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 March 31,
2005**





**[
      ]**
    **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
Carolina56-2253025


(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 [ ]




**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
April 29, 2005


Common
Stock ($.001 par
value) 38,126,787


Preferred
Stock Class A ($.001 par
value) 1,000,000









*Table of Contents*





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 unaudited
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. The reports and other information filed by us will be
available for inspection and copying at the public reference facilities of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.





Copies of
such material may be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., 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










2
 *Table of Contents*





HOUSERAISING,
INC.
FORM
10-QSB

For the
Quarter ended March 31, 2005

TABLE OF CONTENTS





PageCautionary
      Statement and Risk Factors that May Affect Future Results
    4PART
      IITEM
      1.  Selected Financial
Statements
    5Balance Sheet - March 31, 2005
    (unaudited)
    5Statements of Operations - Three Months Ended March 31, 2005
      and 2004 (unaudited)
    6Statements of Cash Flows - Three Months Ended March 31, 2005
      and 2004 (unaudited)
    7Notes to Financial Statements
    (unaudited)
    8ITEM
      2.  Management’s Discussion and Analysis of
      Financial Condition and Plan of Operations
    14ITEM
      3.  Controls and Procedures
    17PART
      IIITEM
      1.  Legal Proceedings
    18ITEM
      2.  Changes in Securities
    18ITEM
      3.  Default Upon Senior Securities
    18ITEM
      4.  Submission of Matters to a Vote of Security
      Holders
    18ITEM
      5.  Other Information
    18ITEM
      6.  Exhibits and Reports on Form
    8-K
    19Signatures
    20


3
 *Table of Contents*





**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:





·
    Changes
      in general and local economic and market conditions where our operations
      are conducted and where prospective purchasers of homes
    live;


·
    the
      effects of weather, natural disasters or global developments, including
      terrorist acts and war on terrorism negatively affecting local home
      building industry and adversely affecting new home installations
      market;


·
    the
      timing and extent of changes in interest
rates;


·
    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 home
      builders 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 personnel in order to meet the goals set forth in its business plan
      and rollout of Zone operations;


·
    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 heavily dependent upon the continued active participation of
      its President, Robert V. McLemore;


·
    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, 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 accounting opinion that raises
      substantial 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.





4
 *Table of Contents*








**PART
I**





**ITEM
1. SELECTED FINANCIAL STATEMENTS**





**HouseRaising, Inc. and Subsidiaries (A Development Stage
      Company)****Consolidated
      Condensed Balance Sheet (unaudited)****As
      of March 31, 2005****ASSETS**CURRENT
      ASSETSCash
      and Cash Equivalents
    
    $
    12,254Prepaids
    
    
    510,917Accounts
      Receivable
    
    
    26,000Other
      Current Assets
    
    
    63,847TOTAL
      CURRENT ASSETS
    
    
    613,018PROPERTY
      AND EQUIPMENTProperty
      and Equipment
    
    
    200,947Accumulated
      Depreciation
    
    
    (96,941
    )Net
      Property and Equipment
    
    
    104,006OTHER
      ASSETOther
      Assets
    
    
    1,853Capitalized
      Software
    
    
    8,804,289Net
      Other Assets
    
    
    8,806,142TOTAL
      ASSETS
    
    $
    9,523,166**LIABILITIES
      AND STOCKHOLDERS' EQUITY**LIABILITIESCurrent
      Liabilities:Accounts
      Payable and Accrued Expenses
    
    $
    400,880Interest
      Payable
    
    
    19,307Notes
      Payable
    
    
    967,622TOTAL
      LIABILITIES
    
    
    1,387,809STOCKHOLDERS'
      EQUITYPreferred
      Stock ($.001 par value, 5,000,000 authorized:none
      issued and outstanding)Preferred
      Stock Class A Convertible ($.001 par value, 5,000,000
      authorized:
    
    
    1,0001,000,000
      issued and outstanding)
    
    
    -Common
      Stock Series A ($.001 par value, 90,000,000 shares authorized:
    
    
    -36,459,638
      shares issued and outstanding)
    
    
    37,449Common
      Stock Subscribed but not Issued
    
    
    1,946,035Additional
      Paid-in-Capital
    
    
    8,839,553Retained
      Deficit
    
    
    (2,688,680
    )TOTAL
      STOCKHOLDERS' EQUITY
    
    
    8,135,357TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
    
    $
    9,523,166





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





5
 *Table of Contents*




**HouseRaising, Inc. and Subsidiaries (A Development Stage
      Company)**Consolidated
      Statement of Operations (unaudited)For
      the three months ended March 31, 2005 and 20042005
    
