P 520. 628-7415
(Address, including zip code, and telephone number,
Gregory J. Quarles
9070 S. Rita Road, Suite 1500
Mary P. O’Hara, Esq.
If the only securities being registered on this
form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☒
If any of the securities being registered on this
form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans, check the following box. ☒
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant
to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, please check the following box. ☐
If this Form is a post-effective amendment to
a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, please check the following box. ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly
and current reports, proxy statements, and other information with the SEC. Such reports, proxy statements, and other information concerning
us can be read and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 or on the Internet at
http://www.sec.gov. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. The
SEC also maintains a web site at http://www.sec.gov that contains reports, proxy statements and other information about issuers, such
as us, who file electronically with the SEC.
We have filed with the SEC
a registration statement on Form S-3 under the Securities Act of 1933, as amended (the “Securities Act”) with respect to the
securities covered by this prospectus. This prospectus, which is a part of the registration statement, does not contain all of the information
set forth in the registration statement or the exhibits and schedules filed therewith. For further information with respect to us and
the securities covered by this prospectus, please see the registration statement and the exhibits filed with the registration statement.
A copy of the registration statement and the exhibits filed with the registration statement may be inspected without charge from
the SEC as indicated above, or from us as indicated under “Incorporation by Reference.”
INCORPORATION BY REFERENCE
The SEC allows us to “incorporate
by reference” into this prospectus the information that we file with the SEC. This permits us to disclose important information
to you by referring to these filed documents. Any information referred to in this way is considered part of this prospectus, and any information
filed with the SEC by us after the date of this prospectus will automatically be deemed to update and supersede this information. We incorporate
by reference the following documents that have been filed with the SEC (other than, in each case, documents or information deemed furnished
and not filed in accordance with SEC rules, including pursuant to Item 2.02 or Item 7.01 or any related exhibit furnished under Item 9.01(d)
of Form 8-K, and no such information shall be deemed specifically incorporated by reference hereby):
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●
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Annual Report on Form 10-K for the fiscal year ended December 31, 2020;
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●
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Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2021; and
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●
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Current Reports on Form
8-K filed with the SEC on July 16, 18 and 19, October 31, and November 8, 2019, January 6, March 10, June 4 and 15, August 5, September 2, 3, 10 and 29, October 6 and November 12, 2020 and January 7 and February 3 and 9, 2021.
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We also incorporate by reference
any future filings (other than information in such documents that is not deemed to be filed) made with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) until we file a post-effective
amendment which indicates the termination of the offering of the securities made by this prospectus.
Any statement contained in
a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed to be modified or superseded to the
extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by
reference in this prospectus modifies or supersedes that statement. Any statement so modified or superseded will not be deemed, except
as so modified or supersede, to constitute a part of this prospectus.
Upon written or oral request,
we will provide, without charge, each person to whom a copy of this prospectus is delivered, a copy of any document incorporated by reference
in this prospectus (other than exhibits, unless such exhibits are specifically incorporated by reference in such documents). Requests
should be directed to Applied Energetics Inc. 9070 Rita Road, Suite 1500, Tucson, AZ 85747, Attn. Stephen McCommon, Finance Manager.
USE OF MARKET AND INDUSTRY DATA
This prospectus includes market and industry data
that has been obtained from third party sources, including industry publications, as well as industry data prepared by our management
on the basis of its knowledge of and experience in the industries in which we operate (including our management’s estimates and
assumptions relating to such industries based on that knowledge). Management’s knowledge of such industries has been developed through
its experience and participation in these industries. While our management believes the third-party sources referred to in this prospectus
are reliable, neither we nor our management have independently verified any of the data from such sources referred to in this prospectus
or ascertained the underlying economic assumptions relied upon by such sources. Internally prepared and third-party market forecasts,
in particular, are estimates only and may be inaccurate, especially over long periods of time. In addition, we have not independently
verified any of the industry data prepared by management or ascertained the underlying estimates and assumptions relied upon by management.
Furthermore, references in this prospectus to any publications, reports, surveys or articles prepared by third parties should not be construed
as depicting the complete findings of the entire publication, report, survey or article. The information in any such publication, report,
survey or article is not incorporated by reference in this prospectus.
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This prospectus contains certain statements relating
to our future results that are considered “forward-looking statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Some of these statements can be identified by use of forward-looking words such as “believes,” “expects,”
“anticipates,” “may,” “should,” “seeks,” “approximately,” “intends,”
“plans” or “estimates,” or the negative of these words, or other comparable terminology. The discussion of financial
trends, strategy, plans or intentions may also include forward-looking statements. Actual results may differ materially from those expressed
or implied as a result of certain risks and uncertainties, including, but not limited to, changes in political and economic conditions;
interest rate fluctuation; competitive pricing pressures within our market; equity and fixed income market fluctuation; technological
change; changes in law; changes in fiscal, monetary regulatory and tax policies as well as other risks and uncertainties detailed elsewhere
in this prospectus or from time-to-time in our filings with the Securities and Exchange Commission. Such forward-looking statements speak
only as of the date on which such statements are made, and we undertake no obligation to update any forward-looking statement to reflect
events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.
