##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 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 reported) October 17, 2005
 Microfield
Group, Inc.  (Exact name of registrant as specified in its charter
 Oregon
    
    000-26226
    
    93-0935149(State or other jurisdiction
of incorporation)
    
    Commission
file number
    
    (IRS Employer
Identification No.)
 1631 NW Thurman, Suite 200, Portland, OR
    
    97209(Address of principal executive offices)
    
    (Zip Code)
 (503) 419-3580
 
   o
    
    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)o
    
    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)o
    
    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b))o
    
    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR 240.13e-4(c))




---



TABLE OF CONTENTS  ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENTITEM 7.01. REGULATION FD DISCLOSUREITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITSItem 9.01(a) Unaudited Pro Forma Condensed Combined Financial Statements of Microfield Group, IncItem 9.01(b) Financial Statements of ECI, Inc. for the Years Ended December 31, 2004 and 2003ENERGYCONNECT, INC. BALANCE SHEETS AS OF DECEMBER 31, 2004 AND 2003ENERGYCONNECT, INC. STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003ENERGYCONNECT, INC. STATEMENT OF DEFICIENCY IN SHAREHOLDERS EQUITY FISCAL YEARS ENDED DECEMBER 31, 2004 AND 2003ENERGYCONNECT, INC. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003    Table of Contents  
 ITEM
1.01. entry into a material definitive agreement .
  Merger Agreement
      
 ITEM 7.01. regulation fd disclosure .
   2




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##### Table of Contents



ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
  (a)
    
    Unaudited Pro Forma Condensed Combined Financial Statements of Microfield Group, Inc. giving
effect to the acquisition of ECI.(b)
    
    Audited Financial Statements of ECI as of December 31, 2004 and December 31, 2003 and for the
years then ended.(c)
    
    Unaudited Interim Financial Statements of ECI as of and for the nine-month periods ended
September 30, 2005 and September 30, 2004.(d)
    
    Exhibits
 
 3




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##### Table of Contents



Pro FormaMicrofield
    
    
    
    
    
    Pro Forma
    
    
    
    
    
    BalancesGroup
    
    ECI
    
    Adjustments
    
    Reference
    
    (unaudited)Sales
    
    $
    36,466,618
    
    
    $
    75,594
    
    
    
    
    
    
    
    
    
    
    $
    36,542,212Cost of sales
    
    
    30,334,987
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,334,987Gross profit
    
    
    6,131,631
    
    
    
    75,549
    
    
    
    
    
    
    
    
    
    
    
    6,207,225Operating expenses:Sales, general and administrative
    
    
    9,748,188
    
    
    
    938,565
    
    
    
    
    
    
    
    
    
    
    
    10,686,753Write-off of impaired intangible assets
    
    
    376,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    376,000Loss on lease termination
    
    
    515,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    515,000Total operating expenses
    
    
    10,639,188
    
    
    
    938,565
    
    
    
    
    
    
    
    
    
    
    
    11,577,753Income (loss) from operations
    
    
    (4,507,557
    )
    
    
    (862,971
    )
    
    
    
    
    
    
    
    
    
    
    (5,370,528
    )Other income (expense)
    
    
    (1,886,333
    )
    
    
    (40
    )
    
    
    
    
    
    
    
    
    
    
    (1,886,333
    )Loss from continuing operations
    
    $
    (6,393,890
    )
    
    $
    (863,011
    )
    
    
    
    
    
    
    
    
    
    $
    (7,256,901
    )Basic and diluted net loss per share from continuing operations
    
    $
    (0.37
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (0.16
    )Weighted average shares used in per share calculations:Basic and fully diluted
    
    
    17,340,152
    
    
    
    
    
    
    
    27,365,305
    
    
    
    
    
    
    
    44,705,457
 4




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##### Table of Contents



Pro FormaMicrofield
    
    
    
    
    
    Pro Forma
    
    
    
    
    
    BalancesGroup
    
    ECI
    
    Adjustments
    
    Reference
    
    (unaudited)Sales
    
    $
    37,991,269
    
    
    $
    244,825
    
    
    
    
    
    
    
    
    
