(OTC Bulletin Board: has been awarded a Small Business Innovation
Research (SBIR) contract by the Air Force Research Laboratory (AFRL) to design
and begin the development of the SpaceDev Streaker(TM) small launch vehicle
(SLV). SpaceDev Streaker(TM) will be designed to responsively and affordably
lift up to 1,000 pounds to Low Earth Orbit (LEO).

“SpaceDev is thrilled to be selected for this award,” said Jim Benson
founding chairman and chief executive of SpaceDev. “Our engineers have been
working on a practical and cost-effective small launch vehicle design for the
past three years. The Air Force has indicated a need for a responsive small
launch vehicle capable of quickly launching small satellites in the size-class
of SpaceDev’s CHIPSat microsatellite, and Common Aero Vehicles (CAVs).
Various government and commercial organizations have also expressed the need
to orbit small payloads at an affordable price, and with short lead times.”

The SpaceDev Streaker(TM) SLV concept is based on a proprietary
combination of technologies to increase the performance of hybrid rocket motor
technology. Hybrid rocket motors are a combination of solid fuel and liquid
oxidizer, and can be relatively safe, clean, non-explosive, and storable, and
can be throttled, shut down and restarted. SpaceDev has developed small
hybrid rocket motor technology for the National Reconnaissance Office, is
working on a Shuttle and EELV compatible intelligent “space tug” based on
hybrid technology, for the Air Force, and continues developing its larger
hybrid motor in competition for Burt Rutan’s historic private manned space
program, SpaceShipOne.

About SpaceDev

SpaceDev (OTC Bulletin Board: (SPDV) creates and sells affordable and
innovative space products and solutions to government and commercial
enterprises. SpaceDev products and solutions include the design, manufacture,
marketing and operation of sophisticated micro- and nano- satellites, hybrid
rocket-based orbital Maneuvering and orbital Transfer Vehicles (MTVs) as well
as safe sub-orbital and orbital hybrid rocket-based propulsion systems. For
more information, visit .

This news release may contain forward-looking statements concerning the
company’s business and future prospects and other similar statements that do
not concern matters of historical fact. Forward-looking statements relating
to product development, business prospects and development of a commercial
market for technological advances are based on the company’s current
expectations. The company’s current expectations are subject to all of the
uncertainties and risks customarily associated with developing business
ventures including, but not limited to, risks associated with new product
development and availability of raw resources and suppliers, risks to marketed
products and availability of financing and other sources of income, as well as
risks discussed in the company’s periodic reports filed with the U.S.
Securities & Exchange Commission. The company’s actual results may differ
materially from current expectations. Readers are cautioned not to put undue
reliance on forward-looking statements contained in this release and to read
it in conjunction with the Company’s annual report on Form 10-KSB, including
the consolidated financial statements filed therewith. The company disclaims
any intent or obligation to update publicly these forward-looking statements,
whether as a result of new information, future events or for any other reason.