U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549







FORM
10-KSB











**[X]**
    **ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
      for the period ended December 31,
2004**





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




HOUSERAISING,
INC.
 (Exact
name of small business issuer as specified in its charter)




**TECHNOLOGY
CONNECTIONS, INC.**
 (Former
name of registrant)




**North
      Carolina**
      **(State or other jurisdiction
      of**
      **incorporation or
      organization)**
    **56-2253025**
      **(IRS
      Employer identification No.)****4801
      East Independence Road, Suite 201,**
      **Charlotte,
      North Carolina 28212**
      **(Address
      of principal executive offices)**
    **000-50701**
      **(Commission File
      No.)****(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





Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this form 10-KSB
or any amendment to this Form 10-KSB. x





The
aggregate market value of the common shares (based on the closing price) held by
non-affiliates of the registrant on March 15,
2005 was approximately $13,311,682.





Number of
shares of common stock outstanding as of March 15, 2005: 37,369,774


Number of
shares of preferred stock outstanding as of March 15, 2005:
1,000,000
















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 annual report contains the required audited financial
statements. We are not required to deliver an annual report to security holders
and will not voluntarily deliver a copy of the annual 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, 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.




2




**HOUSERAISING,
      INC.****FORM
      10-KSB**For
      the Year ended December 31, 2004**TABLE
      OF CONTENTS**PageCautionary Statement and Risk Factors that May Affect Future
      Results
    4PART
      IITEM
      1.
    Business
    5ITEM
      2.
    Property
    9ITEM
      3.
    Legal Proceedings
    9ITEM
      4.
    Submission of Matters to a Vote of Security
      Holders
    9PART
      IIITEM
      5.
    Market for Registrants Common Equity and Related Stockholder
      Matters
    10ITEM
      6.
    Selected Financial Statements
    11Balance Sheet - December 31, 2004
      (audited)
    12Statements of Operations - Year Ended December 31, 2004
      and 2003 (audited)
    13Statements of Cash Flows - Year Ended December 31, 2004 and
      2003 (audited)
    14Notes to Financial Statements (audited)
    16ITEM
      7.
    Management’s Discussion and Analysis of Financial Condition
      and Plan of Operations
    27ITEM
      8.
    Changes in and Disagreements with Accountants on Accounting
      and Financial Disclosure
    30ITEM
      8A.
    Controls and Procedures
    30ITEM
      8B.
    Other Matters
    31PART
      IIIITEM
      9.
    Directors, Executive Officers of the
      Registrant
    32ITEM
      10.
    Executive Compensation
    32ITEM
      11.
    Security Ownership of Certain Beneficial Owners and
      Management Related Stockholder
      Matters
    33ITEM
      12.
    Certain Relationships and Related
      Transactions
    33ITEM
      13.
    Principal Accountant Fees and Services
    33PART
      IVITEM
      14.
    Exhibits and Reports on Form 8-K
    34Singatures
    35


3




**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 and natural disasters;


·
    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 sales personnel in order to meet the goals set forth in its business
      plan and planned 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;


·
    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 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





**PART
I**





**ITEM 1. BUSINESS.**





**General**





HouseRaising , Inc., a
Delaware corporation, was organized in 1999 by Robert
V. McLemore, founder and president. HouseRaising’s founder formed the company to
develop a design/build business process capable of turning complicated pre-sold
homebuilding projects into predictable experiences for buyers and builders.
Utilizing four decades of experience in the design/build industry and state of
the art technology, Mr. McLemore has turned those experiences into a patented
framework capable of bringing predictability to pre-sold design/build and
renovation projects. On August 31, 2004, HouseRaising, Inc., merged with
Technology Connections, Inc., a North Carolina corporation and publicly traded
company, and Technology Connections, Inc. changed its name to HouseRaising, Inc.
HouseRaising, Inc., a North Carolina corporation (“HRI” or “Company”), is the
issuer filing this annual report on Form 10-KSB.





When this
section uses the words
“the company,” "we," "us," and "our," they refer to
HouseRaising, Inc. a nd its subsidiaries,
unless the context otherwise requires. The Company’s principal executive offices
are located at 4801 East Independence Boulevard, Suite 201, Charlotte, North
Carolina 28212. Its telephone number is (704) 532-2121.





**Our
Business:**





HouseRaising
is a development stage company and has net revenues of $159,130 and net loss of
$(927,196) in fiscal 2004. HRI is 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 renovation projects on
customer’s existing homes. Using it’s own proprietary software, HouseRaising
also serves as an Application Service Provider focusing on bringing disruptive
technology/solutions to the custom home building industry, thus helping
HomeBuyers build their own home and independent HomeBuilders who manage the
complete building process.





HRI is in
the process of implementing its national rollout business plan which includes:
1) the completion of an internet-based portal and digital framework for the
company’s proprietary design/build management system named System C that will be
utilized in selling, designing and managing design/build and renovation
projects; 2) developing an operating arm that connects company operations and
digital system to homebuyers and small builders; and 3) building a national
marketing network through internet, telephone and direct channels that allow
customers to design/build and manage the home of their dreams in the manner they
so desire.





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. Management believes this market exists based on the size of the current
design/build market and its anticipated growth over the next five years.
HouseRaising’s plan is to develop small builder relationships in small markets
and in isolated places where most large builders cannot feasibly develop
operations. HouseRaising will operate on a smaller scale than that of many of
the large regional builders. From this strategy HouseRaising hopes to produce
significant revenues over a five year period of time.





**HouseRaising
Involves the Design/Build Segment of Homebuilding Industry:**





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 for their customers. 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. Low interest rates and low inflation
have teamed to provide homebuyers the opportunity to not only build a fine home,
they can now afford to include upgrades, making the home truly a dream home.





**HouseRaising’s
Design/Build System:**





The
HouseRaising system represents a tried and proven method that provides users a
way to manage emotional issues faced in every design/build project. This process
allows homebuyers and builders to conduct business fairly and enjoyably,
building complicated projects at fair prices. HouseRaising is combining its
system and support operation into a structure capable of duplication regionally
and nationally. Through three subsidiaries: HouseRaisingAcademy, HouseRaisingUSA
and HouseRaising—HomeBuyerDirect., the company believes its approach will
revolutionize the design/build industry.





5


****


**HouseRaisingAcademy,
LLC (“HRA”):**





HouseRaisingAcademy,
LLC is a wholly-owned subsidiary of the company. HRA is an internet-based portal
and digital framework for HouseRaising’s proprietary design/build management
system named System C. System C addresses 1,269 issues through implementation of
3,400 business requirements that are
inherent in all Design/Build Custom Homes across 6 platforms that can be
accessed from the Internet by HomeBuyers and HomeBuilders. The
Academy also offers online learning programs that are utilized to teach users
the what, where, when, how and why of HouseRaising’s superior design/build
process outlined in System C. HouseRaisingAcademy links homebuyers, homebuilders
and vendors in an organized and focused experience designed to achieve
predictable results. Additionally, by linking classroom and Internet learning
programs, HRA retrains individuals to become successful entrepreneurs in the
design/build industry.