    2004(a)SALES
      AND COST OF SALES:Sales
    
    $
    1,590
    
    $
    39,026Cost
      of sales
    
    
    1,248
    
    
    28,471Gross
      Profit
    
    
    342
    
    
    10,555OTHER
      REVENUES:Sales
      and service fees
    
    
    8,462
    
    
    65,262Other
      income
    
    
    94
    
    
    6,150NET
      REVENUES
    
    
    8,898
    
    
    81,967OPERATING
      EXPENSES:Selling,
      general and administrative
    
    
    467,114
    
    
    104,905Consulting
      fees
    
    
    513,349
    
    
    153,001980,463
    
    
    257,906OTHER
      EXPENSE:Interest
      expense
    
    
    9,247
    
    
    2,793NET
      LOSS
    
    $
    (980,812
    )
    $
    (178,732
    )Net
      Loss Per Common ShareBasic
      & Fully Diluted
    
    $
    *
    
    
    *Weighted
      Average CommonShares
      Outstanding
    
    
    37,010,437
    
    
    17,200,002(b
    )* =
      Less than ($.01)(a)
      = Consolidated HouseRaising, Inc. and Technology Connections,
      Inc.(b)
      = Reflects solely HouseRaising, Inc. shares




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





6
 *Table of Contents*




**HouseRaising, Inc. and Subsidiaries (A Development Stage
      Company)****Statements
      of Cash Flows (unaudited)****For
      the three months ended March 31, 2005 and 2004******2005
    
    2004(c)CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
    
    $
    (980,812
    )
    $
    (178,732
    )Adjustments
      to reconcile net loss to netcash
      (used in) operating activities:Depreciation
    
    
    7,558
    
    
    2,681Common
      stock subscribed for services rendered
    
    
    1,086,047
    
    
    190,002(Increase)
      decrease in operating assets:
    
    
    (88,000
    )
    
    --Accounts
      receivable
    
    
    (59
    )
    
    --Capitalized
      software
    
    
    (233,050
    )
    
    (9,889
    )Excess
      of costs over billings on uncompleted contracts
    
    
    (4,204
    )
    
    (17,135
    )Accounts
      payable and accrued expenses
    
    
    (5,343
    )
    
    (55,704
    )NET
      CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    
    
    (217,863
    )
    
    (68,777
    )CASH
      FLOWS FROM INVESTMENT ACTIVITIES:Purchase
      of property and equipment
    
    
    (25,515
    )
    
    (706
    )NET
      CASH (USED IN) INVESTMENT ACTIVITIES
    
    
    (25,515
    )
    
    (706
    )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      for sale of common stock
    
    
    -
    
    
    -Proceeds
      from capital contributions
    
    
    -
    
    
    44,667Borrowings
      on notes payable
    
    
    230,865
    
    
    25,000NET
      CASH PROVIDED BY FINANCING ACTIVITIES
    
    
    230,865
    
    
    69,667NET
      INCREASE IN CASH ANDCASH
      EQUIVALENTS
    
    
    (12,513
    )
    
    184CASH
      AND CASH EQUIVALENTS:Beginning
      of period
    
    
    24,767
    
    
    382End
      of period
    
    $
    12,254
    
    $
    566(c)
      - Consolidated HouseRaising, Inc. and Technology Connections,
      Inc.




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





7
 *Table of Contents*




**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-Q 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, 2004.





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 March 31, 2005 and the
results of their operations for the three months ended March 31, 2005 and 2004
and their cash flows for the three months ended March 31, 2005 and 2004. All
such adjustments are of a normal recurring nature, unless otherwise disclosed in
this Form 10-Q 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 are in the business of
selling, designing and managing design/build and renovation projects and home
building 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:


*
HouseRaising of Greater Charlotte, LLC—100% ownership by the
Company


*
HouseRaising of Greenville, LLC—100% ownership by the Company


*
HouseRaising of Columbia, LLC—100% ownership by the Company


*
HouseRaising of Asheville, LLC—100% ownership by the Company


*
HouseRaising of Wilmington, LLC—100% ownership by the Company


*
HouseRaising of Myrtle Beach, LLC—100% ownership by the Company


*
HouseRaising of Charleston, LLC—100% ownership by the Company





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 development. HouseRaisingUSA, LLC is responsible for
owning, organizing and operating the regional limited liability companies which
design and build customer homes for homebuyers in their respective area.