    
    $
    38,236,094Cost of sales
    
    
    31,038,688
    
    
    
    153,318
    
    
    
    
    
    
    
    
    
    
    
    31,192,006Gross profit
    
    
    6,952,581
    
    
    
    91,507
    
    
    
    
    
    
    
    
    
    
    
    7,044,088Operating expenses:Sales, general and administrative expense
    
    
    5,467,267
    
    
    
    1,566,741
    
    
    
    
    
    
    
    
    
    
    
    7,034,008Income/(loss) from operations
    
    
    1,485,314
    
    
    
    (1,475,234
    )
    
    
    
    
    
    
    
    
    
    
    10,080Other income (expense), net
    
    
    (1,196,377
    )
    
    
    388,309
    
    
    
    
    
    
    
    
    
    
    
    (808,068
    )Income (loss) from continuing operations
    
    $
    288,937
    
    
    $
    (1,086,925
    )
    
    
    
    
    
    
    
    
    
    $
    (797,988
    )Basic and diluted earnings (loss) from continuing operations per share
    
    $
    0.01
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (0.02
    )Weighted average shares used in per share calculations:Basic and fully diluted
    
    
    19,209,011
    
    
    
    
    
    
    
    27,365,305
    
    
    
    
    
    
    
    46,574,316
 5




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##### Table of Contents



Pro Forma
    
    
    
    
    
    Pro Forma BalancesMicrofield Group
    
    ECI
    
    Adjustments
    
    
    
    
    
    (unaudited)AssetsCurrent assetsCash
    
    $
    1,415,975
    
    
    $
    48,997
    
    
    
    
    
    
    
    
    
    
    $
    1,464,972Accounts receivable
    
    
    9,927,075
    
    
    
    47,827
    
    
    
    
    
    
    
    
    
    
    
    9,974,902Other current assets
    
    
    4,841,909
    
    
    
    21,845
    
    
    
    
    
    
    
    
    
    
    
    4,863,754Total current assets
    
    
    16,184,959
    
    
    
    118,669
    
    
    
    
    
    
    
    
    
    
    
    16,303,628Equipment, net
    
    
    458,836
    
    
    
    1,449
    
    
    
    
    
    
    
    
    
    
    
    460,285Intangibles, net
    
    
    2,218,306
    
    
    
    33,977
    
    
    $
    108,127,403
    
    
    Note 2
    
    
    110,379,686Goodwill
    
    
    8,410,574
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,410,574Other assets
    
    
    315,002
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    315,002Total Assets
    
    $
    27,587,677
    
    
    $
    154,095
    
    
    $
    108,127,403
    
    
    
    
    
    
    $
    135,869,175Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable
    
    $
    8,393,022
    
    
$
    627,215
    
    
    
    
    
    
    
    
    
    
    $
    9,020,237Line of credit
    
    
    4,568,515
    
    
    
    117,454
    
    
    
    
    
    
    
    
    
    
    
    4,685,969Current portion of notes payable
    
    
    3,517,308
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,517,308Other current liabilities
    
    
    7,741,420
    
    
    
    189,124
    
    
    
    
    
    
    
    
    
    
    
    7,930,544Total current liabilities
    
    
    24,220,265
    
    
    
    933,793
    
    
    
    
    
    
    
    
    
    
    
    25,154,058Long term liabilities
    
    
    1,991,751
    
    
    
    226,789
    
    
    
    
    
    
    
    
    
    
    
    2,218,540Total liabilities
    
    
    26,212,016
    
    
    
    1,160,582
    
    
    
    
    
    
    
    
    
    
    
    27,372,598Shareholders Equity (Deficit)Convertible Series 2 preferred stock, no par value,
10,000,000 shares authorized 6,642,865 shares
issued and outstanding
    
    
    2,765,101
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,765,101Convertible Series 3 preferred stock, no par value,
10,000,000 shares authorized 3,603 shares issued
and outstanding
    
    
    1,529,138
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,529,138Convertible Series 4 preferred stock, no par value,
10,000,000 shares authorized 4,392 shares issued
and outstanding
    
    
    1,703,424
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,703,424Common stock, no par value, 125,000,000 shares
authorized, 21,177,468 issued and outstanding as of
October 1, 2005.
    
