SecProbe.io

CORRESP
1
filename1.htm

    Unassociated Document

      November
16, 2010

      Ms. Linda
Cvrkel

      Branch
Chief

      Securities
and Exchange Commission

      Washington,
D.C. 20549-0402

      Dear Ms.
Cvrkel,

      This
letter sets forth the responses of Applied Energetics, Inc. (we, us or the
“Company”) to the comments of the staff (the “Staff”) of the Securities and
Exchange Commission with regard to the Form 10-K for the fiscal year ended
December 31, 2009.  The Staff’s comments were provided to the Company
in a letter dated November 8, 2010.  For the convenience of the Staff,
the text of the comments is reproduced in its entirety followed by our
responses.

                  Results
      of Operations

                  Litigation
      Settlement and

                  Note
      1 – Organization of Business and Summary of Significant Accounting
      Policies Settlement Expenses, page
      F-8

              1. Comment:

              In
      light of the materiality of the amount of settlement expenses incurred
      during 2009, please tell us and expand your disclosure in future filings
      to indicate the nature and amounts of the costs included in settlement
      expenses in your consolidated statement of operations.  As part
      of our response and your revised disclosure, you should also explain how
      the fair value of the 2,283,887 shares issued as part of the settlement
      was determined.

              Response:

              In
      future filings, the Company will expand its disclosure in footnote 1 –
      Settlement Expenses to read as
follows:

    “Litigation
settlement expenses for 2009 were approximately $1.3 million.  This
amount represents $1,119,105 for the market value of the 2,283,887 shares issued
in settlement of the class action lawsuit filed by George Wood and Raymond
Deedon, and the derivative action filed by John T. Johnasen settled on September
29, 2009.  We valued the shares based on the closing price of the
shares on October 9, 2009, the date the shares were
issued.  Additionally, we had legal expense of $143,072 not covered by
insurance proceeds.

    Also
included in litigation settlement expenses are $50,000 in settlement of an
arbitration demand filed by eScrub Systems Inc. and $25,233 in legal expenses
incurred associated with this settlement.”

    Note 14 – Subsequent events,
page F-23

              2.
      Comment:

              We
      note your disclosures indicating that NewOak opted out of the class action
      settlement and alleges that the alleged misrepresentations constituted
      breaches of its agreement with the company and that the company breached
      warranties it made to NewOak in connection with the 2005 private
      placement.  NewOak seeks indemnification and recovery for
      alleged breach of contract, unjust enrichment, quantum meruit, fraudulent
      misrepresentation, tortuous interference with prospective economic
      relations and violation of Section 10(b) of the Exchange Act and Rule
      10b-5 promulgated thereunder, and seeks an award of monetary damages in
      excess of $10 million, plus punitive damages and attorney’s fees and
      costs.  Please note that in accordance with ASC 450-20-50-3 if
      no accrual is made for a loss contingency because one or both of the
      conditions are not met, or an exposure to loss exists in excess of the
      amount accrued pursuant to the provisions of ASC 450-20-30-1, disclosure
      of the contingency shall be made when there is at least a reasonable
      possibility that a loss or an addi-tional loss may have been
      incurred.  The disclosure shall indicate the nature of the
      contingency and shall give an estimate of the possible loss or range of
      loss or state that such an estimate cannot be made.  Please
      revise your disclosures in future filings to disclose the amount of any
      accrual for loss that has been established in connection with this pending
      litigation as well as the amount or range of potential loss to which the
      company is exposed in connection with this pending
      litiga-tion.  Refer to the disclosure requirements outlined in
      ASC 450-20-50.

              Response:

              In
      accordance with ASC 450-20-25-2[b], the Company has not established an
      accrual because a reasonable estimate of loss cannot be
      made.  In accordance with ASC 450-20-50-5, the Company will
      disclose in future filings that no accrual for loss has been established
      in connection with this pending litigation until such time a reasonable
      estimate of the loss or range of loss can be
  made.

        In accordance
with your letter and comments, we acknowledge the Company is responsible for the
adequacy and accuracy of the disclosure in the filing.  Staff comments or
changes to disclosure in response to Staff comments do not foreclose the
Commission from taking any action with respect to the filing; and the Company
may not assert Staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United
States.

                Sincerely,

                  APPLIED
      ENERGETICS, INC.

                By:

              /s/ Humberto
      Astorga

              Humberto
      Astorga

              Chief
      Financial Officer