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 GAAP
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.





8
 *Table of Contents*





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





Revenue
Recognition —The
Company’s revenue is derived primarily from providing the design and build
management system to homebuilders on a percentage of such home’s contract price.
The sales and service fee portion is recognized in the initial construction
stage and approximates 10% of the home’s contract price. The balance of the
Company’s management fee approximates 50% of the home’s profit and is recognized
at closing. Revenues from construction contracts are recognized on the
completed-contract method. 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. 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.





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 is projected to be in 2005. 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.





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.





S-8
Share Payments —The
Company currently provides S-8 registered shares as compensation for services
rendered as a means of conserving cash until it obtains debt or equity
financing. The Company accrues the value of services rendered as an expense or
capital expenditure (when it is readily determinable) instead of the stock price
at the time the shares are transferred. Employees, 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.





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. Accordingly, this presentation has been adopted for the
period presented. There were no adjustments required 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.





9
 *Table of Contents*





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





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**





In June
2001, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 143, *“Accounting
for Asset Retirement Obligations”* which
addresses the accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated retirement costs.
SFAS No. 143 requires that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred if a reasonable
estimate of fair value cannot be made. SFAS No. 143 is effective for financial
statements issued for fiscal years beginning after June 15, 2002. The Company
does not expect SFAS No. 143 to have a material effect on its consolidated
financial condition or consolidated cash flows.





In August
2001, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 144, *“Accounting
for the Impairment or Disposal of Long-Lived Assets”.* SFAS No.
144 generally establishes a standard framework to measure the impairment of
long-lived assets and expands the Accounting Principles Board (“APB”) 30,
“Reporting the Results of Operations—Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions” to include a component of the entity (rather than a
segment of the business). SFAS No.144 is effective for financial statements
issued for fiscal years beginning after December 15, 2001. The Company does not
expect SFAS No. 144 to have a material effect on its consolidated financial
condition and consolidated cash flows.





In April
of 2002, Statement of Financial Accounting Standards (SFAS) No. 145 was issued
which rescinded SFAS Statements 4, 44, and 64, amended No. 13 and contained
technical corrections. As a result of SFAS No. 145, gains and losses from
extinguishments of debt will be classified as extraordinary items only if they
meet the criteria in APB Opinion No. 30, that they are unusual and infrequent
and not part of an entity’s recurring operations. The Company adopted SFAS on
January 1, 2004. The Company does not expect SFAS No. 145 to have a material
effect on its financial condition or cash flows.





In July
of 2002, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standard (SFAS) No. 146, which addresses significant issues regarding
the recognition, measurement, and reporting of costs that are associated with
exit and disposal activities, including restructuring activities that are
currently accounted for pursuant to the guidance that the Emerging Issues Task
Force (EITF) has set forth in EITF Issue No. 94-3, *“Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (Including Certain Costs Incurred in a Restructuring)”* . SFAS
No. 146 revises the accounting for certain lease termination costs and employee
termination benefits, which are generally recognized in connection with
restructuring charges. The provisions of SFAS 146 are effective for exit or
disposal activities that are initiated after December 31, 2002. The Company does
not expect SFAS No. 146 to have an impact its financial statements as adopted on
January 1, 2004.





In
November 2002, the Financial Accounting Standards Board issued Interpretation
No. 45 (FIN 45), “ *Guarantor’s
Accounting and Disclosure Requirements for Guarantee, Including Indirect
Guarantees or Indebtedness of Others”* , which
addresses the disclosures to be made by a guarantor in its interim and annual
financial statements about its obligations under guarantees. FIN 45 also
requires the recognition of a liability by a guarantor at the inception of
certain guarantees that are entered into or modified after December 31,
2002.





In
December 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard (SFAS) No. 148, *“Accounting
for Stock-Based Compensation Transition and Disclosure”* —an
amendment to SFAS No. 123 (SFAS No. 148), which provides alternative methods of
transition for companies voluntarily planning on implementing the fair value
recognition provisions of SFAS No. 123. SFAS No. 148 also revises the disclosure
provisions of SFAS No. 123 to require more prominent disclosure of the method of
accounting for stock-based compensation, and requiring disclosure of pro forma
net income and earnings per share as if the fair value recognition provisions of
SFAS No. 123 had been applied from the original effective date of SFAS No. 123.
The Company adopted the disclosures provisions of SFAS No. 148 for the quarters
ending after December 15, 2002.




