GREENVILLE, Ind. (April 1, 2002) – The National Aeronautics and Space
Administration (NASA) has selected Space Hardware Optimization Technology,
Inc.(SHOT), for four Small Business Innovation Research (SBIR) contracts —
totaling more than $1.3 million — for further development of the company’s
latest biotechnology research devices.

“Through these contracts we’ll add products to our catalog of spaceflight
research hardware, and transfer the technologies we invent along the way
into equipment for our Earth-based customers,” said SHOT President and CEO
Mark S. Deuser. “The technical challenges we’ll be addressing under these
new agreements will really showcase the ingenuity and resourcefulness of our
engineers and scientists.”

NASA’s SBIR program office, which competitively selects proposals for
funding, awarded SHOT Phase One contracts to establish the feasibility and
technical merit of two of the company’s recent biotechnology innovations.
The contracts are valued at approximately $70,000 each.

This first, an automated (robotic) optical monitor for high-throughput
crystal growth experiments, is expected to have applications in
pharmaceutical research. The other is a system for robotically conducting
multiple simultaneous cell-culturing experiments. Both are ultimately
intended to function within a cassette about the size of a lunchbox which,
in its spaceflight configuration, is then inserted into SHOT’s on-orbit
bioproccesing facility. Cell culturing is important to cancer,
immunodeficiency and diabetes research as well as the development of new
treatments for neurological diseases like Parkinson’s, Alzheimer’s and
Huntington’s.

Awards for Phase Two are based upon the results of Phase One and the
scientific and technical merit of the Phase Two proposal. Approximately 40
percent of Phase Ones go on to Phase Two — the principal research &
development effort. A greater emphasis also is placed on evidence of the
development of commercial applications for the technology. The SHOT
innovations recently earning Phase Two contracts are known as Dynacult and
Dynascope. Contract values are approximately $600,000 each.

Also intended for use in space in SHOT’s on-orbit bioprocessing facility,
Dynacult is a robotic cell-culture bioreactor system. Some of the
experiments performed in space by John Glenn with SHOT hardware in 1998
utilized several of the fundamental systems being proposed for Dynacult.

Tissue engineering is emerging as one of the most feasible applications of
microgravity in the development of space biomedical products. In the
United States each year, millions of individuals are in need of replacement
tissues and organs and the shortage of these tissues is a major limiting
factor to survival and quality of life. Research focused on growth of
individual cells into functional three-dimensional aggregates similar to
human tissues requires special culture devices. Using Dynacult in space,
scientists will be able to grow cells and tissues without them falling to
the “bottom” of a vessel. This enables the differentiation of tissues, such
as those needed in transplants, to be developed and observed. Both the
biomedical research community and NASA are actively engaged in maturing this
technology as an eventual alternative source of transplantable tissue.

The second Phase Two contract is for a product called Dynascope — a modular
microscopic observation chamber system for studying specific biological
components in, or interactions between fluids. Ideally suited are materials
like blood, emulsions of liquids that do not mix, suspensions of particles
used in drug delivery and solutions used in making thin films like filter
membranes.

SHOT’s system employs a single microscopic slide that can be observed under
a variety of conditions. Rather than maintaining a large inventory of
slides and culturing dishes, researchers can work with a modular system of
components that can be assembled to perform a multitude of experiments and a
variety of applied field research involving motion under a microscope.

Dynascope will meet requirements of automated microscopy on the
International Space Station. And on Earth, companies and research
laboratories pursuing cell therapy and gene therapy are expected to be most
interested, as are diagnostic firms. Improved techniques for observation of
moving cells, cellular particles, proteins, microcapsules, and fluids in
general, also are commercially important to scientific research areas such
as immunology, physiology, biochemistry and microbiology, as well as medical
areas such as hematology, endocrinology, oncology, infectious diseases and
biotechnology.

SHOT has been very successful in competing for SBIR contracts and
progressing them through the phased development process. In the past 10
years, the company has earned nearly two dozen such contracts – ranging in
value from tens of thousands to tens of millions of dollars. Over the
16-year life of the program, SHOT has received more SBIR contracts than any
other Indiana or Kentucky company.

Founded in 1988, SHOT is an applied-technology company that provides
engineering services and equipment to a broad spectrum of customers. Most
current contracts are with NASA to develop biological and medical research
hardware for flight aboard the space shuttle and the International Space
Station. Hardware produced by SHOT has been launched on seven space shuttle
missions and three sub-orbital rocket flights.