UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): August 31, 2004
HOUSERAISING, INC.
------------------
(Exact Name of Registrant as Specified in Charter)
North Carolina
--------------
(State or Other Jurisdiction of Incorporation)
000-50701
---------
(Commission File Number)
56-2253025
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(I.R.S. Employer Identification No.)
4801 East Independence Boulevard, Suite 201
Charlotte, North Carolina 28212
-----------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(704) 532-2121
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(Registrant's Telephone Number, Including Area Code)
TECHNOLOGY CONNECTIONS, INC.
-------------------------------------------------------------
(Former Name or Former Address, if Changed since Last Report)
This Current Report on Form 8-K/A is filed by HouseRaising, Inc., a North
Carolina corporation (the "Registrant"), in connection with the items described
below. It amends that certain Current Report on Form 8-K, dated September 7,
2004, and filed by the Registrant with the Commission on September 7, 2004.
Item 9.01 Financial Statements and Exhibits.
On February 19, 2004, HouseRaising, Inc. a Delaware corporation
("HouseRaising"), Technology Connections, Inc., a North Carolina corporation
("Technology Connections"), and the shareholders of HouseRaising (the
"HouseRaising Stockholders"), executed an Agreement and Plan of Merger (the
"Merger Agreement"), pursuant to which HouseRaising agreed to merge with and
into Technology Connections (the Merger"), with the HouseRaising 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 in
exchange for their shares of HouseRaising. In addition, pursuant to the Merger
Agreement, Technology Connections agreed to change its corporate name from
"Technology Connections, Inc." to "HouseRaising, Inc." prior to the closing.
The sole purpose of this Form 8-K amendment is to provide the financial
statements of HouseRaising as required by Item 9.01(a) of Form 8-K and the
proforma financial information required by Item 9.01(b) of Form 8-K, which
financial statements and information were excluded from the Current Report on
Form 8-K filed on September 7, 2004, in reliance on Items 9.01(a)(4) and
9.01(b)(2), respectively, of that form.
ITEM 9.01(a) - FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED
The following financial statements of HouseRaising are set forth below: (i) the
audited consolidated balance sheets, (ii) the audited statements of operations,
(iii) the audited consolidated statements of stockholders' deficit and (iv) the
audited consolidated statements of cash flows, in each case for the years ended
December 31, 2003 and 2002, and (v) the consolidated notes to the financial
statements for such period.
INDEPENDENT AUDITOR'S REPORT
----------------------------
To the Board of Directors and Stockholders HouseRaising, Inc. (FKA
HouseRaisingUSA, Inc.) and Subsidiaries 4801 East Independence Blvd, Ste. 200
Charlotte, NC 28212
I have audited the accompanying consolidated balance sheet of HouseRaising Inc.,
(FKA HouseRaisingUSA, Inc.) and Subsidiaries (a development stage company) as of
December 31, 2003 and the related consolidated statements of operations,
stockholders' equity, and cash flows for the years ended December 31, 2003 and
2002. 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. (FKA HouseRaisingUSA, Inc.) and Subsidiaries (a development
stage company) as of December 31, 2003, and the consolidated results of its
operations and its cash flows for the years ended December 31, 2003 and 2002 in
conformity with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming HouseRaising,
Inc. (FKA HouseRaisingUSA, Inc.) will continue as a going concern. HouseRaising,
Inc (FKA HouseRaisingUSA, Inc.) has suffered recurring losses and has yet to
generate an internal cash flow that raises substantial doubt about its ability
to continue as a going concern. Management's plans in regard to these matters
are 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 26, 2004
HOUSERAISING, INC. AND SUBSIDIARIES (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2003
================================================================================
ASSETS
CURRENT ASSETS
- ---------------
Cash and cash equivalents $ -
Due from builders 59,595
--------------
TOTAL CURRENT ASSETS 59,595
PROPERTY AND EQUIPMENT
- ------------------------
Computer and office equipment 78,196
Furniture and fixtures 37,300
Accumulated Depreciation (59,151)
--------------
NET FIXED ASSETS 56,345
OTHER ASSETS
- -------------
Other Assets 1,818
Capitalized Software 7,529,532
--------------
NET OTHER ASSETS 7,531,350
--------------
TOTAL ASSETS $ 7,647,290
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
- --------------------
Excess of outstanding checks over bank balance $ 16,429
Accounts Payable & credit cards 103,286
Due to Builders 4,097
Buydowns and other accruals 45,078
Interest Payable 74,986
Current portion of notes payable 502,712
--------------
TOTAL CURRENT LIABILITIES 746,588
--------------
TOTAL LIABILITIES 746,588
--------------
STOCKHOLDERS' EQUITY
- ---------------------
Common stock series A (.001 par value, 90,000,000
shares authorized; 17,160,574 issued and
outstanding at December 31, 2003) 17,161
Common stock series B (.001 par value, 10,000,000
shares authorized; 10,000,000 issued and
outstanding at December 31, 2003) 10,000
Preferred stock ($.001 par value; 20,000,000 shared
authorized; none issued and outstanding at
December 31, 2003) -
Common stock subscribed but not yet issued 690,206
Additional paid-in capital 6,963,961
Retained deficit (780,626)
--------------
TOTAL STOCKHOLDERS' EQUITY 6,900,702
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,647,290
==============
The accompanying notes are an integral part of these consolidated financial
statements.
