MTSX Metal Storm Limited ADS (MM)

Metal Storm Limited Announces Sale of ProCam Business ARLINGTON, Va., May 25 /PRNewswire-FirstCall/ -- Metal Storm Limited (NASDAQ:MTSXNASDAQ:andNASDAQ:ASXNASDAQ:tradingNASDAQ:code:NASDAQ:MST) Metal Storm Limited today announced that it had entered into a formal agreement to sell the ProCam Machine LLC (ProCam) business to Monroe Machined Products, Inc. (MMP) of Seattle, Washington. Under the terms of the agreement MMP will purchase the assets and current order backlog and assume the accounts payable liabilities of ProCam's precision machining facility based in Seattle. It is expected that the sale will be completed by May 31 2005. CEO, David Smith said that the sale of ProCam will release valuable cash resources and management time to support its main focus in commercializing Metal Storm's 40mm weapons system. MMP will pay US$1.3M for the fixed assets, and the current order book of ProCam plus an additional amount to cover inventory and the net of accounts receivable and accounts payable. A sum of US$50,000 has been retained in trust contingent on the satisfaction of the conditions of the agreement. Cash proceeds from the sale are expected to be in the order of US$800K net of satisfying the balance of retained liabilities. The agreement also provides that most staff will be offered positions with MMP. Mr Smith said that the expertise and toolsets that had been developed at ProCam to support Metal Storm will continue to be available to the Company after the sale. About Metal Storm Metal Storm Limited is a defense technology company, employing 60 staff, headquartered in Brisbane, Australia and incorporated in the US, with offices in Washington DC and a defense engineering capability located in Seattle, operating as ProCam Machine LLC. The Company has invented 100% electronic ballistics technology that has no known conventional equivalent. Metal Storm is working with government agencies and departments, including the National Institute of Justice (US), the US Navy and US Army to develop a variety of systems utilizing the Metal Storm non-mechanical, electronically fired stacked ammunition system. Safe Harbor 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 U.S., 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. DATASOURCE: Metal Storm Limited CONTACT: David Smith, Metal Storm, Inc., +1-703-248-8218, ; Investor Contact - Gregory Pettit, +1-212-885-0301, , or Stefan Anikewich, +1-212-885-0505, , both of Hill and Knowlton for Metal Storm Limited

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