APPLIED ENERGETICS, INC. · 2020. 9. 3. · Applied Energetics Investment Thesis •Directed Energy...

Leaders in Advanced Optical & Directed Energy TechnologiesENERGETICS, INC.APPLIED

September 2020Corporate Presentation

APPLIED ENERGETICS, INC.This document is not, and nothing in it should be construed as, an offer, invitation, or recommendation in respect of the securities of Applied Energetics, Inc. or asolicitation of an offer to buy such securities in any jurisdiction. Neither this presentation nor anything in it shall form the basis of any contract or commitment. Thispresentation does not constitute advice to potential investors nor does it take into account the investment objectives, financial situation or needs of any potential investor.

Safe Harbor Statement

The documents in this presentation (or directly accessible herefrom) may contain forward-looking statements. These statements relate to future events or AppliedEnergetics, Inc.’s future financial performance. Any statements that are not statements of historical fact (including, without limitation, statements to the effect that thecompany or its management "believes", "expects", "anticipates", "plans," and similar expressions), or which are included under "Projected Performance," shouldbe considered forward-looking statements. A number of important factors could cause Applied Energetics, Inc.’s actual results to differ materially from those indicatedby the forward-looking statements. Applied Energetics, Inc. disclaims any obligation to update any forward-looking statement. In addition, actual results may differmaterially due to factors such as the impact of the COVID-19 outbreak or future epidemics on our business.

Applied Energetics, Inc.2480 W Ruthrauff Road, Suite 140Q Tucson, AZ 85705 Office 520.628.7415

Attention: Financial Manager Website: aergs.com

Additional InformationApplied Energetics, Inc.’s internet address is www.aergs.com The company makes available, free of charge, all SEC filings at www.aergs.com. Its annual report onForm 10-K, quarterly reports on Form l0-Q, current reports on Form 8- K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of theExchange Act, are available as soon as reasonably practicable after they are electronically filed or furnished to, the SEC. You also may request a copy of eachdocument at no cost, by writing or calling us at the following address or telephone number:

Applied Energetics | September 2020

http://www.aergs.com/

http://www.aergs.com/

Applied Energetics Develops…

… innovative directed energy solutions, ultra-short pulse lasers, and related technologies for the national security, medical technology, and advanced manufacturing markets

• Ultra-Short Pulse Lasers (USP)• Laser Guided Energy (LGE™)• Laser Induced Plasma Channel (LIPC™)• Frequency Agile Optical Sources (UV to Far IR)• Advanced Fiber Applications• Counter Improvised Threats

CORPORATE CAPABILITIES

3Applied Energetics | September 2020

Applied Energetics Investment Thesis

• Directed Energy pure play in Ultra-Short Pulse (USP) and Laser Guided Energy (LGETM) technologies for defense applications

• Elite Management team assembled Q2 2019

• Strong IP Portfolio: Over $50M of public and privately funded IP with portfolio of 26 patents and 11 applications held under government secrecy orders

• Well positioned in a shifting global military threat of power and electronic warfare

• Active Partner with three of the leading universities in Optical Source Technologies

• Executed contract award March 2020 with U.S Army for Stand-off Electronic Denial; completed Phase I ontract June 2020; invited by Army to submit Phase II; submission completed August 2020

Goal: To be the industry leader in USP and LGE IP development and leverage our IP portfolio with leading defense systems integrators 4Applied Energetics | September 2020

DOD Priorities for 2020

• Hypersonics• Artificial Intelligence • Directed Energy

"We are looking forward to beginning a number of important modernization programs in areas such as hypersonic weapons, artificial intelligence and directed energy that have been held back because of the [continuing resolution]," he said.

Mark Esper, Secretary of DefenseDOD News, December 20, 2019


Why now? High double-digit, year-over-year spending growth in Directed Energy by U.S. to compete with China and Russia

$1.2 Billion in

Annual Federal Spend

2021"China has the political will and fiscal strength to sustain a steady increase in defense spending during the next decade," the DOD explained in its 2019 report on China's military might. (1)

“Russia and China are all investing heavily in hypersonic technologies. Military chiefs are warning that the U.S. could be left behind by its authoritarian adversaries, at least when it comes to nuclear-capable hypersonics.” (2)

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$1.8 Billion in

Estimated Annual Federal Spend

$543 Million in

Annual Federal Spend

2017

2019


The Threat is Real – The Risk is Significant

“A list of the world's top 100 defense firms published by Defense News (2019) revealed that 6 of the top 15 companies are Chinese. Last year, there wasn't a single Chinesecompany among the top 100.”(3)