    
    22,195,411
    
    
    
    
    
    
    $
    107,120,916
    
    
    Note 2
    
    
    129,316,327Common stock warrants
    
    
    2,389,879
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,389,879Common stock
 2,500 shares of no par value
authorized, 143 shares issued and outstanding at
September 30, 2005
    
    
    
    
    
    
    1,491,968
    
    
    
    (1,491,968
    )
    
    Note 2
    
    
    Accumulated deficit
    
    
    (29,207,292
    )
    
    
    (2,498,455
    )
    
    
    2,498,455
    
    
    Note 2
    
    
    (29,207,292
    )Shareholders Equity (Deficit)
    
    
    1,375,661
    
    
    
    (1,006,487
    )
    
    
    108,127,403
    
    
    
    
    
    
    
    108,496,577Total Liabilities and Shareholders Equity (Deficit)
    
    $
    27,587,677
    
    
    $
    154,095
    
    
    $
    108,127,403
    
    
    
    
    
    
    $
    135,869,175
  6




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Note 1  Basis of Presentation
     Note 2  Pro forma purchase price adjustments
   Common stock
    
    $
    64,034,814Warrants
    
    
    36,119,391Stock options
    
    
    6,769,711Direct acquisition costs
    
    
    197,000Total
    
    $
    107,120,916
 7




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Cash and other current assets
    
    $
    118,669Equipment and other assets
    
    
    35,426Goodwill and other intangible assets
    
    
    108,127,403Current liabilities
    
    
    (1,160,582
    )Total purchase price
    
    $
    107,120,916
    8




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##### Table of Contents



Item 9.01(b) Financial Statements of ECI, Inc. for the Years Ended December 31, 2004 and 2003:Report of registered independent certified public accounting firmBalance Sheets at December 31, 2004 and 2003Statements of Operations for the years ended December 31, 2004 and 2003Statement of Changes in Shareholders Equity (Deficit) for the years ended December 31, 2004 and 2003Statements of Cash Flows for the years ended December 31, 2004 and 2003Notes to Financial StatementsItem 9.01(c) Unaudited Interim Financial Statements of ECI, Inc. for the Nine Months Ended September 30, 2005 and 2004:Condensed Balance Sheets at September 30, 2005 and September 30, 2004Condensed Statements of Operations for the nine months ended September 30, 2005 and September 30, 2004Condensed Statement of Cash Flows for the nine months ended September 30, 2005 and September 30, 2004Notes to Unaudited Interim Financial Statements
 9




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Item 9.01(b) Financial Statements of ECI, Inc. for the Years Ended December 31, 2004 and 2003
 RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP  Certified Public Accountants
 REPORT OF REGISTERED INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM
 
     /s/RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
 
 10




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##### Table of Contents



ENERGYCONNECT, INC.
BALANCE SHEETS
AS OF DECEMBER 31, 2004 AND 2003
 December
31, 2004
    
    

December
31, 2003Current assets:Cash and cash equivalents
    
    $
    10,814
    
    
    $
    6,087Other current assets
    
    
    14,689
    
    
    
    4,466Total current assets
    
    
    25,503
    
    
    
    10,553Property and equipment, net of accumulated
depreciation of $22,701 and $16,399 at December
31,2004 and 2003 ,respectively (Note 4)
    
    
    4,185
    
    
    
    116Intangible assets, net of accumulated amortization
of $104 and $0 at December 31,2004 and 2003,
respectively (Note 5)
    
    
    3,006
    
    
    
    Total assets
    
    $
    32,694
    
    
    $
    10,669Current liabilities:Accounts payable
    
    $
    181,378
    
    
    $
    1,625Accrued payroll and taxes
    
    
    413,532
    
    
    
    280,000Bank line of credit (Note 6)
    
    
    100,412
    
    
    
    Note payable (Note 11)
    
    
    200,000
    
    
    
    Other current liabilities-related parties (Note 8)
    
    
    128,355
    
    
    
    118,256Total current liabilities
    
    
    1,023,677
    
    
    
