the quarter ended September 30, 2006 compared to $51,959 for
      the
      same period in 2005. The interest recorded in the third quarter of 2006 was
      principally for the company’s line of credit with Wachovia Bank and some
      interest associated with the bridge lenders. The interest recorded in 2005
      was
      principally to reimburse bridge lenders of HouseRaising as well as to the
      Technology Connections predecessor entity. The Company has offered bridge
      lenders an opportunity to enter into an equity-for-debt swap as part of the
      company’s private placement offering and several bridge lenders have agreed to
      do this. Going forward we would expect this level of interest expense to subside
      as those debt obligations are retired, unless the company cannot obtain
      additional equity financing and must resort to borrowing additional funds.





**Income
      / Losses**





The
      net
      loss for the quarter
      ended September 30, 2006 was $2,779,032 versus a net loss of $3,470,863 in
      the
      same period in 2005, a decrease of approximately 20% or $691,831. The decrease
      in net losses is directly attributable to an increase in sales associated with
      new construction and remodeling projects and a decrease in consulting fees
      in
      the nine months ended 2006 versus 2005. Future income/losses will depend on
      the
      success of implementing the company’s business plan in 2006. The company does
      already have approximately $5,100,000 of new home construction work in process
      for 2006 which is a $3,100,000 increase from year-end and has signed four
      operating agreements to establish regional operations with experienced
      homebuilders in Charlotte, North Carolina, Wilmington, North Carolina, Beaufort
      and Bluffton (near Charleston), South Carolina and Gulfport, Mississippi which
      is expected to rapidly increase custom homes sales in these regions and
      consistent with implementing our business plan. The actual sales will be
      recorded upon completion of each project while sales and service revenue will
      be
      recorded as earned.





**Impact
      of Inflation**





We
      believe that inflation has had a negligible effect on operations since
      inception. We believe that we can offset inflationary increases in the cost
      of
      labor by increasing sales and improving operating efficiencies.





**Liquidity
      and Capital Resources**





Cash
      flows used in operations were $ 2,005,137
      for the nine month period ended September 30, 2006 versus $682,323 for the
      same
      period in 2005. This reflects a net increase in cash used by operations of
      $1,322,814 principally due to a decrease in common stock issued for services
      for
      the nine months offset by a decrease in net operating loss and expenditures
      on
      capitalized software.





Cash
      flows used in investment activities were $67,064 and $167,790 for the nine
      months ended September 30, 2006 and 2005, respectively. This was principally
      due
      to investments in property and equipment for the company.





Cash
      flows provided by financing activities were $1,982,090 and $1,206,075,
      respectively, for the nine months ended September 30, 2006 and 2005. The
      increase was principally due to issuance of common stock associated with the
      equity-for-debt swap with the company’s bridge lenders that occurred in the
      first nine months of 2006 (see Note 12 of Notes to Consolidated Financial
      Statements and Part II, Item 2 Changes in Securities of Form 10-QSB filed with
      the SEC on August 14, 2006 for more information) and the increase in borrowings
      on notes payable, principally draws on a bank loan with Wachovia.





We
      had
      cash on hand of $202,272 and a working capital deficit of $3,515,613 as of
      September 30, 2006 which is not sufficient to fund our operations through the
      next twelve months. Our working capital deficit is due to current obligations
      in
      accounts payable and notes payable from the bridge lenders and line of credit
      from Wachovia Bank. In early 2006, the Company entered into agreements with
      some
      of the bridge lenders to convert their debt obligations into restricted stock
      of
      the company and warrants for future purchase of restricted stock of the company
      through our Private Placement Memorandum which is further described under Note
      12 of the Notes to Consolidated Financial Statements.