HOUSERAISING, INC. AND SUBSIDIARIES (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
==========================================================================================================
Cumulative Since
2003 2002 Inception
------------ ------------ ----------------
SALES:
- ------
Total Project Sales $ 50,536 $ 3,216,025 $ 4,675,451
Project Costs $ 31,608 $ 2,985,145 $ 3,745,177
REVENUES:
- ---------
Project Gross Profits $ 18,928 $ 230,880 $ 930,274
Sales and Service Fees $ 4,600 $ 398,467 $ 562,883
Other Income $ 2,515 $ 23,799 $ 26,314
------------ ------------ ----------------
TOTAL REVENUE $ 26,043 $ 653,146 $ 1,519,471
------------ ------------ ----------------
EXPENSES:
- ---------
General and administrative 377,045 311,107 3,495,019
------------ ------------ ----------------
TOTAL EXPENSES 377,045 311,107 3,495,019
------------ ------------ ----------------
OPERATING INCOME (LOSS) (351,002) 342,039 (1,080,626)
------------ ------------ ----------------
Gain from sale of 50% of subsidiary 300,000 - 300,000
------------ ------------ ----------------
NET INCOME (LOSS) $ (51,002) $ 342,039 $ (780,626)
============ ============ ================
Net (loss) per share- basic and fully diluted * $ 0.02 $ (0.05)
============ ============ ================
Weighted average shares outstanding 16,995,497 16,522,154 16,000,084
============ ============ ================
* Less than ($.01)
The accompanying notes are an integral part of these consolidated financial
statements.
HOUSERAISING, INC. AND SUBSIDIARIES (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
==========================================================================================================
Cumulative Since
2003 2002 Inception
------------ ------------ ----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
- -------------------------------------
Net income (loss) $ (51,002) $ 342,039 $ (780,626)
Adjustments to reconcile net income (loss)
to net cash (used in) operating activities
Depreciation 15,307 15,308 59,151
Gain from sale of 50% of subsidiary (300,000) - (300,000)
Capital contribution-services - 1,951,173 1,951,173
Common stock issued for capitalized software - - 3,477,605
Incurrence of notes payable in exchange
for services rendered 154,329 263,579 417,908
Common stock subscribed for services but
not yet received 1,233,885 603,867 1,837,752
(Increase) in capitalized software (1,365,941) (3,759,217) (7,529,532)
(Increase) in other assets - (1,818) (1,818)
(Increase) in due from builders - (59,595) (59,595)
Increase (decrease) in accounts payable
and accruals (367,807) 516,845 223,350
Increase (decrease) in outstanding checks in
excess of bank balance 8,410 (7,614) 16,429
Increase (decrease) in due to builders (130,074) 134,171 4,097
------------ ------------ ----------------
NET CASH (USED IN) OPERATING ACTIVITIES (802,893) (1,262) (684,106)
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------
Expenditures for fixed assets - (7,278) (115,496)
Proceeds from sale of 50% of subsidiary 300,000 - 300,000
------------ ------------ ----------------
NET CASH PROVIDED BY INVESTING ACTIVITIES 300,000 (7,278) 184,504
CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------
Borrowings on notes payable 507,727 507,727
Repayments on notes payable (5,015) (5,015)
Proceeds from capital contribution 60,450 - 60,450
------------ ------------ ----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 563,162 - 563,162
------------ ------------ ----------------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS 60,269 (8,540) 63,560
CASH AND CASH EQUIVALENTS:
BEGINNING OF THE PERIOD - 8,540 -
------------ ------------ ----------------
END OF THE PERIOD $ - $ - $ -
============ ============ ================
Non-cash financing activity:
Issuance of 499,842 common shares as payment
for debts of $500,169 - 500,169 500,169
============ ============ ================
The accompanying notes are an integral part of these consolidated financial
statements.