    399,881Long-term liabilities:Loans payable-related parties (Note 8)
    
    
    280,240
    
    
    
    19,000Total long-term liabilities
    
    
    280,240
    
    
    
    19,000Commitments and contingencies (Note 12)
    
    
    
    
    
    
    Deficiency in stockholders equity:Common stock, no par value, 2,500 shares authorized,
143 and 141 shares issued and outstanding at
December 31, 2004 and 2003, respectively (Note
10)
    
    
    425,322
    
    
    
    350,307Common stock subscription (Note 10)
    
    
    (285,015
    )
    
    
    (210,000
    )Accumulated deficit
    
    
    (1,411,530
    )
    
    
    (548,519
    )Total deficiency in stockholders equity
    
    
    (1,271,223
    )
    
    
    (408,212
    )Total liabilities and deficiency in stockholders equity
    
    $
    32,694
    
    
    $
    10,669
  11




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ENERGYCONNECT, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
 December 31,
    
    
    December 31,2004
    
    
    2003Sales
    
    $
    75,594
    
    
    $
    Operating expenses:Sales, general and administrative
    
    
    938,565
    
    
    
    261,908Loss from operations
    
    
    (862,971
    )
    
    
    (261,908
    )Interest income (expense), net
    
    
    (40
    )
    
    
    4,466Loss before provision for income taxes
    
    
    (863,011
    )
    
    
    (257,442
    )Provision for income taxes
    
    
    
    
    
    
    Net loss
    
    $
    (863,011
    )
    
    $
    (257,442
    )Basic and diluted net loss per share
    
    $
    (6,078
    )
    
    $
    (2,163
    )Weighted average shares used in per share calculations:Basic and diluted
    
    
    142
    
    
    
    119
  12




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ENERGYCONNECT, INC.
STATEMENT OF DEFICIENCY IN SHAREHOLDERS EQUITY
FISCAL YEARS ENDED DECEMBER 31, 2004 AND 2003
 Shares
    
    Amount
    
    Subscription Receivable
    
    Accumulated Deficit
    
    Total Shareholders
Equity(Deficit)Balance December 31,
2002
    
    
    100
    
    
    $
    140,307
    
    
    $
    
    
    
    $
    (291,077
    )
    
    $
    (150,770
    )Common stock issued
in exchange for
note receivable
    
    
    40
    
    
    
    200,000
    
    
    
    (200,000
    )
    
    
    
    
    
    
    Common stock
subscribed
    
    
    1
    
    
    
    10,000
    
    
    
    (10,000
    )
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (257,442
    )
    
    
    (257,442
    )Balance December
31, 2003
    
    
    141
    
    
    $
    350,307
    
    
    $
    (210,000
    )
    
    
    (548,519
    )
    
    $
    (408,212
    )Common stock
subscribed
    
    
    2
    
    
    
    75,015
    
    
    
    (75,015
    )
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (863,011
    )
    
    
    (863,011
    )Balance December
31, 2004
    
    
    143
    
    
    $
    425,322
    
    
    $
    (285,015
    )
    
    $
    (1,411,530
    )
    
    $
    (1,271,223
    )
  13




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##### Table of Contents



ENERGYCONNECT, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
 December 31, 2004
    
    December 31, 2003Cash flows from operating activities:Net loss
    
    $
    (863,011
    )
    
    $
    (257,442
    )Adjustments to reconcile net loss to net cash used in
operating activities
Depreciation and amortization (Note 4 and 5)
    
    
    6,406
    
    
    
    765Changes in current assets and liabilities:Other current assets
    
    
    (10,223
    )
    
    
    (4,466
    )Accounts payable
    
    
    313,086
    
    
    
    158,293Other current liabilities
    
    
    10,298
    
    
    
    80,882Net cash used in operating activities
    
    
    (543,444
    )
    
    
    (21,968
    )Cash flows from investing activities
Purchase of intangibles (Note 5)
    
    
    (3,110
    )
    
    
    Purchases of property and equipment (Note 4)
    
    
    (10,371
    )
    
    
    Net cash used in investing activities
    
    
    (13,481
    )
    
    
    Cash flows from financing activities:Proceeds from note payable (Note 11)
    
