SpaceDev's founding chairman and CEO, Jim Benson, recently signed a Space Act Memorandum of Understanding (MOU) with NASA Ames Research Center director, Dr. Scott Hubbard. This non-binding MOU confirms the intention of the two parties to explore novel, hybrid propulsion based hypersonic test beds for routine human space access. The parties will explore collaborative partnerships to investigate the potential of using SpaceDev's proven hybrid propulsion and other technologies, and a low cost, private space program development approach, to establish and design new piloted small launch vehicles and flight test platforms to enable near-term, low-cost routine space access for NASA and the United States. One possibility for collaboration is the SpaceDev Dream Chaser(TM) project, which is currently being discussed with NASA Ames.

Unlike the more complex SpaceShipOne, for which SpaceDev provides critical proprietary hybrid rocket motor propulsion technologies, the SpaceDev Dream Chaser(TM) would be crewed and take-off vertically, like most launch vehicles, and will glide back for a normal horizontal runway landing.

"This project is one small step for SpaceDev, but could evolve into one giant leap for affordable, commercial human space flight," said Jim Benson. "I have been waiting for almost fifty years for commercial space flight, and have concluded that SpaceDev, through our unbroken string of successful space technology developments, now has the technical capability and know-how, along with our partners, and when fully funded, to quickly develop a safe and affordable human space flight program, beginning with sub-orbital flights in the near future, and building up to reliable orbital public space transportation hopefully by the end of this decade."

"I am delighted that we will be working with SpaceDev to help meet the goals of The Vision for Space Exploration," said G. Scott Hubbard, director of NASA Ames Research Center, located in California's Silicon Valley. "Near-term, low-cost, crewed and uncrewed routine space access is a key for realizing the nation's Exploration Vision. I look forward to a long and fruitful partnership with SpaceDev to explore the technologies for a new class of exciting launch vehicles for future space exploration."

The sub-orbital SpaceDev Dream Chaser(TM) is derived from an existing X-Plane concept and will have an altitude goal of approximately 160 km (about 100 miles) and will be powered by a single, high performance hybrid rocket motor, under parallel development by SpaceDev for the SpaceDev Streaker(TM), a family of small, expendable launch vehicles, designed to affordably deliver small satellites to low earth orbit. The SpaceDev Dream Chaser(TM) will use motor technology being developed for the SpaceDev Streaker(TM) booster stage, the most powerful motor in the Streaker family. The SpaceDev Dream Chaser(TM) motor will produce approximately 100,000 pounds of thrust, about six times the thrust of the SpaceShipOne motor, but less than one-half the thrust of the 250,000 pounds of thrust produced by hybrid rocket motors developed several years ago by the American Rocket Company (AMROC).

SpaceDev's non-explosive hybrid rocket motors use synthetic rubber as the fuel, and nitrous oxide for the oxidizer to make the rubber burn. Traditional rocket motors use two liquids, or a solid propellant that combines the fuel and oxidizer, but both types of rocket motors are explosive, and all solid motors produce copious quantities of toxic exhaust. SpaceDev's hybrid rocket motors are non-toxic and do not detonate like solid or liquid rocket motors.

About SpaceDev

SpaceDev (OTCBB: SPDV) 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. Upon founding SpaceDev in 1997, Jim Benson started the trend of successful computer entrepreneurs moving into the space development arena. For more information, visit www.spacedev.com.

About NASA/Ames

Ames Research Center, one of ten field installations of the National Aeronautics and Space Administration, is located in the heart of California's Silicon Valley at the core of the research cluster of high-tech companies, universities and laboratories that define the region's character. Ames plays a critical role in virtually all NASA missions in support of America's space and aeronautics programs. Ames conducts critical R&D and develops enabling technologies that make NASA missions possible. In addition, Ames works collaboratively with the FAA, conducting research in air traffic management to make safer, cheaper and more efficient air travel a reality. Ames engages in information and education outreach, forms collaborative partnerships, and fosters commercial application of NASA technologies.

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 references to non-explosive motors directly relate to the zero TNT equivalent rating of its hybrid rocket motors and that they do not detonate notwithstanding the fact that any pressure vessel may rupture but not "explode" like a solid or liquid rocket motor. 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.

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