The live firing, anticipated to be held in the U.S. during the second quarter of 2004, is the key deliverable under a Memorandum of Understanding (MOU) that Metal Storm signed with Dragonfly Pictures Inc (DPI) on February 23. Under the MOU the company's electronic-weapon technology will be integrated with DPI's new Dragonfly DP-4X UAV helicopter for these live firings.

The Dragonfly DP-4X is a man-portable, remotely controlled, Vertical Take-Off and Landing (VTOL) UAV that is approximately 85.5 inches long, 32 inches wide, 44 inches high, has a rotor span of 118.5 inches, and weighs approximately 140 pounds. It is designed to carry imaging, communications and environmental sensors for aerial intelligence gathering and reconnaissance.

Dragonfly Pictures Inc. chief executive officer, Mr. Michael Piasecki, said the integration of Metal Storm's unique, lightweight, electronic, multi-shot weapon system complemented DPI's 'systems' approach in preparing the new Dragonfly DP-4X as a weaponized UAV helicopter.

"Metal Storm offers a genuinely transformational electronic-weapon system that will allow us to extend the application of UAVs beyond just information gathering," Mr. Piasecki said.

"Our affordable and versatile Dragonfly DP-4X is being prepared for riskier and more offensive missions to combat many of the new threats that defy traditional battlefield tactics," he said.

Metal Storm director of scientific innovation, Mr. Mike O'Dwyer, said DPI's UAV helicopters were an excellent platform for demonstrating Metal Storm's technology to the U.S. defense industry and military decision-makers because they have already been used in frontline operational locations.

"Currently, small to medium UAV helicopters and airplanes are restricted to the surveillance role as they have no real offensive capability," Mr. O'Dwyer said.

"This project provides us with an ideal means of showcasing the versatility of Metal Storm's electronic-weapon systems in the expanding UAV market, which is expected to grow to $10.5 billion in the next decade," he said.

"Integrating Metal Storm's electronic-weapon system with small, lightweight UAV helicopters, will enable them, for the first time, to undertake small-scale strikes to support ground troops by day or night, escort convoys, clear roads and retaliate against mobile, man-launched ordnance such as those used in Iraq recently," said Mr. O'Dwyer.

Metal Storm's chief executive officer, Mr. Charles Vehlow, said armed UAVs were seen as a vital and emerging defense requirement that could open a new and major market for Metal Storm technology.

"An extra $1 billion in funding for UAV programs was allocated in the 2003/2004 U.S. defense budget to rapidly progress the development of this capability," Mr. Vehlow said.

"Armed UAVs offer affordable support for manned military systems at a reduced cost and without unnecessarily risking soldiers' lives," he said.

"This project allows Metal Storm to support DPI demonstrations for enhanced UAV capabilities now under consideration for the U.S. Army's Future Combat Systems (FCS) program.

"The MOU with DPI resulted from one of many U.S.-defense-industry inquiries and project opportunities that have arisen from the successful test-firing of our 24-barrel 40mm Grenade Pod in October of last year," said Mr. Vehlow.

Dragonfly Pictures Inchas pioneered a family of small vertical take-off and landing (VTOL) unmanned helicopters for military, civil and commercial users for twelve years. Originally, the platforms developed by DPI were built to support the special effects industry; now DPI's technology is being applied to Homeland Security roles and Convoy protection applications around the globe.

Under Mr. Michael W. Piasecki's leadership, DPI continues a strong tradition of 65+years of helicopter technology development, a legacy that started in 1942 by Frank N. Piasecki, the father of the Tandem Helicopter still in use today in Afghanistan and IRAQ.

DPI has focused its expertise to rapidly develop products that will directly assist small unit commanders which confront ambushes, Land Mines and Improvised Explosive Devices (IEDs) on a daily basis. These products are by design: multi-mission flexible, HMMWV compatible, and substantially reduce operator work load and support personnel.

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.

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