Applied Energetics

"Innovative Ultrafast Lasers and Particle Beam Systems"

Applied Energetics Reports 2011 Financial Results

TUCSON, Ariz. - March 23, 2012 - Applied Energetics, Inc., (AERG.OB) reported summary financial results for the twelve months ended December 31, 2011.

Year-to-Date 2011 Summary Financial Results

Revenue decreased approximately $8.0 million to $5.0 million for the year ended December 31, 2011 compared to 2010 primarily as a result of the reduction in Government spending on the Company’s technologies. The Company’s counter-IED revenue decreased by $6.9 million to $2.2 million in 2011 as work was completed on a contract supporting the USMC during the first half of 2011. Lased Guided Energy (LGE) revenue decreased by $822,000 to $2.1 million as the available funding was exhausted under a contract with Armament Research, Development and Engineering Center (ARDEC). Ultra Short Pulse (USP) Laser revenues decreased by $503,000 for the year ended 2011 largely due to the delivery of a USP Laser to the Navy in June of 2010. Offsetting these decreases in revenue was an increase in High Voltage revenue of $227,000 for the year ended 2011.

Net loss attributable to common shareholders for the twelve months ended December 31, 2011 was $6.5 million, or $0.07 per basic and diluted common share, as compared to a net loss of $3.2 million or $0.04 per basic and diluted common share for the same period last year.

At December 31, 2011, we had approximately $3.9 million of cash and cash equivalents, a decrease of approximately $5 million. Our continuance in business beyond 2012 is dependent on successful development of new commercial customers and sales of our USP laser systems, obtaining profitable operations and additional financing necessary to fund our operations.

At December 31, 2011, the Company had a backlog of approximately $390,000 to be completed within the next twelve months.

As a result of the decrease in U.S. Government funding, the Company has significantly reduced its workforce to a level consistent with its expected operations.

The Company is also considering strategic alternatives, including mergers, the acquisition of one or more businesses or technologies, and/or the disposition of one or more of its existing businesses.

In July of 2011, the board reduced its compensation by 15% and in March 2012, the board further reduced its compensation by 25%.

Joe Hayden, President, commented, “We expect revenues for 2012 to decline as a result of decreased Government spending and tightening of the defense budget, the completion of our contract with the USMC for our counter-IED systems and completion of funding under our ARDEC contract for our LGE technology. As a result, to reduce our cost of revenue, research and development and general and administrative expenses, we have made a strategic decision not to invest internal funds on the further development and advancement of our LGE, LIPC, counter-IED and high voltage systems and have reduced our work force to a level consistent with our expected operations, and continue to operate our High Voltage Electron Beam System application center for potential customers. Our focus will be primarily on advancing our solid state USP lasers for commercial applications. We believe our proprietary USP laser systems have the potential to offer better performance for high pulse energy and high average power compared to commercially available USP lasers for micromachining. Our USP laser application center enables potential customers and strategic partners to use, test and validate the capabilities of our USP laser systems for their individual needs and try new and emerging applications prior to purchasing our USP lasers systems. In addition, we have a cooperative work agreement with Laser Light Technologies, a leading contract manufacturer in the commercial micromachining market, to jointly develop USP lasers and processes for the laser micromachining market. We have provided a USP system to Laser Light for use in their manufacturing facility to further develop commercial micromachining applications.”

About Applied Energetics, Inc.

Through the establishment of our core technologies for defense applications, Applied Energetics has gained expertise and proprietary knowledge in high performance lasers, high-voltage electronics, advanced dynamic optics and atmospheric and plasma interactions. Potential industrial applications include micromachining for the medical, aerospace, electronic, and automotive industries, materials processing applications such as cross-linking of polymers, sterilization of medical equipment and other uses requiring compact, high energy systems.

Applied Energetics operates an Application Center for customers to verify process and see the Company’s high pulse energy ultra short pulse laser system and compact electron beam accelerator.

For more information about Applied Energetics, please visit

"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," “may,” “plan,” “seek,” “strategy,” "demonstrate," "intend," "expect," “continue,” "contemplate," "estimate," "anticipate," “will,” "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.

To see the full release with financial tables, click here.