-
          22
          -


Overall,
      we have funded our cash needs from inception through September 30, 2006 with
      a
      series of debt and equity transactions. The Company’s principal source of
      working capital in 2005 and 2006 was a loan made by the Company’s founder, a
      line of credit established with Wachovia Bank, the sales of the company’s
      Private Placement Memorandum to accredited investors, commitments from vendors
      to develop HouseRaising’s software system in exchange for shares of stock, and
      fee revenues and profits from existing new home and renovation sales. In
      addition, some Management and independent contractors providing services to
      the
      company have agreed to accept shares as a means of paying for critical services
      to implement its business plan. We have not entered into any commitments for
      significant capital expenditures, except the on-going software development
      project previously mentioned.





Going
      forward we will rely substantially on new revenue from our business development
      efforts; however, we have no current capital reserves that will sustain our
      business for the next twelve months. The company does have approximately
      $5,100,000 of new home construction work in process for 2006 and a pipeline
      of
      prospective customers which is consistent with implementing our business plan.
      The Company has also signed four operating agreements to establish regional
      operations with experienced homebuilders in Charlotte, North Carolina,
      Wilmington, North Carolina, Beaufort and Bluffton (near Charleston), South
      Carolina and Gulfport, Mississippi which is expected to rapidly increase custom
      homes sales in these regions and consistent with implementing our business
      plan.
      Actual sales will be recorded upon completion of each project while sales and
      service revenue will be recorded as earned. If the projected revenues fall
      short
      of needed capital we may not be able to sustain our cash needs for the next
      twelve months. To date, the company has had investors willing to contribute
      equity to finance on-going operations. However, such parties are under no legal
      obligation to provide us with future capital infusions. If we are unable to
      receive additional cash infusions from these parties, we will need to obtain
      additional capital through equity or debt financing to sustain operations.
      Failure to obtain such financing could have a material adverse effect on
      operations and financial condition.





Accordingly,
      the company is seeking additional debt or equity financing or funding from
      third
      parties, in exchange for which the company might be required to issue a
      substantial equity position. There is no assurance that the company will be
      able
      to obtain additional financing on terms acceptable to its Management. If
      Management is successful in obtaining additional funding, these funds will
      be
      used primarily to expand sales and marketing efforts of its homebuilding
      operations (new home and renovation sales) in the Carolinas (covering North
      and
      South Carolina) and the Gulf Coast region, implementing marketing and sales
      for
      its membership and independent builder programs in the southeast and eventually
      nationally, implementing marketing and sales for its disaster relief services,
      on-going software development to improve its system and to provide working
      capital needed for repayment of outstanding notes payable. The Company also
      continues to explore acquisition opportunities that may assist in the successful
      implementation of its business plan (see Note 9B Other Matters for further
      discussion on this item).





Demand
      for our services will be dependent on, among other things, market acceptance
      of
      our services, the real estate market in general, and general economic
      conditions, which are cyclical in nature. Inasmuch as a major portion of our
      activities is the receipt of revenues from the sales of new home services,
      our
      business operations may be adversely affected by our competitors and prolonged
      recessionary periods. The company has provided a detailed list of risks and
      cautionary statements at the beginning of this document.


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          23
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**ITEM
      3. CONTROLS AND PROCEDURES**





*QuarterlyEvaluation
      of Controls* .
      As of
      the end of the period covered by this quarterly report on Form 10-QSB, we
      evaluated the effectiveness of the design and operation of our disclosure
      controls and procedures ("Disclosure Controls"). This evaluation (“Evaluation”)
      was performed by our Chairman and Chief Executive Officer, Gregory J. Wessling,
      and President and Founder, Robert V. McLemore (jointly known as “CEO”), our
      Chief Financial Officer, Richard A. von Gnechten (“CFO”) and our Chief
      Administrative Officer, Christine M. Carriker. In addition, we have discussed
      these matters with our securities counsel. In this section, we present the
      conclusions of our CEO and CFO based on and as of the date of the Evaluation
      with respect to the effectiveness of our Disclosure Controls.





*CEO
      and CFO Certifications* .
      Attached to this quarterly report, as Exhibits 31.1 through 31.4, are certain
      certifications of the CEO and CFO, which are required in accordance with the
      Exchange Act and the Commission's rules implementing such section (the "Rule
      13a-14(a)/15d-14(a) Certifications"). This section of the quarterly report
      contains the information concerning the Evaluation referred to in the Rule
      13a-14(a)/15d-14(a) Certifications. This information should be read in
      conjunction with the Rule 13a-14(a)/15d-14(a) Certifications for a more complete
      understanding of the topic presented.