10
 *Table of Contents*





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





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 instruments 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.





**(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 periods ended March 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, 2004 is as follows:




Total
      deferred tax assets
    
    $
    648,000Valuation
      allowance
    
    
    (648,000
    )Net
      deferred tax asset
    
    $


The
reconciliation of income taxes computed at the federal statutory income tax rate
to total income taxes for the periods ended March 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.





As of
December 31, 2004, the Company had federal and state net operating loss
carryforwards in the amount of approximately $1,700,000, which expire at various
times through the year 2025.





11
 *Table of Contents*





**(5)
Going Concern**





As shown
in the audited financial statements for the year ended December 31, 2004
(incorporated by reference to HRI’s Annual Report on SEC Form 10-KSB for year
ended December 31, 2004), the Company has suffered recurring losses from
operations to date. During 2004, the Company had minimal revenues, a net loss of
$927,196, a net deficiency of $1,707,822 and a net working capital deficit of
$628,974.





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. As of the end of the first quarter of 2005, the Company has
already obtained new contracts totaling $2,436,707 of sales in incomplete
construction projects. On average these new construction projects are completed
within 9 months. Additionally, the Company will continue to rely upon equity
infusions from investors in order to improve liquidity and sustain operations.
The company has investors that have indicated a willingness to contribute equity
to finance on-going operations and the Company did obtain $12 million in funding
in March, 2005 that it declined as management believes they will obtain better
financing terms from interested prospective investors. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.





**(6)
Acquisition and related reorganization**





On
February 19, 2004, HouseRaising, Inc., a Delaware corporation, Technology
Connections, Inc., a North Carolina corporation, and the shareholders of
HouseRaising, Inc., executed an Agreement and Plan of Merger (“the Merger
Agreement”), pursuant to which HouseRaising, Inc. agreed to merge with and into
Technology Connections, Inc., (“the Merger”) with the HouseRaising, Inc.
Stockholders receiving in the aggregate 27,288,732 shares of common stock and
1,000,000 shares of Class A Convertible Preferred Stock of Technology
Connections, Inc. in exchange for their shares of HouseRaising, Inc. In
addition, pursuant to the Merger Agreement, Technology Connections, Inc. agreed
to change its corporate name from “Technology Connections, Inc.” to
“HouseRaising, Inc.” prior to closing.





The
shares of Class A Convertible Preferred Stock to be issued in the Merger are
convertible into ten (10) shares of fully paid and non-assessable shares of
common stock five (5) years after the date of issuance, and they have a class
vote to approve or disapprove any merger, sale of assets, combination or
reorganization involving HouseRaising, or other fundamental corporate
transaction involving HouseRaising, Inc. In addition, each share of Class A
Convertible Preferred Stock issued in the Merger is entitled to ten (10) votes
per share on all matters on which common stock votes upon issuance.





On August
31, 2004, the Merger was consummated when Articles of Merger and name change
were filed by the parties with the Secretary of State in the State of North
Carolina.





The
acquisition was accounted for as a reverse merger wherein HouseRaising, Inc. was
the accounting acquirer and Technology Connections, Inc. was the legal acquirer.
Accordingly, the accounting acquirer recorded the assets purchased and
liabilities assumed as part of the merger and the entire equity section of the
legal acquirer was eliminated with negative book value acquired offset against
the paid in capital of the accounting acquirer, in accordance with SFAS #141.





**(7)
Non-qualified Stock Compensation Plan**





On April
6, the Company adopted Amendment Number 1 to its 2004 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 an additional 1,000,000 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.





**(8)
Development Stage Company**





The
Company is in the development stage as of March 31, 2005 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.





12
 *Table of Contents*





**(9)
Commitments**





The
Company leases its office facilities. The Company also has one vehicle under
lease that has been classified as an operating lease expiring in September 2006.
Payment due under the lease is $1,384 per month.





Rent
expense was $78,574 and $79,024 in 2004 and 2003, respectively.





Future
minimum rental payments as of December 31, 2004 in the aggregate and for each of
the two succeeding years are as follows:





Year      Amount





2005      $
78,574


2006      $
78,574


Total $157,148





**(10)
Notes Payable**





**Notes
payable at March 31, 2005 consist of the following:**





Unsecured
note payable to an unrelated party.


