BRISBANE, 7 December 2009 – Metal Storm Limited (ASX trading...

BRISBANE, 7 December 2009 – Metal Storm Limited (ASX trading code: MST, OTC
Symbol: MTSXY).
Metal Storm has previously announced the signing of an Equity Subscription Agreement and
a Loan Facility Agreement for an investment of US$35 million by Assure Fast Holdings
Limited BVI (AFHL).
The first tranche of approximately $2.1 million (US$1.9 million) of equity capital was initially
scheduled to close on 3 November but had been extended subsequently until 7 pm on Friday
4 December.
The most recent delay was the result of Bank documentation which required further action
within AFHL’s Banks. During Friday substantial action to give effect to closing the First
Tranche funding was undertaken but by 7 pm had not delivered funds into Metal Storm’s
account. However, work by AFHL over the weekend and documents provided to the
Company now means Metal Storm expects AFHL will complete the delivery of First Tranche
funds by 7 pm (Brisbane) Tuesday 8 December, 2009.
During Friday and Saturday the Company has negotiated an immediate small equity
placement to provide carry forward funding and documentation for that is expected to be
completed today. Additionally the Company has finalised negotiations and will commence
documentation today for a further equity funding for up to $25M as a whole or partial
substitute for the AFHL funding.
The Company will issue instructions to its legal team on both these new sources of funding in
the expectation that this funding as a package will be adequate for the Company’s immediate
and at least the next 12 month funding needs.
As previously announced, the Company has reduced its day to day expenditure to remain
solvent for as long as possible to allow as much time as possible for this funding to be
received. The Board is testing the issue of solvency each day and will need to appoint an
Administrator as soon as that test cannot be satisfied. The Board is satisfied that the
probability of that occurring has reduced but is not yet fully eliminated.