Applied Energetics, Inc. (AERG)

[travel lightly]

In relation to today’s filing:

On August 31, 2020, Applied Energetics, Inc. completed its bridge financing consisting of the issuance of 10% Promissory Notes in the aggregate original principal amount of $5,411,698, which amount includes $1,087,698 which were issued upon exchange for principal and/or interest due on outstanding promissory notes that were previously issued by the company. These notes bear interest at a rate of 10% per annum. At any time after October 15, 2020 until July 15, 2021, the date of maturity, (i) each investor may elect to convert these notes into shares of our common stock, at a conversion price of $0.30 per share and (ii) the company may elect to prepay, either in cash or in shares of common stock at a price of $0.30 per share, at the option of the holder, the amount of principal and interest then outstanding under each note. In the event we elect to prepay the notes, we will notify the holders, each of whom will then have five business days to notify the company if they prefer to receive such prepayment in cash or stock. These notes are payable in full at maturity. In lieu of repayment of the principal and interest on the notes at maturity, the company may elect to convert the amounts due into shares of common stock at a price of $0.15 per share.