Telkonet, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

10. STOCK OPTIONS AND WARRANTS (Tables)

10. STOCK OPTIONS AND WARRANTS (Tables)

3 Months Ended

Mar. 31, 2013

The following table summarizes the changes in options outstanding and the related prices for the shares of the Company’s common stock issued to employees of the Company under a non-qualified employee stock option plan.

Options Outstanding								Options Exercisable
Exercise Prices		Number Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	0.01 - $0.15		175,000		4.57	$	0.14		175,000	$	0.14
$	0.16 - $0.99		915,642		9.17		0.19		645,642		0.19
$	1.00 - $5.99		190,000		2.53		3.14		190,000		3.14
			1,280,642		7.55	$	0.62		1,010,642	$	0.73

Transactions involving stock options issued to employees are summarized as follows:

	Number of Shares			Weighted Average Price Per Share
Outstanding at January 1, 2012		685,000		$	1.45
Granted		915,642			0.19
Exercised		–			–
Cancelled or expired		(320,000	)		1.16
Outstanding at December 31, 2012		1,280,642		$	0.62
Granted		–			–
Exercised		–			–
Cancelled or expired		–			–
Outstanding at March 31, 2013		1,280,642		$	0.62

Warrants

The following table summarizes the changes in warrants outstanding and the related prices for the shares of the Company’s common stock issued to non-employees of the Company. These warrants were granted in lieu of cash compensation for services performed or financing expenses and in connection with placement of convertible preferred stock.

		Warrants Outstanding						Warrants Exercisable
Exercise Prices		Number Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	0.13		7,439,240		2.87	$	0.13		7,439,240	$	0.13
	0.33		1,628,800		1.64		0.33		1,628,800		0.33
	0.60		800,000		0.10		0.60		800,000		0.60
	3.00		770,485		1.60		3.00		770,485		3.00
			10,638,525		2.38	$	0.40		10,638,525	$	0.40

Transactions involving warrants are summarized as follows:

	Number of Shares			Weighted Average Price Per Share
Outstanding at January 1, 2012		14,921,920		$	0.50
Issued		–			–
Exercised		(3,115,390	)		0.13
Canceled or expired		(976,114	)		2.20
Outstanding at December 31, 2012		10,830,416			0.45
Issued		–			–
Exercised		–			–
Canceled or expired		(191,891	)		3.00
Outstanding at March 31, 2013		10,638,525		$	0.40

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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