    
    200,000
    
    
    
    Loan from shareholder, net
    
    
    261,240
    
    
    
    19,000Borrowing on line of credit (Note 6)
    
    
    100,412
    
    
    
    Net cash provided by financing activities
    
    
    561,652
    
    
    
    19,000Net increase (decrease) in cash and cash equivalents
    
    
    4,727
    
    
    
    (2,968
    )Cash and cash equivalents, beginning of year
    
    
    6,087
    
    
    
    9,055Cash and cash equivalents, end of year
    
    $
    10,814
    
    
    $
    6,087Supplemental Disclosures of Cash Flow Information:Interest paid in cash
    
    $
    
    
    
    $
    Taxes paid in cash
    
    $
    
    
    
    $
    
  14




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ENERGYCONNECT, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003
 1. Description of the Business
   2. Liquidity Matters
    3. Summary of Significant Accounting Policies
 Fiscal Year
  15




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Cash and Cash Equivalents
  Fair Value of Financial Instruments
  Advertising Costs
  Property and Equipment
  Concentrations
  Revenue and Cost Recognition
   16




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Impairment of Long-lived Assets
   Income Taxes
  Computation of Net Income (Loss) per Share
  Comprehensive Income
 17




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Use of Estimates
  Research and Development
  Stock Based Compensation
  18




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Reclassification
  Recent Accounting Pronouncements
 SFAS 123R
 SFAS 151.
 SFAS 152.
 SFAS 153.
 19




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##### Table of Contents



FIN 47.
 SFAS 154.
 4. Property and Equipment
  December 31,
    
    
    December 31,2004
    
    
    2003Computer hardware and software
    
    $
    26,886
    
    
    $
    16,515Less accumulated depreciation and amortization
    
    
    (22,701
    )
    
    
    (16,399
    )$
    4,185
    
    
    $
    116
 .
 5. Intangible Assets
  2004
    
    2003Patent
    
    $
    3,110
    
    $
    Less: accumulated amortization
    
    
    (104
    )
    
    Intangible assets, net
    
    $
    3,006
    
    $
    
  6. Debt
 Operating Line of Credit
  7. Income Taxes
 20




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8. Related Party Transactions
  December 31, 2004
    
    
    December 31, 2003Short term payables:Gene Ameduri
    
    $
    30,651
    
    
    $
    15,461Rodney Boucher
    
    
    
    
    
    
    39,347Vincent Cushing
    
    
    97,704
    
    
    
    63,448Total current payables
    
    
    128,355
    
    
    
    118,256Long term payables:Rodney Boucher
    
    
    280,240
    
    
    
    19,000Total long term payables
    
    $
    280,240
    
    
    $
    19,000
  9. Business Concentration
  10. Capital Stock
     11. Notes Payable to Microfield
  12. Commitments and Contingencies
 Consulting Agreement
  21




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Litigation
  13. Subsequent Events
  22




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EnergyConnect, Inc.
Condensed Balance Sheets
As of September 30, 2005 and December 31, 2004
 As of
    
    
    As ofSeptember 30,
    
    
    December 31,2005
    
    
    2004(Unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    48,997
    
    
    $
    10,814Accounts receivable
    
    
    47,827
    
    
    
    Other current assets
    
    
    21,845
    
    
    
    14,689Total current assets
    
    
    118,669
    
    
    
    25,503Property and equipment, net
    
    
    1,449
    
    
    
    4,185Other assets
    
    
    33,977
    
    
    
    3,006Total Assets
    
    $
    154,095
    
    
    $
    32,694Liabilities and Shareholders DeficitCurrent liabilities:Accounts payable
    
$
    627,215
    
    
$
    181,378Accrued Payroll and Taxes
    
    
    
    
    
    
    413,532Note payable
    
    
    
    
    
    
    200,000Line of credit
    
    
    117,454
    
    
    
    100,412Other current liabilities
    
    
    189,124
    
    
    
    128,355Total current liabilities
    
    
    933,793
    
    
    
    1,023,677Long term portion of notes payable
    
    
    226,789
    
    
    
    280,240Total liabilities
    
    
    1,160,582
    
    
    
