( MTSX ) ~ Metal Storm Passes June 30 Performance Milestones
Thursday June 21, 12:00 am ET
ARLINGTON, VA--(MARKET WIRE)--Jun 21, 2007 -- Metal Storm Limited (NasdaqCM:MTSX - News) (ASX:MST.AX - News).
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Metal Storm is pleased to provide further information relating to meeting its covenants with the Convertible Note Holders and progress with the Singapore Test Firings:
A) Covenants
In past releases to the market, Metal Storm has made clear the criticality of its satisfying certain covenants within the Convertible Note Holders Trust Deed by June 30, 2007.
The company has also previously advised that the two crucial covenants are the requirement to provide fully functional ammunition systems and prototypes of specified systems and to maintain a minimum cash balance of $AUD19.5M up to June 30, 2007.
The company now advises as follows:
1. The independent expert appointed by the Trustee has provided an initial summary report to the Trustee, verbatim:
"Metal Storm Testing - June 2007
On 18 June 2007 Metal Storm completed testing to demonstrate achievement of the Milestones required by the Trust Deed for which you are Trustee. Testing was undertaken at the Bukit Timah complex of Singapore Technologies Kinetics (STK) and included the following systems:
-- Ammunition systems -- integrated with STK
-- The Redback™ system -- Integrated with Electro Optical Systems
-- The 3GL system
The testing program followed the plan provided with my first report to you and agreed as a fair test of the Trust Deed Milestones.
The Metal Storm systems of ammunition, Redback™ and 3GL, performed as required to meet the plan standards in objective firing tests. In addition, Redback™ and 3GL were assessed as meeting the test standards in the areas subjective assessment.
In summary, the Metal Storm projects for ammunition Redback™ and 3GL are assessed as having achieved a "fully functional prototype" state of development and there are no apparent obstacles to them achieving full production standard.
My full report on the testing will follow as soon as possible.
Yours sincerely
Mike Hannan
Independent Expert"
2. The company presently has a cash at bank position of $AUD20.8M.
The covenant requires at least $AUD19.5M to be held. The Board expects net cash out flow to June 30 to be no more than $AUD150,000. Accordingly the Board anticipates this covenant will be met.
As a consequence of the above the Board is confident that all current requirements of the covenants within the Trust Deed will be met and exceeded by June 30, 2007.
B) Test Firings
The performance covenants were measured as a part of a comprehensive test firing program currently being undertaken by Metal Storm at the facilities of Singapore Technologies Kinetics (STK) at Bukit Timah, Singapore.
The test firing program includes the testing of:
-- The Redback™ remotely operated weapons system, a collaborative
development between Metal Storm, Electro Optic Systems (EOS) and STK.
-- The 3GL three shot grenade launcher.
-- 40mm High Explosive, Enhanced Blast and Low velocity Airburst
ammunition comprising STK warheads with Metal Storm tails.
On June 15, the Company advised that, working with teams from its partners EOS and STK, it had successfully completed the test firing schedule for Redback™ and the ammunition.
On June 18, the Company commenced test firing of the 3GL three shot grenade launcher and successfully completed all tests required to meet the performance milestones defined in the Trust Deed. The Independent Expert, Mr Mike Hannan, was present for these tests.
Mr Hannan is a former Brigadier General in the Australian Defence Force (ADF). He commanded the UN Peace Keeping operations in the Middle East during the Gulf War and has on-the-ground experience in Iraq, Afghanistan, East Timor and the Solomon Islands. He was Chief Instructor of the Weapons Wing of the Army Infantry Centre, Commanding Officer of the Army Battle School, and was responsible for the introduction of the Milan missile system to the ADF. On entering civilian life Mr Hannan became CEO of a manufacturer of ceramic and soft armour for military contracts. In this role he gained extensive experience in the technical measurement of ballistic performance. This included the management of NATA approved ballistic testing facilities for both certification and research and development.
Of the successes so far in Singapore, Dr Lee Finniear, CEO, states that "this step is not only the achievement of a Milestone for the Trust Deed, but represents a truly monumental Milestone for the Company. Metal Storm has proven, without doubt and fully confirmed by an independent expert, that its low velocity 40mm weapons systems are real and perform well, including the initial integration of munitions, barrels, software, fire control and targeting systems. Further, the comment by the independent expert that 'there are no apparent obstacles to them achieving full production standard' provides further evidence that we are on the right track toward the commercial delivery of Metal Storm weapons and munitions."
