escottVentures II Investment Expands Working Capital

SPACEHAB, Inc., a
leading provider of commercial space services, today announced that its
subsidiary Space Media, Inc. (SMI), has received a $750,000 equity investment
from escottVentures II, LLC, of Melbourne, Florida.
SMI’s primary business
activities are the STARS Academy global education program and The Space Store,
an online retail business.

escottVentures II has assumed a seat on SMI’s board of directors along
with its equity stake.
SMI intends to use this venture capital investment to
help build worldwide enrollment in its STARS Academy global education program
and sales of space and educational merchandise through The Space Store.

“We’re pleased to have escottVentures II joining forces with us,” said Jim
Royston, SMI’s Vice President of Education.
“The principals are excited about
growth prospects for STARS Academy and The Space Store and are ready to help
us expand our business.”

“SMI has a solid business plan and dedicated leadership,” said James
Massoni, Managing Member of escottVentures II.
“We’re looking forward to
helping Space Media grow.”

STARS Academy is an online interactive cultural and scientific exchange
program for ages 8-18.
The paid-subscription program is a yearlong adventure
that takes students across the Earth and oceans and into space on a quest for
learning.
Endangered species is this year’s theme for the “Earth Defenders”
component of the program.
STARS Academy students will be tracking the
movements of endangered leatherback turtles around the world, using data
collected and transmitted via satellite.

The U.N. Office for Outer Space Affairs has endorsed the STARS Academy and
is working with Space Media to build participation in the program throughout
the developing world.
Currently more than 40 countries have expressed an
interest in participating in this year’s program.

As part of the STARS Academy’s space learning component, “To Mars and
Beyond,” students will participate in real space research.
STARS Academy
plans to fly nine experiments this school year, two aboard the International
Space Station (ISS) and seven aboard upcoming NASA Space Shuttle mission STS-
107. The first STARS experiments flew aboard Shuttle mission STS-93 in July
1999. The experiments included a study of the development of butterflies in
microgravity.
Artifacts of this experiment were donated to the Smithsonian
Institution’s National Air and Space Museum in May 2000 and are now on
permanent display there.

Space Media’s online retail business, The Space Store, is continually
expanding its line of merchandise.
Earlier this year, it started selling
space station foods originally developed by SPACEHAB subsidiary Johnson
Engineering and currently on the menu for crew members dining aboard the
International Space Station.

Founded in 1984, with more than $100 million in annual revenue, SPACEHAB,
Inc., is a leading provider of commercial space services.
The company
develops, owns, and operates habitat and laboratory modules and cargo carriers
aboard NASA’s Space Shuttles. It also supports astronaut training and space
station configuration management at NASA’s Johnson Space Center in Houston and
builds space-flight trainers and mockups. SPACEHAB’s Astrotech subsidiary
provides commercial satellite processing services at facilities in California
and Florida.
SPACEHAB’s newest strategic growth initiative, SPACEHAB
Huntsville, will provide customer-focused end-to-end services to the space
research community at NASA’s Marshall Space Flight Center in Huntsville,
Alabama.
SPACEHAB subsidiary Space Media, Inc.(TM), brings space into homes
and classrooms worldwide with interactive education programs through STARS
Academy (http://www.starsacademy.com ), and space merchandise from The Space
Store (http://www.thespacestore.com ).

This release contains forward-looking statements that are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those projected in such statements. Such risks and
uncertainties include, but are not limited to, whether the company will fully
realize the economic benefits under its NASA and other customer contracts, the
timing and mix of Space Shuttle missions, the successful development and
commercialization of new space assets, technological difficulties, product
demand, timing of new contracts, launches and business, market acceptance
risks, the effect of economic conditions, uncertainty in government funding,
the impact of competition, and other risks detailed in the Company’s
Securities and Exchange Commission filings.