Ownership Submission
FORM 5
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
Form 3 Holdings Reported
Form 4 Transactions Reported
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
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1. Name and Address of Reporting Person *
LYNCH TOM
 2. Issuer Name and Ticker or Trading Symbol
TELKONET INC [TKO] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
__X__ Director _____ 10% Owner
_____ Officer (give title below) _____ Other (specify below)
(Last)
(First)
(Middle)

20374 SENECA MEADOWS PARKWAY		 3. Statement for Issuer's Fiscal Year Ended (Month/Day/Year)
12/31/2006
(Street)


GERMANTOWN, MD 20876		 4. If Amendment, Date Original Filed(Month/Day/Year)
 6. Individual or Joint/Group Reporting
(check applicable line)

_X_ Form Filed by One Reporting Person
___ Form Filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)		 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)		 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)		 5. Amount of Securities Beneficially Owned at end of Issuer's Fiscal Year
(Instr. 3 and 4)		 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)		 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Amount (A) or (D) Price
Common Stock par value $0.001     3         D (5)  

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. SEC 2270 (9-02)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)		 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)		 5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)		 6. Date Exercisable and Expiration Date
(Month/Day/Year)		 7. Title and Amount of Underlying Securities
(Instr. 3 and 4)		 8. Price of Derivative Security
(Instr. 5)		 9. Number of Derivative Securities Beneficially Owned at End of Issuer's Fiscal Year
(Instr. 4)		 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)		 11. Nature of Indirect Beneficial Ownership
(Instr. 4)
(A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Option to purchase (2) $ 2 10/01/2003   A4 40,000     (6) 10/01/2013 Common
40,000
$ 2 40,000
D
 
Option to purchase (3) $ 2 04/20/2004   A4   20,000   (6) 10/01/2013 Common
20,000
$ 2 20,000
D
 
Option to purchase (4) $ 3.45 04/20/2004   A4 40,000     (6) 04/20/2014 Common
40,000
$ 3.45 60,000
D
 
Option to purchase $ 3.45 04/01/2005   A4 40,000     (6) 04/01/2015 Common
40,000
$ 3.45 100,000
D
 

Reporting Owners

Reporting Owner Name / Address Relationships
Director 10% Owner Officer Other
LYNCH TOM
20374 SENECA MEADOWS PARKWAY
GERMANTOWN, MD 20876		   X      

Signatures

/s/ Thomas C. Lynch 04/25/2007
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) No shares beneficially owned as of October 1, 2003; the date of appointment to the Board of Directors
(2) Options issued pursuant to appointment to the Board of Directors' on October 1, 2003.
(3) Options cancelled pursuant to revised compensation agreement approved by the Board on April 20, 2004.
(4) Options issued pursuant to revised compensation agreement approved by the Board on April 20, 2004.
(5) Not applicable.
(6) Stock options issued pursuant to the Director's Compensation Plan vest at a rate of 10,000 options per quarter.

Note: File three copies of this Form, one of which must be manually signed. If space provided is insufficient, see Instruction 6 for procedure.

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