For
Immediate Release: July 25, 2007
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NEWS
RELEASE
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Germantown,
MD, Telkonet, Inc. (AMEX: TKO), the leader in providing in-building
broadband access over existing electrical wiring,
today announced that it received correspondence from the American
Stock
Exchange (AMEX) indicating that it has resolved the continued
listing
deficiencies referenced in the AMEX’s letter, dated April 17, 2007. After
reviewing the Company’s Plan of Compliance, which was submitted to AMEX on
May 1, 2007, AMEX determined that the Company has taken appropriate
action
to bring it into compliance with Section 120 and 121(A) of the
AMEX
Company Guide.
However,
after reviewing publicly available information and information
provided by
the Company, AMEX determined that the Company violated certain
of AMEX’s
corporate governance standards in connection with certain stock
option
grants made during fiscal years 2005 and 2006. In particular,
AMEX
concluded that during this time period, the Company made certain
stock
option grants that were not in accordance with the requirements
of the
Company’s shareholder approved Stock Incentive Plan. As a result, AMEX
determined that the Company violated the AMEX shareholder approval
requirements as set forth in Section 711 of the AMEX Company
Guide, since
the grants in question were not consistent with the Stock Incentive
Plan
as approved by the shareholders. AMEX noted in its correspondence
that,
for each of 33 separate stock option grants aggregating 1,550,000
shares
of the Company’s common stock, the strike price of the option was less
than the closing share price on the date of the grant in violation
of the
Stock Incentive Plan. AMEX also concluded that the Company
did not
properly account for the stock options granted at below fair
market value
and, therefore, did not present its financial statements in
accordance
with United States Generally Accepted Accounting Principles
as required by
Sections 134 and 1101 of the AMEX Company Guide. Based on the
foregoing,
AMEX determined that it was appropriate to issue the Company
a Warning
Letter in accordance with Section 1009 of the AMEX Company
Guide.
Subsequent
to the grants in question and prior to AMEX’s inquiry, the Company took
remedial action to correct its deficient stock option granting
procedure,
including adopting formal measures to ensure the proper segregation
of
duties with respect to the granting, notification, approval
and
distribution of stock option grants under the Stock Incentive
Plan on a
going-forward basis. The Company also reviewed each stock option
award
granted during the periods in question with its independent
auditors and
concluded that the failure to properly account for these grants
did not
have a material impact on the Company’s financial statements during the
affected periods and a restatement of the Company’s financial statements
is not warranted.
(more)
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Contact:
Michael
Porter
President
Porter,
LeVay & Rose, Inc.
212.564.4700
mike@plrinvest.com
www.plrinvest.com
Adam
Mazur
Rubenstein
Public Relations
212-843-8073
amazur@rubensteinpr.com
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