"Nereus appears to present several better and important science opportunities including the potential of finding water and carbon compounds on the asteroid, and the unique chance to compare on-site measurements with ground-based measurements from Nereus' close approach to Earth," said Jim Benson, SpaceDev, president and chief executive officer. "We believe the Nereus mission offers the science community the widest possible variety of science compared to other potential targets, and it could maximize our chances of attracting paying customers."

Nereus, an Apollo-type near Earth asteroid (NEA), will pass within about 2.5 million miles of Earth in January of 2002, which is close enough for ground-based radar installations and telescopes to gather detailed information prior to NEAP's planned arrival about four months later. The company commissioned Mr. Spear's study because management believed that Nereus could be a more desirable destination than the original launch target. Mr. Spear's study has appeared to confirm the advantages of Nereus.

"Tony Spear, who led the recent NEAP feasibility study from June 15 through July 15, believes that Nereus is the quintessential near-Earth asteroid mission," said Benson. Mr. Spear was the Mars Pathfinder Project Manager, and recently retired from NASA's Jet Propulsion Laboratory (JPL) after thirty years of successful deep-space science missions.

"Additionally, Mr. Spear highlighted the following attributes of Nereus that could make it such an appealing project: it is a C-type asteroid about 1 km in diameter with a well-known orbit between Mars and Earth. Nereus is also scientifically interesting because it is carbonaceous, it may have a high water content, and it may consist of many other types of useful elements and volatiles," said Benson.

Benson noted that scientists who lobbied SpaceDev to change targets to Nereus believe a project to Nereus could help shed light on the early formation and composition of the solar system. "Furthermore, it could be very interesting as a possible astrobiology research site since it may possess most of the basic ingredients necessary for life, including a reasonable temperature below its surface."

To reach Nereus, NEAP launch is planned for April 3, 2001 and will remain in the Earth-moon system until January 12, 2002, when it should escape Earth's gravity to encounter Nereus on about May 12, 2002. NEAP should complete its primary mission by mid-June, 2002 if all proceeds according to the current plan.

Originally, SpaceDev planned to launch NEAP by the middle to end of 2000, but Benson noted that the new target is much more attractive scientifically and its schedule is more accommodating to potential payloads. It could now be possible to add lunar or Earth experiments to the spacecraft therefore increasing potential additional revenue, possibly including the search for water on the moon, prior to leaving the Earth-moon system for Nereus.

"Due to Nereus' orbit and position compared to Earth, it is relatively easy to reach given the capabilities of our planned propulsion system. This, in turn, simplified many of the spacecraft support systems while lowering costs, which were important factors in selecting this asteroid," said Benson.

FYI

The foregoing press release includes numerous forward-looking statements concerning the company's business and future prospects and other similar statements that do not concern matters of historical fact. The federal securities laws provide a limited "safe harbor" for certain forward-looking statements. Forward-looking statements in this press release 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 new business ventures including, but not limited to, market conditions, successful product development and acceptance, competition and overall economic conditions, as well as the risk of adverse regulatory actions. The company's actual results may differ materially from current expectations. Readers are cautioned not to put undue reliance on forward-looking statements. 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.