You should not consider the above list to be a
complete statement of all risks and uncertainties. You are cautioned not to place undue reliance on any such forward-looking statements,
which speak only as of the date such statements were first made. Except to the extent required by federal securities laws, we undertake
no obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events.
RISK FACTORS
Investing in our securities involves a high degree
of risk. Before making a decision to invest in our securities, in addition to the other information contained in this prospectus, any
accompanying prospectus supplement or any related free writing prospectus, or incorporated by reference herein or therein, you should
carefully consider the risks discussed under “Risk Factors” in our most recent Annual Report on Form 10-K, in our Quarterly
Reports on Form 10-Q, in any prospectus supplement related hereto, and in other information contained in our publicly available SEC filings
and press releases. See “Where You Can Find Additional Information.”
USE OF PROCEEDS
We will not receive any of the proceeds from the
sale of common stock being offered by the selling stockholders. We will, however, receive proceeds from the selling stockholders’
exercise of the warrants to purchase shares of our common stock, should they choose to exercise, which shares we are hereby registering.
We will use these proceeds for general corporate purposes, including for working capital.
We will pay for the expenses of this offering,
except that the selling stockholders will pay any broker discounts or commissions or equivalent expenses and expenses of selling stockholder
legal counsel, if any, applicable to any sale of the shares.
DILUTION
The execution of the warrants held by the selling
stockholders in accordance with the agreements covering the warrants will result in the issuance of shares of our common stock, which
will in turn have a dilutive impact on our stockholders. As a result, our net loss per share could decrease in future periods and the
market price of our common stock could decline.
APPLIED ENERGETICS, INC.
Applied
Energetics, Inc. is a corporation organized and existing under the laws of the State of Delaware. Our executive office is located at 9070
S. Rita Road, Suite 1500, Tucson, Arizona 85747 and our telephone number is (520) 628-7415.
Applied
Energetics specializes in the development and manufacture of advanced high-performance lasers, high voltage electronics, advanced optical
systems, and integrated guided energy systems for defense, aerospace, industrial, and scientific customers worldwide.
AERG
has developed, successfully demonstrated and holds all crucial intellectual property rights to a dynamic Directed Energy technology called
Laser Guided Energy (“LGE®”) and Laser Induced Plasma Channel (“LIPC®”). LGE and LIPC are technologies
that can be used in a new generation of high-tech weapons. The Department of Defense (DOD) previously recognized two key types of Directed
Energy Weapon (“DEW”) technologies, High Energy Lasers (“HEL”), and High-Power Microwave (“HPM”).
Neither the HEL nor the HPM intellectual property portfolio is owned by a single entity. The DOD then designated a third DEW technology,
LGE. Applied Energetics’s LGE and LIPC technologies are wholly owned by Applied Energetics and patent protected with 26 current
patents and an additional 11 Government Sensitive Patent Applications (“GSPA”). These GSPA’s are held under secrecy
orders of the US government and allow the company greatly extended protection rights.
Applied
Energetics technology is vastly different from conventional directed energy weapons, i.e. HEL, and HPM. LGE uses Ultra-Short Pulse (USP)
laser technology to combine the speed and precision of lasers with the overwhelming impact on targeted threats with high-voltage electricity.
This unique directed energy solution allows extremely high peak power and energy, with target and effects tenability, and is effective
against a wide variety of potential targets. A key element of LGE is its novel ability to offer selectable and tunable properties that
can help protect non-combatants and combat zone infrastructure.
As
Applied Energetics looks toward the future, our corporate strategic roadmap builds upon the significant value of the company’s USP
capabilities and key intellectual property, including LGE and LIPC, to offer our prospective partners, co-developers and system integrators
a variety of next-generation Ultra Short-Pulse and frequency-agile optical sources from the ultraviolet to the far infrared portion of
the electromagnetic spectrum to address numerous challenges within the military, medical device, and advanced manufacturing market sectors.
DESCRIPTION OF SECURITIES
The following description
of our capital stock being registered herein is a summary only and is qualified in its entirety by reference to our Articles of Incorporation,
as amended, and Amended and Restated Bylaws, which are included as Exhibits 3.1 through 3.7 of the Company’s Annual Report on Form
10-K (incorporating such documents by reference to prior reports on file with the SEC by the Company).
