SPACEHAB, Incorporated
, a leading provider of commercial space services,
today announced notification from NASA that the Agency has received
the Company’s formal contract claim and has initiated a review and
internal audit of the amounts specified. NASA stated that it intends
to advise SPACEHAB of its findings on June 24, 2004.

As reported January 20, 2004, SPACEHAB submitted a detailed claim
to NASA in the amount of $87.7 million for recovery of its Research
Double Module (RDM) investment. The module and related equipment were
destroyed during the STS-107 Space Shuttle Columbia accident.

About SPACEHAB, Incorporated

SPACEHAB, Incorporated (www.spacehab.com) is a leading provider of
commercial and government space services with three primary business
units. The Flight Services business unit develops, owns, and operates
habitat and laboratory modules and cargo carriers aboard NASA’s Space
Shuttles for Space Station resupply and research purposes. SPACEHAB’s
Astrotech subsidiary provides payload processing support services for
both commercial and government customers at company-owned facilities
in Florida and California. The Company’s Government Services business
unit supports NASA’s Johnson Space Center providing configuration
management, product engineering, and support services for both the
Space Station and Space Shuttle programs. Additionally, through The
Space Store, Space Media provides space merchandise to the public and
space enthusiasts worldwide (www.thespacestore.com).

The statements in this document may contain “forward-looking
statements” within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. Such
statements are subject to risks and uncertainties that could cause
actual results to differ materially from those projected in the
statements. In addition to those risks and uncertainties discussed
herein, such risks and uncertainties include, but are not limited to,
whether the Company will fully realize the economic benefits under its
U.S. National Aeronautics and Space Administration (“NASA”) and other
customer contracts, whether NASA and other customers will continue to
utilize the Company’s habitat modules and related commercial space
assets, whether plans to complete the International Space Station
(“ISS”) are fulfilled, continued availability and use of the U.S.
Space Shuttle system, technological difficulties, product demand and
market acceptance risks, the effect of economic conditions,
uncertainty in government funding, the impact of competition, delays
and uncertainties in future space shuttle and ISS programs, resolution
of the Company’s indemnification claim with NASA arising from the loss
of the Columbia orbiter and its crew during the STS-107 mission, and
other risks described in reports filed by the Company with the
Securities and Exchange Commission. The Company assumes no obligation
to update these forward-looking statements.