Telkonet Inc., a struggling company that makes energy-related gadgets and software for consumers, has secured a new $2 million loan designed to help it stay in business.

The company, in connection with its subsidiary EthoStream LLC as co-borrower, received the loan from Heritage Bank of Commerce. The loan is secured by the assets of both companies. The bank is employing covenants that set a minimum Ebitda level and a minimum asset-coverage ratio that the companies must maintain.

In Telkonet's most recent annual report, filed on March 31 with the SEC, Telkonet says that the company's accountant has expressed substantial doubt about the company's ability to continue as a going concern because of the company's history of cash flow deficits, liquidity constraints and negative working capital. Telkonet said in that filing that its ability to stay in business depended on funding from outside sources.

Telkonet, headquartered in Milwaukee, Wisconsin, provides hardware, software and services to commercial energy customers. The company's products include the EcoInsight and EcoWave intelligent thermostats, the EcoGuard energy management outlet and the EcoSwitch energy-efficient light switch. EthoStream is a high-speed Internet access provider that provides services to more than 8 million monthly users.

Through Dec. 31, the company had incurred cumulative losses since it was founded in 1999 of more than $121.9 million.

The company announced some more good news in August, saying that it had been able to increase revenue 21 percent over the second quarter the prior year. The company brought in $4.4 million, up from $3.6 million in the second quarter of 2013. The company's gross profit increased 43 percent to $2.1 million, up from $1.5 million for the second quarter of 2013.

"Increasing demand for our EcoSmart energy management platform drove overall growth in total revenues by 21 percent in the second quarter," said Telkonet CEO Jason Tienor in a statement.

For the previous edition of Turnaround Tuesday, see Struggling Supplements Group RiceBran Raises $6M

For more struggling companies, see Mergers & Acquisitions Distressed Company Watch List. Tune in Tuesday, Oct. 28 for the next edition of Turnaround Tuesday.

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