Next Generation of Optical Directed Energy: CW vs USP

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Continuous Wave (CW) Ultra-Short Pulse (USP)

Background & Capabilities

• JTO-HEL programs started 2000• Power output ~ 60-100kW• Heats the Target: Drones, Mortars, Small Munitions• Dwells for Seconds on Target

• Next Generation of DOD Laser DE• Peak Power 1 TW + (= 1 Billion kW)• Disrupts the Sensors of any size target or sends instant amount of TW

on target• Billionth of second on target with multiple strikes

Short Comings & Differences

• Heats the Target over time (Many Seconds)• Requires ↑ Input Power to Scale Output ↑• Requires More Fibers/Crystals to Scale• Beam Diverges with Distance• Much Higher Platform specs for SWaP, Cooling

• Instant impact on Target, Generates RF and Optical Damaging Effects• Precise Beam and Optical Filaments over longer distances• USP Derivatives are Tunable to Distance and Lethality• Much Lower Platform Req’s for SWaP, Cooling (1/100 to 1/1000 less

than CW)• Potential for Battery Power to achieve more impact/scale

Marketspace• Raytheon, Lockheed, Northrup, GA, Boeing and

nLight/Nutronics• > $700 million in Contracts Awarded 2017-2019

• Applied Energetics, other players focused mostly commercial and medical

• AE executed it’s first USP contract directly from Army, March 2020


Ultra-Short Pulse Lasers Address New & Emerging Threats - CW Lasers Cannot

Continuous Wave Lasers (CW)• Constant power output equals peak power (100s of kW)• Purely thermal effects on target, heat kill.• Long-range engagements, long dwell time required• Primary uses against rockets, artillery, and mortar (RAM)

Ultra-Short Pulse Lasers (USP)• Ionizes air / vaporizes all materials• 1 TW ~ Peak electrical power output of the U.S. grid• Produces non-thermal effects• Primary uses against imagers and sensors

Time Time

1 second

Power

1 Watt

1 Second x 1 Watt = 1 Joule of Energy

Compress in Time

Power

1 ps

1 TWatt

Same 1 Joule of Energy

1 TWatt = 1,000 Billion Watts1 ps = 1/1000 Billionth second

Extremely High Peak Power is the Key


The Threat is Real – The Risk is Significant

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Laser Guided Energy

High Voltage

USP Laser

AE Counter-Threat

CapabilitiesSensors Hypersonics Base Security Communicators


Operational Scenarios

Applied Energetics, Inc. | NobleCon 16 | 17 February 2020

High Power High Voltage(Ready Now)

• Perimeter Defense• Vehicle stopping – electrified

rumble strips• Choke Points

Ultra-Short Pulse Laser(Under Development)

• Counter sensors and electronics

• Interior building security• Tunable intensity• Pulse technology

Laser Guided Energy (Future Development)

• Broad range of counter sensor/electronic effects

• Non-lethal to lethal effects• Anti-IED/VBIEDs• Vehicle stopping

Directed energy solutions using high peak power, frequency agile sources have a large application space that can provide real-time scalable, layered defenses. This includes tunable target effects and ranged engagement that can be electronically controlled via remote locations.

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Applied Energetics Directed Energy Capability

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USP Lasers Laser Guided EnergyHigh Voltage

Vehicle Stopping and Counter VB-IED

Infrastructure Control Points

• Perimeter Defense

• Vehicle stopping – electrified rumble strips

• Choke Points

• Counter sensors and electronics

• Interior building security

• Variable intensity

• Pulse technology• Broad range of counter sensor/electronic effects

• Non-lethal to lethal effects

• Anti-IED/VBIEDs

• Vehicle stopping

+ =


We Invent, Own, and Co-Develop Dual-Use Short Pulse Laser Capabilities

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ResearchAt our core, AE invents new technology.

Emerging Dual UseAt the heart of our strategy is the ability to develop technology with dual-use capabilities.

Planned Revenue Model

Industry PartnershipDeveloping the right industry partners is critical to accelerating our technology.

Co-DevelopmentThe final stages of our development are to leverage our intellectual property into licensing and co-developmentagreements.

