Since obtaining regulatory compliance for it's products in August, the Company has maintained a clear focus on it's marketing plan, which called for the launch of the PlugPlus(TM) high-speed Internet products into three primary commercial markets, (Multi-Dwelling, Government and Hospitality), with the initial introduction into the Hospitality market.

The Company launched an aggressive national sales campaign on the first of September to establish sales traction in the hospitality market. The sales campaign goal was to enhance brand awareness and drive product sales by developing a national installed base of hotels utilizing the Telkonet high-speed Internet solution. The initial installed base can then be leveraged to demonstrate Telkonet's solution and provide testimonials to other hotel owners in those regions. Installed hotels and hotels waiting to be installed span 30 states and locations in Canada and include brands such as Best Western, Clarion, Comfort Inn, Comfort Suites, Days Inn, EconoLodge, English Inn, Hampton Inn, Holiday Inn, Quality Inn, Quality Inn and Suites, Residence Inn, Rodeway Inn, Shamrock Inn and Suites, Sheraton, Sleep Inn and Westin Hotels.

In support of the sales campaign additional Telkonet direct sales personnel have been hired. Sales targets include but have not been limited to the franchisees of Choice Hotels International (NYSE:CHH) where Telkonet is an approved vendor under a Strategic Alliance Agreement. Choice Hotels is one of the largest hotel franchise companies with more than 5,000 hotels, which include Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Rodeway Inn, EconoLodge and MainStay Suites brand names. Other newly hired sales personnel focused their sales efforts on non-Choice hotels and the development of building relationships with strategic Value Added Resellers (VAR's).

To increase visibility, promote PlugPlus(TM) Internet products and generate sales leads, Telkonet also implemented a supplemental marketing campaign in October, targeting the hospitality and multi-dwelling unit (MDU) markets. Telkonet exhibited their products at key trade shows in October and November, ran advertisements in national trade publications and buyer's guides and enhanced it's web site content. In addition, Telkonet was featured in the cover story article in the October issue of UNITS, the National Apartment Association's magazine, which can be read on Telkonet's web site at http://www.telkonet.com/html/articles1.html.

Ronald Pickett, President of Telkonet Inc. stated, "We have gained significant momentum within the hospitality market as a result of our collective efforts. Hotels under contract are being installed each and every week while new hospitality sales continue to close. We will now strive to maintain our existing momentum in the hospitality market segment while we take what we have learned and focus on developing traction in the MDU and Government markets."

About Telkonet

Telkonet's products provide connectivity over existing electrical wiring and do not require the costly installation of additional wiring or major disruption of business activity. Superior network performance is the cornerstone of the technology. Using advanced algorithms, the system delivers extended and superior reach, reliability and security. It also incorporates a centralized point for administration of the modems and software upgrades.

The Telkonet PlugPlus(TM) Internet family of networking and Internet distribution products are designed for use in commercial and residential applications, including multi-dwelling units and the hospitality and government markets offering a viable and cost-effective alternative to the challenges of hardwiring and wireless local area networks (LANs). In many situations, the Telkonet system can be implemented more quickly and less expensively than adding dedicated wiring or installing a wireless system.

The Company is cultivating strategic partnerships with value-added resellers, system integrators and distributors, leveraging the partners' brand name, delivery infrastructure and customer relationships. The Company has designed its products to perform on European 220-volt systems and plans to enter the European market subsequent to the successful implementation of its domestic 120-volt product in the U.S. and Canada.

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).