Applied Energetics Announces Exchange of Common Stock for the Majority of Its Outstanding Convertible Preferred Stock.

TUCSON, Ariz. -- Applied Energetics, Inc., (Nasdaq: AERG), the Guided Energy[TM] Company, today announced that on November 3 and November 4, 2008 it had entered into agreements with six stockholders to issue an aggregate of 5,051,000 shares of its common stock in exchange for the return for cancellation of 505,100 of its Series A Redeemable Convertible Preferred Stock (the "Exchange"). The shares of Common Stock issued in the Exchange were issued pursuant to an exemption from registration under the Securities Act of 1933 (the "Act") provided by Section 3(a)(a) promulgated under the Act. After conversion, the Company had 86,154,499 shares of Common Stock outstanding and 145,572 shares of Convertible Preferred Stock outstanding.

The Series A preferred stock provides for cumulative dividends at 6.5% per annum and has a stated conversion price of $12.00 per share. The Preferred Stock dividends are payable in cash, shares of the Company's common stock or a combination thereof.

Dana Marshall, Chairman, President and Chief Executive Officer of Applied Energetics, commented, "This exchange significantly reduces our company's outstanding preferred shares, and reduces future dilution or cash drain related to dividend obligations. We believe this transaction to be beneficial to the Company and our common stockholders, while also being fair and reasonable for the participating preferred shareholders."

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[R] (LGE[R]) 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.