Common Stock
We are authorized to issue
up to 500,000,000 shares of common stock, $0.001 par value per share. Holders of our common stock are entitled to receive dividends when
and as declared by our board of directors out of funds legally available. Holders of our common stock are entitled to one vote for each
share on all matters voted on by stockholders, including the election of directors. Holders of our common stock do not have any conversion,
redemption or preemptive rights. In the event of our dissolution, liquidation or winding up, holders of our common stock are entitled
to share ratably in any assets remaining after the satisfaction in full of the prior rights of creditors and the aggregate liquidation
preference of any preferred stock then outstanding. The rights, preferences and privileges of the holders of our common stock are subject
to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate and issue
in the future.
Preferred Stock
As of December 31, 2020 and
2019, there were 13,602 shares of Series A Redeemable Convertible Preferred Stock (the “Series A Preferred Stock”) outstanding.
The company has not paid the dividends commencing with the quarterly dividend due August 1, 2013. Dividend arrearages as of December 31,
2020 and April 8, 2021 were approximately $261,000 and $270,000, respectively. Our Board of Directors suspended the declaration of the
dividend, commencing with the dividend payable as of February 1, 2015 since we did not have a surplus (as such term is defined in the
Delaware general corporation Law) as of December 31, 2014, until such time as we have a surplus or net profits for a fiscal year.
Our Series A Preferred Stock
has a liquidation preference of $25.00 per Share. The Series A Preferred Stock bears dividends at the rate of 6.5% of the liquidation
preference per share per annum, which accrues from the date of issuance, and is payable quarterly. Dividends may be paid in: (i) cash,
(ii) shares of our common stock (valued for such purpose at 95% of the weighted average of the last sales prices of our common stock for
each of the trading days in the ten trading day period ending on the third trading day prior to the applicable dividend payment date),
provided that the issuance and/or resale of all such shares of our common stock are then covered by an effective registration statement
and the company’s common stock is listed on a U.S. national securities exchange or the Nasdaq Stock Market at the time of issuance
or (iii) any combination of the foregoing. If the company fails to make a dividend payment within five business days following a dividend
payment date, the dividend rate shall immediately and automatically increase by 1% from 6.5% of the liquidation preference per offered
share of Series A preferred stock to 7.5% of such liquidation preference. If a payment default shall occur on two consecutive dividend
payment dates, the dividend rate shall immediately and automatically increase to 10% of the liquidation preference for as long as such
payment default continues and shall immediately and automatically return to the Initial dividend rate at such time as the payment default
is no longer continuing.
Warrants and Options
As of the date of this prospectus, we have outstanding
warrants to purchase up to 2,750,000 shares of our common stock. 2,525,000 shares of our common stock offered by the Selling Stockholders
in this Prospectus underlie such warrants. These include warrants to purchase up to 2,500,000 shares which were issued to the owners of
Applied Optical Sciences (“AOS”) as partial consideration for our acquisition of substantially all of AOS’s assets in
May 2019. Additionally, warrants to purchase up to 25,000 shares are being offered by Selling Stockholders who acquired such warrants
in private financings during 2019.
As of the date of this prospectus, we have outstanding
options to purchase up to 29,409,090 shares of our common stock. These options have been issued to members of our management team and
other service providers in exchange for services.
Quotation on OTCQB
Our common stock is quoted by the OTCQB under the symbol “AERG.”
Transfer Agent and Registrar
The transfer agent and registrar
for our common stock is Continental Stock Transfer & Trust Company.
SELLING STOCKHOLDERS
The
following table sets forth the information as to the ownership of our securities by the Selling Stockholders on June 8, 2021, at which
time 199,765,973 shares of our common stock were outstanding. Unless otherwise indicated, it is assumed that each Selling Stockholder
listed below possesses sole voting and investment power with respect to the shares owned as of such date by the Selling Stockholder.