Bearing
8% interest.         $
5,640





Unsecured
note payable to an unrelated party.


Bearing
8%
interest. $13,177





Secured
note payable to an unrelated party.


Bearing
0% interest. Note matures April
2005. $30,000
**





Secured
note payable to an unrelated party.


Bearing
0% interest. Note matured April
2005. $50,000
**





Secured
note payable to an unrelated party.


Bearing
15% interest. Note matures May
2005. $155,000
**





Secured
note payable to an unrelated party.


Bearing
0% interest. Note matures April
2005. $91,500
**





Unsecured
note payable to an unrelated party.


Bearing
0% interest. $1,851





Secured
note payable to an unrelated party.


Bearing
0% interest. Note matures April
2005. $105,000
**





Secured
note payable to an unrelated party.


New note
restructured for shares of stock


Bearing
0% interest. Note matures April
2005. $37,500
**





Secured
demand note payable to a related party.


Original
amount $156,580.08


Bearing
6% interest. Note matures December
2005 $477,954





Total
Current
Portion $967,622


========


**The
Company converted these debts to equity by issuing restricted common shares of
the Company’s stock as full settlement for interest obligations existing on
these promissory notes, and issued new, non-interest bearing promissory notes
payable within 6 months from date of reissue. For the year ending December 31,
2004, the Company imputed interest on the 0% interest bearing notes using a rate
of 5%. No further interest is due on these notes until they are paid in full at
which time imputed interest will be calculated. As of the date of this filing,
these notes have matured, but payment has not yet been made; it is expected but
uncertain whether the company will be able to extend these existing agreements
on similar terms.





13
 *Table of Contents*




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





**Management’s
Discussion and Analysis of Financial Condition and Results of Operations for
March 31, 2005**


**


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





**Executive
Overview & Strategy**





HouseRaising,
Inc. is a development stage company in the business of selling, designing and
managing design/build and renovation projects and home building solutions in the
residential homebuilding market for homebuyers and homebuilders. HRI is a unique
company that sells, designs and builds unique homes for homebuyers on lots they
have purchased, and acts as contractors in providing renovations on customer’s
existing homes. Using its own proprietary software, HouseRaising also serves as
an Application Service Provider focusing on bringing innovative
technology/solutions to the custom home building industry, thus helping home
buyers build their own home and independent home builders manage the complete
building process.





On
February 19, 2004, HouseRaising executed an Agreement and Plan of Merger (“the
Merger”) to which HRI agrees 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
major focus is on completing its proprietary software that will be used to
design and build multiple projects simultaneously. Beginning in 2004,
HouseRaising of Greater Charlotte, LLC commenced sales of new home and
renovation projects utilizing a manual version of the system. Further discussion
on the Company’s business plan can be found in Item 1 of the Company’s Annual
Report on SEC Form 10-KSB for year ended December 31, 2004, which is
incorporated by reference.





Other
than commitments from vendors to develop HouseRaising’s software in exchange for
shares of stock, and fee revenues and profits from existing home and renovation
sales, HouseRaising does not currently have any external sources of working
capital. HouseRaising’s management has not entered into any commitments for
significant capital expenditures, except the software development project
mentioned above whereby the company issues common stock as work is completed. In
addition, 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. The Company has limited plans to hire additional
employees until management is successful in securing a substantial capital
infusion.





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 provide working capital needed for repayment of outstanding
notes payable, continued software development and to finance research,
development and advancement of intellectual property concerns, for new home and
renovation sales and marketing expense in the Carolinas Zone (covering North and
South Carolina) and rollout of additional zone operations each year thereafter.
The Company also continues to explore acquisition opportunities that may assist
in the successful implementation of its business plan (see Part II Item 5 Other
Items for further discussion on this item).





**Results
of Operations for Quarter Ended March 31, 2005 Compared to March 31,
2004**





**Sales**





The
Company reports total project sales based on the contract amount due to design
and build project, in the quarter in which the sale in approved and closed.
HouseRaising had sales of $1,590 for the quarter ended March 31, 2005, compared
to $39,026 for the same period in 2004. The results of operations in 2004
reflect the combined revenue of HouseRaising, Inc. and Technology Connections,
Inc. Upon completion of the merger on August 31, 2004, the operations of the
former Technology Connections, Inc. were discontinued. The sales for
HouseRaising, Inc. decreased due to the timing of current new construction and
remodeling in the greater Charlotte area and as the company shifts from a focus
on software development to operational implementation of its business plan in
the Carolinas Zone. All sales were from unrelated third parties and were made
primarily to new home buyers and remodeling work. In the
first quarter of 2005, the Company has obtained new contracts totaling $2,436,707 in sales
that are projected to be completed within an average of 9 months.