*Disclosure
      Controls* .
      Disclosure Controls are procedures designed with the objective of ensuring
      that
      information required to be disclosed in our reports filed with the Commission
      under the Exchange Act, such as this quarterly report, is recorded, processed,
      summarized and reported within the time period specified in the Commission's
      rules and forms. Disclosure Controls are also designed with the objective of
      ensuring that material information relating to us is made known to the CEO
      and
      the CFO by others, particularly during the period in which the applicable report
      is being prepared.





*Limitations
      on the Effectiveness of Controls* .
      Our
      management does not expect that our Disclosure Controls will prevent all error
      and all fraud. A control system, no matter how well developed and operated,
      can
      provide only reasonable, but not absolute assurance that the objectives of
      the
      control system are met. Further, the design of the control system must reflect
      the fact that there are resource constraints, and the benefits of controls
      must
      be considered relative to their design and monitoring costs. Because of the
      inherent limitations in all control systems, no evaluation of controls can
      provide absolute assurance that all control issues and instances of fraud,
      if
      any, within the Company have been detected. These inherent limitations include
      the realities that judgments in decision-making can be faulty, and that
      breakdowns can occur because of simple error or mistake. Additionally, controls
      can be circumvented by the individual acts of some persons, by collusion of
      two
      or more people, or by management override of the control. The design of a system
      of controls also is based in part upon certain assumptions about the likelihood
      of future events, and there can be no assurance that any design will succeed
      in
      achieving its stated objectives under all potential future conditions. Over
      time, control may become inadequate because of changes in conditions, or because
      the degree of compliance with the policies or procedures may deteriorate.
      Because of the inherent limitations in a cost-effective control system,
      misstatements due to error or fraud may occur and not be detected.





*Scope
      of the Evaluation* .
      The CEO
      and CFO's evaluation of our Disclosure Controls included a review of the
      controls' (i) objectives, (ii) design, (iii) implementation, and (iv) the effect
      of the controls on the information generated for use in this quarterly report.
      In the course of the Evaluation, the CEO and CFO sought to identify data errors,
      control problems, acts of fraud, and they sought to confirm that appropriate
      corrective action, including process improvements, was being undertaken. This
      type of evaluation is done on a quarterly basis so that the conclusions
      concerning the effectiveness of our controls can be reported in our quarterly
      reports on Form 10-QSB and annual reports on Form 10-KSB. The overall goals
      of
      these various evaluation activities are to monitor our Disclosure Controls,
      and
      to make modifications if and as necessary. Our intent in this regard is that
      the
      Disclosure Controls will be maintained as dynamic systems that change (including
      improvements and corrections) as conditions warrant.





*Conclusions.* Based
      upon the Evaluation, our disclosure controls and procedures are designed to
      provide reasonable assurance of achieving our objectives. Our CEO and CFO have
      concluded that our disclosure controls and procedures are effective at that
      reasonable assurance level to ensure that material information relating to
      the
      Company is made known to management, including the CEO and CFO, particularly
      during the period when our periodic reports are being prepared, and that our
      Internal Controls are effective at that assurance level to provide reasonable
      assurance that our financial statements are fairly presented in conformity
      with
      accounting principals generally accepted in the United States. Additionally,
      there has been no change in our Internal Controls that occurred during our
      most
      recent fiscal quarter that has materially affected, or is reasonably likely
      to
      affect, our Internal Controls.





