10-Q - AERG - Equibles

UNITED STATES

SECURITIES AND EXCHANGECOMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ Quarterly ReportPursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2026

☐ Transition ReportPursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _________ to ________

Commission File Number001-14015

APPLIED ENERGETICS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	77-0262908

| (Address of Principal Executive Offices) | (Zip Code) |

Registrant’s telephonenumber, including area code (520) 628-7415

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or 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. (Check one):

Large accelerated filer:	☐	Accelerated filer:	☐

| Non-accelerated filer: | ☒ | Smaller reporting company: | ☒ |

| | | Emerging growth company | ☐ |

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 provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Exchange Act: None

Securities registered pursuant to Section 12(g) of the Exchange Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered

| Common Stock, par value $0.001 per share | AERG | OTCQB |

As of May 12, 2026, there were 223,944,247 shares of the issuer’s common stock, par value $0.001 per share, outstanding.

APPLIED ENERGETICS, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
ITEM 1.	Condensed Consolidated Unaudited Financial Statements	1
	Condensed Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025	1
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025 (Unaudited)	2
	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2026 and 2025 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 (Unaudited)	4
	Notes to Condensed Consolidated Unaudited Financial Statements	5
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	21
ITEM 4.	Controls and Procedures	22
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	23
ITEM 1A.	Risk Factors	23
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
ITEM 3.	Defaults upon Senior Securities	23
ITEM 4.	Mine Safety Disclosures	23
ITEM 5	Other Information	23
ITEM 6.	Exhibits	23
SIGNATURES		24

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

APPLIED ENERGETICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

			December 31,
			2025

Assets
Current assets
Cash and cash equivalents	4,064,093		$	6,436,082
Other assets	584,419			533,382
Total current assets	4,648,512			6,969,464
Long-term assets
Property and equipment - net	1,222,287			1,267,037
Right of use asset – operating lease	741,471			811,153
Security deposit	17,004			17,004
Total long-term assets	1,980,762			2,095,194
Total assets	6,629,274		$	9,064,658
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	256,801		$	220,908
Notes payable	-			48,000
Operating lease liability - current	294,894			281,162
Accrued expenses	337,099			242,197
Accrued dividends	48,079			48,079
Total current liabilities	936,873			840,346
Long-term liabilities
Operating lease liability - non-current	576,405			664,542
Total long-term liabilities	576,405			664,542
Total liabilities	1,513,278			1,504,888
Commitments and contingencies
Stockholders’ Equity
Series A convertible preferred stock, .001 par value, 2,000,000 shares authorized and 13,602 shares issued and outstanding at March 31, 2026 and December 31, 2025 (Liquidation preference 340,050 and 340,050, respectively)	14			14
Common stock, .001 par value, 500,000,000 shares authorized; 229,806,058 and 229,580,642 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively	229,809			229,583
Additional paid-in capital	143,555,878			142,192,155
Accumulated deficit	(138,669,705	)		(134,861,982	)
Total stockholders’ equity	5,115,996			7,559,770
Total Liabilities and Stockholders’ Equity	6,629,274		$	9,064,658

All values are in US Dollars.

See accompanying notes to condensed consolidated financial statements (unaudited).

APPLIED ENERGETICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	FOR THE THREE MONTHS ENDED <br> MARCH 31,
	2026			2025
Revenue	$	-		$	209,753
Cost of revenue		-			63,914
Gross profit		-			145,839
Operating expenses
General and administrative		3,282,788			2,609,688
Selling and marketing		172,279			318,784
Research and development		375,041			323,047
Total operating expenses		3,830,108			3,251,519
Operating loss		(3,830,108	)		(3,105,680	)
Other income/(expense)
Other income		22,385			14
Total other income/(expense)		22,385			14
Loss before provision for income taxes		(3,807,723	)		(3,105,666	)
Provision for income taxes		-			-
Net loss		(3,807,723	)		(3,105,666	)
Preferred stock dividends		(8,501	)		(8,501	)
Net loss attributable to common stockholders	$	(3,816,224	)	$	(3,114,167	)
Net loss attributable to common stockholders per common share - basic and diluted	$	(0.02	)	$	(0.01	)
Weighted average number of common shares outstanding		229,696,301			217,422,627

See accompanying notes to condensed consolidated financial statements (unaudited).

APPLIED ENERGETICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND2025

(Unaudited)

	Preferred Stock				Common Stock						Additional <br> Paid-In			Accumulated			Total<br> Stockholders’<br> (Deficit)
	Shares		Amount		Shares			Amount			Capital			Deficit			Equity
Balance at December 31, 2025		13,602	$	14		229,580,642	(A)	$	229,583		$	142,192,155		$	(134,861,982	)	$	7,559,770
Stock-based compensation		-		-		-			-			1,348,232			-			1,348,232
Common stock issued on exercise of options		-		-		217,463			218			20,162			-			20,380
Common stock issued for settlement of restricted stock units		-		-		11,667			12			(12	)		-			-
Common stock withheld to cover income tax withholding obligations		-		-		(3,751	)		(4	)		(4,659	)		-			(4,663	)
Net loss for the period ended March 31, 2026		-		-		-			-			-			(3,807,723	)		(3,807,723	)
Balance at March 31, 2026		13,602	$	14		229,806,021		$	229,809		$	143,555,878		$	(138,669,705	)	$	5,115,996
(A)	Includes issuance in 2025 of 5,961,774 prefunded warrants.
---	---
	Preferred Stock				Common Stock						Additional <br><br>Paid-In			Accumulated			Total<br> Stockholders’<br> (Deficit)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Shares		Amount		Shares			Amount			Capital			Deficit			Equity
Balance at December 31, 2024		13,602	$	14		213,860,508		$	213,861		$	120,168,124		$	(119,989,252	)	$	392,747
Stock-based compensation		-		-		-			-			912,593			-			912,593
Common stock issued on exercise of options		-		-		30,000			30			11,970			-			12,000
Issuance of common stock under the market offering		-		-		4,272,334			4,272			5,999,978			-			6,004,250
Common stock issued for settlement of restricted stock units		-		-		11,667			12			(12	)		-			-
Common stock withheld to cover income tax withholding obligations		-		-		(3,693	)		(4	)		(2,729	)		-			(2,733	)
Shares issued for consulting services		-		-		80,000			80			79,120			-			79,200
Net loss for the period ended March 31, 2025		-		-		-			-			-			(3,105,666	)		(3,105,666	)
Balance at March 31, 2025		13,602	$	14		218,250,816		$	218,251		$	127,169,044		$	(123,094,918	)	$	4,292,391

See accompanying notes to condensed consolidated financial statements (unaudited).

APPLIED ENERGETICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	FOR THE THREE MONTHS ENDED<br> MARCH 31,
	2026			2025
Cash Flows From Operating Activities
Net loss	$	(3,807,723	)	$	(3,105,666	)
Adjustments to reconcile net loss to net cash used in operating activities:
Noncash stock based compensation expense		1,348,232			991,793
Amortization of ROU assets		69,682			63,762
Depreciation		88,143			56,151
Amortization of prepaid assets		51,250			38,393
Changes in assets and liabilities:
Accounts receivable		-			245,505
Other assets		(102,287	)		(28,159	)
ROU liabilities		(74,405	)		(58,708	)
Accounts payable		35,893			35,152
Accrued expenses and compensation		94,902			30,166
Net cash used in operating activities		(2,296,313	)		(1,731,610	)
Cash Flows From Investing Activities
Purchase of equipment		(43,393	)		(114,118	)
Net cash used in investing activities		(43,393	)		(114,118	)
Cash Flows From Financing Activities
Proceeds from issuance of common stock under the market offering		-			6,004,250
Repayment of insurance premium loan		(48,000	)		(47,325	)
Tax withholdings related to net share settlement of RSU’s		(4,663	)		(2,733	)
Proceeds from the exercise of stock options and warrants		20,380			12,000
Net cash provided by financing activities		(32,283	)		5,966,193
Net change in cash and cash equivalents		(2,371,989	)		4,120,464
Cash and cash equivalents, beginning of year		6,436,082			164,812
Cash and cash equivalents, at end of period	$	4,064,093		$	4,285,276
Supplemental disclosure of cash flow information
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-

See accompanying notes to condensed consolidated financial statements (unaudited).

