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Applied Energetics Announces the Full-Value Conversion of $7.4 Million of Long-Term Auction-Rate Securities to Cash

^{Published on 2008-12-23 13:25:53, Last Modified on 2008-12-23 13:26:47 - Market Wire}
 

TUCSON, Ariz.--([ BUSINESS WIRE ])--Applied Energetics, Inc., (Nasdaq: AERG), the Guided Energy™ Company, today announced that as of December 23, 2008, it has received the full $7.4 million in cash resulting from the par-value sales of its AAA-rated Student Loan Auction-Rate Securities (SLARS). Today, Applied Energetics no longer owns any Auction-Rate Securities (ARS) or SLARS investments. As recorded in our 2008 first, second and third-quarter financial statements the Company recorded a temporary loss classified within Shareholders Equity reflecting a temporary impairment to the carrying values of these securities due to illiquidity from repeatedly failed auctions which first occurred in February 2008. Such temporary impairment entry was also fully reversed. All of the Company's Cash, Cash Equivalents, and/or Marketable Securities (including this $7.4 million) are now invested in short-term investments with secure underlying assets.

Dana Marshall, Chairman and CEO, commented, "We have had a number of investors inquire on prior quarterly conference calls regarding our cash availability and specifically the liquidation of the SLARS we have held since 2005. We felt that this news release was appropriate given the existing turbulent market conditions, the previous temporary illiquidity of these assets, and our need to eventually utilize this cash to fund long-term operations. We believe we have sufficient cash assets to run our business."

About Applied Energetics Inc.

Applied Energetics, Inc., based in Tucson Ariz., specializes in development and manufacture of high performance lasers, high voltage electronics, advanced optical systems, and integrated guided energy systems for defense, aerospace, industrial, and scientific customers worldwide. Applied Energetics pioneered the development of Laser Guided Energy® (LGE®) technology, and related solutions for defense and security applications. For more information about Applied Energetics, please visit [ www.appliedenergetics.com ].

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

Certain statements contained in this News Release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such factors include, but are not limited to: the dependence on sales of a limited number of products and the uncertainty of the timing and magnitude of government funding and orders, dependence on sales to government customers; the uncertainty of patent protection; the uncertainty of strategic alliances; the uncertainty of management tenure; the impact of third-party suppliers' manufacturing constraints or difficulties; management's ability to achieve business performance objectives, market acceptance of, and demand for, the Company's products, and resulting revenues; development and testing of technology and products; manufacturing capabilities; impact of competitive products and pricing; litigation and other risks detailed in the Company's filings with the Securities and Exchange Commission. The words "looking forward," "believe," "demonstrate," "intend," "expect," "contemplate," "estimate," "anticipate," "likely" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. Applied Energetics undertakes no obligation to update any forward-looking statements contained in this news release.