    1,303,917Commitments and contingencies
    
    
    
    
    
    
    Shareholders deficit:Common stock, no par value, 2,500 shares authorized,
143 shares issued and outstanding at September 30, 2005
and December 31, 2004
    
    
    1,491,968
    
    
    
    425,322Common Stock
Subscription
    
    
    
    
    
    
    (285,015
    )Accumulated deficit
    
    
    (2,498,455
    )
    
    
    (1,411,530
    )Total shareholders equity (deficit)
    
    
  (1,006,487
    )
    
    
    (1,271,223
    )Total liabilities and shareholders equity (deficit)
    
    $
    154,095
    
    
    $
    32,694
  23




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EnergyConnect, Inc.
Condensed Statements of Operations
For the nine months ended September 30, 2005 and 2004
 Nine Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004(Unaudited)
    
    
    (Unaudited)Sales
    
    $
    244,825
    
    
    $
    52,314Cost of sales
    
    
    153,318
    
    
    
    12,750Gross profit
    
    
    91,507
    
    
    
    39,564Operating expenses:Sales, general and administrative expense
    
    
    1,566,741
    
    
    
    696,518Loss from operations
    
    
    (1,475,234
    )
    
    
    (656,954
    )Other income (expense), net
    
    
    388,309
    
    
    
    (6,894
    )Net Loss
    
    $
    (1,086,925
    )
    
    $
    (663,848
    )
  24




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##### Table of Contents



EnergyConnect, Inc.
Condensed Statements of Cash Flows
For the nine months ended September 30, 2005 and 2004
 Nine Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004(Unaudited)
    
    
    (Unaudited)Cash flows from operating activities:Net cash used in operating activities
    
    $
    (1,231,792
    )
    
    $
    (442,413
    )Net cash used in investing activities
    
    
    (28,235
    )
    
    
    (7,840
    )Net cash provided by financing activities
    
    
    1,298,210
    
    
    
    445,180Net increase (decrease) in cash and cash equivalents
    
    
    38,183
    
    
    
    (5,073
    )Cash and cash equivalents, beginning of period
    
    
    10,814
    
    
    
    6,087Cash and cash equivalents, end of period
    
    $
    48,997
    
    
    $
    1,014
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##### Table of Contents



ENERGYCONNECT, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(UNAUDITED)
 1. Description of the Business
   2. Liquidity Matters
    3. Summary of Significant Accounting Policies
 General
  26




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##### Table of Contents



Fiscal Year
  Cash and Cash Equivalents
  Fair Value of Financial Instruments
  Advertising Costs
  Property and Equipment
  Concentrations
  27




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##### Table of Contents



Revenue and Cost Recognition
    Impairment of Long-lived Assets
   Income Taxes
  28




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##### Table of Contents



Computation of Net Income (Loss) per Share
  Comprehensive Income
   Use of Estimates
  Research and Development
  Stock Based Compensation
  29




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##### Table of Contents



Reclassification
  Recent Accounting Pronouncements
 SFAS 123R
 SFAS 151.
 SFAS 152.
 30




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##### Table of Contents



SFAS 153.
 SFAS 154.
 4. Debt
  5. Related Party Transactions
  September 30, 2005
    
    
    December 31, 2004Short term payables:Gene Ameduri
    
    $
    42,000
    
    
    $
    30,651Rodney
Boucher
    
    
    67,000
    
    
    
    Vincent Cushing
    
    
    80,124
    
    
    
    97,704Total current payables
    
    
    189,124
    
    
    
    128,355Long term payables:Rodney Boucher
    
    
    226,789
    
    
    
    280,240$
    226,789
    
    
    $
    280,240
  31




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##### Table of Contents



6. Capital Stock
  7. Subsequent Events
  32




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##### Table of Contents



.
 *
    
    2.1 Agreement and Plan of Merger.*
    
    99.1 Press Release dated July 20, 2005 announcing acquisition.
 *
    
    Incorporated by reference to registrants Form 8-K filed on October 17, 2005.
 SIGNATURES
   Microfield Group, Inc./s/ A. Mark WalterA. Mark Walter, President