APPLIED ENERGETICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

NOTE 1 – ORGANIZATION OF BUSINESS, GOINGCONCERN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of Applied Energetics, Inc. and its wholly owned subsidiary North Star Power Engineering, Inc. (“North Star”) (collectively, “company,” “Applied Energetics,” “we,” “our” or “us”). All intercompany balances and transactions have been eliminated.

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, the instructions for Form 10-Q and the rules and regulations of the SEC. Accordingly, since they are interim statements, the accompanying unaudited condensed consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements, but reflect all adjustments consisting of normal, recurring adjustments, that are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of the results that may be expected for any future periods. The December 31, 2025, balance sheet information was derived from the audited financial statements as of that date. The interim unaudited condensed consolidated financial statements should be read in conjunction with the company’s audited consolidated financial statements contained in our Annual Report on Form 10-K.

Going Concern

For the three months ended March 31, 2026, the Company incurred a net loss of $3,807,723, had negative cash flows from operations of $2,296,313 and may incur additional future losses due to limited contract activity. At March 31, 2026, the company had total current assets of $4,648,512 and total current liabilities of $936,873, resulting in working capital of $3,711,639. At March 31, 2026, the company had cash of $4,064,093.

Based on the Company’s current business plan, it believes its cash balance as of the date of this filing, together with anticipated revenues from government contracts, will be sufficient to meet its anticipated cash requirements for the near term. However, there can be no assurance that the current business plan will be achievable. Such conditions raise substantial doubts about the Company’s ability to continue as a going concern for one year from the date the financial statements are issued.

The Company’s existence depends upon management’s ability to develop profitable operations. Management is devoting substantially all of its efforts to developing its business and raising capital and there can be no assurance that management’s efforts will result in profitable operations or enable it to overcome future liquidity concerns. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability of assets, the amount or classification of liabilities or otherwise that might be necessary should the Company be unable to continue as a going concern.

APPLIED ENERGETICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Trade conditions, such as unusually high and fluctuating tariffs, exacerbated supply chain shutdowns and delays, contribute to this uncertainty. Additionally, Russia’s military action in Ukraine, war in the Middle East, and related economic sanctions around the globe, could impact the Company’s ability to source necessary supplies and equipment which could materially and adversely affect its ability to continue as a going concern. In addition, the Company’s ability to continue as a going concern may depend on its ability to raise capital, which may be impacted by these events, including as a result of increased market volatility, or decreased market liquidity. This may result in third-party financing being unavailable on terms acceptable to the company or at all. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

To further improve its liquidity position, the Company’s management continues to explore additional equity financing through discussions with investment bankers and private investors. The company may be unsuccessful in its effort to secure additional equity financing. The financial statements do not include any adjustments relating to the recoverability of assets and the amount or classification of liabilities that might be necessary should the company be unable to continue as a going concern.

Applied Energetics, Inc. is a corporation organized and existing under the laws of the State of Delaware. Our headquarters are located at 9070 S. Rita Road Suite 1500, Tucson, Arizona, 85747, including office and laboratory space, and our telephone number is (520) 628-7415.

Use of Estimates

The preparation of unaudited condensed financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management bases its assumptions on historical experiences and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. In addition, management considers the basis and methodology used in developing and selecting these estimates, the trends in and amounts of these estimates, specific matters affecting the amount of and changes in these estimates, and any other matters related to these estimates, including significant issues concerning accounting principles and financial statement presentation. Such estimates and assumptions could change in the future as more information becomes known which could impact the amounts reported and disclosed herein. Significant estimates include revenue recognition, carrying amounts of long-lived assets, valuation assumptions for share-based payments, evaluation of debt modification accounting, effective borrowing rate determinations, analysis of fair value transferred upon debt extinguishment, valuation and calculation of measurements of income tax assets and liabilities.

Net Loss Attributable to Common Stockholders

Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period before giving effect to stock options, stock warrants, restricted stock units and convertible securities outstanding, which are considered to be dilutive common stock equivalents. Diluted net loss per common share is calculated based on the weighted average number of common and potentially dilutive shares outstanding during the period after giving effect to dilutive common stock equivalents. Contingently issuable shares are included in the computation of basic loss per share when issuance of the shares is no longer contingent. The number of options, restricted stock units, warrants, and our Series A Convertible Preferred Stock, which were not included in the computation of earnings per share because the effect was antidilutive, was 37,973,773 and 35,793,004 for the three months ended March 31, 2026 and 2025, respectively.

Significant Concentrations and Risks

We maintain cash balances at a commercial bank, and, at times, balances exceed FDIC limits. As of March 31, 2026, $3,809,644 was uninsured.

APPLIED ENERGETICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

NOTE 2 – NEW ACCOUNTING STANDARDS

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses. The guidance in ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory; employee compensation; and depreciation, amortization and depletion expenses for each caption on the income statement where such expenses are included. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. The Company is currently evaluating the provisions of this guidance and assessing the potential impact on the Company’s financial statement disclosures.

NOTE 3 – OTHER ASSETS

Other assets consisted of the following as of March 31, 2026 and December 31, 2025:

	As of<br> March 31,		As of<br> December 31,
	2026		2025
Prepaid Expenses	$	533,169	$	430,882
Prepaid Insurance		51,250		102,500
Total other assets	$	584,419	$	533,382

NOTE 4 – PROPERTY AND EQUIPMENT – NET

Property and equipment – net consisted of the following as of March 31, 2026 and December 31, 2025:

	As of<br> March 31,			As of<br> December 31,
	2026			2025
Lab equipment	$	763,011		$	763,011
Battle Lab Equipment		1,108,334			1,102,941
Software		442,310			442,310
Furniture and fixtures		24,143			24,143
Computer equipment		161,978			161,978
Other Property Used for Transportation		49,200			11,200
Total property and equipment		2,548,976			2,505,583
Less: Accumulated depreciation		(1,326,689	)		(1,238,546	)
Property and equipment, net	$	1,222,287		$	1,267,037

Depreciation expense for the three months ended March 31, 2026 and 2025, was $88,143 and $56,151, respectively. There were no material additions or disposals during the period ended March 31, 2026.

APPLIED ENERGETICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

NOTE 5 – SECURITY DEPOSIT

As of March 31, 2026 and December 31, 2025, the Company had security deposit totaling $17,004 which primarily consist of amounts paid under office and facility lease agreements. These deposits are refundable upon lease termination, subject to the terms of the underlying agreements. The security deposits are classified as non-current assets, as the leases are not expected to terminate within the next twelve months.

NOTE 6 – ACCRUED EXPENSES

Accrued expenses consisted of the following as of March 31, 2026 and December 31, 2025:

	As of<br> March 31,		As of<br> December 31,
	2026		2025
Accrued payroll	$	203,310	$	148,218
Accrued 401k		9,339		-
Accrued PTO		71,651		55,673
Accrued payroll taxes		15,167		26,832
Accrued other		37,632		11,474
Total accrued expenses	$	337,099	$	242,197

NOTE 7 – NOTES PAYABLE

Premium Financing

On June 12, 2025, the Company entered into an agreement with Oakwood D&O Insurance to provide financing in the amount of $160,000 for the insurance premium associated with two D&O policies. Both policies commenced June 12, 2025, and provide coverage for the next 12 months, expiring June 11, 2026. The loan bears interest at a fixed rate of 9.250% per annum and required the company to prepay $45,000 and appears on the balance sheet as other asset. On July 12, 2025, the Company commenced monthly principal and interest payments of $16,686 which was the first payment of ten remaining months due of $166,861.50, the last payment of which was scheduled to be made on April 12, 2026. As of March 31, 2026, the outstanding balance on the note was $0.