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          24
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**PART
      II**


**ITEM
      1. LEGAL PROCEEDINGS.**





In
      the
      matter of Nite Capital, LP, Plaintiff v. Robert V. McLemore and HouseRaising,
      Inc., Defendants, 05C 3757:


On
      May 3,
      2006, Nite Capital, LP (“Nite”) re-filed its complaint against Robert V.
      McLemore, President of HouseRaising (“McLemore”) and HouseRaising, in the
      Circuit Court of the Nineteenth Judicial Circuit for Lake County, Illinois.
      The
      re-filed complaint essentially makes the same allegations and demands the same
      relief as an earlier complaint filed in federal court in Illinois. HouseRaising
      filed a motion for dismissal based on lack of jurisdiction, but this filing
      was
      denied on October 18, 2006. Consistent with time requirements of Illinois law,
      HouseRaising filed a response to the complaint in Circuit Court on November
      7,
      2006. A copy of a
      Form 8-K, filed with the Commission on July 19, 2005, reporting the filing
      of
      the initial complaint by Nite in the U.S. District Court for the Northern
      District of Illinois, Eastern Division, against McLemore and HouseRaising,
      describes the litigation in more detail and is hereby incorporated by reference.
      That complaint was voluntarily dismissed on a motion made by Nite on April
      12,
      2006.





Mr.
      McLemore maintains his previously stated position that Nite Capital defaulted
      on
      the underlying contract and that he and HouseRaising are not at fault. As
      previously stated, the terms of the contract at issue are disputed by the
      Defendants, and HouseRaising reports that it was not even a party to the alleged
      contract. The Defendants continue to engage Sugar, Friedberg and Felsenthal,
      LLP, counsel admitted to practice law in state court in Illinois and the U.S.
      District Court for the Northern District of Illinois, and intends to vigorously
      defend this action. The Company believes the claims against it amount to a
      thinly disguised effort to insert HouseRaising into a dispute over a contract
      between two private parties.





Background:


In
      November 2004, Robert V. McLemore, President and Founder of HouseRaising,
      entered into a personal contract whereby he agreed to sell Nite Capital, LP,
      an
      investment firm based in Chicago, Illinois, a certain number of shares of his
      personal stock in return for Nite Capital’s agreement not to sell the shares for
      a set period of time and not to short sell the shares. It is Mr. McLemore’s
      belief that Nite Capital defaulted on this contract, and, as a result, McLemore
      refused to complete the transaction until a review of the short selling
      activities of Nite Capital and its principals could be completed. In connection
      with such review, HouseRaising filed a complaint with the NASD which requested
      an investigation into what management termed a “wave of coordinated naked short
      selling” in HouseRaising’s common stock over a three month period of time.
      Management of HouseRaising believes that this coordinated effort may have
      violated NASD rules, as well as applicable federal securities laws.





**ITEM
      2. CHANGES IN SECURITIES.**





On
      August
      10, 2006, the Board of Directors of the Registrant met and authorized the entry
      into three amendments to existing employment agreements with Gregory J.
      Wessling, Director, Chairman and Chief Executive Officer, Robert V. McLemore,
      Director, President and Founder, and Grant S. Neerings, Director, Chief
      Technology Officer and President of HouseRaisingAcademy, LLC. All of the three
      directors abstained from voting on the matters considered by the Board of
      Directors described herein, and the amendments and all additional matters
      described herein were approved by the unanimous vote of the five remaining
      directors. The Company filed a Form 8-K with the SEC on August 16, 2006
      describing this matter which included a copy of the Articles of Amendment
      establishing the Class B Convertible Preferred Stock which is incorporated
      herein by reference.





Mr.
      Wessling, Mr. McLemore and Mr. Neerings all agreed to an amendment to their
      employment agreements which increased the term to five years. In return, the
      Board of Directors authorized the issuance of a bonus to Mr. Wessling of 200,000
      shares of a new series of Class B Convertible Preferred Stock in consideration
      of his agreement to amend his employment agreement. The Board also cited as
      additional consideration the fact that Mr. Wessling had recently co-signed
      a
      $1,000,000 promissory note with Wachovia Bank in favor of the Registrant. The
      Board finally noted Mr. Wessling’s record of exceptional service to the
      Registrant as further consideration for the bonus.