Selling Stockholder (2)
|
|
Shares of
Common
Stock
Owned
Before the
Offering
|
|
|
Total Number
of Shares of
Common
Stock to be
Offered (1) (2)
|
|
|
Shares of
Common
Stock to be
Beneficially
Owned
After the
Offering (2)
|
|
|
Percentage
of Common
Stock
Beneficially
Owned
After the
Offering
|
|
Dan Baer
|
|
|
8,228,097
|
(3)
|
|
|
150,000
|
|
|
|
8,078,097
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(3)
|
|
|
4
|
%
|
Stephen Baksa
|
|
|
4,679,882
|
|
|
|
1,562,500
|
|
|
|
3,117,382
|
|
|
|
1.6
|
%
|
Medford Bragg
|
|
|
1,300,000
|
|
|
|
312,500
|
|
|
|
987,500
|
|
|
|
* *
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|
Thomas R. Brown
|
|
|
600,000
|
|
|
|
25,000
|
|
|
|
575,000
|
|
|
|
*
|
|
Edward M Giles Revocable Trust(4)
|
|
|
348,011
|
|
|
|
325,000
|
|
|
|
23,011
|
|
|
|
*
|
|
Edward M Giles Roth IRA
|
|
|
680,000
|
|
|
|
325,000
|
|
|
|
355,000
|
|
|
|
*
|
|
Douglas Faris
|
|
|
7,425,000
|
|
|
|
500,000
|
|
|
|
6,925,000
|
|
|
|
3.5% 3
|
|
Giles Family 2015 Trust(4)
|
|
|
514,521
|
|
|
|
325,000
|
|
|
|
189,521
|
|
|
|
*
|
|
Walter Giles(5)
|
|
|
343,106
|
|
|
|
300,000
|
|
|
|
43,106
|
|
|
|
*
|
|
Charles A. Hale
|
|
|
1,159,090
|
(6)
|
|
|
250,000
|
(7)
|
|
|
909,090
|
(6)
|
|
|
*
|
|
Robert Webster Hargett
|
|
|
312,500
|
|
|
|
312,500
|
|
|
|
-0-
|
|
|
|
--
|
|
Robert L Harris, Sr.
|
|
|
3,600,000
|
|
|
|
100,000
|
|
|
|
3,500,000
|
|
|
|
|
|
Nicholas Healy
|
|
|
165,300
|
|
|
|
125,000
|
(7)
|
|
|
40,300
|
|
|
|
*
|
|
Paul G. and Susan J. Holmes
|
|
|
312,500
|
|
|
|
312,500
|
|
|
|
-0-
|
|
|
|
--
|
|
Robin B. House
|
|
|
250,000
|
|
|
|
250,000
|
(7)
|
|
|
-0-
|
|
|
|
--
|
|
Isles Capital LP (5)
|
|
|
349,874
|
|
|
|
325,000
|
|
|
|
24,874
|
|
|
|
*
|
|
Robert Katherman
|
|
|
9,500,633
|
|
|
|
75,000
|
|
|
|
9,425,633
|
|
|
|
4.7
|
%
|
James E. Marner
|
|
|
125,360
|
|
|
|
125,000
|
(7)
|
|
|
360
|
|
|
|
*
|
|
James McAree
|
|
|
300,000
|
|
|
|
300,000
|
|
|
|
-0-
|
|
|
|
--
|
|
Stephen McCahon
|
|
|
18,687,861
|
(8)
|
|
|
1,750,000
|
(7)
|
|
|
16,937,861
|
|
|
|
8.5
|
%
|
Charles J. Messer
|
|
|
195,290
|
|
|
|
100,000
|
|
|
|
95,290
|
|
|
|
*
|
|
Philip A. Musser Revocable Trust
|
|
|
595,000
|
|
|
|
300,000
|
|
|
|
295,000
|
|
|
|
*
|
|
Keith Phillips
|
|
|
156,250
|
|
|
|
156,250
|
|
|
|
-0-
|
|
|
|
-
|
|
Scott Roth
|
|
|
375,000
|
|
|
|
100,000
|
|
|
|
275,000
|
|
|
|
*
|
|
Michael Rowe
|
|
|
525,000
|
|
|
|
25,000
|
|
|
|
500,000
|
|
|
|
*
|
|
Alan Vaughan
|
|
|
2,382,500
|
|
|
|
12,500
|
|
|
|
2,370,000
|
|
|
|
4
|
%
|
C. Porter Vaughan
|
|
|
717,500
|
|
|
|
12,500
|
|
|
|
705,000
|
|
|
|
*
|
|
Neal E. Waldron Revocable Trust
|
|
|
250,000
|
|
|
|
250,000
|
|
|
|
-0-
|
|
|
|
--
|
|
George F. Wood(9)
|
|
|
4,560,902
|
|
|
|
812,500
|
|
|
|
3,748,402
|
|
|
|
|
|
George T. Wood(9)
|
|
|
295,000
|
|
|
|
125,000
|
|
|
|
170,000
|
|
|
|
*
|
|
George F. Wood, Roth IRA(9)
|
|
|
312,500
|
|
|
|
312,500
|
|
|
|
-0-
|
|
|
|
--
|
|
Watson H. Wright
|
|
|
1,250,000
|
|
|
|
50,000
|
|
|
|
1,200,000
|
|
|
|
*
|
|
TOTAL
|
|
|
|
|
|
|
10,006,250
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents the shares held by the selling stockholders which
we have agreed to include in this Prospectus.