On March 12, 2024, the Company entered into an agreement with Oakwood D&O Insurance to provide financing in the amount of $189,302 for the insurance premium associated with two D&O policies. Both policies commenced March 12, 2024, and provided coverage for the next 15 months, expiring June 11, 2025. The loan bears interest at a fixed rate of 9.50% per annum and required the company to prepay $41,057 and appears on the balance sheet as an “other asset.” On April 12, 2024, the Company commenced monthly principal and interest payments of $15,775 which was the first payment of twelve remaining months due of $189,302, the last payment of which was made on March 12, 2025. As of December 31, 2025, the outstanding balance on the note was $0.

Notes Payable Reconciliation

The following reconciles notes payable as of March 31, 2026, and December 31, 2025:

	March 31,<br> 2026			December 31, <br> 2025
Beginning balance	$	47,325		$	47,325
Notes payable		-			160,000
Payments on notes payable		(47,325	)		(159,325	)
Total		-			48,000
Less-Notes payable – current		-			48,000
Notes payable – non-current	$	-		$	-

APPLIED ENERGETICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

NOTE 8 – STOCKHOLDERS’ EQUITY

Authorized Capital Stock

During the three months ended March 31, 2025, the Company completed the placement of 8,010,652 shares of its common stock, par value, $0.001 per share, some of which were underlying pre-funded common stock purchase warrants, in a private sale to individual purchasers at a price of $0.75 per share (or $0.749 per underlying share for pre-funded warrants), for aggregate proceeds in the approximate amount of $ 6,004,250.

During the three months ended March 31, 2025, the company issued 30,000 shares of common stock upon the exercise of 30,000 options at an exercise price of $0.40 a share. As a result, the company received $12,000 in cash proceeds as part of the transaction.

During the three months ended March 31, 2025, restricted stock units covering 11,667 shares of the company’s common stock vested. The Company issued 11,667 and withheld 3,693 shares of common stock from the holder pursuant to their restricted stock unit agreements to cover its tax withholding obligation of $2,733.

During the three months ended March 31, 2025, the Company issued 80,000 shares of common stock to consultants in exchange for services rendered. During the three months ended March 31, 2026, the Company recognized stock compensation expense of $79,120.

During the three months ended March 31, 2026, the Company issued 217,463 shares of common stock upon the exercise of 217,463 options at an average exercise price of $0.09 a share. As a result, the Company received $20,380 in cash proceeds as part of the transaction.

During the three months ended March 31, 2026, restricted stock units covering 11,667 shares of the company’s common stock vested. The Company issued 11,667 and withheld 3,751 shares of common stock from the holder pursuant to their restricted stock unit agreements to cover its tax withholding obligation of $4,663.

Preferred Stock

As of March 31, 2026, and December 31, 2025, there were 13,602 shares of Series A Redeemable Convertible Preferred Stock (the “Series A Preferred Stock”) issued and outstanding, respectively. The company has not paid the dividends commencing with the quarterly dividend due August 1, 2013. Dividend arrearages as of March 31, 2026, including previously accrued dividends of $48,079 included in our balance sheet total approximately $439,521. The Company’s Board of Directors suspended the declaration of the dividend, commencing with the dividend payable as of February 1, 2015, since the Company 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.

The 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.

APPLIED ENERGETICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Each share of Series A Preferred Stock is convertible at any time at the option of the holder into a number of shares of common stock equal to the liquidation preference (plus any unpaid dividends for periods prior to the dividend payment date immediately preceding the date of conversion by the holder) divided by the conversion price (initially $12.00 per share, subject to adjustment in the event of a stock dividend or split, reorganization, recapitalization or similar event). If the closing sale price of the common stock is greater than 140% of the conversion price on 20 out of 30 trading days, the company may redeem the Series A Preferred Stock in whole or in part at any time through October 31, 2010, upon at least 30 days’ notice, at a redemption price, payable in cash, equal to 100% of the liquidation preference of the shares to be redeemed, plus unpaid dividends thereon to, but excluding, the redemption date, subject to certain conditions. In addition, beginning November 1, 2010, the company may redeem the Series A Preferred Stock in whole or in part, upon at least 30 days’ notice, at a redemption price, payable in cash, equal to 100% of the liquidation preference of the Series A Preferred Stock to be redeemed, plus unpaid dividends thereon to, but excluding, the redemption date, under certain conditions.

If a change of control occurs, each holder of shares of Series A Convertible Preferred Stock that are outstanding immediately prior to the change of control shall have the right to require the corporation to purchase, out of legally available funds, any outstanding shares of Series A Convertible Preferred Stock at the defined purchase price. The purchase price is defined as: per share of Preferred Stock, 101% of the liquidation preference thereof, plus all unpaid and accumulated dividends, if any, to the date of purchase thereof. The purchase price is payable, at the corporation’s option, (x) in cash, (y) in shares of the common stock at a discount of 5% from the fair market value of Common Stock on the Purchase Date (i.e. valued at a 95% discount of the Common Stock on the Purchase Date), or (z) any combination thereof.

If the Corporation pays all or a portion of the Purchase Price in Common Stock, no fractional shares of Common Stock will be issued; instead, the company will round the applicable number of shares of Common Stock up to the nearest whole number of shares; provided that the Corporation may pay the Purchase Price (or a portion thereof), whether in cash or in shares of Common Stock, only if the Corporation has funds legally available for such payment and may pay the Purchase Price (or a portion thereof) in shares of its Common Stock only if (i) the Common Stock is listed on a U.S. national securities exchange or the Nasdaq Stock Market at the time of issuance and (ii) a shelf registration statement covering the issuance by the Corporation and/or resales of the Common Stock issuable as payment of the Purchase Price is effective on the Payment Date unless such shares are eligible for immediate resale in the public market by non-affiliates of the Corporation.

Stock Option and Stock Issuance Plan

Effective November 12, 2018, the Board of Directors of Applied Energetics, Inc. adopted the 2018 Incentive Stock Plan. The plan provides for the allocation and issuance of stock, restricted stock purchase offers and options (both incentive stock options and non-qualified stock options) to officers, directors, employees and consultants of the company. The board reserved a total of 50,000,000 shares for possible issuance under the plan.

The Company has, from time to time, also granted non-plan options and restricted stock units to certain officers, directors, employees and consultants. Total stock-based compensation expense for grants to officers, employees and consultants was $1,348,232 and $991,793 for the three months ended March 31, 2026, and 2025, respectively, which was charged to general and administrative expense.

The $1,348,232 stock-based compensation for the three months ended March 31, 2026, was comprised of $929,673 option expense and $418,559 expense from the vesting of the restricted stock.

The Company recognized no related income tax benefit because our deferred tax assets are fully offset by a valuation allowance.

As of March 31, 2026, the company has $8,511,976 of unrecognized compensation cost related to unvested stock options granted and outstanding, net of estimated forfeitures. The cost is expected to be recognized on a weighted average basis over a period of approximately six years.