The
      Board
      of Directors authorized the issuance of a bonus to Mr. McLemore of 500,000
      shares of Class B Convertible Preferred Stock in consideration of his agreement
      to amend his employment agreement. The Board also cited as additional
      consideration the fact that Mr. McLemore had recently co-signed a $1,000,000
      promissory note with Wachovia Bank in favor of the Registrant. In addition,
      Mr.
      McLemore agreed to assign all right, title and interest that he owned in two
      copyrighted applications for System C, the custom design-build computer
      management software that is at the heart of the Registrant’s business plan. The
      Board further noted Mr. McLemore’s record of exceptional service as further
      consideration for the bonus.





The
      Board
      of Directors authorized the issuance of a bonus to Mr. Neerings of 100,000
      shares of Class B Convertible Preferred Stock in consideration of his agreement
      to amend his employment agreement. The Board also cited as additional
      consideration Mr. Neerings’ record of exceptional service to the Registrant, in
      particular, his instrumental role in developing the Registrant’s System C.





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          25
          -


The
      Class
      B Convertible Preferred Stock is convertible after three years from the date
      of
      issuance into ten (10) shares of common stock, and it votes on an “as converted”
basis with the common stock on all matters except to approve any merger, sale
      of
      assets, combination or reorganization involving the Registrant, or other
      fundamental corporate transaction involving the Registrant, in which case the
      Class B Convertible Preferred Stock has a class vote. In addition to any other
      rights provided by law, the Registrant shall not without first obtaining the
      affirmative vote or written consent of the holders of a majority of the
      outstanding shares of Class B Convertible Preferred, make any payment of
      dividends or other distributions or any redemption or repurchase of common
      stock
      or options or warrants to purchase common stock of the Registrant.





The
      Board
      of Directors also emphasized that the issuance of 800,000 shares of Class B
      Convertible Preferred Stock to the Registrant’s insiders would tend to have an
      anti-takeover effect, and enable management to focus on implementing its
      business plan without losing control of the Registrant. The issuance would
      also
      lessen the dilutive impact on management’s stake of certain financings that were
      under consideration.





The
      Registrant had 48,785,230 shares of common stock and 1,000,000 shares of Class
      A
      Convertible Preferred Stock outstanding as of July 31, 2006, for a total of
      58,785,230 shares of total outstanding combined voting power. After the issuance
      of the 800,000 shares of Class B Convertible Preferred Stock described herein,
      the Registrant will have 66,785,230 shares of total outstanding combined voting
      power.





The
      offering of the Class B Convertible Preferred Stock is intended to be exempt
      from registration pursuant to Section 4(2) of the Securities Act of 1933, as
      amended. The facts relied on by the issuer to make the exemption available
      include: (1) the issuance was an isolated private transaction which did not
      involve a public offering; (2) there was only one offeree, (3) the offeree
      has
      agreed to the imposition of a restrictive legend on the face of the stock
      certificate representing its shares, to the effect that it will not convert
      the
      shares of Class B Convertible Preferred Stock into common stock, and resell
      the
      stock unless its shares are registered or an exemption from registration is
      available; (4) the offeree was a sophisticated investor; (5) there were no
      subsequent or contemporaneous public offerings of the stock; (6) the certificate
      for the shares of Class B Convertible Preferred Stock were not broken down
      into
      smaller denominations; and (7) the negotiations for the sale of the stock took
      place directly between the offeree and our management.





**ITEM
      3. DEFAULT UPON SENIOR SECURITIES.**





None.





**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**





None.





**ITEM
      5. OTHER MATTERS**





Part
      of
      HouseRaising, Inc.’s strategy is to build its business through the merger or
      acquisition of existing homebuilders and technology companies that will benefit
      our application service business. It is reasonable to expect that such activity
      is an ongoing part of HRI’s business development efforts. At any given time the
      company could be in process of analyzing or negotiating
      an offer in connection with such a transaction. However, any discussion or
      speculation on specific transactions is only conjecture until such time that
      a
      definite agreement is signed and announced in an SEC filing and press release.
      It is possible that no transactions will take place at all.





