SEC Form 4

FORM 4		UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940	OMB APPROVAL OMB Number: 3235-0287 Estimated average burden hours per response: 0.5
	Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person* SADLE STEPHEN L (Last) (First) (Middle) 902A COMMERCE ROAD (Street) ANNAPOLIS MD 21401 (City) (State) (Zip)	2. Issuer Name and Ticker or Trading Symbol TELKONET INC [ TKO ]	5. Relationship of Reporting Person(s) to Issuer (Check all applicable) X Director 10% Owner X Officer (give title below) Other (specify below) Senior Vice President
	3. Date of Earliest Transaction (Month/Day/Year) 03/31/2004
	4. If Amendment, Date of Original Filed (Month/Day/Year)	6. Individual or Joint/Group Filing (Check Applicable Line) Form filed by One Reporting Person X Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price
Common Stock par value $0.001 per share	03/31/2004		S		50,000	D	$0	3,600,514	D

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Option to purchase common stock	$1	01/01/2003		A		75,000		03/30/2003	01/01/2013	Common stock par value $0.001 per share	75,000	$1.22(1)	75,000	D
Option to purchase common stock	$1	01/01/2003		A		75,000		06/30/2003	01/01/2013	Common stock par value $0.001 per share	75,000	$1.22(1)	75,000	D
Option to purchase common stock	$1	01/01/2003		A		75,000		09/30/2003	01/01/2013	Common stock par value $0.001 per share	75,000	$1.22(1)	75,000	D
Option to purchase common stock	$1	01/01/2003		A		75,000		12/30/2003	01/01/2013	Common stock par value $0.001 per share	75,000	$1.22(1)	75,000	D
Option to purchase common stock	$1	01/01/2003		A		75,000		03/30/2004	01/01/2013	Common stock par value $0.001 per share	75,000	$1.22(1)	75,000	D
Option to purchase common stock	$1	01/01/2003		A		75,000		06/30/2004	01/01/2013	Common stock par value $0.001 per share	75,000	$1.22(1)	75,000	D
Option to purchase common stock	$1	01/01/2003		A		75,000		09/30/2004	01/01/2013	Common stock par value $0.001 per share	75,000	$1.22(1)	75,000	D
Option to purchase common stock	$1	01/01/2003		A		75,000		12/30/2004	01/01/2013	Common stock par value $0.001 per share	75,000	$1.22(1)	75,000	D
Option to purchase common stock	$1	01/01/2003		A		75,000		03/30/2005	01/01/2013	Common stock par value $0.001 per share	75,000	$1.22(1)	75,000	D
Option to purchase common stock	$1	01/01/2003		A		75,000		06/30/2005	01/01/2013	Common stock par value $0.001 per share	75,000	$1.22(1)	75,000	D
Option to purchase common stock	$1	01/01/2003		A		75,000		09/30/2005	01/01/2013	Common stock par value $0.001 per share	75,000	$1.22(1)	75,000	D
Option to purchase common stock	$1	01/01/2003		A		75,000		12/30/2005	01/01/2013	Common stock par value $0.001 per share	75,000	$1.22(1)	75,000	D

1. Name and Address of Reporting Person* SADLE STEPHEN L (Last) (First) (Middle) 902A COMMERCE ROAD (Street) ANNAPOLIS MD 21401 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer X Director 10% Owner X Officer (give title below) Other (specify below) Senior Vice President

1. Name and Address of Reporting Person* SADLE BARBARA J (Last) (First) (Middle) 902A COMMERCE ROAD (Street) ANNAPOLIS MD 21401 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director 10% Owner Officer (give title below) X Other (specify below) spouse

Explanation of Responses:

1. The options to purchase Telkonet common stock were received in connection with a stock repurchase of the issuer pursuant to which the reporting person surrendered 2,147,695 shares of Telkonet common stock and options to purchase 200,000 shares of Telkonet common stock at an exercise price of $1.00. The price of the options granted to the reporting person was calculated by dividing the aggregate value on January 1, 2003 of the Telkonet common stock and in -the-money options to purchase Telkonet common stock surrendered in the stock repurchase, by the number of options to purchase Telkonet common stock in the stock repurchase.

Remarks:

	Stephen L. Sadle	04/08/2004
	Barbara J. Sadle	04/08/2004
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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