APPLIED ENERGETICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

The following table summarizes the activity of our stock options for the three months ended March 31, 2026:

	Shares			Weighted<br> Average<br> Exercise<br> Price		Weighted<br> Average<br> Contractual<br> Term<br> Outstanding		Intrinsic<br> Value

| Outstanding at December 31, 2025 | | 33,371,563 | | $ | 0.30 | | 5.43 | $ | 262,199,729 | |

| Granted | | 675,000 | | | 1.42 | | 9.36 | | 5,163,158 | |

| Exercised | | (217,500 | ) | | 0.09 | | 2.75 | | (577,117 | ) |

| Forfeited or expired | | (400,000 | ) | | - | | - | | - | |

| Outstanding at March 31, 2026 | | 33,429,063 | | | 0.62 | | 5.16 | | 153,227,964 | |

| Outstanding and exercisable at March 31, 2026 | | 21,637,395 | | | 0.42 | | 3.38 | | 63,649,913 | |

We determine the fair value of option grant share-based awards at their grant date, using a Black-Scholes- Merton Option- Pricing Model applying the assumptions in the following table:

	Three Months<br> Ended <br> March 31,
	2026
Assumptions:
Risk-free interest rate		3.94-4.17	%
Expected dividend yield		0	%
Expected volatility		86.20-87.44	%
Expected life (in years)		6.5-7.0

The fair value of restricted stock and restricted stock units was estimated using the closing price of our common stock on the date of award and fully recognized upon vesting. Restricted stock activity for the three months ended March 31, 2026, was as follows:

	Restricted Stock Outstanding
	Shares			Weighted<br> Average<br> Fair Value<br> per Share<br> at Grant Date
Nonvested at December 31, 2025		3,057,121			2.44
Granted – restricted stock units and awards		-			-
Granted – performance-based stock units		-			-
Canceled		-			-
Vested		(11,667	)		(2.25	)
Nonvested at March 31, 2026		3,045,454		$	2.45

APPLIED ENERGETICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

As of March 31, 2026, and December 31, 2025, there was $1,124,196 and $1,542,756 respectively in unrecognized stock- based compensation related to unvested restricted stock agreements, net of estimated forfeitures. The cost is expected to be recognized on a weighted average basis over a period of approximately six years.

On October 9, 2025, the Company entered a private placement issued 5,995,674 shares of its common stock (or pre-funded warrants in lieu thereof) to a group of existing accredited investors at a purchase price of $1.80 per share. The pre-funded warrants are exercisable immediately upon issuance at a price of $0.001 per share until exercised. The Company assessed the pre-funded warrants for appropriate balance sheet classification and concluded that the pre-funded warrants are freestanding equity-linked financial instruments that meet the criteria for equity classification under ASC 480 and ASC 815. Accordingly, they are classified as equity and accounted for as a component of common stock at the time of issuance. The Company also determined that the prefunded warrants should be included in the determination of basic and diluted earnings per share in accordance with ASC 260, Earnings per Share.

Warrant stock activity for the three months ended March 31, 2026, was as follows:

	Warrant Activity

| Outstanding at December 31, 2025 | | 1,435,000 | $ | 0.0600 | | 3.33 |

| Granted | | - | | - | | - |

| Exercised | | - | | - | | - |

| Forfeited | | - | | - | | - |

| Outstanding and exercisable at March 31, 2026 | | 1,435,000 | $ | 0.0600 | | 3.33 |

						Warrants Exercisable

| 0.06 | 1,435,000 | | 3.3 | $ | 0.06 | | 1,435,000 |

| | 1,435,000 | | 3.3 | $ | 0.06 | | 1,435,000 |

All values are in US Dollars.

APPLIED ENERGETICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

NOTE 9 – REVENUE RECOGNITION

The company derives revenue from technical research detailing the findings of its investigations to its customers under contract for specific projects. Under Topic 606, revenue is recognized when control of promised goods and services is transferred to customers, and the amount of revenue recognized reflects the consideration to which an entity expects to be entitled in exchange for the goods and services transferred. A performance obligation is a contractual promise to transfer a distinct good or service to the customer and is the unit of account under Topic 606. The transaction price of a contract is allocated to distinct performance obligations and recognized as revenue when or as the performance obligations are satisfied. The company’s contracts require significant integrated services and are accounted for as a single performance obligation, and revenue is recognized by the company over the contract term at a fixed contract price.

Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract.

As of March 31, 2026 and December 31, 2025, the Company had $0 of accounts receivable recorded on the balance sheet.

Concentrations

During the three months ended March 31, 2026, the Company had $0 in revenue recognized. As of March 31, 2026, the Company has $0 of accounts receivable recorded on the balance sheet. Accordingly, no allowance for doubtful accounts was recorded as of March 31, 2026.

During the three months ended March 31, 2025, two customers accounted for a total of $209,753 in revenue or 100% of revenue recognized. As of March 31, 2025, the Company has $90,334 or 100% of accounts receivable recorded as current assets on the balance sheet related to two customers. Based on the Company’s evaluation of credit risk, historical collection experience, and subsequent collections received, management concluded that these receivables are fully collectible. Accordingly, no allowance for doubtful accounts was recorded as of March 31, 2025. The accounts receivable balance was fully collected.

APPLIED ENERGETICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Operating Leases

In March 2021, the company signed a five-year lease for a 13,000 square foot laboratory/office space in Tucson. The initial base rent was $6.7626 per rentable square foot for year one and escalated to $ 9.2009 per rentable square foot in year two. It is to further escalate to $11.4806 per rentable square foot in year three, $13.1740 per rentable square foot in year four and $14.9306 per rentable square foot in year five, in addition to certain operating expenses and taxes.

On June 7, 2023, the company entered into an amendment to extend the term of the original lease from April 26, 2026 to July 31, 2028. Included in the lease amendment is extension space commencing on August 1, 2023. As of August 1, 2023 the Company has secured additional square footage in the amount of 9,805 rentable square feet (8,375 usable square feet). The initial base rent for expansion space was $9.10 per rentable square foot for year one, and escalated to $10.20 in year two, $11.30 in year three, $12.40 in year four and $13.50 in year five, plus certain operating expenses and taxes.

On July 3, 2024, Applied Energetics, Inc. exercised its option to lease more than 5,000 square feet of additional space at the University of Arizona Tech Park. The Company will occupy, in the aggregate, approximately 26,000 sq. ft. of space at the Arizona Tech Park. The company took the option to lease this additional space under the June 7, 2023, amendment.

The Company incurred lease expense for its operating leases of $164,133 which was included in general and administrative expenses in the statements of operation for the period ended March 31, 2026. During the three months ended March 31, 2026, the Company made cash lease payments in the amount of $94,553.

At March 31, 2026, the Company had approximately $299,703 in future minimum lease payments due for the nine months ended. The below table presents the future minimum lease payments due reconciled to lease liabilities.

	Operating <br><br>Lease
For the three months ended March 31, 2026
2026, nine months ended	$	299,703
2027		418,216
2028		250,317
2029		-
Thereafter		-
Total undiscounted lease payments		968,236
Present value discount, less interest		96,936
Lease Liability	$	871,299

APPLIED ENERGETICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

Guarantees

The Company agrees to indemnify its officers and directors for certain events or occurrences arising as a result of the officers or directors serving in such capacity. The maximum amount of future payments that the company could be required to make under these indemnification agreements is unlimited. However, the Company maintains a director’s and officer’s liability insurance policy that limits its exposure and enables it to recover a portion of any future amounts paid. As a result, it believes the estimated fair value of these indemnification agreements is minimal because of its insurance coverage, and it has not recognized any liabilities for these agreements as of March 31, 2026 and 2025.

Litigation

On January 15, 2021, the company filed a complaint in the United States District Court, Southern District of New York, against Gusrae, Kaplan & Nusbaum (GKN) and Ryan Whalen for malpractice and breach of New York Rules of Professional Conduct by both parties as former counsel to the company. On May 28, 2021, GKN and Mr. Whalen filed a motion to dismiss the complaint. On June 25, 2021, the company filed an opposition to the motion. On July 13, 2021, GKN and Mr. Whalen filed their reply brief. On March 30, 2022, United States Magistrate Judge Debra Freeman signed an order denying the motion of GKN and Mr. Whalen to dismiss the company’s claim for malpractice and for rescission of the shares-for-fees agreement under which GKN and Whalen received 1,242,710 shares of the company’s common stock. The motion was partially granted as to the separate claim for violation of NYRPC 1.7 and 1.8 because the court found that it was duplicative of the malpractice claim. Motions for summary judgment in the case were fully briefed, and the judge held oral arguments on August 7, 2025. On September 17, 2025, the court issued an Opinion and Order denying both parties’ motions for Summary Judgment. The parties participated in a mediation on April 23, 2026 which did not result in a settlement. The court recently scheduled the trial to commence on December 1, 2026.