**HouseRaisingUSA,
LLC (“HR-USA”):**





HouseRaisingUSA,
LLC is a wholly-owned subsidiary of the company. HR-USA
is the people side of the business, connecting the company operations and
digital system to homebuyers and local builders- turning design and build
projects into successful endeavors. HR-USA extends its presence nationally by
establishing and managing 37 Zone Design/Build operations across the
country.  During the first 5 years, HR-USA plans to fully develop the
Carolinas’ operating Zone through company builders and builder relationships
that sell, design and build unique homes and renovation projects. By the fifth
year of operation. HR-USA plans to roll out four additional Zone operations (one
each year).





**HouseRaising—HomeBuyerDirect,
LLC (“HR—HBD”):**





HouseRaising—HomeBuyerDirect,
LLC is a wholly-owned subsidiary of the company. HR—HBD is a national company
operating as an Internet and direct marketing channel for HomeBuyers to manage
and design/build their own dream home. HR-HBD sells a menu of services and
provides consulting and systems to help HomeBuyers manage the complex home
building process. In these projects, the HomeBuyers have the financial risks of
the costs of finished projects, thus HRI reports these revenues as fees charged
and not the project’s sales price. In some cases, customers will decide to
engage HR-HBD to build the home for them at a fixed price. .





**A
Summary of the HouseRaising Business...its Vision and Long Range
Goals:**





Through
implementation of a 5-stage business development plan, HouseRaising intends to
grow the business significantly in the design/build and renovation
categories.





The
company intends to accomplish its goal by consolidating quality builders and
vendors into a single company, by designing and building single-family homes and
renovation projects, and by acquiring existing companies.





**HouseRaisingUSA
Manages Expansion Nationally by Creating Relationships with Many Small Builders
Selling and Building Two to Three Homes Annually:**





HouseRaisingUSA’s
marketing focus is to operate under the radar screens of large builders, with
goals of becoming “a national company of local homebuildersTM.” While
HouseRaising will establish builder relationships in large cities, our emphasis
is developing multiple builder relationships in small towns across
America.





Thousands
of homebuyers each year enter the design/build arena by developing house plans
from their dreams. They take incomplete plans and specs and set out to obtain
bids from small builders, hoping to obtain fair prices and a quality product.
Without realizing it, these homebuyers are creating a nearly impossible business
endeavor, putting their dream homes in a battle with small builders and vendors.
By connecting all parties to the contract and by utilizing HouseRaising’s unique
design/build system and management process, HRI allows homebuyers to develop
financially sound and enjoyable homebuilding experiences. HouseRaising
eliminates surprises by establishing quality standards and management processes
utilized by all participants in the project.





HouseRaising’s
unique process does not reduce builder creativity nor does it restrict the
ability to create “one of a kind” residences demanded by discriminating buyers.
HouseRaising’s invention encourages unique homebuilding by defining the what,
when, how and why of creating quality residences in a fun and financially sound
manner. HouseRaising is a tried, tested and proven process appreciated by
builders, vendors, and homebuyers alike.





6


****


**HouseRaising’s
Typical Builder Candidate:**





The small
homebuilder/entrepreneur is the number one candidate for becoming a HouseRaising
Builder. These dedicated homebuilders manage 2 to 4 home projects annually
because they love it, and because building someone’s home allows them a way to
express their creative talents. The builders are usually skilled in the art of
building, own a pick up truck and tools required to build a quality home.
Currently, there are approximately 12,000 licensed homebuilders in North
Carolina alone that bid against each other on complex design/build projects. The
majority of homebuilder/entrepreneurs fail because they cannot control their
projects. They usually earn less money per year than the subcontractors they
employ to erect the homes they build. HouseRaising recruits these builders into
a well-organized operation, where they can focus on building quality homes at
fair prices.





**HouseRaising’s
Invention Sets the Company Apart from All Others in the Design/Build Industry:**





HouseRaising,
Inc. is a company representing a body of knowledge derived from four decades of
selling, designing and building unique homes. That knowledge consists of
in-depth analyses and review of 2,000 design/build projects performed by its
president and founder, Robert V. McLemore.  In addition to reviewing
physical results of each project, the analyses considered homebuyer, homebuilder
and vendor contributions, their personalities, emotions, expectations and
behavioral patterns. The five-year long project resulted in identifying 1,269
issues that confront every design/build project. Important to the study, it was
determined that each of the 1,269 issues had a direct impact on both the
emotional and financial outcome of the projects. The analysis resulted in
HouseRaising defining 3,400 specific business requirements needed to address
these issues. HouseRaising is developing this intellectual property into a
proprietary design/build system offered as an Internet-based management
structure designed to train and support projects nationwide. When complete, this
system and support structure will represent a HouseRaising investment in excess
of $10 million in an intangible asset on its books. As of December 31, 2004, the
date of our last audit, the intangible asset on HouseRaising books amounted to
$8,571,239, HouseRaising has filed for patent on its System C process in 150
countries.





In
addition to the specific tasks defined by the 3,400-part process, HouseRaising
is developing a proprietary “Design/Price Module” that electronically prices
unique homes without homebuyers prematurely investing in house plans. This
unique module assists homebuyers and builders to create and price their dream
home within minutes, reducing the anxieties created by paying for house plans
that do not meet the financial needs of the participants. Historically, this
pricing/designing process predicts costs of unique home projects to within 1/2
of 1% of actual costs.





**HouseRaisingAcademy’s
Use of Technology and the Invention:**





HouseRaising
has invented a tool that enables the company to manage custom homebuilding like
no other company in the business. The invention has been tested and it works.
Technology allows HouseRaisingAcademy to replicate the invention in many
locations simultaneously, without loss of control. HouseRaising’s business model
utilizes the Internet to distribute and manage the use of its invention to
define the WHAT IS TO BE DONE...BY WHOM... WHERE...WHEN...and WHY on *every* project.





**The
Academy’s Design Center:**





“No
Surprises” with HouseRaising: HRI develops Zone Design Centers throughout the
country whereby HomeBuyers can view every item that will be installed in their
homes. Not only the materials and fixtures that will be in the homes, but to
view the items “installed” thereby defining the quality of the products and the
installation of those products.





Bundled
Services: HouseRaisingAcademy offers Homebuyers a Choice of Building Processes
from having HRI design and build the home 100% Turn Key- to Assisting Homebuyers
That Choose to Manage the Building of Their On Home





On-line
Dependable Pricing: HomeBuyers can negotiate prices on-line and contract for
services from a menu of support services, thereby reducing the costs of their
homes by more than the 15% normal savings provided by HouseRaising’s Turn-Key
Builders.




**Competition:**





The
homebuilding business is highly competitive and fragmented. However,
HouseRaising’s competition is not the large national homebuilders, we compete
with the small craftsman or craftswoman builders that bid against other small
builders for projects provided by customers. Currently, we know of no companies
developing the type affiliations and support structure HouseRaising offers small
builders.