14
 *Table of Contents*


****


**Cost
of Sales**





The cost
of sales includes the building expense plus other direct costs associated with
new construction, such as subcontractors and permits. It is customary to
experience variations in the cost of sales as a percentage of net sales based on
the types of homes at any given location and the related cost of labor to
complete the jobs. Commensurate with the sales described above, the cost of
sales for the quarter ended March 31, 2005 were $1,248 versus $28,471 for the
same period in 2004.





**Gross
Profits**





The
Company earns profits as the net difference of the 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. Due to the timing of new home sales and remodeling work, HouseRaising
had gross profits of $342 for a small renovation project for the quarter ended
March 31, 2005 compared to $10,555 for the same period in 2004.





**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 home buyers paying these charges at the
beginning of construction. The fees are a direct cost to the project. Sales and
service fee revenues were $8,462 for the first quarter of 2005 compared to
$65,262 in 2004. Going forward we would expect this to continue to grow as our
operations expand.





**Other
Income**





The
Company earned $94 in consulting income for the period ending March 31, 2005,
compared to $6,150 for the same period in 2004. We would not expect this to
increase in 2005 as we implement our business plan focused on design/build and
renovation projects and sales and service fees.





**Net
Revenues**





HouseRaising’s
net revenues were $8,898 for the quarter ended 2005 compared to $81,967 for
2004. The net revenue decline was principally due to the timing of new home
sales and remodeling work and the company’s focus in 2004 on developing its
System-C software system.





**Expenses**





Total
expenses for the quarter ended March 31, 2005 and 2004 were $980,463 and
$257,906, respectively. This
increase in administrative and consulting expenses is primarily due to costs
related to developing HouseRaising’s Carolinas zone and design/build operations
in Charlotte, NC, general business and investor relations consulting as well as
executive management to raise capital for the company. The administrative costs
include advertising, compensation for employees 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 region.





Due to
our start up efforts, we 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 with the normal course of business. We expect to develop
additional revenue sources consistent with these expense levels as we roll out
our business plan in 2005.





**Other
Expense**





HouseRaising
had interest expense of $9,247 for the quarter ended March 31, 2005 compared to
$2,793 for the same period in 2004. This represents interest to reimburse bridge
lenders for both HouseRaising as well as the former Technology Connections
entity. In 2003, HouseRaising completed a debt offering to a select group of
accredited investors, which provided cash of $507,727 to HouseRaising, Inc. In
November, 2004, the Company completed an equity for debt swap which reimbursed
these investors for their debts and converted much of the outstanding debt to
restricted shares in the company. Going forward we would expect this level of
interest expense to moderate unless the company cannot obtain equity financing
and must resort to borrowing additional funds.




15
 *Table of Contents*




**Income
/ Losses**





The net
loss for the quarter ended March 31, 2005 was $980,812 versus a net loss of
$178,732 in the same period in 2004, an increase in the loss of $802,080. The
increase in net losses is directly attributable to the increase in
administrative and consulting fees to commence rolling out operating activities
of the company, including establishing the Carolinas operating zone and raising
capital funding for the company. Future income will depend on the success of
implementing the company’s business plan in 2005. The company does have
approximately $2,436,707 of new home construction work in process for 2005 which
is 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. There is no guarantee that all of these projects will be
completed.





**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 was $217,863 for the quarter ended March 31, 2005
versus cash flows used in operations of $68,777 for the same period in 2004.
This reflects a net increase in cash used by operations of $149,086 principally
due to the increase in net loss and increase in expenditures for the capitalized
software offset by an increase in the issuance of common stock for services
rendered.





Cash
flows used in investment activities were $25,515 and $706 for the quarter ended
March 31, 2005 and 2004, respectively. This was principally due to the purchase
of property and equipment associated with new personnel engaged for operating
purposes in the first quarter of 2005.





Cash
flows provided by financing activities were $230,865 and $69,667, respectively,
for the quarter ended March 31, 2005 and 2004. The principle difference was an
increase in notes payable by a related party to support current
operations.





