FORM 5 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b). Form 3 Holdings Reported Form 4 Transactions Reported

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person * Hall Thomas M 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 _____ Officer (give title below) _____ Other (specify below) (Last) (First) (Middle) 20374 SENECA MEADOWS PARKWAY 3. Statement for Issuer's Fiscal Year Ended (Month/Day/Year) 12/31/2006 (Street) GERMANTOWN, MD 20876 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Reporting (check applicable line) _X_ Form Filed by One Reporting Person ___ Form Filed by More than One Reporting Person (City) (State) (Zip) 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 at end of Issuer's Fiscal Year (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Amount (A) or (D) Price Common Stock par value $0.001     3         D Â

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

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SEC 2270 (9-02)

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 Underlying Securities (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned at End of Issuer's Fiscal Year (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Option to purchase (2)

$ 1

03/28/2002

Â

J(4)(5)

50,000

Â

03/28/2002

03/28/2005

Common

50,000

$ 1

50,000

D

Â

Option to purchase (3)

$ 1

04/25/2002

Â

J(4)(5)

50,000

Â

04/25/2002

04/25/2005

Common

50,000

$ 1

100,000

D

Â

Option to purchase

$ 3.45

04/20/2004

Â

A4

40,000

Â

  (6)

04/01/2014

Common

40,000

$ 3.45

140,000

D

Â

Option to purchase

$ 3.45

04/01/2005

Â

A4

40,000

Â

  (6)

04/01/2015

Common

40,000

$ 3.45

80,000

D

Â

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
Hall Thomas M 20374 SENECA MEADOWS PARKWAY GERMANTOWN, MD 20876	  X	Â	Â	Â

Signatures

/s/ Thomas M. Hall		04/25/2007
**Signature of Reporting Person		Date

Explanation of Responses:

*	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).
(1)	Shares beneficially owned as of April 20, 2004, the date of appointment to the Board of Directors
(2)	Warrants to purchase shares of common stock attached to a Series A convertible debenture, dated April 2, 2002 with a 3 year expiration and exerciseable at $1.00 per share. These warrants were converted into 50,000 shares of common stock on March 25, 2005. This transaction was reported on SEC EDGAR Form 4, filed April 7, 2005.
(3)	Warrants to purchase shares of common stock attached to a Series A convertible debenture, dated April 25, 2002 with a 3 year expiration and exerciseable at $1.00 per share. These warrants were converted into 36,150 shares of common stock (net of consideration paid in shares of common stock) on April 25, 2005. This transaction was reported on SEC EDGAR Form 4, filed April 28, 2005.
(4)	This transaction was supposed to be filed on a Form 3.
(5)	Represents warrants to purchase shares of common stock at $1.00 per share, beneficially owned as of April 20, 2004.
(6)	Stock options issued pursuant to the Director's Compensation Plan vest at a rate of 10,000 options per quarter.

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