telkonet_8k-091008.htm
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
September
9, 2008
(Date of
earliest event reported)
TELKONET,
INC.
(Exact
Name of Registrant as Specified in Its Charter)
Utah
(State or Other Jurisdiction of
Incorporation)
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000-31972
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87-0627421
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(Commission
File No.)
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(I.R.S.
Employer Identification No.)
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20374 Seneca Meadows
Parkway, Germantown, Maryland 20876
(Address
of Principal Executive Offices)
(240)-912-1800
(Registrant's
Telephone Number)
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[
] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425).
[
] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12).
[
] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b)).
[
] Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c)).
Item
2.03 Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
On
September 9, 2008, Telkonet, Inc. (the “Company”) entered into a two-year line
of credit facility in the aggregate principal amount of $1,000,000 with Thermo
Credit, LLC. The outstanding principal balance bears interest at the greater of
(i) the Wall Street Journal Prime Rate plus nine (9%) percent per annum,
adjusted on the date of any change in such prime or base rate, or (ii) Sixteen
percent (16%). Interest, computed on a 365/360 simple interest basis,
and fees on the credit facility are payable monthly in arrears on the last day
of each month and continuing on the last day of each month until the maturity
date. The occurrence of one or more of the following will constitute
an event of default under the credit facility: (i) the failure of the Company to
make any payment on any loan when due, (ii) the failure of the Company to
observe or perform promptly when due any covenant, agreement or obligation under
the loan agreement or under any of the other loan documents or under any other
obligation to Thermo Credit, (iii) a default under any of the loan documents, or
(iv) the material inaccuracy at any time of any warranty, representation or
statement made to Thermo Credit by the Company under the loan agreement. Upon
the occurrence of an event of default, Thermo Credit, at its option, will have
the right to exercise any and all of its rights and remedies under the loan
documents, including, but not limited to, the right to foreclose on the assets
pledged by the Company as security for the credit facility. The
Company may prepay amounts outstanding under the credit facility in whole or in
part at any time. In the event of such prepayment, Thermo Credit will
be entitled to receive a prepayment fee of four percent (4.0%) of the highest
aggregate loan commitment amount if prepayment occurs before the end of the
first year and three percent (3.0%) if prepayment occurs
thereafter. The credit facility is secured by the Company’s inventory
pursuant to Security Agreement, a copy of which is attached hereto as Exhibit
10.2. The proceeds from this line of credit will be used for the
working capital requirements of the Company.
Item
9.01 Financial Statements
and Exhibits.
(d)
Exhibits
4.1
Promissory Note in favor of Thermo Credit, LLC
10.1 Commercial
Business Loan Agreement
10.2 Security
Agreement
99.1 Press
Release dated September 10, 2008
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.
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TELKONET,
INC.
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Date:
September 10, 2008
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By:
/s/ Richard J.
Leimbach
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Richard
J. Leimbach
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Chief
Financial Officer
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