**Current
      Status of Announced Transactions**





All
      previously announced transactions have been completed, brought to resolution
      or
      have no further update. These items were previously described in the Company’s
      Annual Report on Form 10-KSB filed on March 31, 2006 and are incorporated herein
      by reference.


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          26
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**ITEM
      6. EXHIBITS AND REPORTS ON FORM 8-K**





**(a)
      Reports on Form 8-K**





Subsequent
      to June 30, 2006, the Company filed the following Current Reports on Forms
      8-K
      with the SEC as follows:





Dated
                (filing date)
            
            Items
                ReportedAugust
                10, 2006 (August 17, 2006)
            
            Form
                8-K Entry into a Material Definitive AgreementJune
                28, 2006 (July 5, 2006)
            
            Form
                8-K Entry into a Material Definitive Agreement





**(b)
      Exhibits**





Exhibits
      for HouseRaising and its subsidiaries are listed below.





**INDEX
      TO EXHIBITS**





The
      exhibits designated by an asterisk (*) are filed herein. The exhibits not so
      designated are incorporated by reference to the indicated filing.





Exhibit
                No.
            
            Descriptions2.1.1
            
            Agreement
                and Plan of Merger, dated February 19, 2004 (incorporated by reference
                from Exh. 2 to the Definitive Information Statement filed on August
                10,
                2004)3.1
            
            Articles
                of Incorporation (incorporated by reference from Exh.3 of Form SB-2
                filed
                April 11, 2002)3.2
            
            Articles
                of Amendment to Articles of Incorporation to Change Name (incorporated
                by
                reference from Exh. 3 to the Definitive Information Statement filed
                August
                10, 2004)3.3
            
            Bylaws
                of HouseRaising, Inc. (incorporated by reference from Exh.3 to Form
                SB-2
                filed April 11, 2002)3.4
            
            Articles
                of Amendment for Class A Voting Convertible Preferred Stock (incorporated
                by reference from Exh. 4 to the Definitive Information Statement
                filed
                August 10, 2002)31.1
            
            Rule
                13a-14(a)/15d-14(a) Certification of Gregory J. Wessling, Chairman
                and
                Chief Executive Officer*31.2
            
            Rule
                13a-14(a)/15d-14(a) Certification of Robert V. McLemore, President
                and
                Founder*31.3
            
            Rule
                13a-14(a)/15d-14(a) Certification of Richard A. von Gnechten, Chief
                Financial Officer*31.4
            
            Rule
                13a-14(a)/15d-14(a) Certification of Christine M. Carriker,
                Secretary/Treasurer, SVP & Chief Administrative
                Officer*32.1
            
            Section
                1350 Certification of Gregory J. Wessling, Chairman and Chief Executive
                Officer*32.2
            
            Section
                1350 Certification of Robert V. McLemore, President and
                Founder*32.3
            
            Section
                1350 Certification of Richard A. von Gnechten, Chief Financial
                Officer*32.4
            
            Section
                1350 Certification of Christine M. Carriker, Secretary/Treasurer,
                SVP and
                Chief Administrative Officer*


_________________________________


*-Filed
      herewith





-signature
      page follows-


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          27
          -





SIGNATURES





Pursuant
      to the requirements of Section 13 or 15 (d) 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.





HOUSERAISING,
                INC.(Registrant)/s/
                Gregory J. WesslingDate:
                November 14, 2006
            Gregory
                J. WesslingChairman
                of the Board andChief
                Executive Officer(Principal
                Executive Officer)/s/
                Robert V. McLemoreDate:
                November 14, 2006
            Robert
                V. McLemorePresident
                and Founder(Principal
                Executive Officer)/s/
                Richard A. von GnechtenDate:
                November 14, 2006
            Richard
                A. von GnechtenChief
                Financial Officer(Principal
                Financial Officer)/s/
                Christine M. CarrikerDate:
                November 14, 2006
            Christine
                M. CarrikerSecretary/Treasurer,
                SVP &Chief
                Administrative Officer(Principal
                Accounting Officer)





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