SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
October 3, 2003
Date of Report
(Date of Earliest Event Reported)
TELKONET, INC.
(formerly known as Comstock Coal Company, Inc.)
(Exact Name of Registrant as Specified in its Charter)
902-A Commerce Road
Annapolis, Maryland 21401
(Address of principal executive offices)
410/897-5900
Registrant's telephone number
Utah 87-0627421
(State of Incorporation) (IRS Employer Identification No.)
ITEM 5. Other Events
The following press release was issued to announce the recent events of the
company.
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TELKONET DEBT HOLDERS ELECT TO CONVERT $6.3M TO EQUITY PROVIDING ADDITIONAL
$3.8M FUNDING
Annapolis, Md. - Telkonet, Inc. (OTCBB: TLKO - News), the leader in delivering
high-speed Internet access over electrical wiring, today announced that certain
convertible and senior note holders have elected to convert $6.3 million into
equity including the exercise of $3.8 million of warrants, resulting in a cash
position of $8.4 million, shareholder's equity in excess of $5.1 million and
outstanding shares of 29.7 million as of June 30, 2003. The proforma balance
sheet as of June 30, 2003 below illustrates the effect of the conversion of debt
and exercise of warrants.
Summary Proforma Balance Sheet
Unaudited Proforma Adjustments Proforma
June 30, 2003 Debit Credit June 30, 2003
------------- ----- ------ -------------
Assets:
Cash 4,580,779 3,847,250 8,428,029
Other current assets 525,272 525,272
-------------------------------------------------
Total current assets 5,106,051 3,847,250 8,953,301
Other assets 323,893 323,893
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Total Assets 5,429,945 3,847,250 9,277,195
=================================================
Liabilities & shareholder's equity
Current liabilities 1,297,829 272,625 -- 1,025,204
Convertible debentures - net of discounts 1,453,720 1,308,348 145,372
Senior notes 5,000,000 2,011,000 2,989,000
Shareholder's (deficiency) equity (2,321,604) 7,439,223 5,117,619
-------------------------------------------------
Total liabilities & shareholder's equity 5,429,945 3,591,973 7,439,223 9,277,195
=================================================
Telkonet's PlugPlusInternet(TM) products deliver high-speed Internet access over
standard electrical wiring, eliminating the need to rewire a building and
enabling users to access the Internet from virtually any electrical outlet. Ron
Pickett, President of Telkonet, stated, "The election of our debt holders to
convert this debt to equity along with the purchase of their warrants
demonstrates the continued commitment of our funding partners and their
confidence in Telkonet".
Telkonet's products provide connectivity over existing electrical wiring and do
not require the costly installation of additional wiring, or major disruption of
business activity. In many situations, the Telkonet system can be implemented
more quickly and less expensively than adding dedicated wiring or installing a
wireless system. The Telkonet PlugPlusInternet family of Internet access
products offers a viable and cost-effective alternative to the challenges of
hardwiring and wireless local area networks (LANs). Telkonet PlugPlusInternet
products are designed for use in commercial and residential applications,
including multi-dwelling units and the hospitality and government markets.
Statements included in this release may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements involve a number of risks and uncertainties such as competitive
factors, technological development, market demand and the Company's ability to
obtain new contracts and accurately estimate net revenues due to variability in
size, scope and duration of projects, and internal issues in the sponsoring
client. Further information on potential factors that could affect the Company's
financial results, can be found in the Company's Registration Statement and in
its Reports on Forms 8-K filed with the Securities and Exchange Commission
(SEC).