HOUSERAISING, INC. AND SUBSIDIARIES (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
=============================================================================================================================
Deficit
Series A Series A Series B Series B Accumulated
Common Common Common Common Preferred Preferred Additional During the
Shares Stock Shares Stock Shares Stock Paid-in Development
(000's) $ (000's) $ (000's) $ Capital Stage
-------- -------- -------- -------- --------- --------- ---------- ------------
Balances, at Inception - - - - - - - -
Issuances of Series A
Common Shares in November
2002 at $0.293 per share
for cash consideration 16,000 $ 16,000 - - - - $2,350,535 $ (1,071,663)
Issuances of Series A Common
Shares in November 2002 at
$1.00 per share for services 980 $ 980 - - - - $ 979,020 -
Issuance of Series B Common
Stock in November 2002 at
$ 0.001 per share for cash
consideration - - 10,000 $ 10,000 - - - -
Contribution of capital - - - - - - 2,451,342 -
Net Income for the year - - - - - - - 342,039
-------- -------- -------- -------- --------- --------- ---------- ------------
Balances, December 31, 2002 16,980 $ 16,980 10,000 $ 10,000 - - 5,780,897 (729,624)
Issuance of Series B shares - - - - - - - -
Issuance of Series A Common
Shares in November 2003 at
$0.33 per share for cash
consideration 151 $ 151 - - - - 151 -
Issuance of Series A Common
Shares in November 2003 at
$0.35 per share for cash
consideration 27 $ 27 - - - - 27 -
Issuance of Series A Common
Shares in November 2003 at
$0.33 per share for cash
consideration 3 $ 3 - - - - 3 -
Common Stock Subscribed - - - - - - 1,233,885 -
Net income for the year - - - - - - (51,002) (51,002)
-------- -------- -------- -------- --------- --------- ---------- ------------
Balances, December 31, 2003 17,161 $ 17,161 10,000 $ 10,000 - - $6,963,961 $ (780,626)
======== ======== ======== ======== ========= ========= ========== ============
The accompanying notes are an integral part of these consolidated financial
statements.
HOUSERAISING, INC. (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2003
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ----------------------------------------------------------
Business Activity - HouseRaising, Inc. (FKA HouseRaisingUSA, Inc.) and
Subsidiaries (the Company) was organized under the laws of the State of Delaware
in 1999. On May 5, 2003, HouseRaising, Inc. (FKA HouseRaisingUSA, Inc.) and
subsidiaries legally amended its Articles of Incorporation to effect a name
change from HouseRaisingUSA, Inc.
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 Company operates three subsidiaries: MBSI of the Carolinas, Inc.,
MBSI Realty, Inc., and MBSI Service Corp. On May 24, 2003, the Company approved
the dissolution on MBSI of the Carolinas, Inc. and its three regional
subsidiaries: MBSIHOMES of Western North Carolina, Inc., MBSIHOMES of Eastern
North Carolina, Inc., and MBSIHOMES of South Carolina, Inc. At that time the
Company decided to replace MBSI of the Carolinas, Inc. and its three regional
subsidiaries with thirteen separately incorporated limited liability companies
to be located in thirteen regions:
* HouseRaising of Greater Charlotte, LLC-50% ownership by the Company-50% was
sold in June 2003 to three unrelated individuals.