|
(2)
|
Assumes all of the shares being offered under this Prospectus
will be sold by the Selling Stockholders. However, we are unable to determine the exact number of shares that will actually be sold hereunder.
|
(3)
|
Includes 100,000 shares underlying Non-Qualified Stock Options,
exercisable at $0.07 per share.
|
(4)
|
Edward M. Giles is Trustee of the Edward M. Giles Revocable
Trust. Zachary Wydra is Trustee of the Giles Family 2015 Trust, and its beneficiaries are Walter, Carolyn, Stephen and Jeanne Giles.
|
(5)
|
Walter Giles is the General Partner of Isles Capital LP,
and its beneficial owners are Walter, Carolyn, Stephen and Jeanne Giles.
|
(6)
|
Includes 909,090 shares underlying Non-Qualified Stock Options,
exercisable at $0.05 per share.
|
(7)
|
All such shares underlie warrants issued to such holder as
consideration for the acquisition of substantially all of the assets of Applied Optical Sciences.
|
(8)
|
Dr. McCahon’s beneficial ownership includes 4,010,000
shares held in the names of two of his children.
|
(9)
|
George F. Wood is the beneficial owner of 4,873,402 shares
of common stock, in his name and in the name of the George F. Wood Roth IRA, of which 1,250,000 are offered hereby. His total beneficial
ownership after giving effect to the sale of all shares offered by him in this offering, will be 3,623,402 shares or approximately 1.7%.
|
The information set forth
above is based upon information obtained from the selling stockholders and upon information in our possession regarding the issuance of
shares of common stock and warrants to the selling stockholders in connection with private placement transactions. None of the selling
stockholders has within the past three years had any position, office or other material relationship with us or any of our subsidiaries
other than as a holder of shares of our common stock or warrants.
PLAN OF DISTRIBUTION
Each Selling Stockholder (the
“Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest may, from time to
time, sell any or all of their securities covered hereby on the OTCQB or any other stock exchange, market or trading facility on which
the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use
any one or more of the following methods when selling securities:
|
●
|
ordinary brokerage transactions and transactions in which
the broker-dealer solicits purchasers;
|
|
●
|
block trades in which the broker-dealer will attempt to sell
the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;
|
|
●
|
purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
|
|
●
|
an exchange distribution in accordance with the rules of the
applicable exchange;
|
|
●
|
privately negotiated transactions;
|
|
●
|
settlement of short sales entered into after the effective
date of the registration statement of which this prospectus is a part;
|
|
●
|
in transactions through broker-dealers that agree with the
Selling Stockholders to sell a specified number of such securities at a stipulated price per security;
|
|
●
|
through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;
|
|
●
|
a combination of any such methods of sale; or
|
|
●
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any other method permitted pursuant to applicable law.
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The Selling Stockholders may
also sell securities under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), if available,
rather than under this prospectus.
Broker-dealers engaged by
the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts
from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts
to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction, not in excess of
a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in
compliance with FINRA IM-2440.
In connection with the sale
of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling
Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities
to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer
or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
We will pay all of the expenses
incident to the registration, offering, and sale of the shares to the public other than commissions or discounts of underwriters, broker-dealers,
or agents. Any commissions, discounts or other fees payable to brokers-dealers in connection with any sale of the shares of common stock
will be borne by the selling stockholders, the purchasers participating in such transaction, or both.
The Selling Stockholders and
any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning
of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities
Act. We know of no existing arrangements between the selling stockholders, any other shareholder, broker, dealer, underwriter, or agent
relating to the sale or distribution of the shares offered by this prospectus. In no event shall any broker-dealer receive fees, commissions
and markups which, in the aggregate, would exceed eight percent (8%).
Because Selling Stockholders
may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus delivery
requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this Prospectus which qualify
for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this Prospectus.
We agreed to keep this Prospectus
effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and
without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance
with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities
have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities
will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in
certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under
the Exchange Act, any person engaged in the distribution of the resale shares may not simultaneously engage in market making activities
with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution.
In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder,
including Regulation M, which may limit the timing of purchases and sales of shares of the common stock by the Selling Stockholders or
any other person. We will make copies of this Prospectus available to the Selling Stockholders and have informed them of the need to deliver
a copy of this Prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities
Act).
Penny Stock Rules
Our shares of common stock
are subject to the “penny stock” rules of the Exchange Act. In general terms, “penny stock” is defined as any
equity security that has a market price less than $5.00 per share, subject to certain exceptions. The rules provide that any equity security
is considered to be a penny stock unless that security is registered and traded on a national securities exchange meeting specified criteria
set by the SEC, authorized for quotation from the NASDAQ stock market, issued by a registered investment company, and excluded from the
definition on the basis of price (at least $5.00 per share), or based on the issuer’s net tangible assets or revenues. In the last
case, the issuer’s net tangible assets must exceed $3,000,000 if in continuous operation for at least three years or $5,000,000
if in operation for less than three years, or the issuer’s average revenues for each of the past three years must exceed $6,000,000.
