Metal Storm Inc. Awarded Contract by US Naval Surface Warfare Center, Dahlgren Division

Market Wire, August, 2007

Metal Storm Incorporated (MSI) (NASDAQ: MTSX) (ASX: MST) announces it has been awarded a sole source contract by the Naval Surface Warfare Center, Dahlgren Division (NSWCDD) for the purchase of a four barrel 40mm weapons pod and associated spares for testing. The NSWC Dahlgren Platform Integration Division integrates advanced technologies for multi-service customers, including programs of record, rapid prototyping, and operational experimentation. The Metal Storm system capabilities will be tested for suitability and potential for future certification testing and application for deployment.

Under the terms of the contract, MSI will deliver Qty 1 x 4 barrel 40mm Weapon Pod Assembly, Qty 1 Electronic Fire Control Unit and Qty 3 x 40mm 4042 Weapon Assemblies. The contract is valued at USD$63,864 with delivery to occur on or before 31 October, 2007.

About Metal Storm Incorporated

Metal Storm Incorporated is an engineering services company, licensed to sell Metal Storm Limited Stacked Projectile Electronic Ballistics Technology and products within the United States defense and homeland security markets.

Notes:

Metal Storm Limited: Australian Stock Exchange trading code: MST

Metal Storm Limited: NASDAQ Small Cap ticker symbol: MTSX

About Metal Storm

Metal Storm Inc is incorporated in Delaware with its principal office in Arlington, Virginia.

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.

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 utilises 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.

Company Contact: USA Peter Faulkner SVP US Operations Metal Storm, Inc. Ph: 1 703 248 8218 Australia Dr Lee Finniear Chief Executive Officer Metal Storm Limited Ph: 61 7 3123 4700