* HouseRaising of the Triangle, LLC-100% ownership by the Company
* HouseRaising of the Triad, 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
* HouseRaising of Blowing Rock, LLC-100% ownership by the Company
* HouseRaising of OBX, LLC-100% ownership by the Company
* HouseRaising of Pinehurst, LLC-100% ownership by the Company
* HouseRaising of Central North Carolina, 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.
HOUSERAISING, INC. (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2003
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT')
- ---------------------------------------------------------------
In July 2003, the Company formed 2 new subsidiaries, HouseRaisingAcademy, LLC
and HouseRaisingUSA, LLC. HouseRaisingAcademy, LLC develops and manages the
Company's internet based E-Learning and Homebuilder Management System currently
in development. HouseRaisingUSA, LLC is responsible for organizing and owning
the 13 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.
Revenue Recognition-The Company's revenue is derived from three sources. First,
the Company designs and builds custom homes and renovation projects for a fixed
price whereby the Company is at financial risk as to the project's cost. Second,
HouseRaisingAcademy provides services to outside homebuilders and homebuyers
whereby it is paid a fee. In this line of business the Company does not bear any
financial risk. Third, the Company expects to receive franchise fees and
royalties by selling interests in selected territories to outside parties. There
is no financial risk in this line of business and the Company is paid a fixed
fee for its franchises.
Revenue is recognized for design/build activities when the project is completed.
For the Company's design/build activities, the amount of revenue that is
recognized is determined by an estimate of the cost to build a house, to which
is added a varying margin of profit between six and ten percent. The Company's
commitment to build a custom home for a fixed price is made at the time when a
design/build contract is executed. The amount of revenue for
HouseRaisingAcademy's activities is based on a predetermined fee amount for
specific services rendered, such as (1) sales fees of 2% of the estimated cost
of the house, (2) design fees of 2.5% of the estimated cost of the house, (3)
engineering, coordinating and vendor relationship management fees of 2.5%, (4)
cash flow management, accounts payable, distribution of funds,
HOUSERAISING, INC. (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2003
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT')
- ---------------------------------------------------------------
and lien release fees of 1% of the estimated cost of the house, (5) builder
management fees of 1% of the estimated cost of the house and (6) reconciliation,
warranty and review fees of 1% of the estimated cost of the house. Revenue for
these services is recognized when the particular service is completed. The
amount of revenue for the Company's franchising activities currently varies
between $500,000 and $1.0 million per franchise. Revenue for franchising
activities is recognized when all of the contractual elements of a particular
franchise agreement have been fulfilled.
Consulting revenues are based on standard hourly rates billed by
HouseRaisingAcademy when earned.
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 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 placed in service (i.e. when the
development of internal use software is completed) which is projected to be
sometime in early 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.
Advertising Costs-Advertising costs are expensed as incurred. The Company does
not incur any direct-response advertising costs. Advertising expense totaled
$31,372 and $20,798 for the years ended December 31, 2003 and 2002,
respectively.
HOUSERAISING, INC. (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2003
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT')
- ---------------------------------------------------------------
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. All accounts receivable at December 31, 2003 are
fully collectible.
Impairment of Long-Lived Assets - The Company evaluates the recoverability of
its fixed assets and other assets in accordance with Statement of Financial
Accounting Standards No.144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" ("SFAS 144"). SFAS 144 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 assets relate. SFAS 144 excludes goodwill and intangible
assets. When an asset exceeds its expected cash flows, it is considered to be
impaired and is written down to fair value, which is determined based on either
discounted future cash flows or appraised values. The Company adopted the
statement on January 1, 2002. No impairments of these types of assets were
recognized during the two years ended December 31, 2003 based upon a management
review of such assets.
HOUSERAISING, INC. (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2003
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
RECENT ACCOUNTING PRONOUNCEMENTS (CONT')
- -------------------------------------------
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.
In July of 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard (SFAS) No. 146, which addresses significant issues
regarding the
HOUSERAISING, INC. (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2003
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT')
- ---------------------------------------------------------------
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.