Trading in shares of penny
stock is subject to additional sales practice requirements for broker-dealers who sell penny stocks to persons other than established
customers and accredited investors. Accredited investors, in general, include individuals with assets in excess of $1,000,000 or annual
income exceeding $200,000 (or $300,000 together with their spouse), and certain institutional investors. For transactions covered by these
rules, broker-dealers must make a special suitability determination for the purchase of the security and must have received the purchaser’s
written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, the rules require
the delivery, prior to the first transaction, of a risk disclosure document relating to the penny stock. A broker-dealer also must disclose
the commissions payable to both the broker-dealer and the registered representative, and current quotations for the security. Finally,
monthly statements must be sent disclosing recent price information for the penny stocks. These rules may restrict the ability of broker-dealers
to trade or maintain a market in our common stock, to the extent it is penny stock, and may affect the ability of stockholders to sell
their shares.
DESCRIPTION OF SECURITIES
The following description
of our capital stock being registered herein is a summary only and is qualified in its entirety by reference to our Articles of Incorporation,
as amended, and Amended and Restated Bylaws, which are included as Exhibits 3.1 through 3.7 of the Company’s Annual Report on Form
10-K (incorporating such documents by reference to prior reports on file with the SEC by the Company).
Common Stock
We are authorized to issue
up to 500,000,000 shares of common stock, $0.001 par value per share. Holders of our common stock are entitled to receive dividends when
and as declared by our board of directors out of funds legally available. Holders of our common stock are entitled to one vote for each
share on all matters voted on by stockholders, including the election of directors. Holders of our common stock do not have any conversion,
redemption or preemptive rights. In the event of our dissolution, liquidation or winding up, holders of our common stock are entitled
to share ratably in any assets remaining after the satisfaction in full of the prior rights of creditors and the aggregate liquidation
preference of any preferred stock then outstanding. The rights, preferences and privileges of the holders of our common stock are subject
to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate and issue
in the future.
Preferred Stock
As of December 31, 2020 and
2019, there were 13,602 shares of Series A Redeemable Convertible Preferred Stock (the “Series A Preferred Stock”) outstanding.
The company has not paid the dividends commencing with the quarterly dividend due August 1, 2013. Dividend arrearages as of December 31,
2020 and April 8, 2021 were approximately $261,000 and $270,000, respectively. Our Board of Directors suspended the declaration of
the dividend, commencing with the dividend payable as of February 1, 2015 since we did not have a surplus (as such term is defined in
the Delaware general corporation Law) as of December 31, 2014, until such time as we have a surplus or net profits for a fiscal year.
Our Series A Preferred Stock
has a liquidation preference of $25.00 per Share. The Series A Preferred Stock bears dividends at the rate of 6.5% of the liquidation
preference per share per annum, which accrues from the date of issuance, and is payable quarterly. Dividends may be paid in: (i) cash,
(ii) shares of our common stock (valued for such purpose at 95% of the weighted average of the last sales prices of our common stock for
each of the trading days in the ten trading day period ending on the third trading day prior to the applicable dividend payment date),
provided that the issuance and/or resale of all such shares of our common stock are then covered by an effective registration statement
and the company’s common stock is listed on a U.S. national securities exchange or the Nasdaq Stock Market at the time of issuance
or (iii) any combination of the foregoing. If the company fails to make a dividend payment within five business days following a dividend
payment date, the dividend rate shall immediately and automatically increase by 1% from 6.5% of the liquidation preference per offered
share of Series A preferred stock to 7.5% of such liquidation preference. If a payment default shall occur on two consecutive dividend
payment dates, the dividend rate shall immediately and automatically increase to 10% of the liquidation preference for as long as such
payment default continues and shall immediately and automatically return to the Initial dividend rate at such time as the payment default
is no longer continuing.
Transfer Agent and Registrar
The transfer agent and registrar
for our common stock is Continental Stock Transfer & Trust Company.
LEGAL MATTERS
Unless otherwise stated in an accompanying prospectus
supplement, Masur Griffitts Avidor LLP, New York, New York, will provide us with an
opinion as to the legality of the securities offered under this prospectus.
EXPERTS
The consolidated financial statements of Applied
Energetics, Inc. and subsidiary, as of and for the year ended December 31, 2020 and 2019, have been incorporated by reference herein in
reliance upon the report of RBSM LLP, independent registered public accounting firm, and upon the authority of said firm as expert in
accounting and auditing.