Overall,
we have funded our cash needs from inception through March 31, 2005 with a
series of debt and equity transactions. If we are unable to receive additional
cash from related parties, we may need to rely on financing from outside sources
through debt or equity transactions. Our related parties are under no legal
obligation to provide us with capital infusions. Failure to obtain such
financing could have a material adverse effect on operations and financial
condition.





We had
cash on hand of $12,254 and a working capital deficit of $774,791 as of March
31, 2005 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. We will rely on new revenue from our business
development efforts going forward; however, we have no current or projected
capital reserves that will sustain our business for the next twelve months. The
company does have $2,436,707 of new home construction work in process for 2005,
as well as a number of prospects that have not yet signed contracts. The 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 capital needs for the next
twelve months. We will then need to obtain additional capital through equity or
debt financing to sustain operations.





M odifications
to our business plans or additional property acquisitions may require additional
capital for us to operate. The company is working on raising additional funds
through equity or debt financing . The
company has investors who have indicated a willingness to contribute equity to
finance on-going operations and the Company did obtain a commitment for $12
million in funding in March, 2005 that it declined as management believes they
will obtain better financing terms from interested prospective investors.





On a
long-term basis, liquidity is dependent on continuation and expansion of
operations, receipt of revenues, and additional infusions of capital and debt
financing. Our current capital and revenues are insufficient to fund such
expansion. If we choose to launch such an expansion campaign, we will require
substantially more capital. We expect to raise this capital through an
additional stock offering. The funds raised from this offering will be used to
market our services as well as expand operations and contribute to working
capital. If we are unable to raise additional capital, our growth potential will
be adversely affected and we will have to significantly modify our plans.





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.





16
 *Table of Contents*






**ITEM 3. CONTROLS AND PROCEDURES**





*Quarterly
Evaluation 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, Charles M. Skibo, 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 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, the Company's CEO and CFO have concluded that, subject to
the limitations noted above, our Disclosure Controls are effective 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.




17
 *Table of Contents*





**PART
II**


**ITEM
1. LEGAL PROCEEDINGS.**





None.





**ITEM
2. CHANGES IN SECURITIES.**





None.





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





None.





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





At
HouseRaising’s 2005 Annual Meeting held on May 5, 2005, shareholders elected our
eight directors to serve for an additional term of one year and thereafter until
their successors are qualified and elected, and also ratified management’s
choice of Traci J. Anderson, CPA, as the company’s auditor for fiscal 2005. A
total of 26,949,719 shares voted for each of these two items and 0 voted
against. We filed a Definitive Information Statement on Schedule 14C with the
Commission on March 23, 2005, in connection with the 2005 Annual
Meeting.





**ITEM
5. OTHER MATTERS**





Part of
HouseRaising, Inc.’s strategy is to build its business through the merger or
acquisition of existing home builders and technology companies that will benefit
our application service business at a fair price. 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 making an offer
for 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. It is also possible that no transactions
will take place at all.





**Current
Status of Announced Transactions**





The
Company has previously announced an agreement in principle to acquire
LearnBytes, LLC, a North Carolina limited liability company, which is engaged in
the business of web-based multimedia program design and development. We
anticipate signing a definitive Asset Purchase Agreement in the second quarter
of 2005 with Learnbytes, and to consummate the acquisition of assets as soon
thereafter as is practicable. It is projected that the acquisition of Learnbytes
will bring approximately $20,000 in unaudited total assets and nominal unaudited
total revenues to HRI (given LearnBytes’ current focus on developing System C)
for fiscal 2005.





In
February, 2005, the Company entered into agreements to acquire two separate
regional homebuilders, Carriker Construction Company, Inc. and Mark White Custom
Builders, LLC, in the second quarter of 2005. These acquisitions will not have a
material impact on the balance sheet of the Company.





On April
22, 2005, HouseRaising entered into an agreement to acquire Integrity
Contractors Inc. (“ICI”) of Pensacola, Florida. ICI’s President/Founder has
joined HRI’s management team as Vice President and National Manager of Project
Development. The company plans to use this acquisition to launch its Northwest
Florida Zone operation. The acquisition itself will not have a material impact
on the balance sheet of the Company.