7


****


**The
HouseRaising Advantage:**





HouseRaising
is unique in its approach to the marketplace. It focuses on the smaller markets
where there is little or no competition. The company utilizes small local
builders who’s quality and workmanship are masterful, but the cost of their
services are much lower than average. HouseRaising assumes almost no risk, i.e.,


• no risk
in purchasing land (homebuyer already has his lot),


• no risk
during construction (homebuyer gets the construction loan), and


• no risk
after construction (homebuyer already secured permanent financing).


Furthermore,
the company's margins are excellent at 16% for new homes and 24% for
renovations.





HouseRaising
is a low cost operation with low capital expenses as well. By utilizing small
builders for lower costs and the efficiency brought to bear by System C, coupled
with no financing costs and low sales & marketing costs assures HouseRaising
a low cost structure.





**HR-USA:
The Zone Model**





HouseRaising
is a national company, however our job cost accounting system reduces all Zone
costs to a set amount charged to each design/build and renovation project. This
allows management to adjust projections and overhead costs based on sales. The
consolidated projection of zone cash sources and uses lists net cash flow
derived from design/build and renovation projects in a zone after deducting
costs of producing the homes, costs of the region’s services and support, and
including costs of the zone employees and overhead costs.





HouseRaising's
long-term plans envision developing 37 Zones throughout the country. HRI targets
selling 1/2 of 1% of the market in that territory, a viable and attainable goal.
The rest of 2005 is dedicated to expanding Zone 1 in the Carolinas and to
completing the system and management process. Thereafter, the company will start
rolling out a new Zone each year and eventually across the country. The
continued rollout of additional Zones would build a much larger business for
HouseRaising.





We are in
the process of developing a design center showroom for Zone 1 in Charlotte,
North Carolina. This gives the consumer the chance to experience the features
and benefits of our design and home building process first-hand.





**HR-HomeBuyerDirect:
The Internet / System C Advantage**





HR-HBD
combines the advantage of sales and service over the Internet with System C
enabling the HomeBuyer, who has decided to be the General Contractor, to access
the System C’s six platforms for a systemized way of building his dream home.
This enables the HomeBuyer to cover the 3,400 tasks inherent in all custom
design/build home projects, managed through the Internet. This assures the
project is complete on-budget, in a timely fashion, with a quality product, and
a savings of around 22% versus what he would normally pay. HR-HomeBuyerDirect
derives its revenue through charging fees for its services, typically 8% for a
new home or renovation project. HR-HBD will offer its services on a nationwide
basis.





**HouseRaisingAcademy**





HouseRaisingAcademy
derives its revenue from the following:


• 2%
royalty and service fees on the price of the new home or renovation to
HomeBuilders, including HR-USA, that use System C and the Design
Center.


• 2%
royalty and service fee on the price of the new home or renovation to the
HomeBuyer accessing System C over the Internet. Fee is charged to
HR-HomeBuyerDirect which is bundled into its combined offering to the HomeBuyer.
There will also be opportunity to earn fees for Certifying Builders and Seminar
Fees for both HomeBuyers and HomeBuilders that use the System On-line. No
additional revenues have yet been added for these services.





HRA
reduces the 1,269 issues to management requirements and teaches homebuilders,
homebuyers, vendors and subcontractors how to utilize the system to develop
predictable projects. The company, created in 2003, is developing System C, the
Zone Kit and the E-Learning operation. The HouseRaising Academy is being
developed by Grant Neerings, an experienced IT officer and owner of LearnBytes.
The Academy will electronically manage operations from a central
location.


Similar
to airline pilots reviewing preflight lists and takeoff procedures,
HouseRaisingAcademy insures that Zone Operations’ use of the system is repeated
on each project, focusing the success of the project more on the user's ability
to follow specific instructions, than on their ability to know the
material.





It is the
combination of the learning experience with the discipline created by repeated
use of the Academy that provides HouseRaising an accurate means of predicting
outcomes of projects on a national level.  This service is available only
through a proprietary software system and an Internet-based interactive learning
center, HouseRaising does not disclose the details of the 1,269 Business Issues
and subsequent Business Requirements which provides added protection for its
intellectual properties.





During
the past few months, a manual adaptation of the System and process was
introduced in the Carolinas, serving a dozen independent homebuilders, and
generating predicted results in terms of profits for HouseRaising and its
Builder Partners while saving Homebuyers between 15% and 30% on the cost of
their new homes.





8


****


**Regulation
and Environmental Matters:**





Since
HouseRaising does not develop subdivisions or communities, the company is less
effected by environmental and regulation matters. We are subject to various
local, state and federal statutes, ordinances, rules and regulations concerning
zoning, building designs, construction and similar matters. In addition, we are
subject to various licensing, registration and filing requirements in connection
with construction, advertising and sale of design/build projects in our regional
operations. We are also subject to a variety of local, state and federal
statutes, ordinances, rules and regulations concerning protection of public
health and the environment. We maintain a policy of engaging engineers and
environmental consultants to evaluate certain sites located in environmental
sensitive areas.





**Outlook
for Homebuilding is Positive:**





The
homebuilding industry is enjoying record sales and has done so for close to a
decade. Low interest rates coupled with population growth, forming millions of
new households each year has created record profits for the nation’s largest
builders. HouseRaising’s research indicates the current level of homebuilding
throughout America is sustainable as long as interest rates stay between 6% and
7%. While most economists support the theory that current rates will continue to
rise, they also believe it unlikely that rates will rise above the 6-7% target
in the near future. Whatever the outcome of interest rates and the economy, it
is obvious that homebuilding in general should remain brisk through 2010.








**ITEM 2. PROPERTY.**





We do not
own any property nor do we have any contracts or options to acquire any property
in the future. Our corporate headquarters is currently located at 4801 E.
Independence Blvd., Charlotte, NC 28212, and we occupy that space pursuant to a
month to month agreement requiring the payment of $6,547.85 per month.








**ITEM 3. LEGAL PROCEEDINGS.**





None.








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





None.




9





**PART
II**





**ITEM 5. MARKET FOR REGISTRANTS’ COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS**





Our stock
is qualified for quotation on the over the counter bulletin board under the
symbol "HRAI", formerly “TLGY”(3) in 2003. During the 2003 through 2004 period,
the Company's common stock traded on the Over-the-Counter Bulletin Board. The
range of high and low bid quotations for the Common Stock for the two most
recently completed fiscal years and the current fiscal year are provided below.
The volume of trading in the Company's Common Stock has been limited and the bid
prices as reported may not be indicative of the value of the Common Stock or of
the existence of an active trading market. These over-the-counter market
quotations were provided by the Over-the-Counter Bulletin Board and may not
necessarily represent actual transactions; they reflect inter-dealer prices
without retail markup, markdown or commissions.





