This may be an early model of the M-204 Grenade Launcher which attaches to the underside of the M-16 rifle. It makes an over and under weapon, 5.56mm and 40mm. The extra large heat shield forearm makes me think it is a pre-production or test model. And the red blob on the muzzle has to be a pre-production dust cover rag. That is Gary Lee aiming the weapon, STRAC all the way.