As with any litigation, the Company cannot predict the outcome with certainty, but the company expects to provide further updates on the status of the litigation as circumstances warrant.

The Company may, from time to time, be involved in legal proceedings arising from the normal course of business.

NOTE 11 – SEGMENT INFORMATION

ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the chief operating decision maker (“CODM”), or group, in deciding how to allocate resources and assess performance.

The CODM has been identified as the Chief Executive Officer, who reviews the assets, operating results, and financial metrics for the company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that there is only one reportable segment.

The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the statement of operations as net income or loss. When evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews each of the key metric included in net income or loss and set forth in the table below.

APPLIED ENERGETICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Unaudited)

The Company is currently deemed to be comprised of only one operating segment and one reportable segment. The following table presents selected financial information with respect to the Company’s single reportable segment for the three months ended March 31, 2026 and 2025:

	FOR THE THREE MONTHS ENDED <br> MARCH 31,
	2026			2025
Revenue	$	-		$	209,753
Operating Expenses
Cost of revenue
Payroll and related		-			59,064
Materials and supplies		-			4,850
Total cost of revenue		-			63,914
General and administrative
Payroll and related		1,001,682			680,320
Professional fees		323,845			319,582
Board compensation		96,250			76,250
Employee stock based compensation		864,134			471,744
Consulting stock based compensation		484,097			520,049
Materials and supplies		37,867			71,886
Marketing and travel		87,343			64,727
Investor relations		24,462			36,122
Insurance		51,250			75,533
Software and communications		56,757			71,602
General and administrative, including rent		166,958			165,722
Depreciation		88,143			56,151
Total general and administrative		3,282,788			2,609,688
Selling and marketing
Professional fees		134,700			256,777
Payroll and related		23,817			60,164
Marketing and travel		13,762			1,843
Total selling and marketing		172,279			318,784
Research and development
Payroll and related		317,442			182,707
Materials and supplies		57,599			140,340
Total research and development		375,041			323,047
Operating loss	$	(3,830,108	)	$	(3,105,680	)

NOTE 12 – SUBSEQUENT EVENTS

The Company’s management has evaluated subsequent events occurring after March 31, 2026, the date of our most recent balance sheet, through the date our financial statements were issued.

Effective April 17, 2026, the company received a requisition from the University of Rochester in the amount of $243,000 for the next phase of an arrangement with the university to support its Laboratory for Laser Energetics (LLE) for ongoing efforts to develop pulsed laser technologies. The work is expected to be completed by June 30, 2026.

Subsequent to the period ended March 31, 2026, the Company issued an incentive stock option to purchase up to 100,000 shares of common stock, at an exercise price of $1.22, to one employee.

Subsequent to the period ended March 31, 2026, the Company granted an advisory board member a nonstatutory stock option to purchase 1,000,000 shares of the Company’s common stock at an exercise price of $1.20 per share. The option vests as to 100,000 shares on the grant date, with the remaining 900,000 shares vesting in nine equal semi-annual installments beginning six months after the grant date and expires ten years from the grant date.

Subsequent to the period ended March 31, 2026, certain holders of the Company’s outstanding stock options exercised their rights to purchase shares of the Company’s common stock. As a result of these exercises, the Company issued an aggregate of 108,000 shares of common stock at exercise prices ranting from $0.07 to $0.40 per share, resulting in total cash proceeds to the Company of $10,300.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSISOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our discussion and analysis of the financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the related disclosures included elsewhere herein and in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included as part of our Annual Report on Form 10-K for the year ended December 31, 2025.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the securities laws. Forward-looking statements include all statements that do not relate solely to the historical or current facts and can be identified by the use of forward-looking words such as “may,” “believe,” “will,” “would,” “could,” “should,” “expect,” “project,” “anticipate,” “estimates,” “possible,” “plan,” “strategy,” “target,” “prospect,” or “continue,” and other similar terms and phrases. These forward-looking statements are based on the current plans and expectations of our management and are subject to a number of uncertainties and risks that could significantly affect our current plans and expectations, as well as future results of operations and financial condition and may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause our actual results to differ materially from our expectations are described in Item 1A (Risk Factors) of our Annual Report on Form 10-K, for the year ended December 31, 2025. Although we believe that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to have been correct. We do not assume any obligation to update these forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting such forward-looking statements.

Overview

Applied Energetics, Inc. is a leader in developing the next generation optical sources exhibiting ever-increasing output energy, peak power and frequency agility while also providing decreased size, weight, and cost of these systems for customers. Applied Energetics utilizes patented, dual-use technologies to advance critical industries. Leveraging our proprietary fiber-based architecture and wavelength- and pulse-agility capability, our USP technology can enable users to achieve specific effects across different use cases with an unmatched blend of size, weight, and power attributes. While initially designed to meet the emerging needs and priorities for the national security community, our directed energy technology also has potential commercial applications in both the biomedical and advanced manufacturing industries.

Our USP lasers are designed to provide:

●	Frequency Agile Optical Sources from Ultraviolet (UV) to Far<br>Infrared (IR)
●	Pulse Duration Agility
---	---
●	Size, Weight, and Power Optimization
---	---
●	Advanced Fiber Applications
---	---
●	Laser Guided Energy (LGE®)
---	---
●	Laser Induced Plasma Channel (LIPC®)
---	---

Applied Energetics’ directed energy technologies are vastly different from conventional directed energy systems. Our proprietary fiber-based architecture is a key differentiator for our most recent technology demonstrators. Compared with traditional continuous wave laser technologies, with their larger footprints, AE’s architecture enables orders of magnitude size-weight-power reductions on all deliverables, for powerful, dual-use and agile systems that can fit a host of platforms while delivering very high-intensity, ultrashort pulses of light to the required target. This unique directed energy solution allows extremely high peak power and energy, with target and effects tunability, and is effective against a wide variety of potential targets.

Applied Energetics’ optical fiber-based laser architectures also enable unmatched wavelength agility as well as pulse duration agility. Using innovative and highly specialized frequency shifting techniques, wavelengths can be custom tuned from the deep ultraviolet to the far infrared. In addition, temporal outputs can be adjusted from continuous wave to sub-picoseconds. The technology enables the customer to adjust the lasers’ operating parameters, ultimately creating more flexibility to change wavelength and pulse width. This feature allows for optimization of laser performance for defense or commercial applications.

Our proprietary USP laser technology provides a significantly more compact solution than current continuous wave laser platforms while still delivering high peak power. Continuous wave laser systems are typically used to heat a target and, during continuous illumination, this heat transfer leads to melting or charring of the material. Using continuous wave output powers that now exceed 100 kilowatts (1kW = 1000 watts), it can take anywhere from seconds to tens of seconds to impact a target. By contrast, Applied Energetics has delivered USP lasers to national security users that exceed five terawatts (1 TW = 1 trillion watts) in peak power, with the difference being that this peak power from a USP laser is delivered in a pulse that is less than a trillionth of a second. During this short pulse duration, and having such a high peak intensity, near-instantaneous ablation of the surface of the threat takes place. The net result of our innovative USP approaches is highly effective lasers capable of jamming, damaging, and destroying certain surveillance and reconnaissance sensors with mountable footprints that require only a fraction of the size, weight, and power requirements of other-directed energy technologies. We believe the combination of both low size and weight, along with power characteristics of wavelength and pulse duration agility will help us achieve our vision statement of “Directed Energy, Anywhere.”

