SpaceDev's Starsys Division to Showcase Orbital Express Hardware at CSIA DEMOGala.

POWAY, Calif. -- SpaceDev (OTCBB: SPDV) subsidiary, Starsys, Inc., a leading supplier of mechanical subsystems for spacecraft, has accepted an invitation to be one of only 30 Colorado technology companies to showcase their innovations during the Colorado Software and Internet Association's (CSIA) DEMOGala on September 21, 2006 at the Grand Hyatt in Denver.

The DEMOGala evening event will feature a keynote address by Jeffrey Rhoda, Vice President of Innovation That Matters for IBM, and is the largest event during Colorado Tech Week, a statewide celebration showcasing the state's technology economy.

Starsys will demonstrate the Orbital Express (OE) Capture System, a key subsystem for the Orbital Express mission, scheduled for launch in December of 2006. Orbital Express is being developed by the Defense Advanced Research Projects Agency (DARPA). A successful demonstration will provide the foundation for developing an operational system that can provide routine on-orbit servicing of existing satellites as well as future space assets. The Starsys hardware captures, then docks, two independent spacecraft, creating electrical and fluid connections that allow one of the spacecraft to be serviced by the other.

"Starsys is very proud to be part of the CSIA DEMOgala, and we are honored to be one of the few selected from among the many truly innovative advanced technology companies from across this state," said Mark Sirangelo, Vice-Chairman and CEO of SpaceDev. "The Company's development, qualification and delivery of the Orbital Express hardware is an important contribution to the program and to see them in person will leave a lasting impression on the DEMOGala audience of investors, CEOs, potential customers and leaders from throughout the region."

"Starsys is yet another great example of Colorado's advanced technology industry, and one of the most important reasons we're holding the CSIA DEMOGala," said Su Hawk, president of CSIA. "Our event is focused on recognizing the great technology happening in our state, and we're looking forward to sharing the intensity, innovation and inspiration happening across Colorado with the hundreds of people in attendance."

The CSIA DEMOGala Technology Showcase will feature demonstrations and exhibits from the broadest range of categories, including: aerospace/satellite, biotechnology, IT, software, RFID, medical/healthcare, nanotechnology, renewable energy, mining, and robotics. DEMOGala is expected to draw more than 750 attendees.

The event begins with a Technology Showcase, followed by a reception, dinner, keynote address by Rhoda, and other elements. Registration is available at www.coloradosoftware.org or by calling CSIA's main offices at 303.592.4070.

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. In addition, Starsys, Inc., a wholly-owned subsidiary of SpaceDev, 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 restraint, deployment and actuation of moving spacecraft components. For more information, visit www.spacedev.com and www.starsys.com.

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 the items discussed above. Factors directly related to the subject of this release that could cause or contribute to such differences include risks and uncertainties associated with the Company's acquisition of Starsys Research Corporation, including (i) 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.