In January 2003, Financial Accounting Standards Board issued FIN No. 46,
"Consolidation of Variable Interest Entities". FIN No. 46 requires the
consolidation of entities that cannot finance their activities without the
support of other parties and that lack certain characteristics of a controlling
interest, such as the ability to make decisions about the entity's activities
via voting rights or similar rights. The entity that consolidates the variable
interest entity is the primary beneficiary of the entity's activities. FIN No.
46 applies immediately to variable interest entities created after January 31,
2003, and must be applied in the first period beginning after June 15, 2003 for
entities in which an enterprise holds a variable interest entity that it
acquired before
HOUSERAISING, INC. (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2003
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT')
- ---------------------------------------------------------------
February 1, 2003. The Company plans to adopt this Interpretation in the first
quarter of fiscal 2004.
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.
RECENT ACCOUNTING PRONOUNCEMENTS (CONT')
- -------------------------------------------
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, 2003 and 2002 are summarized as follows:
Cash paid during the years for interest and income taxes:
HOUSERAISING, INC. (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2003
NOTE C-INCOME TAXES
- ---------------------
2003 2002
---- ----
Income Taxes $--- $---
Interest $--- $---
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, 2003 and 2002.
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, 2003 is as follows:
Total deferred tax assets $ 297,000
Valuation allowance (297,000)
----------
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, 2003 and 2002 is as
follows:
2003 2002
---- ----
Income 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 %
==== ====
HOUSERAISING, INC. (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2003
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 $20,000 and $(130,000) in 2003 and 2002, respectively.
As of December 31, 2003, the Company had federal and state net operating loss
carryforwards in the amount of approximately $781,000, which expire at various
times through the year 2024.
NOTE D-GOING CONCERN
- ----------------------
As shown in the accompanying financial statements, the Company has suffered
recurring losses from operations to date. It experienced a significant decrease
in revenues, a net loss of $51,002 in 2003, had a net deficiency of $780,626 and
a net working capital deficit of $686,993 as of December 31, 2003. These factors
raise substantial doubt about the Company's ability to continue as a going
concern.
Management's plans in regard to this matter are to raise equity capital and seek
strategic relationships and alliances in order to increase sales in an effort to
generate positive cash flow. Management has 3 new home sales in Region I
(HouseRaising of Greater Charlotte, LLC) for the first quarter of 2004 which are
expected to generate revenue. Additionally, the Company must continue to rely
upon equity infusions from investors in order to improve liquidity and sustain
operations. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
NOTE E-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. Each individual's
share and contribution is as follows:
Lane Ostrow 1/3 share for $100,000
Jack H. Marks 1/3 share for $100,000
Richard Brasser 1/3 share for $100,000
NOTE F-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,
2003 and 2002.
NOTE G-EQUITY
- --------------
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
HOUSERAISING, INC. (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2003
NOTE G-EQUITY (CONT')
- -----------------------
monies received to paid in capital. In 2002, the Company issued 499,842 Series
"A" restricted common shares to related parties as payment for debts occurred in
previous years in an amount of $500,169. During 2002, the Company issued stock
subscription agreements of 1,951,173 shares to 16 vendors and individuals
providing contract labor. The valuation of the shares issued for services was
based on the fair value of services received, which was the most reliable
measurement tool of the services rendered for the shares. The parties provided
labor and materials for database building and other electronic components of the
Company's internal use software program. These were capitalized into the cost of
the software under SOP 98-1. Specifically, these were costs incurred during the
application development stage whereby the following activities were performed:
design of chosen path, software configuration, software interfaces, coding,
testing, etc. During the year ended December 31, 2002, the Company issued
480,000 Series A common shares to a related party for satisfaction of debt in
the amount of $480,156. During the year ended December 31, 2002, the Company
issued 16,000,000 common shares to inventors/related parties in exchange for
contribution of capitalized software in the amount of $4,679,626.
NOTE H-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. The payment due under the lease is $1,384 per month.
Rent expense was $79,024 and $79,124 in 2003 and 2002, respectively.
Future minimum rental payments as of December 31, 2003 in the aggregate and for
each of the two succeeding years are as follows:
Year Amount
---- ---------
2004 $ 78,574
2005 $ 78,574
---------
Total $ 157,148
=========
HOUSERAISING, INC. (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2003
NOTE I-NOTES PAYABLE
- ----------------------
Notes payable at December 31, 2003 consist of the following:
Unsecured note payable to an unrelated party.
