The following is my opinion only. It is not investment...

The following is my opinion only. It is not investment advice.

There are indicators that over time there has been interference applied to the progress of Metal Storm technology. Two such indicators include (1) the robot like, predictable, and almost insanely persistent long term bashing on a well known US finance forum and (2) the well publicised attempt by the Chinese government to take control of the Company.

Having said that, the performance of the Board, and of the management of the Company is absolutely woeful, such that any who might seek to interfere must hold their bellies laughing, as they watch rapid-fire blundering by the management of the company unintentionally do their bidding for them.

The present management team have done an exceptionally poor job. The Company has been under threat of financial failure, not because of the GFC as management now seeks to claim, but entirely because of their own repeated failures to produce the progress, the products, the sales, revenues and timelines that they have boasted they would. Had they achieved their own published objectives, I expect the Market, and industry majors, would now be strongly supporting the Company. Also, I doubt the share price would now be hovering near invisibility with the Company yet again fumbling around for capital.

The history is laid bare in Company releases. On 14 May 2009 the CEO advised the Market
"the next 3GL version ...... is currently under construction" (1) "It will shortly be certified to shoulder fire high explosives" and (2) "will be the primary demonstration weapon for business development and marketing in the second half of this year."

His claim leaves NO doubt about the certainty and timing of formal 3GL H.E. certification. It is a straight forward EMPHATIC statement to the Market. It is an objective that he does not present as being conditional. Rather, he asserts that 3GL H.E. firing certification will happen "shortly" after May 2009, and used for demos during the second half of 2009.

He is just as emphatic about H.E. ammunition. "Our 40mm High Explosive ammunition is proceeding well... and will complete qualification for man-firing in the coming months." Clearly the 'coming months' would have to be well before the end of 2009, to accommodate the certified H.E. 3GL shoulder firing demos.

Note the use of the word 'WILL' throughout the statements. Also note the total absence of any issue of doubt.

22 June 2009:
In this CEO Bulletin, it continues to be that there are no constraints advised for 3GL H.E. certification. Everything is apparently on track.

18 Sept 2009:
A three months delay in the ammo is announced, to refine a tail clip design. No mention of any delay with the 3GL itself though. We are also assured that the Company has "a high degree of confidence that formal qualification will be successful." No suggestion of technical hurdles. Merely a three month delay then, and only on the ammo.

So, in summary, as of the 18 Sept 2009, though various announcements, the Company had confirmed to the market that the shoulder fired, reloadable, H.E. firing 3GL WILL be certified and demonstrated sometime before the end of 2009, and that the 40mm H.E. ammunition WILL be certified (by Jan 2010) three months after the CDR is completed in October 2009. No caveats.

Then... COMPLETE SILENCE from the CEO for fully five months, with NO reporting on ANY progress. Nothing on certification or the promised sales and promised revenues. Nothing. How is it acceptable that the Market can be promised these make-or-break critical timelines and milestones, then be forced to watch the same timelines pass, as the Company silently ignores their passage?

Finally, on 16 Feb 2010, a CEO Bulletin. Surely the CEO would be confirming in the Bulletin that the 3GL has been certified?. But No. In this much-delayed Bulletin, the word 'certification' is not even mentioned in the single-paragraph 3GL 'review'. The mighty 3GL gets just 3 short sentences. Nothing about real progress. Nothing about the promised sales or revenues. Nothing about the demos. Nothing about why the objectives were failed.

Surely though, the CEO would at least confirm that the H.E. ammo has been certified?. But No. It is now only 'continuing toward' certification, and with no revised timelines. Rather the Bulletin starts out by bemoaning the GFC.

In my view, the fact that they failed to deliver on these most-critical of promises was devastatingly bad news for shareholders, for Market confidence, and for the future of the Company.

This was made all the more so by the Chairman, in the Annual Report 22/04/2008:
".. the Company will announce good news or bad news whenever the news is material and/or price sensitive. In circumstances where no information is being provided that means simply that the Company is advancing what it said it would advance satisfactorily and in accordance with the commercial timelines it has set."

Additional to the rules of continuous disclosure, when the Chairman of a listed company makes such a clear statement as the one above, we are entitled to take it exactly as it reads. It is a clear, strong and public commitment to advise the market of material news good or bad, and it specifically states that in the ABSENCE of news from the Company the market can be assured that the Company is "ADVANCING WHAT IT SAID IT WOULD".. "SATISFACTORILY, AND IN ACCORDANCE WITH THE COMMERCIAL TIMELINES IT HAS SET".

So, according to the Chairman, we could rest assured that, in the absence of news during the five month period between Bulletins, all objectives, including the H.E. 3GL and the H.E. ammo, were advancing in accordance with the commercial timelines it had set. But we would later find that that was anything but the case!

We have a failed Chairman and a failed CEO. The technology deserves better. We are entitled to VERY MUCH BETTER.