Applied Energetics,
Inc.
10,006,250 Shares of Common Stock
Offered by the Selling Stockholders
The date of this prospectus is ,
2021.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance
and Distribution
The following is a statement
of the estimated expenses (other than underwriting discounts and commissions) to be borne by Applied Energetics, Inc. in connection with
the issuance and distribution of the securities registered under this registration statement. Except
for the SEC registration fee, all amounts are estimates.
SEC registration fee
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$
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|
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Legal fees and expenses
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6,000.00
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Accounting fees and expenses
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7,500.00
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Miscellaneous
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1,000.00
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|
Total
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$
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14,500.00
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|
Item 15. Indemnification of Directors
and Officers
The Company’s Certificate
of Incorporation and Bylaws provide for indemnification of officers and directors of the Company and certain other persons to the full
extent permitted by law, as now in effect or later amended, against liabilities and expenses incurred by any of them in certain stated
proceedings and under certain stated conditions.
The Company may maintain insurance
for the benefit of its directors, officers, employees, agents and certain other persons, insuring such persons against any expense, liability
or loss, including liability under the securities laws. In addition, the Company has entered into indemnification agreements with our
directors and executive officers that require us to indemnify these persons for claims made against each of these persons because he or
she is, was or may be deemed to be a director, officer, employee or agent of the Company or any of our subsidiaries. We are obligated
to pay the expenses of these persons in connection with any claims that are subject to the agreement.
Section 102 of the DGCL allows
a corporation to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages
for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged
in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation
of the DGCL or obtained an improper personal benefit.
Section 145 of the DGCL provides,
among other things, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that
the person is or was a director, officer, agent or employee of the corporation or is or was serving at the corporation’s request
as a director, officer, agent, or employee of another corporation, partnership, joint venture, trust or other enterprise, against expenses,
including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection
with such action, suit or proceeding. The power to indemnify applies (1) if such person is successful on the merits or otherwise in defense
of any action, suit or proceeding, or (2) if such person acted in good faith and in a manner he or she reasonably believed to be in the
best interest, or not opposed to the best interest, of the corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The power to indemnify applies to actions brought by or in the right of the
corporation as well, but only to the extent of defense expenses (including attorneys’ fees but excluding amounts paid in settlement)
actually and reasonably incurred and not to any satisfaction of judgment or settlement of the claim itself, and with the further limitation
that in such actions no indemnification shall be made in the event of any adjudication of negligence or misconduct in the performance
of his or her duties to the corporation, unless the court believes that in the light of all the circumstances indemnification should apply.
Section 174 of the DGCL provides,
among other things, that a director, who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase
or redemption, may be held liable for such actions. A director who was either absent when the unlawful actions were approved or dissented
at the time may avoid liability by causing his or her dissent to such actions to be entered in the books containing the minutes of the
meetings of the board of directors at the time such action occurred or immediately after such absent director receives notice of the unlawful
acts.
Item 16. Exhibits
EXHIBIT
NUMBER
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DESCRIPTION
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2.1
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Amended and Restated Plan and Agreement of Merger entered into as of March 17, 2004, by and among U.S. Home & Garden, Inc. (“USHG”), Ionatron Acquisition Corp., a wholly-owned subsidiary of USHG, Robert Kassel (for purposes of Sections 5.9, 6.2(d), 6.2(j), 9.4 and 10.10 only), Fred Heiden (for purposes of Section 9.4 only), and Ionatron, Inc. and Robert Howard, Stephen W. McCahon, Thomas C. Dearmin and Joseph C. Hayden (incorporated by reference to the comparable exhibit filed with the Registrant’s Form 8-K filed with the SEC on March 24, 2004).
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3.1
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Certificate of Incorporation, as amended, (incorporated by reference to the comparable exhibit filed with the Registrant’s Form 10-KSB for the fiscal year ended June 30, 1995).
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3.2
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Certificate of Amendment of Certificate of Incorporation of the Registrant filed with the Secretary of State of the State of Delaware on April 29, 2004 (incorporated by reference to the comparable exhibit filed with the Registrant’s Form 10-Q for the quarterly period ended March 31, 2004).
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3.3
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Certificate of Elimination of the 10% Series A Convertible Preferred Stock of the Registrant (incorporated by reference to the comparable exhibit filed with the Registrant’s Form 8-K filed with the SEC on October 28, 2005).
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3.4
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Certificate of Designation of the 6.5% Series A Redeemable Convertible Preferred Stock of the Registrant (incorporated by reference to the comparable exhibit filed with the Registrant’s 8-K filed with the SEC on October 28, 2005).
