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TKOI > SEC Filings for TKOI > Form 8-K on 6-Jun-2013All Recent SEC Filings

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Form 8-K for TELKONET INC


6-Jun-2013

Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligatio


Item 1.01. Entry into Material Definitive Agreements.

Effective as of May 31, 2013, Telkonet, Inc. (the "Company") entered into a Revolving Credit Facility (the "Agreement") with Bridge Bank, N.A. (the "Bank") in a principal amount not to exceed $2,000,000. The Agreement is subject to a borrowing base that is equal to the sum of 80% of the Company's eligible accounts receivable and 25% of the eligible inventory. The Agreement is available for working capital and other lawful general corporate purposes. The outstanding principal balance of the facility bears interest at Prime Rate plus 2.75.

The Company is subject to certain financial covenants under the Agreement, consisting of a minimum asset coverage ratio of not less than 1.50:1.0 and minimum revenue and net income of at least 75% of the operating projections approved by the Company's board of directors. The Agreement contains other representations and warranties, covenants, events of default, and other provisions customary to transactions of this nature.

Pursuant to the Agreement and the Intellectual Property Security Agreement (the "Security Agreement"), the Company granted to the Bank a security interest in all of its assets to secure its obligations under the Agreement.

The description of the Agreement and the Security Agreement contained herein is qualified in its entirety by reference to the full text of the Agreement and the Security Agreement, copies of which are attached hereto as Exhibit 10.1 and 10.2, respectively, and incorporated herein by reference.



Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth above under Item 1.01 is incorporate be reference in this Item 2.03.



Item 9.01 Financial Statements and Exhibits.

Exhibit No. Description

10.1        Business Financing Agreement, effective as of May 31, 2013, between
            Telkonet, Inc. and Bridge Bank, N.A.
10.2        Intellectual Property Security Agreement between Telkonet, Inc. and
            Bridge Bank, N.A.

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