Exhibit 99.1
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News
Release
|
Media
Contacts:
Joe Noel,
240.912.1851
Michael
Wachs, CEOcast, 212.732.4300, mwachs@ceocast.com
Garrett
Axford, Georgina Garrett / Simon Jones, 866.940.9987, +44.1903.854900 mail@garrett-axford.co.uk
For
Immediate Release
Telkonet
Completes $3.5 Million Sale of Debentures
Proceeds
from the Financing to be Used to Support Additional Growth in Energy Management
Sector and for General Corporate Purposes
June 5,
2008: Germantown, MD – Telkonet, Inc. (AMEX:TKO), the leading provider of
innovative, centrally managed solutions for integrated energy management,
networking, building automation and proactive support services, announced today that it
has entered into definitive agreements with YA Global Investments, L.P. (“YA
Global”) pursuant to which the Company agreed to issue and sell up to $3.5
million of 13% three-year secured convertible debentures (the “Debentures”)
under three closings. Proceeds from the financing will be used for working
capital and general corporate purposes.
“We are
pleased to have completed this financing to help further our market penetration
in key sectors, especially energy management. Our advanced, intelligent Telkonet
SmartEnergy™ system is ideally positioned to enable property management to take
control over the steadily increasing heating, ventilation and air conditioning
(HVAC) costs,” commented Jason Tienor, president and CEO of Telkonet. “With HVAC
costs representing one of the largest operating expense for property owners, our
energy management system is an essential tool to deliver green-energy savings,
control consumption, and reduce maintenance, not only in the hospitality and MDU
sector, but also in commercial buildings and government agencies.”
Under the
first closing, which occurred on May 30, 2008, the Company sold Debentures
having an aggregate principal value of $1.5 million. The Company will also issue
five-year warrants to Y.A. Global to purchase up to 2.5 million shares, at $0.61
per share, upon completion of all three closings. At the first closing, the
Company issued warrants to purchase 2.1 million shares of restricted Common
Stock. Additional closings are subject to Telkonet meeting certain
conditions.
The
Debentures may be redeemed at any time, subject to certain conditions, in whole
or in part, by the Company upon payment of a redemption premium equal to 15% of
the principal amount of the Debentures being redeemed. The holders of the
Debenture may also convert all or a portion of the Debentures at any time at a
price equal to the lesser of (i) $0.58, or (ii) ninety percent of the lowest
volume weighted average price of the Company’s Common Stock during the ten
trading days immediately preceding the conversion date.
The
securities issued in this transaction have not been registered and are being
sold pursuant to the exemption from registration provided by Section 4(2) of the
Securities Act of 1933 and/or Rule 506 of Regulation D promulgated thereunder.
Telkonet has agreed to register the shares of Common Stock underlying each of
the Debentures and Warrants.
Telkonet
previously entered into a receivables financing with Thermo Credit, LLC under
which Thermo Credit agreed to lend the Company, on a revolving basis, up to $2.5
million. Additional details on the sale of the Debentures may be found in the
Company’s Form 8-K filing with the Securities and Exchange
Commission.
(more)
About
Telkonet
Telkonet’s
unique broadband networking solutions currently support more than 1.6 million
network users per month, with its energy management systems optimizing energy
consumption in over 80,000 rooms. Telkonet’s technology innovation is
underpinned by the highest level of end-to-end quality of service, with
comprehensive technical customer support. Its systems deliver wide-ranging
functionality, from wired and wireless high-speed Internet access to energy
management, IP surveillance and local area networking. Telkonet’s platforms are
widely deployed on the global stage – in single buildings and ships, in
multi-building complexes, hospitality venues and multi-dwelling units, and at
government, education and defense locations.
Telkonet’s innovations include the
revolutionary Telkonet Series 5 and the Telkonet iWire System™, which convert a site’s existing
internal electrical infrastructure into an IP network backbone – quickly,
cost-effectively and without disruption. The portfolio also includes the
integrated EthoStream product suite, providing a comprehensive and advanced
technology management platform for the hospitality industry, differentiated by
outstanding remote management tools and a dedicated customer support facility.
Telkonet SmartEnergy™ completes the line-up, delivering
typical bottom line savings of 30% by controlling in-room energy consumption
according to occupancy. For more information, please visit www.telkonet.com.
All
company, brand or product names are registered trademarks or trademarks of their
respective holders.
###
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).