SecProbe.io

Mail Stop 3561

December 19, 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
   Form 10-Q for the quarterly  period ended September 30, 2008
File No. 001-14015

Dear Mr. Marshall:

We have reviewed your response letter  dated November 24, 2008 and have the
following comment.  Where indicated, we th ink you should revise your document in
response to this comment.  If you disagree, we  will consider your e xplanation as to why
our comment is inapplicable or a revision is unnecessary.  Please be as detailed as
necessary in your explanation.  In our comment, we may ask you to provide us with
information so we may better understand your  disclosure.  After 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-Q for the quarterly p eriod ended September 30, 2008

 Note 13.  Subsequent Events

1. We note your response to our prior co mment 2, but do not believe that your
response was fully responsive to our prior comment 2. Based on your response
and the disclosure on page 12 in Form 10-Q for the period ended September 30,
2008, we note that the negotiated exchange of 5,051,000 shares of your common stock in exchange for the return of 505,100 shares of your Series A Redeemable
Convertible Preferred stock re presents a modification to th e original terms of your
Convertible Preferred Stock held by cer tain parties to change the initial
conversion price of $12.00 per share to a conversion price substantially less than $12.00 per share.  We also note from your response that the Company does not believe that SFAS No. 84, was applicable to this modification because the Company did not offer changed conversi on privileges only exercisable for a
limited period of time, but instead sepa rately negotiated redemption of the
preferred shares on an in dividual basis with a limited number of holders.  We
further note from the Company’s respons e that instead accounting for this
exchange as an inducement offer pursuant to SFAS No.84, the Company intends to account for this transaction as a rede mption of the preferred stock pursuant to
EITF Topic D-42, under which the Company will account for the difference between the fair value of the common shar es issued and the carrying value of the
preferred shares as an adjustment to th e Company’s net loss to arrive at the net
loss available to common shareholders. We  also note that the Company expects a
benefit to result to the Company’s common shareholders’ from using this
accounting treatment for the transaction.

Based on your response and the disclosure s included on page 12 of your Form 10-
Q, we continue to believe that this transaction may be more appropriately
accounted for as an induced conversion of  the preferred shares which should be
accounted for pursuant to the guidance in  SFAS No.84.  In this regard, please
address the following matters with resp ect to the exchange transaction:

• Tell us and disclose in future fili ngs the business purpose for negotiating
the exchange transaction. As part  of your response, please indicate
whether the Company contacted all preferred shareholders with the
purpose of initiating negotiations for a possible exchange transaction. If not, please explain how the parties to the exchange transaction were
determined. If these parties contacted the Company to initiate the exchange, please note this in your response.

• Please indicate the period of time ov er which the exchange transaction
was to be completed based on the Co mpany’s negotiations with the six
stockholders that entered into agreem ents with the Company to exchange

Dana A. Marshall
Applied Energetics, Inc.
Page 3

their preferred shares for a revise d number of common shares. Also,
please supplementally provide us with copies of any written agreements
regarding the exchange transactions that were entered into with the
preferred shareholders. Your response should also explain in further detail
why the Company does not believe that  the changed conversion privileges
were not exercisable for only a limited period of time as you have noted in
your response. If the revised conversi on privileges were exercisable for an
unlimited period of time as your response implies, please state this in your
response and in your revised disclosures.

We may have further comment upon revi ew of your response and any related
agreements with the preferred shareholders  that were parties to this transaction.

As appropriate, please respond to this comm ent within 10 business days or tell us
when you will provide us with a response.  Please furnish a cover letter that keys your response to our comment and pr ovides any requested informa tion.  Detailed cover letters
greatly facilitate our review.  Please understand that we may have additional comments
after reviewing your response to our comment.
Your response should be submitted in electronic form, under the label “corresp”
with a copy to the staff.

 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

Dana A. Marshall
Applied Energetics, Inc. Page 4