$ Teaming Arrangements & Contracts

$$

$ Patents & IP

LRIP Build Orders

LicensingAgreements

Adv. Manufacturing

MedicalApplications

$

$


From the Lab to Deployment – Technology Path to a Program of Record

SBIR/BAA/IR&D/OTA/Discretionary Funds**

**Consideration of use of SBIR-developed technologies can occur throughout the acquisition lifecycle

TRL – Technology Readiness Level

Engineering and Manufacturing Development Production and Deployment

B CTechnologyA development start Development start Production start

Preliminary DesignReview (PDR)

Critical Design Review (CDR)

Integration Demonstration

Technologies, timeframe, funding, and other resources match customer needs

Design is stable and performs as expected

Production meets cost, schedule and quality targets

MaterialSolutionAnalysis

Technology Development

Material Development

Decision

Systems Acquisition

Low Rate InitialProduction

Full Rate ProductionPre Solution

Analysis

TRL 1 TRL 2 TRL 3 TRL 4 TRL 5 TRL 6 TRL 7 TRL 8 TRL 9

Pre-Systems Acquisition

6.1 6.2 6.3 6.4 6.5

Research Commercialization

Phase ITime: 6-12 months Cost: $100 - $200k

Phase IITime: 18-24 months Cost: $500k - $1m

Phase IVTime: 12-18 months Cost: $2m - $5m Laser ~ 20% of avg System POR cost

Phase IIITime: 24-36 months Cost: $2m - $5m

= Milestone Review = Decision Point

Systems Deployment


Current Programs and Partnershipsü December 2019 awarded contract with U.S Army for Stand-off Electronic

Denial, A19-T007• RFP objective: Develop a directed energy system capable of disrupting,

disabling or destroying the electronics on a remote target within milliseconds of detection

• Program seeks to eliminate threats through the disruption of a target’s electronics control systems by directing enormous amounts of power onto it as quickly as possible. The solution may be scaled to neutralize targets more than 1km away

• Phase I - $165 K (3 months) contract executed March 2020

• Completed Phase I June 2020

• Phase II opportunity - $1.10M (18 months)

• Invited to submit a Phase II; completed August 2020

ü Partnered with 3 of the leading universities in Optical/Laser Technologies: Univ. of AZ, Univ. of Central FL and Univ. of Rochester

ü Multiple proposals submitted over the past 12 months (from UV to Far IR)• Multitude of federal agencies; not all are defense-related


Advanced USP Dual-Use Laser Applications

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Ultra-Short Pulse Lasers Provide Unique Capabilities That Enable a Very Broad Range of Applications Multiphoton Sub-Surface

Processing

High Precision

Material Modification

Athermal Machining

Sub-Cellular Nano-Surgery

Lidar and Remote Sensing

Spinal Nerves

Advanced Manufacturing Advanced Imaging and Sensing

Additive Subtractive

High Intensity Surface Modification


Applied Energetics Key Management Personnel

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Dr. Greg Quarles - CEO• Over 25 years of executive experience in lasers and defense• Established strategic priorities leading to award of multiple programs of record

• Recognized expert by Congress and senior leaders at the Pentagon

• Leading innovator of dual-use optical technologies globally

• Unique executive combining proven business, science and policy skillsets

Dr. Stephen McCahon – Chief Scientist• Over 30 years experience as a scientific researcher, technology developer, and entrepreneur

• Lead developer of the AE proprietary breakthrough technology Laser Guided Energy

• Industry recognized leader in the development of advanced optical materials, photonic devices, Ultra Short Pulse Laser sources and their applications.

• Co-authored more than 50 scientific publications and more than 30 patents issued and/or pending


Directors & Advisors

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Board of DirectorsBradford T. Adamczyk – Chairman of the BoardGregory J. Quarles, Ph.D. – Director, CEOJonathan R. Barcklow – Director, Vice President & Corporate SecretaryJohn E. Schultz Jr. – Director

Board of AdvisorsChristopher W. Donaghey – Advisor


APPLIED ENERGETICS, INC.

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Investor Relations Contact Information:Cameron Associates, Kevin McGrath (212) 245-4577

Supplemental Materials: Appendix A: References

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1. Pickrell, R. (2019, July 23). China's defense industry is exploding onto the scene as its top arms makers push past Western powerhouses.Business Insider. Retrieved from https://www.businessinsider.com/6-of-the-worlds-top-15-defense-firms-are-chinese-2019-7

2. Brennan, D. (2019, May 19). China's Hypersonic Missiles: How worried should the U.S. be about futuristic weapons? Newsweek. Retrieved from https://www.newsweek.com/china-hypersonic-missile-weapons-worried-u-s-arms-race-military-pentagon-1447681

3. Pickrell, R. (2019, July 23). China's defense industry is exploding onto the scene as its top arms makers push past Western powerhouses.Business Insider. Retrieved from https://www.businessinsider.com/6-of-the-worlds-top-15-defense-firms-are-chinese-2019-7


http://www.businessinsider.com/6-of-the-worlds-top-15-defense-firms-are-chinese-2019-7




APPLIED ENERGETICS, INC. · 2020. 9. 3. · Applied Energetics Investment Thesis •Directed Energy...

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