SpaceDev, Inc. has been authorized by the Missile Defense Agency (MDA) to proceed with Phase III of its Distributed Sensing Experiment program.

This MDA award is the continuation of a five-year, four-phase, $43-million contract to design and develop affordable high-performance networked microsatellites to support national missile defense. The third phase is valued at approximately $29 million, of which SpaceDev is now being funded for $6.5 million, with additional funding expected in GFY 2007. The objectives of Phase III are to assemble, integrate and test three advanced, networked microsatellites in preparation for launch. The phase is expected to be completed within the next three years.

“SpaceDev successfully passed a Critical Design Review with the MDA prior to the award of Phase III, and this review was the last milestone on the path to building the system,” said Mark N. Sirangelo, SpaceDev Chief Executive Officer. “Our customer gave us the green light to proceed with manufacturing, integrating and testing after thoroughly reviewing our designs, technical approach, schedule and hardware demonstration. SpaceDev’s flat-sat test unit has progressed rapidly, successfully demonstrating key hardware and software functionality, and enabling us to achieve this significant milestone in the production of microsatellites for the MDA.”

The fourth and final phase of the program would consist of a satellite launch and demonstration, along with the provision of support during the life of the experiment. The first and second phases, already completed, involved a detailed mission analysis and preliminary microsatellite design, and the design and detailed development of the system, respectively.

Under this contract, SpaceDev’s comprehensive “plug and play” microsat hardware and software will be implemented in the MDA modular microsatellites. The project-specific innovations will also include the implementation of a Linux operating system, object-oriented CORBA software modules, IP communications, as in SpaceDev’s CHIPSat, and commercial industry-standard hardware interfaces. This modular approach is expected to reduce risk, as well as save time and money.

SpaceDev is also offering this modular “plug and play” hardware and software in its MMB-100 low-cost, off-the-shelf commercial microsat, as well.

About SpaceDev, Inc.

SpaceDev (OTCBB: SPDV – News) creates and sells affordable and innovative space products and solutions to government and commercial enterprises. SpaceDev’s innovations include the design, manufacture, marketing and operation of sophisticated micro- and nano-satellites, hybrid rocket-based orbital Maneuvering and orbital Transfer Vehicles as well as sub-orbital and orbital hybrid rocket-based propulsion systems for safe human space flight. In addition, Starsys Research Corporation was acquired by SpaceDev on January 31, 2006, renamed Starsys, Inc., and is now a wholly-owned subsidiary of SpaceDev. Starsys is engaged in the design and manufacture of mechanical and electromechanical subsystems and components for spacecraft. Starsys’ subsystems enable critical spacecraft functions such as pointing solar arrays and communication antennas and restraining, deploying and actuating of moving spacecraft components. For more information, visit

Forward-Looking Statements

Except for the factual statements made herein, the information contained in this news release consists of forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict. Words and expressions reflecting optimism and satisfaction with current prospects, as well as words such as “believe,” “intends,” “expects,” “plans,” “anticipates” and variations thereof, identify forward-looking statements, although their absence does not mean that a statement is not forward looking. Forward-looking statements are based on the Company’s current expectations. Such forward-looking statements are not guarantees of performance, and the Company’s actual results could differ materially from the Company’s current expectations based on many factors that are directly or indirectly related to subject matter of the forward-looking statements. Factors that could cause or contribute to such differences include risks and uncertainties associated with: (i) the Company’s acquisition of Starsys Research Corporation, including the Company’s ability to effectively integrate operations and effectively execute the business plan, (ii) any loss of a major customer or rescheduling or cancellation of customer orders, (iii) the uncertainties in the government budgeting process, (iv) the combined company’s ability to control costs and expenses, (vi) the possibility of further cost overruns on fixed-price contracts, and (vii) the need for additional financing to support the combined business. Reference is also made to other factors set forth in the Company’s periodic reports filed with the Securities and Exchange Commission, including “Management’s Discussion and Analysis” and other sections of the Company’s most current Annual Report on Form 10-KSB and subsequent Quarterly Reports on Form 10-QSB. These forward-looking statements speak only as of the date of this release, and the Company undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release.


The Investor Relations Group

Investors: Dian Griesel/Tom Caden/Erika Moran

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