2003
      Fiscal Year
    High
      Bid
    Low
      BidFirst
      Quarter
    $
      0.42
    $
      0.30Second
      Quarter
    $
      0.66
    $
      0.24Third
      Quarter
    $
      0.64
    $
      0.16Fourth
      Quarter
    $
      0.80
    $
      0.402004
      Fiscal Year
    High
      Bid
    Low
      BidFirst
      Quarter
    $
      0.65
    $
      0.12Second
      Quarter
    $
      0.70
    $
      0.15Third
      Quarter (1)
    $
      1.01
    $
      0.14Fourth
      Quarter (1)
    $
      3.15
    $
      0.232005
      Fiscal Year
    High
      Bid
    Low
      BidFirst
      Quarter (2)
    $
      3.05
    $
      1.15


(1)
    HouseRaising
      consummated a reverse merger with Technology Connections on August 31,
      2004.


(2)
    Reflecting
      trading through March 15, 2005.


(3)
    Trading
      on the OTC Bulletin Board was first reported on 12/09/02 under
      “TGYC”.





The
number of holders of record of the Company's common stock as of March 15, 2005
is 95.





BECAUSE
OUR STOCK IS CONSIDERED A PENNY STOCK ANY INVESTMENT IN OUR STOCK IS CONSIDERED
TO BE A HIGH-RISK INVESTMENT AND IS SUBJECT TO RESTRICTIONS ON
MARKETABILITY.





Our
Shares are "penny stocks" within the definition of that term as contained in the
Securities Exchange Act of 1934, which are generally equity securities with a
price of less than $5.00. Our shares will then be subject to rules that impose
sales practice and disclosure requirements on certain broker-dealers who engage
in certain transactions involving a penny stock. Under the penny stock
regulations, a broker-dealer selling penny stock to anyone other than an
established customer or "accredited investor" must make a special suitability
determination for the purchaser and must receive the purchaser's written consent
to the transaction prior to the sale, unless the broker-dealer is otherwise
exempt. Generally, an individual with a net worth in excess of $1,000,000 or
annual income exceeding $200,000 individually or $300,000 together with his or
her spouse is considered an accredited investor.





In
addition, the penny stock regulations require the broker-dealer to:


·
    deliver,
      prior to any transaction involving a penny stock, a disclosure schedule
      prepared by the Securities and Exchange Commission relating to the penny
      stock market, unless the broker-dealer or the transaction is otherwise
      exempt;


·
    Disclose
      commissions payable to the broker-dealer and the Registered Representative
      and current bid and offer quotations for the securities;


·
    Send
      monthly statements disclosing recent price information with respect to the
      penny stock held in a customer's account, the account's value and
      information regarding the limited market in penny
  stocks;




Because
of these regulations, broker-dealers may encounter difficulties in their attempt
to sell shares of our common stock, which may affect the ability of selling
shareholders or other holders to sell their shares in the secondary market and
have the effect of reducing the level of trading activity in the secondary
market. These additional sales practice and disclosure requirements could impede
the sale of our securities. In addition, the liquidity of our securities may be
decreased, with a corresponding decrease in the price of our securities. Our
shares in all probability will be subject to such penny stock rules and our
shareholders will, in all likelihood, find it difficult to sell their
securities.





Dividend
Policy





All
shares of common stock are entitled to participate proportionally in dividends
if our Board of Directors declares them out of the funds legally available.
These dividends may be paid in cash, property or additional shares of common
stock. We have not paid any dividends since our inception and presently
anticipate that all earnings, if any, will be retained for development of our
business. Any future dividends will be at the discretion of our Board of
Directors and will depend upon, among other things, our future earnings,
operating and financial condition, capital requirements, and other
factors.





10




**ITEM 6.Selected
Financial Statements**




****


**INDEPENDENT
AUDITOR’S REPORT**











To the
Board of Directors and Stockholders


HouseRaising,
Inc. and Subsidiaries


4801 East
Independence Blvd, Ste. 200


Charlotte,
NC 28212





I have
audited the accompanying consolidated balance sheet of HouseRaising Inc., (A
Development Stage Company) and Subsidiaries as of December 31, 2004 and the
related consolidated statements of operations, stockholders’ equity, and cash
flows for the years ended December 31, 2004 and 2003. These financial statements
are the responsibility of the Company’s management. My responsibility is to
express an opinion on these financial statements based on my
audits.





I
conducted my audits in accordance with auditing standards generally accepted in
the United States of America. Those standards require that I plan and perform
the audits to obtain reasonable assurance about whether the consolidated
financial statements are free from material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation. I
believe that my audits provide a reasonable basis for my opinion.





In my
opinion, the consolidated financial statements referred to above present fairly,
in all material respect, the consolidated financial position of HouseRaising,
Inc. and Subsidiaries as of December 31, 2004, and the consolidated results of
its operations and its cash flows for the years ended December 31, 2004 and 2003
in conformity with accounting principles generally accepted in the United States
of America.





The
accompanying financial statements have been prepared assuming HouseRaising, Inc.
will continue as a going concern. As discussed in Note D to the financial
statements, HouseRaising, Inc. is in the development stage (see Note J), has
suffered recurring losses, has a net capital deficiency and has yet to generate
an internal cash flow. These factors raise substantial doubt about its ability
to continue as a going concern. Management’s plans in regard to these matters
are also described in Note D. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.











Traci J.
Anderson, CPA


Huntersville,
NC


March 22,
2005





11





**HouseRaising, Inc. and Subsidiaries (A Development Stage
      Company)****Consolidated
      Condensed Balance Sheet****As
      of December 31, 2004****ASSETS**CURRENT
      ASSETSCash
      and Cash Equivalents
    
    
    
    
    $
    24,767Prepaids
    
    
    
    
    
    422,917Excess
      costs over billings on uncompleted projects
    
    
    
    
    
    59,643Accounts
      Receivable
    
    
    
    
    
    25,941TOTAL
      CURRENT ASSETS
    
    
    
    
    
    533,268PROPERTY
      AND EQUIPMENTProperty
      and Equipment
    
    
    
    
    
    175,432Accumulated
      Depreciation
    
    
    
    
    
    (89,383
    )Net
      Property and Equipment
    
    
    
    
    
    86,049OTHER
      ASSETOther
      Assets
    
    
    
    
    
    1,853Capitalized
      Software
    
    
    
    
    
    8,571,239Net
      Other Assets
    
    
    
    
    
    8,573,092TOTAL
      ASSETS
    
    
    
    
    $
    9,192,409**LIABILITIES
      AND STOCKHOLDERS' EQUITY**LIABILITIESCurrent
      Liabilities:Accounts
      Payable and Accrued Expenses
    
    
    
    
    $
    415,269Interest
      Payable
    
    
    
    
    
    10,216Notes
      Payable
    
    
    
    
    
    736,757TOTAL
      LIABILITIES
    
    
    
    
    
    1,162,242STOCKHOLDERS'
      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)
    
    
    
    
    
    36,460Common
      Stock Subscribed but not Issued
    
    
    
    
    
    1,946,035Additional
      Paid-in-Capital
    
    
    
