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Metal Storm Limited (ASX:MST) Non-renounceable pro rata Rights Issue

Metal Storm announces non-renounceable pro rata Rights Issue to raise up to A$6.6 million

Further to the announcement made on 17 October 2011, Metal Storm today announces the details of a non- renounceable pro rata rights issue of ordinary shares in Metal Storm to shareholders in Australia, New Zealand and Singapore (Eligible Shareholders) to raise up to approximately A$6.6 million (Entitlement Offer). The Entitlement Offer is not underwritten.
The funds raised will be used as working capital to:

 - continue the development of Metal Storm's current products; 

- allow Metal Storm to reduce its reliance on its equity line of credit with Dutchess Opportunity Fund II LP, at least in the short term; and 

- cover Metal Storm's ongoing overhead and operating costs.

 Further information will be set out in the Entitlement Offer Booklet which is expected to be mailed to Eligible Shareholders on 7 November 2011.
Details about the EntitlementOffer
The Entitlement Offer provides Eligible Shareholders with the opportunity to subscribe for one new share in the Company (New Share) for every share held on the record date (3 November 2011), at an issue price of $0.003 per New Share. Eligible Shareholders may also apply for New Shares in excess of their entitlements, although any such application may be scaled back (in whole or part) if the Entitlement Offer is oversubscribed. The New Shares will be quoted on ASX. The full terms of the Entitlement Offer will be set out in the Entitlement Offer Booklet.
The Entitlement Offer is not subject to a minimum amount of funds being raised. As long as the Entitlement Offer is not oversubscribed, the Company will accept all valid applications for New Shares in full.
Further details about the Entitlement Offer, including key dates, are set out below.
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