On March
31, 2005, HouseRaising, Inc. entered into a Membership Interest Purchase
Agreement with COBS Homes, LLC, a California limited liability company (“COBS”),
and all of the members of COBS Homes (“Members”), in which HRI agreed to
acquire, subject to the satisfaction prior to closing of certain conditions
precedent, all of the membership interests, and agreed to enter into employment
agreements and non-compete agreements with certain of the Members for a
consideration consisting of cash and restricted common stock having a combined
aggregate market value of approximately $5.0 million. On April 4, 2005, the
Agreement was amended to provide, among other things, that the closing must
occur on or before July 1, 2005, or HRI or COBS may terminate the Agreement. A
copy of the Agreement and the Letter Agreement which amended it were filed with
the SEC on April 6, 2005.





On May 2,
2005, HouseRaising gave notice of its intention to terminate the Agreement
pursuant to Section 1.11 thereof, and not to consummate the acquisition, based
upon the results of its due diligence investigation of COBS Homes. HouseRaising
management visited the facilities in April and interviewed key personnel of COBS
Homes, as well as reviewed its unaudited financial results for the year ended
December 31, 2004 and the first quarter ended March 31, 2005. After reviewing
COBS current operations, HouseRaising decided not to pursue the acquisition. The
Company will instead invest in accelerating growth of its in-house
HomeBuyerDirect division, operating from corporate headquarters in Charlotte,
North Carolina. Inasmuch as there was no deposit or earnest money paid in
connection with this acquisition, there will be no termination penalties
incurred by the Registrant as a result of its decision.





**Affiliation
Agreement**





On March
31, 2005, HRI and CitiMortgage, Inc. (“CitiMortgage”) entered into an
Affiliation Agreement pursuant to which CitiMortgage will be the sole and
exclusive lender participating with HouseRaising and will have the right of
first offer on all construction and permanent mortgage financing to HRI’s
customers. In return, CitiMortgage has granted HRI a non-exclusive right to use
the CitiMortgage name and logo in HRI’s advertising for the purpose of
indicating the availability of loan financing by CitiMortgage to qualified
applicants.





**Other
Event**





On May 9,
2005, HouseRaising filed a letter with the NASD, which requested an
investigation into what management termed a wave of coordinated naked short
selling in the Company’s common stock over a three month period of time.
Management believes that the coordinated short selling activity may have
contributed to a decline in the closing price of the Company’s common stock from
$2.00 per share on February 1, 2005 to $0.53 per share on May 6, 2005, and this
coordinated effort may have violated NASD rules, as well as applicable federal
securities law. Management cannot predict the outcome of this
request.





18
 *Table of Contents*







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





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





Subsequent
to December 31, 2004, the Company filed the following Current Reports on Forms
8-K with the SEC as follows:




Dated
      (filing date)
    Items
      ReportedMay
      11, 2005 (May 11, 2005)
    Form
      8-K Termination Material AgreementMay
      9, 2005 (May 9, 2005)
    Form
      8-K Other EventsApril
      4, 2005 (April 8, 2005)
    Form
      8-K Entry Material AgreementMarch
      31, 2005 (April 6, 2005)
    Form
      8-K Entry Material AgreementMarch
      22, 2005 (March 22, 2005)
    Form
      8-K Termination Material AgreementMarch
      7, 2005 (March 7, 2005)
    Form
      8-K Change in Directors or Principal OfficersMarch
      3, 2005 (March 4, 2005)
    Form
      8-K Entry Material Agreement


**(b)
Exhibits**





Exhibits
for HouseRaising and their 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.
    Descriptions


2.1.1
    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 Charles M.
      Skibo, 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, Senior Vice President & Chief Administrative
      Officer*


32.1
    Section 1350 Certification of Charles M. Skibo, 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,
      Senior Vice President and Chief Administrative
Officer*


_________________________________


*-Filed
herewith





-signature
page follows-





19
 *Table of Contents*




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/ Charles M. Skibo


Date: May
16, 2005      __________________________


Charles
M. Skibo


Chairman
of the Board and


Chief
Executive Officer


(Principal
Executive Officer)




/s/
Robert V. McLemore


Date: May
16, 2005      __________________________


Robert V.
McLemore


President
and Founder


(Principal
Executive Officer)





/s/ Richard A. von Gnechten


Date: May
16, 2005      __________________________


Richard
A. von Gnechten


Chief
Financial Officer


(Principal
Financial Officer)





/s/ Christine M. Carriker


Date: May
16, 2005      __________________________


Christine
M. Carriker


Senior
Vice President,


Chief
Administrative Officer


(Principal
Accounting Officer)




20
 **





****