AE owns and protects intellectual property that is integral and necessary for the development of Ultrashort Pulse (“USP™”) Lasers, Laser Guided Energy (“LGE®”) and Direct Discharge Electrical products for military and commercial applications. AE currently owns 26 patents and an additional nine 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, including having no expiration date until such time as they are no longer classified after which they will have the normal 20-year patent protection. The company also has two pending patent applications and one provisional patent application which is undergoing conversion to its non-provisional form. We continue to file patent applications as we deem appropriate to protect our intellectual property and enhance our competitive advantage. We conduct research and development efforts under contracts and on an internal basis as we move toward product development and testing.

During the past several years, substantially all of our operating revenues were derived from contracts with DoW agencies and a major research university. Along with the performance of these contracts, we have conducted internal research and development efforts, building a team of scientists and engineers and establishing our testing facilities in the Battle Lab. We have also begun testing products in remote testing field locations, some of them private and some of them run by government agencies or universities. During the past year, our efforts in this area have been focused on preparing for and conducting these tests and preparing product demonstrations.

AE continues to expand its technical capabilities and administrative capacity with the addition of employees, consultants and contractors, and agreements with leading laser and optics universities in the country. AE also works with a team of contractors to strengthen our compliance, IT, technical staff, human resources and public relations.

Recent Developments and Trends

Effective May 17, 2025, the company received a requisition from the University of Rochester in the amount of $181,639. This is part of a contractual arrangement with the university in the approximate amount of $250,000 to support its Laboratory for Laser Energetics (LLE) for ongoing efforts to explore pulsed laser technologies. Work on the contract commenced on July 10, 2025 with a meeting at Applied Energetics headquarters in Tucson, AZ with Dr. Jon Zuegel, Laser Development and Engineering Division Director and a Senior Scientist at the LLE to discuss the research to be provided by the company. We completed work under the requisition and then worked with the University of Rochester to plan and commence work on the next phase. In April 2026, we were awarded a follow-on contract in excess of $240,000 to support Phase 1 of the program.

During the first half of 2025, we were continuing work on two contracts with the Office of Naval Research (ONR), but both contracts were subsequently closed. Also, through November 14, 2025, we were continuing work on a Phase II Small Business Technology Transfer (STTR) contract with the U.S. Army. In the fourth quarter of 2025, we completed work on this contract and received full payment from the customer.

During the three months ended March 31, 2025, we recognized revenues as we performed services under these contracts and recorded related costs under cost of revenues. During the three months ended March 31, 2026, on the other hand, the company was no longer performing services under these contracts so recorded no revenues or costs with respect to them. However, the company has continued working on related technologies as part of its ongoing internal research and development program.

Costs under these firm fixed fee contracts were affected by supply chain disruptions, and shortages of items like semiconductor chips, and related systemic issues, and general inflation. These supply issues similarly affect any internal research and development programs, and we anticipate that they will continue for at least the near term. Micro-electronic and semiconductor chip shortages are still impacting supply chains, and as such, can impact our ability to develop our technology in a timely manner and to execute and deliver technology to meet demands of our prospective customers. Certain optical transmitting components are also in short supply. The ongoing conflict in the Middle East is also putting upward pressure on shipping expenses for all of these products. Expenditures associated with internal research and development, such as supplies, equipment, and components, are recorded as expenses rather than cost of revenues.

During the quarter ended March 31, 2026, the company has continued its work on the design and integration of USP technologies onto the Kord Firefly platform and has extended this work into the second quarter. With recent upgrades and advances to the FIREFLY^TM^ system, the company looks to continue integration into the updated platform.

During the fourth quarter of 2025 and the first quarter of 2026, the company began conducting field tests of certain of its lasers. To do so, it has made arrangements to use existing testing facilities maintained by third parties, including a private entity and a research university. The costs and availability of these testing facilities vary, depending on prior reservations and the minimum length of time needed for each field test. To facilitate these testing outings and make the time spent in the field more efficient, the company purchased an ATC Command/Response Trailer which is outfitted with a ramp door for access to the laser being tested, air conditioning for climate control, a generator, and workstations to enable the team to make adjustments to the lasers being tested in real time in the field. Our team has conducted several such field tests, in one of which, we completely disabled the sensor on a drone at a range that meets specifications provided to us by prospective customers.

The current budgetary and deficit funding environment, continuing inflation, tariffs and other ongoing supply chain disruptions, the appropriations process, federal government shutdowns, and budget cuts, among other items, all continue to create significant short and long-term challenges and risks to the company and its business development endeavors. It is difficult to forecast the effect that any future tariffs will have on our ability to source raw materials, supplies, and equipment needed to continue our operations both for the performance of our ongoing contractual obligations and our internal research and development efforts. Moreover, the cuts to funding and reductions in federal government personnel can impact our cash flows and ability to continue operating. Many of these cuts are proposed to the Departments of War and Homeland Security budgets which are the focus of much of our business development efforts. However, we remain optimistic that the innovative nature of our technology and its novel approach to addressable threats position the company for development, growth, and market opportunities.

Certain mitigating factors could blunt any potential impact of these changes on our industry. The DoW and others in the administration have indicated that funding for innovation and novel technologies will continue to be a priority, and directed energy has been discussed as part of this trend. Also, many of the cuts are being challenged in court and, in some cases, reversed either because of judicial rulings or policy reversals. However, it is difficult to predict precisely where funds will be cut or allocated, and even a general reduction in force can make administrative functions, such as finalizing contracts and government payment processing, challenging. These factors could severely impact our cash flows and our ability to continue operating.

Geo-political events continue to affect our business. In particular, the ongoing military action in the Middle East has restricted the flow of oil and liquid natural gas worldwide and is driving up the price of goods and services which include supplies, materials and equipment which we need for our business. Also, certain economic events and policies, such as tariffs and embargoes, tend to be inflationary and contribute to drive up costs.

For fiscal year 2026, which started on October 1, 2025, the National Defense Authorization Act (NDAA) was delayed, but on December 18, 2025, the-president signed the 2026 NDAA into law (P.L.-119-60). The NDAA sets defense spending policies, while the separate appropriations bills comprising the federal budget fund government spending, including spending on defense and homeland security. This impacts all proposals under review by the DoW. The federal government experienced a funding gap beginning on October 1, 2025—the start of FY2026—and ending when the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026 (P.L. 119-37), was signed into law on November 12, 2025. On February 3, 2026, the president signed the Consolidated Appropriations Act, 2026 (P.L. 119-75). This bill included Defense Appropriations, and all previously unfunded agencies except for Homeland Security.

Critical Accounting Policies

Use of Estimates

The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management bases its assumptions on historical experiences and on various other inputs and estimates that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. In addition, management considers the basis and methodology used in developing and selecting these estimates, the trends in and amounts of these estimates, specific matters affecting the amount of and changes in these estimates, and any other relevant matters related to these estimates, including significant issues concerning accounting principles and financial statement presentation. Such estimates and assumptions could change in the future as more information becomes known which could impact the amounts reported and disclosed herein.

Share-Based Payments

Stock-based compensation cost is measured at grant date, based on the fair value of the award and is recognized as an expense over the requisite service period.

The fair value of each option grant is estimated at the date of grant using the Black-Scholes-Merton option valuation model. We make the following assumptions relative to this model: (i) the annual dividend yield is zero as we do not pay dividends on our common stock, (ii) the weighted-average expected life is based on a midpoint scenario, where the expected life is determined to be half of the time from grant to expiration, after taking into account the vesting period, (iii) the risk free interest rate is based on the U.S. Treasury security rate for the expected life, and (iv) the volatility is based on the level of fluctuations in our historical share price for a period approximately equal to the weighted-average expected life.