On the results of Metal Storm's recent test firing Mr Suresh Withana, Managing Director of Harmony Capital Partners, stated, "Harmony is very pleased with the positive results of the test firings in Singapore. We look forward to working with Metal Storm to position the Company for the commercialization of its products."
The Metal Storm engineering team, lead by Dr Joe Cronin, is continuing its test firing program in Singapore to meet a variety of other objectives, including gathering detailed ballistic data & high speed video, assessing terminal effects and stress testing integrated systems for reliability analysis and further refinement.
The Company looks forward to providing further information on the test firings to the market as data and imagery is gathered and approved for release.
Completion of this milestone confirms the Company is now able to progress its plan of development into the future. That plan was the subject of the reports of the Chairman and of the CEO and MD at the Company's recent AGM. Those reports were announced to the market on May 25, 2007 and can be viewed on Metal Storm's website.
Notes:
Metal Storm's Australian Stock Exchange trading code: MST
Metal Storm's NASDAQ Small Cap ticker symbol: MTSX
About Metal Storm
Metal Storm Limited is a multi-national defence technology company engaged in the development of electronically initiated ballistics systems using its unique "stacked projectile" technology. The company is headquartered in Brisbane, Australia and incorporated in Australia, with an office in Arlington, Virginia.
Metal Storm is working with government agencies and departments, as well as industry, to develop a variety of systems utilising the Metal Storm non-mechanical, electronically fired stacked ammunition system.
Metal Storm's weapon technology uses computer-controlled electronic ignition and a system of stacked projectiles, to achieve a completely non-mechanical gun that is very lightweight and compact, providing a very high firepower to weight ratio. The Metal Storm weapons system utilizes multiple barrels mounted together on one platform which allows varying munitions types to be deployed in a single, low cost, lightweight weapon system. Firing the weapons by electronic ignition requires no moving parts, allowing reliable long term unattended weapon operation.
About Electro Optic Systems Limited
EOS is a public company, specialising in the design, development and production of sophisticated laser technologies, including supporting software and electronic sub-systems. EOS' advanced technologies are applied to a variety of sighting and surveillance applications in the aerospace and defence markets.
The combat-proven EOS sensor and fire control systems are currently deployed in the US Army CROWS (Common Remotely Operated Weapons System) program which has been successfully fielded since 2003, and is used in operations in Iraq. The EOS integrated surveillance and fire control technology employs state-of-the-art multi-spectral sensors and fire control software for direct-fire ballistic weapons.
About ST Kinetics
ST Kinetics is the land systems arm of Singapore Technologies Engineering. It provides integrated systems, specialty vehicles and their related services for defence, government and commercial applications. This includes design and development, systems integration, production, operations & support and life cycle management. Through its subsidiary, Advanced Material Engineering Pte Ltd, ST Kinetics also designs and manufactures a comprehensive suite of 40 mm munition solutions, conventional and smart munitions, advanced protective materials as well as guided system components. It also provides consultancy, design and engineering services for homeland security solutions.
Safe Harbour
Certain statements made herein that use the words "estimate," "project," "intend," "expect," "believe" and similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties which could cause the actual results, performance or achievements of the company to be materially different from those which may be expressed or implied by such statements, including, among others, risks or uncertainties associated with the development of the company's technology, the ability of the company to meet its financial requirements, the ability of the company to protect its proprietary technology, potential limitations on the company's technology, the market for the company's products, government regulation in Australia and the US, changes in tax and other laws, changes in competition and the loss of key personnel. For additional information regarding these and other risks and uncertainties associated with the company's business, reference is made to the company's reports filed from time to time with the Securities and Exchange Commission, including the company's Form 20-F.
Contact:
Company Contact:
Australia
Dr Lee Finniear
Chief Executive Officer
Metal Storm Limited
Ph: +61 7 3123 4700
Mr Terry O'Dwyer
Chairman
Metal Storm Limited
Ph: +61 7 3237 5930
USA
Mr Peter Faulkner
SVP US Operations
Ph: +1 703 248 8218
Harmony Capital Contact (Singapore):
Mr Suresh Withana
Executive Director
Harmony Capital Limited
Ph: +65 6720 2828
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Source: Metal Storm Limited