Bearing 8% interest. Balloon payment of principal
and interest was due April 2002 $ 5,640
Unsecured note payable to an unrelated party.
Bearing 8% interest. Balloon payment of principal
and interest was due May 2002. $ 13,177
Secured note payable to an unrelated party.
Bearing 18% interest. Note matured October 2003. $ 30,000
Secured note payable to an unrelated party.
Bearing 18% interest. Note matured April 2003. $ 50,000
Secured note payable to an unrelated party.
Bearing 5% interest. Note matured May 2003.
Original balance was $15,000. $ 2,600
Secured note payable to an unrelated party.
Bearing 18% interest. Note matured October 2003. $ 50,000
Secured note payable to an unrelated party.
Bearing 8% interest. Note matures May 2004. $ 55,000
Secured note payable to an unrelated party.
Bearing 20% interest. Note matured December 2003. $100,000
Secured note payable to an unrelated party.
Bearing 0% interest. Note matures May 2004. $ 55,000
Unsecured note payable to an unrelated party.
Bearing 0% interest. $ 1,851
Secured note payable to an unrelated party.
Bearing 18% interest. Note matured August 2003. $ 50,000
HOUSERAISING, INC. (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended December 31, 2003
NOTE I-NOTES PAYABLE (CONT')
- -------------------------------
Secured note payable to an unrelated party.
Bearing 18% interest. Note matured November 2003. $ 37,500
Secured note payable to an unrelated party.
Bearing 18% interest. Note matured August 2003. $ 25,000
Secured demand note payable to an unrelated party.
Bearing 0% interest. $ 21,944
Secured demand note payable to an unrelated party.
Bearing 0% interest. $ 5,000
Total Current Portion $502,712
========
On 0% interest bearing notes, the Company imputed interest on the notes using a
rate of 5%. Three of the four notes are payable on demand and have no maturity
dates. Thus, present value equals future value. Of the remaining one note, the
discount on the note payable, assuming a 5% interest rate, equals $1,375 at the
date of the note in November, 2003, or a present value of $53,625. The effect of
interest expense on the discount in the statement of operations for 2003 is only
$458, which represents two months of amortized interest on the discount.
NOTE J-DEVELOPMENT STAGE COMPANY
- -----------------------------------
The Company is in the development stage as of December 31, 2003 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.
The nature of the description of development stage activities in which the
Company is engaged is as follows. The Company has been and is in the process of
raising capital and developing markets.
HOUSERAISING, INC. (FKA HOUSERAISINGUSA, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2003
NOTE J-DEVELOPMENT STAGE COMPANY (CONT')
- --------------------------------------------
The Company has devoted most of its activities to establishing new business in
accordance with paragraph 8 of SFAS #7. Accordingly, planned principal
activities have not commenced, and have not yet produced significant revenues in
the opinion of management.
NOTE K-SUBSEQUENT EVENTS
- --------------------------
On February 19, 2004, the Company signed a Definitive Agreement to be merged
into a publicly traded company, Technology Connections, Inc. (Technology). The
HouseRaising, Inc.'s stockholders acquired the majority of the outstanding
common stock of this publicly held corporation (Technology). The acquisition
resulted in a tax-free exchange for federal and state income tax purposes. The
name of the corporation will be changed to HouseRaising, Inc. as HouseRaising,
Inc. merged into the publicly traded corporation (Technology). The transaction
was accounted for as a reverse merger in accordance with Accounting Principles
Board (APB) Opinion No. 16 wherein the stockholders of HouseRaising, Inc.
retained the majority of the outstanding common stock of the Company after the
merger. The publicly traded corporation did not have a material operating
history over the prior couple of years.
ITEM 9.01(b) - PROFORMA FINANCIAL INFORMATION
The following proforma financial statements, of Technology Connections and
HouseRaising are set forth below: Consolidated (Unaudited) Condensed Pro Forma
Balance Sheet of Technology Connections and HouseRaising as of September 30,
2004, Consolidated (Unaudited) Condensed Pro Forma Statement of Operations for
the nine months ended September 30, 2004, and Consolidated (Unaudited) Condensed
Pro Forma Statement of Operations for the year ended December 31, 2003.