Results of Operations

Comparison of Operations for the Three MonthsEnded March 31, 2026 and 2025:

	2026			2025
Revenue	$	-		$	209,753		)	-100.00	%
Cost of revenue		-			(63,914	)	)	-100.00	%
General and administrative		(3,282,788	)		(2,609,688	)		25.79	%
Selling and marketing		(172,279	)		(318,784	)	)	-45.96	%
Research and development		(375,041	)		(323,047	)		16.09	%
Other income		22,385			14			159792	%
Net loss	$	(3,807,723	)	$	(3,105,666	)	)	22.61	%

All values are in US Dollars.

Revenue

Revenue decreased by approximately $210,000 to $0 for the three months ended March 31, 2026.from the three months ended March 31, 2025. In April 2025, the company was notified by a customer that two of its active contracts were currently unfunded and remain unfunded, resulting in a decrease in revenue for the period. Although the contracts remain open, the company suspended all work until funding is secured in the future. Despite the suspension, the company continues to advance the underlying technology through its internal research and development efforts. Both the customer and the company are actively seeking alternative sources of funding, including from within the original contracting agency and other departments of the U.S. Department of War.

Cost of Revenue

Cost of revenue decreased by approximately $64,000 to $0 for the three months ended March 31, 2026 from the three months ended March 31, 2025. This decrease was attributable to the unavailability of federal funds. The cost of material, supplies and direct labor incurred were expensed to R&D while our programs and work remain active and in place.

General and Administrative

General and administrative expenses increased by approximately $673,000 to approximately $3,283,000 for the three months ended March 31, 2026, compared to approximately $2,610,000 for the three months ended March 31, 2025, primarily due to an increase in salaries and employee benefits of approximately $320,000, as well as an increase in stock based compensation of approximately $356,000.

Selling and Marketing

Selling and marketing expenses decreased by approximately $147,000 to approximately $172,000 for the three months ended March 31, 2026, compared to approximately $319,000 for the three months ended March 31, 2025, due to a decrease of approximately $122,000 in professional fees and a decrease in payroll and related expenses of approximately $36,000 offset by an increase in marketing expenses of approximately $12,000.

Research and Development

Research and development expenses increased by approximately $52,000 to approximately $375,000 for the three months ended March 31, 2026, compared to approximately $323,000 for the three months ended March 31, 2025, primarily due to an increase in labor costs of $135,000 offset by a decrease in material costs of approximately $83,000 associated with continued development of our USP laser technologies.

Net Loss

Our operations for the three months ended March 31, 2026, resulted in a net loss of approximately $3,808,000 an increase of approximately $702,000 compared to a net loss of approximately $3,106,000 for the three months ended March 31, 2025, primarily due to an increase in general and administrative expense and research and development expenses partially offset by a decrease in selling and marketing expenses.

Liquidity and Capital Resources

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the three months ended March 31, 2026, the company incurred a net loss of approximately $3,808,000, had negative cash flows from operations of approximately $2,296,000 and may incur additional future losses due to the possible reduction in government contract activity and the expenses discussed under Results of Operations. In their report accompanying our financial statements for the year ended December 31, 2025, our independent auditors stated that our financial statements were prepared assuming that we would continue as a going concern and that they have substantial doubt as to our ability to do so for one year from the date the financial statements are issued based on our recurring losses from operations and need to raise additional capital. The financial statements do not include any adjustments relating to the recoverability of assets and the amount or classification of liabilities that might be necessary should the company be unable to continue as a going concern.

At March 31, 2026, the company had total current assets of approximately $4,649,000 and total current liabilities of approximately $937,000 resulting in working capital of approximately $3,712,000. At March 31, 2026, we had approximately $4,064,000 of cash and cash equivalents, a decrease of approximately $2,372,000 from approximately $6,436,000 at December 31, 2025.

During the first three months of 2026, the net cash outflow from operating activities was approximately $2,296,000. This amount was comprised primarily of our net loss of approximately $3,808,000, offset by non-cash stock-based compensation expense of approximately $1,348,000, amortization of ROU assets of approximately $70,000, depreciation and amortization of approximately $88,000, and amortization of prepaid assets of approximately $51,000 as well as cash used from changes in assets and liabilities of approximately $46,000 due to a decrease in other assets of approximately $102,000, a decrease in the ROU liability of approximately $75,000 and offset by an increase in accounts payable and accrued liabilities of approximately $131,000.

During the first three months of 2026, the net cash outflow from investing activities was approximately $43,000. This was for the purchase of equipment.

During the first three months of 2026, the net cash outflow from financing activities was approximately $32,000. This amount consisted of approximately $20,000 received from the exercise of options and warrants offset by approximately $4,700 tax withholdings related to the share settlement of RSUs and approximately $48,000 of repayment of an insurance premium loan.

Based on the company’s current business plan, we believe our cash balance as of the date of this report will be sufficient to meet the company’s anticipated cash requirements for the near term. However, we cannot be certain that the current business plan will be achievable.

The company’s existence depends upon management’s ability to develop profitable operations. Management is devoting significant time and effort to developing its business and raising capital, as needed, and cannot be certain that these efforts will be successful. Management’s business development efforts may not result in profitable operations. To fund its research and development and marketing efforts, the company’s management continues to explore possible financing opportunities through discussions with investment bankers and private investors. The company may not be successful in its effort to secure additional financing on terms it considers favorable. The accompanying consolidated financial statements do not include any adjustments that might result should the company be unable to continue as a going concern.

Additionally, international, macroeconomic events, including the military action in the Middle East, the Russian military action in Ukraine and related economic sanctions around the globe could impact the company’s ability to source necessary supplies and equipment which could materially and adversely affect our ability to continue as a going concern. These events may also impair our ability to raise capital, including as a result of increased market volatility, or decreased market liquidity, which also affects the company’s ability to continue as a going concern. Third-party financing may become unavailable on terms acceptable to the company or at all. The impact of such events on the world economy and the specific impact on the company’s financial position and results of operations are difficult to predict. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Budgeting for upcoming expenses and costs of supplies and equipment needed to perform our existing, and any future, grants or contracts requires that we estimate factors such as inflation and geo-political events that affect such expenses and costs. Although inflation generally moderated in 2024 and 2025, recent events in the Middle East appeared to be driving it back up during the first quarter of 2026 through the current date. In addition, the cost of labor continues to increase across certain sectors of the US and global economy which may drive up our general and administrative expenses as well as the cost of personnel, particularly given the highly skilled nature of this work. Inflation has also impacted the price of supplies and materials we must purchase. In addition, geo-political events have further limited the number of countries from which we can source certain supplies and equipment. These limitations can range from outright prohibitions to strong discouragement based on potentially sensitive information. We continually monitor these events and the markets for needed supplies in order to make the best estimates possible, both in our internal budgeting and in any bids or proposals we submit.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Disclosureunder this item is not required for smaller reporting companies.”

ITEM 4. Controls and Procedures

Conclusion Regardingthe Effectiveness of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its chief executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2026 primarily as a result of weaknesses in our internal control over financial reporting as described below. In response to this conclusion and in conjunction with our ongoing assessment and remediation of such internal control over financial reporting as described below, we are in process of strengthening the company’s disclosure controls and procedures.

Management’sReport on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process designed by, or under the supervision of, our chief executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that:

●	pertain to the maintenance of records that, in reasonable<br>detail, accurately and fairly reflect the transactions and dispositions of the company’s assets;
●	provide reasonable assurance that transactions are recorded<br>as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts<br>and expenditures of the company are being made only in accordance with authorizations of the management and directors of the company;<br>and
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●	provide reasonable assurance regarding prevention or timely<br>detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial<br>statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

With the assistance of independent consultants, our management, including our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our internal control over financial reporting as of March 31, 2026, based on the framework established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO Framework). This assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of those controls. This assessment also took into consideration a material weakness cited by our auditors. In particular, our auditors noted lack of segregation of duties and written policies and procedures within the accounting functions and evidence of control review in that we have not designed such policies and procedures at a sufficient level to support the operating effectiveness of controls to prevent and detect potential error. To mitigate this weakness, in 2025, the company retained the services of an independent consulting firm to conduct an assessment of our internal controls, gap analysis, and remediation recommendations. Based on our assessment under the criteria described above, the Chief Executive Officer and Chief Financial Officer have concluded that our internal control over financial reporting was not effective as of March 31, 2026.