    
    
    7,754,494Retained
      Deficit
    
    
    
    
    
    (1,707,822
    )TOTAL
      STOCKHOLDERS' EQUITY
    
    
    
    
    
    8,030,167TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
    
    
    
    
    $
    9,192,409





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





12





**HouseRaising, Inc. and Subsidiaries (A Development Stage
      Company)**Consolidated
      Statement of OperationsFor
      the years ended December 31, 2004 and 20032004
    
    2003SALES
      AND COST OF SALES:Sales
    
    $
    102,382
    
    $
    50,536Cost
      of sales
    
    
    31,509
    
    
    31,608Gross
      Profit
    
    
    70,873
    
    
    18,928OTHER
      REVENUES:Sales
      and service fees
    
    
    73,261
    
    
    4,600Other
      income
    
    
    14,996
    
    
    2,515NET
      REVENUES
    
    
    159,130
    
    
    26,043OPERATING
      EXPENSES:Selling,
      general and administrative
    
    
    641,689
    
    
    293,727Consulting
      fees
    
    
    351,556
    
    
    21,582993,245
    
    
    315,309OTHER
      EXPENSE:Interest
      expense
    
    
    93,081
    
    
    61,736Gain
      from sale of 50% of Subsidiary
    
    
    -
    
    
    300,000NET
      LOSS
    
    $
    (927,196
    )
    $
    (51,002
    )Net
      Loss Per Common ShareBasic
      & Fully Diluted
    
    $
    *
    
    
    *Weighted
      Average CommonShares
      Outstanding
    
    
    12,038,872
    
    
    16,995,497*
      Less than ($.01)





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





13





**HouseRaising, Inc. and Subsidiaries (A Development Stage
      Company)****Statements
      of Cash Flows****For
      the years ended December 31, 2004 and 2003******2004
    
    2003CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
    
    $
    (927,196
    )
    $
    (51,002
    )Adjustments
      to reconcile net loss to netcash
      (used in) operating activities:Depreciation
    
    
    30,232
    
    
    15,307Gain
      from sale of 50% of subsidiary
    
    
    -
    
    
    (300,000
    )Common
      stock subscribed for services
    
    
    2,082,769
    
    
    1,233,885(Increase)
      decrease in operating assets:
    
    
    (422,952
    )
    $
    (130,074
    )Increase
      of notes payable in exchange for services rendered
    
    
    234,045
    
    $
    154,329Accounts
      receivable
    
    
    (33,654
    )Capitalized
      software
    
    
    (1,041,707
    )
    
    (1,426,560
    )Excess
      of costs over billings on uncompleted contracts
    
    
    (59,643
    )
    
    -Accounts
      payable and accrued expenses
    
    
    181,609
    
    
    134,905NET
      CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    
    
    43,503
    
    
    (369,210
    )CASH
      FLOWS FROM INVESTMENT ACTIVITIES:Purchase
      of property and equipment
    
    
    (59,936
    )
    
    -NET
      CASH (USED IN) INVESTMENT ACTIVITIES
    
    
    (59,936
    )
    
    -CASH
      FLOWS FROM FINANCING ACTIVITIES:Decrease
      in excess of outstanding checks
    
    
    -
    
    
    8,410Proceeds
      for sale of common stock
    
    
    41,200
    
    
    -Proceeds
      from capital contributions
    
    
    -
    
    
    60,800Proceeds
      from sale of 50% of subsidiary
    
    
    -
    
    
    300,000NET
      CASH PROVIDED BY FINANCING ACTIVITIES
    
    
    41,200
    
    
    369,210NET
      INCREASE IN CASH ANDCASH
      EQUIVALENTS
    
    
    24,767
    
    
    -CASH
      AND CASH EQUIVALENTS:Beginning
      of period
    
    
    -
    
    
    -End
      of period
    
    $
    24,767
    
    $
    -




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





14





**HouseRaising,
      Inc. and Subsidiaries (A Development Stage
    Company)**Consolidated
      Statement of Stockholders' EquityFor
      the years ended December 31, 2004 and 2003Series
      A
    Series
      A
    Series
      B
    Series
      BCommon
    Common
    Common
    Common
    Preferred
    Preferred
    AdditionalShares
    Stock
    Shares
    Stock
    Shares
    Stock
    Paid-in
    Retained(000's)
    $
    (000's)
    $
    (000's)
    $
    Capital
    DeficitBalances,
      January 1, 2003
    16,980
    $
      16,980
    10,000
    $
      10,000
    -
    -
    $
      5,780,897
    $
      (729,624)Distribution
      of Capital
    -
    -
    -
    -
    -
    -
    (1,288,529)
    -Issuance
      of A shares
    181
    181
    -
    -
    -
    -
    181
    -Common
      Stock Subscribed
    -
    -
    -
    -
    -
    -
    1,233,885Net
      Income (loss) for the year
    -
    -
    -
    -
    -
    -
    (51,002)
    (51,002)Balances,
      December 31, 2003
    17,161
    $
      17,161
    10,000
    $
      10,000
    -
    -
    $
      5,675,432
    $
      (780,626)Issuance
      of A shares--merger
    11,787
    11,787
    -
    -
    -
    -
    164,692
    -Surrender
      B shares--merger
    -
    -
    (10,000)
    (10,000)
    -
    -
    -
    -Issuance
      of A share for services
    7,512
    7,512
    -
    -
    -
    -
    1,914,370
    -Issuance
      of preferred shares--merger
    -
    -
    -
    -
    1,000
    1,000
    -
    -Net
      income (loss) for the year
    -
    -
    -
    -
    -
    -
    -
    (927,196)Balances,
      December 31, 2004
    36,460
    $
      36,460
    -
    $ -
    1,000
    $
      1,000
    $
      7,754,494
    $
      (1,707,822)




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





15






NOTE A—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 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
organizing and owning the regional franchise 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.




16




NOTE
A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’)





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 significant 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 depreciations 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.




17




NOTE
A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’)





Advertising
Costs —Advertising
costs are expensed as incurred. The Company does not incur any direct-response
advertising costs. Advertising expense totaled $29,652 and $31,372 for the years
ended December 31, 2004 and 2003, respectively.





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 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. One
receivable became uncollectible in 2004 and the receivable was directly written
off to Bad Debt Expense in the amount of $36,677.





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.




18




NOTE
A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’)





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.





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 does not
expect SFAS No. 145 to have a material effect on its financial condition or cash
flows. The Company will adopt SFAS on January 1, 2004.




19





NOTE
A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’)





Recent
Accounting Pronouncements (cont’)





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 once 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.




20




NOTE
A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’)





Recent
Accounting Pronouncements (cont’)





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.





NOTE
B—SUPPLEMENTAL CASH FLOW INFORMATION





Supplemental
disclosures of cash flow information for the years ended December 31, 2004 and
2003 are summarized as follows:





Cash paid
during the years for interest and income taxes:




2004
    2003Income
      Taxes
    $
      ---
    $
      ---Interest
    $93,081
    $61,736




21




NOTE
C—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, 2004 and 2003.





