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SEC Comment Letter for APPLIED ENERGETICS, INC. (AERG, AERGP) (CIK 0000879911) (AERG) — Nov 12, 2008

APPLIED ENERGETICS, INC. (AERG, AERGP) (CIK 0000879911)
Date: Nov. 12, 2008 · CIK: 0000879911 · Accession: 0000000000-08-056110

Financial Reporting Regulatory Compliance Capital Structure

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File numbers found in text: 001-14015

Referenced dates: October 6, 2008

Date
November 12, 2008
Author
(520) 622-3835
Form
UPLOAD
Company
APPLIED ENERGETICS, INC. (AERG, AERGP) (CIK 0000879911)

Letter

Mail Stop 3561 November 12, 2008 Via U.S. Mail and Facsimile Dana A. Marshall Chief Executive Officer Applied Energetics, Inc. 3590 East Columbia Street Tucson, Arizona 85714 RE: Applied Energetics, Inc. Form 10-K for the fiscal year ended December 31, 2007 File No. 001-14015

Dear Mr. Marshall:

We have reviewed your response letter dated October 6, 2008 and have the following comments. Where indicated, we think you should revise your document in response to these comments. If you disagree, we will consider your explanation as to why our comment is inapplicable or a revisi on is unnecessary. Please be as detailed as necessary in your explanation. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Af ter reviewing this information, we may raise additional comments. We look forward to working with you in these respects. We welcome any questions you may have about our comment or any other aspect of our review. Feel free to call us at the telephone numbers lis ted at the end of this letter.

Dana A. Marshall Applied Energetics, Inc. Page 2

Form 10-K for the fiscal year ended December 31, 2007 Note 9. Stockholders Equity, page F-17

1. We note your response to our comment 2, where you state that the Series A Preferred Stock is redeemable upon a change of control, which so lely is within the control of the Company. Please elaborat e as to how this change in control redemption provision for your series A Preferred Stock is solely within the control of the Company. Also, please provide us with the complete definition of what constitutes a “change in cont rol” as stipulated in your Series A Preferred Stock change in control redemption provision. As part of your respons e, please tell us how the Company can prevent a purchaser from acquiring a majority of the voting power of the Company’s outstanding co mmon stock. We may have further comment upon receipt of your response. Form 10-Q for the quarterly p eriod ended September 30, 2008

Note 13. Subsequent Events 2. We note the disclosure indicating that from November 3, 2008 to November 4, 2008, the Registrant entered in to agreements with six st ockholders’ to issue an aggregate of 5,051,000 shares of its common st ock in exchange for the return of 505,100 of its Series A Redeemable Convertib le Preferred Stock. Please tell us and revise the notes to your financial stat ements in future filings to explain how you accounted for this transaction in your fi nancial statements. If you believe the fair value of the common shares issued in this exchange transaction was equivalent to the fair value of the pref erred shares received, please explain your basis or rational for this conclusion.

As appropriate, please respond to these co mments within 10 business days or tell us when you will provide us with a response. Pl ease furnish a cover letter that keys your responses to our comments and provides any requested information. Detailed cover letters greatly facilitate our review. Please understand that we may have additional comments after reviewing your responses to our comments.

Your response should be submitted in electronic form, under the label “corresp” with a copy to the staff.

Dana A. Marshall Applied Energetics, Inc. Page 3

You may contact Jeffrey Jaramillo at (202) 551-3212 if you have questions regarding comments on the financia l statements and related matte rs. Please contact me at (202) 551-3813 with any other questions.

Sincerely,
L i n d a C v r k e l B r a n c h C h i e f
Via facsimile: Kenneth M. Wall ace, Chief Financial Officer
(520) 622-3835

Show Raw Text
Mail Stop 3561

November 12, 2008
 Via U.S. Mail and Facsimile

 Dana A. Marshall Chief Executive Officer Applied Energetics, Inc. 3590 East Columbia Street Tucson, Arizona 85714
RE: Applied Energetics, Inc.
   Form 10-K for the fiscal  year ended December 31, 2007

File No. 001-14015

Dear Mr. Marshall:

We have reviewed your response letter  dated October 6, 2008 and have the
following comments.  Where indicated, we think you should revise your document in
response to these comments.  If you disagree, we will consider your explanation as to why our comment is inapplicable or a revisi on is unnecessary.  Please be as detailed as
necessary in your explanation.  In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.  Af ter reviewing this
information, we may raise additional comments.    We look forward to working with you in these respects.  We welcome any
questions you may have about our  comment or any other aspect of our review.  Feel free
to call us at the telephone numbers lis ted at the end of  this letter.

Dana A. Marshall
Applied Energetics, Inc.
Page 2

Form 10-K for the fiscal year ended December 31, 2007
 Note 9. Stockholders Equity, page F-17

1. We note your response to our comment 2, where you state that the Series A
Preferred Stock is redeemable upon a change of control, which so lely is within the
control of the Company.  Please elaborat e as to how this change in control
redemption provision for your series A Preferred Stock is solely within the control
of the Company.  Also, please provide us with the complete definition of what constitutes a “change in cont rol” as stipulated in your  Series A Preferred Stock
change in control redemption provision.  As part of your respons e, please tell us
how the Company can prevent a purchaser from acquiring a majority of the voting
power of the Company’s outstanding co mmon stock.  We may have further
comment upon receipt of your response.
  Form 10-Q for the quarterly p eriod ended September 30, 2008

Note 13. Subsequent Events
2. We note the disclosure indicating that  from November 3, 2008 to November 4,
2008, the Registrant entered in to agreements with six st ockholders’ to issue an
aggregate of 5,051,000 shares of its common st ock in exchange for the return of
505,100 of its Series A Redeemable Convertib le Preferred Stock.  Please tell us
and revise the notes to your financial stat ements in future filings to explain how
you accounted for this transaction in your fi nancial statements.  If you believe the
fair value of the common shares issued in this exchange transaction was
equivalent to the fair value of the pref erred shares received, please explain your
basis or rational for this conclusion.

As appropriate, please respond to these co mments within 10 business days or tell
us when you will provide us with a response.  Pl ease furnish a cover letter that keys your
responses to our comments and provides any requested information.  Detailed cover
letters greatly facilitate our review.  Please understand that we may have additional comments after reviewing your responses to our comments.

Your response should be submitted in electronic form, under the label “corresp”
with a copy to the staff.

Dana A. Marshall
Applied Energetics, Inc. Page 3

 You may contact Jeffrey Jaramillo at  (202) 551-3212 if you have questions
regarding comments on the financia l statements and related matte rs.  Please contact me at
(202) 551-3813 with any other questions.

 Sincerely,
         L i n d a  C v r k e l         B r a n c h  C h i e f

  Via facsimile: Kenneth M. Wall ace, Chief Financial Officer
  (520) 622-3835