Remediation of MaterialWeakness

The company is committed to addressing the material weakness described above and has retained an independent consultant which has conducted a comprehensive assessment of the company’s internal controls and provided a gap analysis and recommendations for remedial measures. Management has begun to implement changes in processes designed to improve its internal control over financial reporting in accordance with some of these preliminary recommendations. Remediation will not be complete until there has been sufficient time to conclude through testing that the controls operate effectively.

Changes in Internal Controls Over Financial Reporting

Other than work on remedial measures set forth above under Management’s Report on Internal Control over Financial Reporting, there has been no change in Applied Energetics’ internal control over financial reporting for the quarter ended March 31, 2026, that materially affected or is reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On January 15, 2021, the company filed a complaint in the United States District Court, Southern District of New York, against Gusrae, Kaplan & Nusbaum (GKN) and Ryan Whalen for malpractice and breach of New York Rules of Professional Conduct by both parties as former counsel to the company. On May 28, 2021, GKN and Mr. Whalen filed a motion to dismiss the complaint. On June 25, 2021, the company filed an opposition to the motion. On July 13, 2021, GKN and Mr. Whalen filed their reply brief. On March 30, 2022, United States Magistrate Judge Debra Freeman signed an order denying the motion of GKN and Mr. Whalen to dismiss the company’s claim for malpractice and for rescission of the shares-for-fees agreement under which GKN and Whalen received 1,242,710 shares of the company’s common stock. The motion was partially granted as to the separate claim for violation of NYRPC 1.7 and 1.8 because the court found that it was duplicative of the malpractice claim. Motions for summary judgment in the case are fully briefed, and the judge held oral arguments on August 7, 2025. On September 17, 2025, the court issued an Opinion and Order denying both parties’ motions for Summary Judgment. The parties participated in a mediation on April 23, 2026. The pre-trial conference, originally set for October, was extended to May 20, 2026, to accommodate the mediation. No date has been set for trial.

As with any litigation, the company cannot predict the outcome with certainty, but the company expects to provide further updates on the status of the litigation as circumstances warrant.

The company may, from time to time, be involved in legal proceedings arising from the normal course of business.

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The company has reported all information pertaining to issuances of equity securities sold during the period covered by this Quarterly Report on Form 10-Q in previously filed report on Forms 10-K, 10-Q and 8-K.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Rule 10b5-1 TradingArrangements

No new 10b5-1 Trading Plans were established by officers or directors during the three months ended March 31, 2026. ****

ITEM 6. EXHIBITS

EXHIBIT NUMBER	DESCRIPTION
10.1	Executive Employment Agreement, dated as of January 28, 2026, by and between the Registrant and Warren Spector (incorporated by reference to Exhibit 99.1 to the Registrant’s Form 8-K filed with the SEC on February 3, 2026).
31.1	Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a).
31.2	Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a).
32.1	Principal Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Principal Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	APPLIED ENERGETICS, INC.
	By:	/s/ Christopher Donaghey
		Christopher Donaghey, President and Chief Executive Officer
Date: May 13, 2026
	By:	/s/Warren Spector
---	---	---
		Warren Spector, Chief Financial Officer
Date: May 13, 2026

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE

PURSUANT TO RULE 15d-14

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Christopher Donaghey, the President and Chief Executive Officer of Applied Energetics, Inc., certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Applied<br>Energetics Inc.;
2.	Based on my knowledge, this report does not contain any untrue<br>statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under<br>which such statements were made, not misleading with respect to the period covered by this report;
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3.	Based on my knowledge, the financial statements, and other<br>financial information included in this report, fairly present in all material respects the financial condition, results of operations<br>and cash flows of the registrant as of, and for, the periods presented in this report;
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4.	The registrant’s other certifying officer(s) and I are responsible<br>for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal<br>controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)	Designed such disclosure controls and procedures, or caused<br>such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,<br>including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which<br>this report is being prepared;
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(b)	Designed such internal control over financial reporting, or<br>caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding<br>the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally<br>accepted accounting principles;
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(c)	Evaluated the effectiveness of the registrant’s disclosure<br>controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,<br>as of the end of the period covered by this report based on such evaluation; and
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(d)	Disclosed in this report any change in the registrant’s internal<br>control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal<br>quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s<br>internal control over financial reporting; and
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5.	I have disclosed, based on our most recent evaluation of<br>internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors<br>(or persons performing the equivalent functions):
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(a)	All significant deficiencies and material weaknesses in the<br>design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability<br>to record, process, summarize and report financial information; and
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(b)	Any fraud, whether or not material, that involves management<br>or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Christopher Donaghey
---
President and Chief Executive Officer
Date: May 13, 2026

Exhibit 31.2

CERTIFICATION OF PRINCIPAL

ACCOUNTING OFFICER

PURSUANT TO RULE 15d-14

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Warren Spector, the Chief Financial Officer of Applied Energetics, Inc., certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Applied<br>Energetics Inc.;
2.	Based on my knowledge, this report does not contain any untrue<br>statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under<br>which such statements were made, not misleading with respect to the period covered by this report;
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3.	Based on my knowledge, the financial statements, and other<br>financial information included in this report, fairly present in all material respects the financial condition, results of operations<br>and cash flows of the registrant as of, and for, the periods presented in this report;
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4.	The registrant’s other certifying officer(s) and I are responsible<br>for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal<br>controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)	Designed such disclosure controls and procedures, or caused<br>such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,<br>including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which<br>this report is being prepared;
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(b)	Designed such internal control over financial reporting, or<br>caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding<br>the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally<br>accepted accounting principles;
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(c)	Evaluated the effectiveness of the registrant’s disclosure<br>controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,<br>as of the end of the period covered by this report based on such evaluation; and
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(d)	Disclosed in this report any change in the registrant’s internal<br>control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal<br>quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s<br>internal control over financial reporting; and
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5.	I have disclosed, based on our most recent evaluation of<br>internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors<br>(or persons performing the equivalent functions):
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(a)	All significant deficiencies and material weaknesses in the<br>design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability<br>to record, process, summarize and report financial information; and
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(b)	Any fraud, whether or not material, that involves management<br>or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Warren Spector
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Warren Spector
Chief Financial Officer
Date: May 13, 2026

Exhibit 32.1

CERTIFICATION OF

PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing by Applied Energetics, Inc. (the “company”) of its Quarterly Report on Form 10-Q for the three months ended March 31, 2026 (the “Report”) I, Christopher Donaghey, President and Chief Executive Officer of the company, certify pursuant to 18 U.S.C. Section. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

(i)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(ii)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the company.
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This certificate is being made for the exclusive purpose of compliance by the chief executive officer of Applied Energetics, Inc. with the requirements of Section 906 of the Sarbanes-Oxley Act of 2002 and may not be used for any other purposes. A signed original of this written statement required by Section 906 has been provided to Applied Energetics, Inc. and will be retained by Applied Energetics, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Christopher Donaghey
Christopher Donaghey
President and<br>Chief Executive Officer
Date: May 13, 2026

Exhibit 32.2

CERTIFICATION OF PRINCIPAL

ACCOUNTING OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing by Applied Energetics, Inc. (the “company”) of its Quarterly Report on Form 10-Q for the three months ended March 31, 2026 (the “Report”) I, Warren Spector, Chief Financial Officer of the company, certify pursuant to 18 U.S.C. Section. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

(i)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(ii)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the company.
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/s/ Warren Spector
Warren Spector
Chief Financial Officer
Date: May 13, 2026