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 years ended December 31, 2004 and 2003 is as
follows:




2004
    2003Income
      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 $351,000 and $20,000 in 2004 and 2003, respectively.





As of
December 31, 2003, 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.




22




NOTE
D—GOING CONCERN





As shown
in the accompanying financial statements, 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. In the first quarter of 2005, the Company has already obtained
new contracts totaling $2,477,938 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 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.








NOTE
E—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.




23




NOTE
E—ACQUISITION AND RELATED REORGANIZATION (CONT’D)





On August
31, 2004, the Merger was consummated when Articles of Merger 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.








NOTE
F—SALE OF A PORTION OF A SUBSIDIARY





In June
2003, the Company sold 50% of its ownership in HouseRaising of Greater
Charlotte, LLC to three unrelated individuals for $300,000. In 2004, the Company
bought back the 50% interest in HouseRaising of Greater Charlotte, LLC in
exchange for the issuance of the Company’s common shares (restricted) to each of
the individuals as follows:





Lane
Ostrow 228,333
shares


Jack H.
Marks 228,333
shares


Richard
Brasser 228,333
shares





NOTE
G—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 December 31, 2004 and 2003.





NOTE
H—EQUITY





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. In
November 2003, the Company issued 180,232 Series “A” Common shares to unrelated
parties for $60,450 with a par value of $181. The Company applied the difference
in the par value and monies received to paid in capital.





NOTE
I--N ON-QUALIFIED
STOCK COMPENSATION PLAN





The
Company has adopted a new 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
3,000,000 shares of its $.001 par value common. The Stock Plan will not exceed
30% of its outstanding common stock at any given time.





NOTE
J--DEVELOPMENT STAGE COMPANY





The
Company is in the development stage as of December 31, 2004 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.




24





NOTE
K—COMMITMENTS





The
Company leases its office facilities. The Company also has one vehicle under
leases 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





NOTE
      L—NOTES PAYABLE**Notes
      payable at December 31, 2004 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.
    
    $
    13,177Secured
      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
      12% interest. Note payable upon demand.
    
    $
    50,000Secured
      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.
    
    $
    1,851Secured
      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 stockBearing
      0% interest. Note matures April 2005.
    
    $
    37,500
      **Secured
      demand note payable to a related party.Original
      amount $156,580.08Bearing
      6% interest. Note matures December 2005
    
    $
    144,689Total
      Current Portion
    
    $
    684,357


25




NOTE
L—NOTES PAYABLE (CONT’D)





**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. On the 0% interest bearing notes,
the Company imputed interest on the notes using a rate of 5%. The effects of
these notes are included in the consolidated financial statements therein.





A Notes
Payable in the amount of $52,400 (Technology Connections, Inc. books) was
satisfied in January 2005. This amount is included in the total amount of
outstanding Notes Payable of $736,757.





NOTE
M—SUBSEQUENT EVENTS





The
Company’s subsidiary, HouseRaisingUSA (HR-USA) has entered into a contract to
acquire Carriker Construction Co., Inc. (Carriker). HR-USA will acquire Carriker
and all assets by issuing Carriker 5,000 shares of the Company’s common stock.
It is anticipated that the transaction will come under a tax-free share exchange
between HR-USA and Carriker. All shares will be restricted under Rule 144.
HR-USA also has entered into a contract to acquire Mark White Custom Builders,
LLC (White). HR-USA will acquire White and all assets by issuing White 5,000
shares of the Company’s common stock. It is anticipated that the transaction
will come under a tax-free share exchange between HR-USA and White. All shares
will be restricted under Rule 144.





The
Company has also entered into a contract to acquire LearnBytes, LLC through an
asset acquisition transaction.




26





**ITEM 7. 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
December 31, 2004**





*(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 renovation projects on
customer’s existing homes. Using it’s own proprietary software, HouseRaising
also serves as an Application Service Provider focusing on bringing disruptive
technology/solutions to the custom home building industry, thus helping
HomeBuyers build their own home and independent HomeBuilders who manage the
complete building process.





On
February 19, 2004, HouseRaising executed an Agreement and Plan of Merger (“the
Merger”)to which HRI agree 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 is described under Item 1 of this
filing.





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 Note 8B Other Matters
for further discussion on this item).





**Results
of Operations for Year Ended December 31, 2004 Compared to December 31,
2003**





**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 $102,532 for the year ended December 31, 2004,
compared to $50,536 for the same period in 2003. This represents an increase of
103%. Sales increased due to more new construction and remodeling in the greater
Charlotte area in the second half of 2004 as the company starts to implement its
business plan and develop its operations 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 already obtained new contracts totaling
$2,478,000 in sales that are projected to be completed by year-end. On average
these new construction projects are completed within 9 months.




27


****


**Cost
of Sales**





The cost
of sales includes the building expense plus other direct costs associated with
new constructions, 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. The cost of sales for the year ended December 31, 2004 were
$31,509 which was approximately equal to the $31,608 for the same period in
2003.





**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. Due to an increase in new home construction and remodeling in the
greater Charlotte area, HouseRaising had gross profits of $71,023 for the year
ended December 31, 2004 compared to $18,928 for the same period in 2003, a three
fold increase. Gross profits will 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. Because
there were more new home and renovation projects in 2004, sales and service fee
revenues increased substantially to $73,261 from $4,600 in 2003. Going forward
we would expect this to continue to grow as our operations expand.





**Other
Income**





The
Company earned $14,996 in consulting income for the period ending December 31,
2004, compared to $2,515 for the same period in 2003. We would not expect this
to increase substantially in 2005 as we implement our business
plan.





**Net
Revenues**





HouseRaising’s
net revenues increased to $159,280 for the year ended 2004 compared to $26,043
for 2003, a six fold increase. This was principally due to commencement of its
business plan resulting in greater new home construction and renovation
projects. We would expect our net revenues to continue to grow as we obtain new
construction and remodeling work in 2005.





**Expenses**





Total
expenses for the year ended December 31, 2004 and 2003 were $984,959 and
$315,309, 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 implementation of its business plan.
The administrative costs include advertising, payroll, payroll-related costs 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 within the 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 $98,667 for the year ended December 31, 2004 compared to
$61,736 for the same period in 2003. 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 subside unless the company cannot obtain equity
financing and must resort to borrowing additional funds.





28


****


**Other
Items**





In June
2003, the Company sold a franchise for $300,000 to a regional design/build
company HouseRaising of Greater Charlotte, LLC. HouseRaising of Greater
Charlotte, LLC sold a 50% membership in the LLC to three (3) outside investors
which was recorded as a gain on sale of 50% of Subsidiary. In 2004, the Company
repurchased this franchise interest in exchange for 684,999 shares of restricted
common stock.