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3.5
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Certificate of Ownership and Merger of Applied Energetics, Inc. into Ionatron, Inc. (incorporated by reference to the comparable exhibit filed with the Registrant’s Form 8-K filed with the SEC on February 20, 2008).
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3.6
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Amended and Restated By-laws of the Registrant (incorporated by reference to Exhibit 3 of the Registrant’s Form 10-Q for the Quarter ended June 30, 2007.
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3.7
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Certificate of Amendment to Certificate of Incorporation filed with the Secretary of State of the State of Delaware on September 10, 2007. (incorporated by reference to Exhibit 3.7 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed on June 17, 2019).
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4.1
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Form of certificate evidencing Common Stock, $.001 par value, of the Registrant (incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form S-1 (Registration No. 333-38483)).
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5.1
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Opinion of Masur Griffitts Avidor LLP
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10.1
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2018 Incentive Stock Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-K for the fiscal year ended December 31, 2018).
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10.2
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Consulting and Advisory Services Agreement, effective as of February 15, 2019, by and between the Registrant and WCC Ventures, LLC (incorporated by reference to Exhibit 99 to Form 8-K filed with the SEC on February 22, 2019).
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10.3
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Advisory Board Agreement by and between registrant and Christopher Donaghey (Previously filed).
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10.4
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Executive Employment Agreement, dated as of April 18,2019, by and between the Registrant and Gregory J. Quarles (Previously filed).
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10.5
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Scientific Advisory Board Agreement, by and between the Registrant and Charles Hale (Previously filed.)
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10.6
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Consulting Agreement, by and between the Registrant and SWM Consulting, LLC (incorporated by reference to comparable exhibit filed with the Registrant’s Form 8-K filed with the SEC on May 31, 2019)
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10.7
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Asset Purchase Agreement, by and between the Registrant and Applied Optical Sciences, Inc. LLC (incorporated by reference to comparable exhibit filed with the Registrant’s Form 8-K filed with the SEC on May 31, 2019)
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10.8
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Contract/Order for Supplied and Services with the Department of the Army, dated as of March 3, 2020 (incorporated by reference to the comparable exhibit filed with the Registrant’s Form 10-K for the year ended December 31, 2019).
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10.9
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Lease Agreement, dated as of March 15, 2021 by and between the Registrant and Campus Research Corporation (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed with the SEC on March 17, 2021).
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21
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Subsidiaries (incorporated by reference to the comparable exhibit filed with the Registrant’s Form 10-K for the year ended December 31, 2006)
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23.1
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Consent of RBSM LLP
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99.1
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Compensation Committee Charter (incorporated by reference to the comparable exhibit filed with the Registrant’s Form 10-K for the year ended December 31, 2010)
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99.2
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Corporate Governance and Nominating Committee Charter (incorporated by reference to the comparable exhibit filed with the Registrant’s Form 10-K for the year ended December 31, 2009)
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99.3
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Audit Committee Charter (incorporated by reference to the comparable exhibit filed with the Registrant’s Form 10-K for the year ended December 31, 2009)
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Item 17. Undertakings
(a) The undersigned registrant
hereby undertakes:
(1) To file, during any period
in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus
required by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus
any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the
effective registration statement;
(iii) To include any material
information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to
such information in the registration statement;
provided, however,
that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) shall not apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant
to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose
of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose
of determining liability under the Securities Act to any purchaser:
(a) Each prospectus filed
by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus
was deemed part of and included in the registration statement; and
(b) Each prospectus required
to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the
Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus
is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus.
As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be
deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided,
however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made
in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior
to such effective date.
(c)
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of
the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated
by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(d) Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements
of the Securities Act, Applied Energetics, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this Registration Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, on the 10 day of June, 2021.
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APPLIED ENERGETICS, INC.
|
|
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By:
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/s/ Gregory J. Quarles
|
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Gregory J. Quarles
|
|
|
Chief Executive Officer and President
|
Pursuant to the requirements of the Securities
Act, this Registration Statement has been signed below by the following persons in the capacities and on the 10th day
of June, 2021.
Name/Signature
|
|
Title
|
|
Date
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|
|
|
|
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/s/ Gregory J. Quarles
|
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Chief Executive Officer, President and Director
|
|
June 10, 2021
|
Gregory J. Quarles
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/s/ Bradford T. Adamczyk
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Chairman and Director
|
|
June 10, 2021
|
Bradford T. Adamczyk
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/s/ Jonathan Barcklow
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Vice President, Secretary and Director
|
|
June 10, 2021
|
Jonathan Barcklow
|
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/s/ John Schultz
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Director
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June 10, 2021
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John Schultz
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II-5
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