telkonet_8k-072407.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
July
18, 2007
(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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000-27305
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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
3.02 Unregistered Sales of Equity Securities.
On
July
18, 2007, Telkonet issued 866,856 unregistered shares of Telkonet, Inc.
(the
“Common Stock”) to Newport Telecommunications Co. (“NTC”) in connection with the
acquisition of substantially all of NTC’s assets by Microwave Satellite
Technologies, Inc. (“MST”), the operating subsidiary of Telkonet’s
majority-owned subsidiary, Microwave Satellite Holdings, Inc.
(“MSHI”). NTC, a New Jersey general partnership, provides broadband
internet and telephone services at certain residential and commercial
properties
in the development known as Newport in Jersey City, New Jersey.
The
Common Stock issued by Telkonet represented $1,530,000 of the total
consideration of $2,550,000 paid by MST in the asset
purchase. The balance of the consideration was paid in cash by
MST. The Common Stock was valued based on the average closing prices
for the Common Stock for the ten trading days immediately prior to the
closing
date. The total consideration will be increased or decreased
depending on the number of subscriber accounts acquired in the asset
purchase
that were in good standing on the closing date. This number will
be determined within 120 days of the closing of the asset purchase.
In
connection with the asset purchase, MSHI has agreed to (a) either pay
$1,530,000 in cash to Telkonet, or (b) issue to Telkonet unregistered
shares of
MSHI common stock equal to approximately $1,530,000 (based at a price
per share
equal to the lesser of (i) the closing price for MSHI common stock on
the day of
the issuance of the shares of common stock to Telkonet, or (ii) $1.00
per share
of MSHI common stock), as consideration for the issuance of the Common
Stock by
Telkonet to NTC in the asset purchase.
The
Common Stock was issued to NTC pursuant to the exemption provided by
Section
4(2) of the Securities Act of 1933 and/or Rule 506 of Regulation D promulgated
thereunder on the basis that the purchaser is an "accredited investor"
as such
term is defined in Rule 501 of Regulation D.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits.
None
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:
July 24, 2007
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By:
/s/ Richard J. Leimbach
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Richard
J. Leimbach
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Vice
President, Finance
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