**Income
/ Losses**





The net
loss for the year ended December 31, 2004 was $924,346 versus a net loss of
$51,002 in the same period in 2003, a decrease of $873,344. 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 losses will depend on the success of implementing the company’s
business plan in 2005. The company does already have approximately $2,478,000 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 provided by operations were $74,554 for the year ended December 31, 2004
and cash flows used in operations of $369,210 for the same period in 2003. This
reflects a net increase in cash provided by operations of $442,764 principally
due an increase in the issuance of common stock for services and a slight
decrease in capitalized software.





Cash
flows used in investment activities were $48,787 and $0 for the year ended
December 31, 2004 and 2003, respectively. This was principally due to the
purchase of property and equipment for the company and Technology Connections,
Inc.





Cash
flows provided by financing activities were $0 and $369,210, respectively, for
the year ended December 31, 2004 and 2003. The cash flows for the 2003 period
included $300,000 from the sale of 50% of the subsidiary HouseRaising of Greater
Charlotte.





Overall,
we have funded our cash needs from inception through December 31, 2004 with a
series of debt and equity transactions. If we are unable to receive additional
cash from our 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 $24,767 and a working capital deficit of $692,817 as of December
31, 2004 which is not sufficient to fund our operations through the next twelve
months. Our working capital deficit is due to current obligations in account
payable and notes payable. We will substantially rely on the existence of new
revenue from our business development efforts; however, we have no current or
projected capital reserves that will sustain our business for the next twelve
months. The company does have $2,778,000 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. 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 that have indicated a willingness to contribute equity to
finance on-going operations and 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.





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. If necessary, we will 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 our 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.




29




**ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.**





None








**ITEM 8A. CONTROLS AND PROCEDURES**





*Quarterly
Evaluation of Controls* . As of
the end of the period covered by this annual report on Form 10-KSB, 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 annual 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 annual 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 annual 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 annual 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.




30





**ITEM 8B. 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. 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 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. Pending consummation of the acquisition, the personnel of
Learnbytes continue to develop the System C program for HRI which is discussed
above.





In 2005,
the Company repurchased the 50% interest in HouseRaising of Greater Charlotte,
LLC that it had sold to three unrelated individuals for $300,000 in June 2003.
HRI provided 684,999 in restricted shares in exchange for the 50% interest.





In
addition, the Company is in negotiations with two separate homebuilders to
acquire their operations in the second quarter of 2005. The acquisition will not
have a material impact on the balance sheet of the Company.




31







**PART
III**





**ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT**





Information
for this item concerning HouseRaising, Inc. executive officers and their
business experience is incorporated by reference from page 9 of the Company’s
Definitive Information Statement on Schedule14-C filed with the Commission on
March 23, 2005 (the “Definitive Information Statement”). Information on the
current HouseRaising, Inc. directors and their business experience and
directorships is incorporated herein by reference from pages 5-6 of the
Definitive Information Statement.





**Family
relationships; director arrangements**





Sherron
Skibo, Chief Operating Officer is the wife of Charles M. Skibo, Chief Executive
Officer and Chairman of the Board. Christine M. Carriker, Senior Vice President
and Chief Administrative Officer is the daughter of Robert V. McLemore,
President and Founder. There are no other family relationships between any
executive officer or director of HouseRaising, Inc.





**Code
of Ethics**





We are
presently working with our legal counsel and Audit Committee to prepare and
adopt a code of ethics that applies to our company and our principal chief
executive officer, principal financial officer, principal accounting officer or
controller, or person performing similar functions (the “Code of Ethics”). A
draft of the Code of Ethics is attached hereto as Exhibit 14.1. The Code of
Ethics is being designed with the intent to deter wrongdoing, and to promote the
following:


·
    Honest
      and ethical conduct, including the ethical handling of action or apparent
      conflicts of interest between personal and professional
      relationships;


·
    Full,
      fair, accurate, timely and understandable disclosure in reports and
      documents that a small business issuer files with, or submits to, the
      Commission and in other public communications made by the small business
      issuer;


·
    Compliance
      with applicable governmental laws, rules and
  regulations;


·
    The
      prompt internal reporting of violations of the code to an appropriate
      person or persons identified in the code;
and


·
    Accountability
      for adherence to the code.








**ITEM 10. EXECUTIVE COMPENSATION**





The
information required under this item for HouseRaising, Inc. is incorporated by
reference from pages 11-14 of the Definitive Information
Statement..





**Board
Compensation**





Directors
who are also officers of the Company do not receive directors’ fees or other
amounts in compensation for participation on the Board of Directors or a
committee of the Board of Directors. All other directors are each paid travel
expenses for each meeting of the Board of Directors attended.





**2004
Non-Qualified Stock Compensation Plan and Amendment
Thereto**





The
Company adopted a 2004 Non-Qualified Stock Compensation Plan on January 27,
2004, and filed a Registration Statement on Form S-8 with the Commission to
register shares awarded under the Plan on the same date. The Compensation
Committee of the Board of Directors issues common stock and awards options to
employees, directors, officers, consultants, advisors and other persons
associated with our Company. The 2004 Plan is intended to provide a method
whereby our company would be stimulated by the personal involvement of our
employees, directors, officers, consultants, advisors and other persons in our
business and reward such involvement, thereby advancing the interests of our
Company and all of its shareholders. A total of 400,000 shares of common stock
were authorized under the 2004 Plan. All 400,000 shares have been awarded and
100,000 of those shares were awarded to management. On July 29, 2004, the
Company filed Post Effective Amendment No. 1 to its Registration Statement on
Form S-8 with the Commission, and amended the 2004 Non-Qualified Stock
Compensation Plan to provide for the issuance of an additional 400,000 shares
pursuant to its provisions. To date, only 315,000 shares have been issued, and
those shares have been awarded to a consultant and 85,000 are available for
issuance. On September 27, 2004, the Company filed Post Effective Amendment No.
2 to its Registration Statement on Form S-8 with the Commission, and amended the
2004 Non-Qualified Stock Compensation Plan to provide for the issuance of an
additional 3,000,000 shares pursuant to its provisions. As of December 31, 2004,
2,077,007 shares have been awarded to consultants or management personnel and
922,993 are available for issuance.





32


****


**Change-in-Control
Agreements**





The
company has management agreements with its Chief Executive Officer, President
and Chief Operating Officer, Chief Administrative Officer and Chief Financial
Officer that are an exhibit to this filing.





**Executive
Management Compensation**





The
HouseRaising Compensation Committee, composed of 3 directors of HouseRaising,
Inc. approves executive compensation for the Named Executive Officers. The
information required to be disclosed concerning the Compensation Committee is
incorporated herein by reference to page 7 of the Company’s Definitive
Information Statement. Actions of HouseRaising’s Compensation Committee are
subject to ratification by the full HouseRaising, Inc. Board of Directors.








**ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS**





Information
concerning security ownership of certain beneficial owners and management, and
related stockholder matters, is incorporated by reference from the Company’s
Definitive Information Statement.