PRO FORMA FINANCIAL STATEMENTS
The following consolidated (unaudited) condensed pro forma balance sheet
reflects the financial position of Technology Connections as of September 30,
2004 as if the merger with HouseRaising had been completed as of that date, and
the consolidated (unaudited) condensed pro forma statements of income for
Technology Connections for the year ended December 31, 2003 and for the nine
months ended September 30, 2004, as if the merger had been completed as of that
date. The merger was actually consummated on August 31, 2004.
These financial statements are presented for informational purposes only and do
not purport to be indicative of the financial position that would have resulted
if the merger had been consummated at each company's year end. The pro forma
financial statements should be read in conjunction with Technology Connections'
financial statements and related notes thereto contained in Technology
Connections' SEC quarterly and annual filings (including its Definitive
Information Statement on Schedule 14C filed with the Commission in connection
with the Merger) and HouseRaising's financial statements and related notes
thereto contained elsewhere in this Form 8-K.
A final determination of required purchase accounting adjustments, including the
allocation of the purchase price to the assets acquired based on their
respective fair values, has not yet been made. Accordingly, the purchase
accounting adjustments made in connection with the development of the pro forma
financial statements are preliminary and have been made solely for purposes of
developing the pro forma combined financial information.
HOUSERAISING, INC. AND TECHNOLOGY CONNECTIONS, INC.
CONSOLIDATED (UNAUDITED) CONDENSED PRO FORMA BALANCE SHEET
AS OF SEPTEMBER 30, 2004
===========================================================================================================
House Technology (Unaudited) (Unaudited)
Raising Connections Adjustments Total
----------- ----------- ----------- ----------
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 6,483 $ - $ - $ 6,483
Inventory - 3,000 - 3,000
Accounts Receivable, net of allowance
for doubtful accounts of $31,564 22,918 3,023 - 25,941
----------- ----------- ----------- ----------
TOTAL CURRENT ASSETS 29,401 6,023 - 35,424
PROPERTY AND EQUIPMENT
Property and Equipment 117,326 33,787 (11,149) 139,964
Accumulated Depreciation (67,805) (12,830) 11,149 (69,486)
----------- ----------- ----------- ----------
Net Property and Equipment 49,521 20,957 - 70,478
OTHER ASSETS
Other Assets 1,818 - - 1,818
Capitalized Software 7,955,485 - - 7,955,485
----------- ----------- ----------- ----------
Net Other Assets 7,957,303 - - 7,957,303
TOTAL ASSETS $ 8,036,225 $ 26,980 $ - $8,063,205
=========== =========== =========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses 278,921 $ 201,895 - $ 480,816
Interest Payable 62,716 - - 62,716
Excess of Outstanding Checks Over Bank Balance - 134 - 134
Notes Payable 613,453 67,400 - 680,853
----------- ----------- ----------- ----------
TOTAL CURRENT LIABILITIES 955,090 269,429 - 1,224,519
STOCKHOLDERS' DEFICIT
Preferred Stock ($.001 par value, 5,000,000
authorized: none issued and outstanding) $ - - - $ -
Preferred Stock ($.001 par value, 20,000,000
authorized: none issued and outstanding) - - - -
Preferred Stock Class A Convertible
($.001 par value, 5,000,000 authorized:
1,000,000 issued and outstanding) 1,000 - - 1,000
Common Stock Series A ($.001 par value,
90,000,000 shares authorized: 30,293,712
shares issued and outstanding) 30,294 2,469 (2,469) 30,294
Common Stock Subscribed but not Issued 2,057,536 - - 2,057,536
Additional Paid-in-Capital 6,029,802 1,104,301 (1,346,750) 5,787,353
Accumulated Deficit (1,037,497) (1,349,219) 1,349,219 (1,037,497)
----------- ----------- ----------- ----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 7,081,135 (242,449) - 6,838,686
----------- ----------- ----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 8,036,225 $ 26,980 $ - $8,063,205
=========== =========== =========== ==========
See accompanying notes to (unaudited) pro forma financial statements.
HOUSERAISING, INC. AND TECHNOLOGY CONNECTIONS, INC.