**Section
16(a) beneficial ownership reporting compliance**





Section
16(a) of the Exchange Act, requires the Company's officers, Directors, and
persons who beneficially own more than ten percent of the Common Stock to file
reports of securities ownership and changes in such ownership with the
Securities and Exchange Commission. Officers, directors and greater than ten
percent beneficial owners also are required by rules promulgated by the
Securities and Exchange Commission to furnish the Company with copies of all
Section 16(a) forms they file. The information required by this item is
incorporated herein by reference to pages 10-11 of the Company’s Definitive
Information Statement.








**ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.**





Except as
hereafter described, none of our directors or executive officers had a direct or
indirect material interest in any transaction during the last two years, or
proposed transaction, to which the Company was a party. The Company has a loan
payable to stockholders at December 31, 2004 consisting of unsecured note
payable to our President and majority stockholder. As of December 31, 2004, the
amount due on this 12-month, 6% per annum loan was $146,080.08.








**ITEM 13. PRINCIPAL ACCOUNTANT FEES AND
SERVICES**





The
information required under this item is incorporated by reference to the
relevant information on pages 13-14 of the Company’s Definitive Information
Statement.





Fees
Billed For Audit and Non-Audit Services


The
following table represents the aggregate fees billed for professional audit
services rendered to the independent auditor, Traci Anderson, CPA ("Anderson")
for our audit of the annual financial statements for the year ended December 31,
2004, and all fees billed for other services rendered by Anderson during those
periods. Anderson was engaged by HRI following the merger that became effective
August 31, 2004.




Year
      Ended December 31
    2004AndersonAudit
      Fees(1)
    $
      16,000Audit-Related
      Fees(2)
    --Tax
      Fees(3)--All
      Other Fees(4)--Total
      Accounting Fees and
      Services$16,000







(1)
    *Audit
      Fees*.
      These are fees for professional services for our audit of the annual
      financial statements, and for the review of the financial statements
      included in our filings on Form 10-KSB, and for services that are normally
      provided in connection with statutory and regulatory filings or
      engagements.




(2)
    *Audit-Related
      Fees*.
      These are fees for the assurance and related services reasonably related
      to the performance of the audit or the review of our financial
      statements.




(3)
    *Tax
      Fees*.
      These are fees for professional services with respect to tax compliance,
      tax advice, and tax planning.




(4)
    *All
      Other Fees*.
      These are fees for permissible work that does not fall within any of the
      other fee categories, i.e., Audit Fees, Audit-Related Fees, or Tax
      Fees.





Pre-Approval
Policy For Audit and Non-Audit Services


The
company recently formed an audit committee and it is anticipated they will adopt
pre-approval policies regarding audit and non-audit services provided by an
accountant. Audit and non-audit services for 2005 will be brought to the
shareholders at its annual meeting as described in the Company’s Definitive
Information Statement. All of the services rendered to the Company by Traci
Anderson were pre-approved by our Board of Directors.





It is
expected that the new policy and procedures may authorize the Board or audit
committee to delegate, to one or more of its members, the authority to
pre-approve certain permitted services, provided that the estimated fee for any
such service does not exceed a specified dollar amount (to be determined). All
pre-approvals shall be contingent on a finding, by the Board, audit committee,
or delegate, as the case may be, that the provision of the proposed services is
compatible with the maintenance of the auditor's independence in the conduct of
its auditing functions. In no event shall any non-audit related service be
approved that would result in the independent auditor no longer being considered
independent under the applica ble rules
and regulations of the Securities and Exchange Commission.




33





**PART
IV**





**ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K**





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





Subsequent
to September 30, 2004, the Company filed the following Current Reports on Forms
8-K with the SEC as follows:




Dated
      (filing date)
    Items
      ReportedMarch
      7, 2005 (March 7, 2005)
    Form
      8-K Change in Directors or Principal OfficersMarch
      4, 2005 (March 4, 2005)
    Form
      8-K Entry Material AgreementNovember
      17, 2004 (November 17, 2004)
    Form
      8-K/A Financial Statements and ExhibitsNovember
      9, 2004 (November 15, 2004)
    Form
      10-QSB Quarterly ReportNovember
      10, 2004 (November 10, 2004)
    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.
    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)10.1
    Management agreement with Robert V. McLemore, President
      and Founder *10.2
    Management agreement with Charles M. Skibo,
      Chairman & Chief Executive Officer*10.3
    Management agreement with Sherron Skibo, Chief
      Operating Officer *10.4
    Management agreement with Christine M. Carriker,
      Senior Vice President & Chief Administrative Officer
    *10.5
    Management agreement with Richard A. von Gnechten,
      Chief Financial Officer*10.6
    Consultant agreement with CEOcast, Inc. (Rachel
      Glicksman)*10.7
    Consultant agreement with Darrel T. Uselton &
      his affiliates (Protrading.com)*14.1
    The Company’s Code of
Ethics*16.1
    Letter
      on Change in Certifying Accountant (incorporated by reference from Exh. 16
      to a Form 8K/A filed October 5, 2004)21
    Subsidiaries of the
Registrant*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


34








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)Date: March 30,
2005
    By:
    /s/ Charles M.
  SkiboName: Charles M. SkiboTitle:   Chairman
      of the Board andChief
      Executive Officer
      (Principal
      Executive Officer)


****Date: March 30, 2005
    By:
    /s/ Robert V. McLemoreName: Robert V. McLemoreTitle:  President and Founder
      (Principal Executive Officer)




****Date: March 30, 2005
    By:
    /s/ Richard A. von GnechtenName: Richard A. von GnechtenTitle:  Chief Financial Officer
      (Principal
      Financial Officer)
  ****Date: March 30, 2005
    By:
    /s/ Christine M. CarrikerName: Christine M. CarrikerTitle:  Senior
      Vice President,Chief
      Administrative Officer
      (Principal Accounting Officer)




Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrants and in the
capacities indicated on March 30, 2005.








Signature
    
    Title/s/
      Charles M. Skibo
    
    Chairman
      of the Board of Directors and Chief Executive OfficerCharles
      M. Skibo
    
    (Principal
      Executive Officer)/s/
      Robert V. McLemore
    
    Founder,
      President and Director of HouseRaising, Inc.Robert
      V. McLemore
    
    (Principal
      Executive Officer)/s/
      Richard A. von Gnechten
    
    Chief
      Financial Officer of HouseRaising, Inc.Richard
      A. von Gnechten
    
    (Principal
      Financial Officer)/s/
      Christine M. Carriker
    
    Co-Founder,
      Senior Vice President, Chief Administrative Officer, Secretary
      and Director of HouseRaising, Inc.Christine
      M. Carriker
    
    (Principal
      Accounting Officer)/s/
      Grant S. Neerings
    
    Chief
      Technology Officer and Director of HouseRaising, Inc.
  andGrant
      Neerings
    
    President
      and Chief Manager of HouseRaisingAcademy, LLC/s/
      Robert M. Burroughs
    
    Director
      of HouseRaising, Inc.Robert
      M. Burroughs/s/
      Daniel S. Fogel
    
    Director
      of HouseRaising, Inc.Daniel
      S. Fogel







35