CONSOLIDATED (UNAUDITED) CONDENSED PRO FORMA STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
===========================================================================================================
(Unaudited) (Unaudited)
House Technology ProForma ProForma
Raising Connections Adjustments Total
----------- ----------- ----------- ----------
SALES AND COST OF SALES:
Sales $ 39,026 $ 150 $ - $ 39,176
Cost of Sales 28,471 - - 28,471
----------- ----------- ----------- ----------
Gross Profit 10,555 150 - 10,705
OTHER REVENUES:
Sales and service fees 57,856 - - 57,856
Other income 6,000 - - 6,000
----------- ----------- ----------- ----------
74,411 150 - 74,561
OPERATING EXPENSES:
Selling, general and administrative 147,966 2,321 - 150,287
Consulting fees 23,400 313,242 - 336,642
----------- ----------- ----------- ----------
171,366 315,563 - 486,929
OPERATING LOSS (96,955) (315,413) - (412,368)
OTHER EXPENSE:
Interest Expense 62,716 5,586 - 68,302
----------- ----------- ----------- ----------
NET LOSS $ (159,671) $ (320,999) $ - $ (480,670)
=========== =========== =========== ==========
See accompanying notes to (unaudited) pro forma financial statements.
HOUSERAISING, INC. AND TECHNOLOGY CONNECTIONS, INC.
CONSOLIDATED (UNAUDITED) CONDENSED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003
===========================================================================================================
(Unaudited) (Unaudited)
House Technology ProForma ProForma
Raising Connections Adjustments Total
----------- ----------- ----------- ----------
SALES AND COST OF SALES:
Sales $ 26,043 $ 44,665 $ - $ 70,708
Cost of Sales - 16,166 - 16,166
----------- ----------- ----------- ----------
Gross Profit 26,043 28,499 - 54,542
----------- ----------- ----------- ----------
OTHER REVENUES:
Sales and service fees - - - -
Other income - - - -
----------- ----------- ----------- ----------
26,043 28,499 - 54,542
OPERATING EXPENSES:
Selling, general and administrative 377,045 41,267 - 418,312
Consulting fees - 263,456 - 263,456
----------- ----------- ----------- ----------
377,045 304,723 - 681,768
OPERATING LOSS (351,002) (276,224) - (627,226)
Gain on sale of subsidiary 300,000 - - 300,000
OTHER EXPENSE:
Interest Expense - 26,220 - 26,220
----------- ----------- ----------- ----------
NET LOSS $ (51,002) $ (302,444) $ - $ (353,446)
=========== =========== =========== ==========
See accompanying notes to (unaudited) pro forma financial statements.
HOUSERAISING, INC. & TECHNOLOGY CONNECTIONS, INC.
ADJUSTMENTS TO CONSOLIDATED (UNAUDITED) CONDENSED PRO FORMA STATEMENTS
SEPTEMBER, 2004
A = On February 19, 2004, HouseRaising, Inc. signed a Definitive Agreement to
be merged into Technology Connections, Inc. The HouseRaising stockholders
acquired the majority of the outstanding common stock of Technology
Connections, Inc. The transaction is accounted for as a reverse purchase
acquisition/merger wherein HouseRaising, Inc. is the accounting acquirer
and Technology Connections, Inc. is the legal acquirer. Accordingly, the
accounting acquirer records the assets purchased and liabilities assumed as
part of the merger and entire equity section of the legal acquirer is
eliminated with negative book value acquired offset against the paid in
capital of the accounting acquirer.
B = To record 27,288,273 common shares issued as part of merger which takes
extinguishes Series A and B shares of HouseRaising, Inc. Also, included
1,000,000 Class A preferred shares issued too.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HOUSERAISING, INC.
November 17, 2004 By: /s/ Robert V. McLemore
-------------------------
Robert V. McLemore
President
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
3.1 Articles of Amendment to Articles of Incorporation of the
Registrant (incorporated by reference from Registrant's Form
SB-2, filed with the Commission on April 11, 2002).
99.1 Agreement and Plan of Merger (incorporated by reference from
Exhibit 10 to the Registrant's Current Report on Form 8-K, filed
with the Commission on February 20, 2004).