SPACEHAB REPORTS FINANCIAL RESULTS FOR SECOND QUARTER FISCAL YEAR 2008

Houston, Texas, February 14, 2008 – SPACEHAB, Incorporated (NASDAQ/NMS: SPAB), a leading provider of commercial space services, today announced financial results for the second quarter ended December 31, 2007 of its fiscal year 2008.

Second Quarter Results
SPACEHAB posted a second quarter fiscal 2008 net loss of $32.8 million, or ($4.36) per common share, on revenue of $4.3 million which included $30.2 million of non-cash debt conversion expense upon consummation of the exchange of its Convertible Subordinated Notes and Senior Convertible Notes into shares of common and preferred stock, compared with a second quarter fiscal 2007 net loss of $1.8 million, or ($1.42) per share on revenue of $12.9 million. Earnings per share of common stock also reflect a non-cash deemed dividend of $3.3 million upon conversion of the Company's Series B Convertible Preferred Stock into shares of common and preferred stock.

In October 2007, SPACEHAB successfully exchanged $7.4 million of its 8.0% convertible notes due October 2007, $46.1 million of its 5.5% convertible notes due October 2010 and its 1.3 million shares of Series B convertible preferred stock for 32.6 million shares of common stock and 61,550 shares of new Series C convertible preferred stock. In November 2007, the Company converted the Series C convertible preferred stock into 89.9 million shares of common stock and affected a 1 for 10 reverse split. On October 15, 2007, SPACEHAB redeemed the outstanding $2.9 million of its 8.0% convertible notes for cash at par.

Six Months Results
SPACEHAB's net loss for the six months ended December 31, 2007 was $33.7 million, or ($7.72) per common share, on revenue of $12.9 million which included the $30.2 million non-cash debt conversion expense upon consummation of the exchange of its Convertible Subordinated Notes and Senior Convertible Notes into shares of Common and Preferred Stock, compared to a net loss of $1.9 million, or ($1.45) per share, on revenue of $27.7 million for the first six months of the prior fiscal year. Earnings per share of common stock also reflect a non-cash deemed dividend of $3.3 million upon conversion of the Company's Series B Convertible Preferred Stock into shares of common and preferred stock.

During the six-month period of fiscal year 2008, the Company completed performance on its last scheduled space shuttle module mission, STS-118. As a result, the Company's revenues were significantly below the first six months for fiscal year 2007.

Liquidity
On December 31, 2007, SPACEHAB's cash and short-term investments were approximately $.3 million. The Company also recorded $10.2 million of Restricted Cash as a non-current asset, consisting of advance payments received on a government contract to modify certain spacecraft processing facilities. The Company carries a non-current liability of $7.4 million for obligations under this construction contract.   This contract contains penalties of up to $3.0 million if SPACEHAB fails to complete the modifications prior to September 30, 2009.  

SPACEHAB's working capital deficit at the end of the quarter was $2.5 million. As of December 31, 2007 SPACEHAB carried a contract backlog of $19.1 million which represents the expected value of contractually-committed work, portions of which are subject to future government funding decisions.

Subsequent to quarter end, Astrotech, a wholly owned subsidiary of SPACEHAB, entered into a $6 million financing facility, consisting of a $4.0 million term loan and a $2.0 million revolving credit facility, with Green Bank, N.A. The new financing facility is part of the Company's ongoing financial restructuring strategy providing capital as SPACEHAB pursues its new business opportunities as well as improving overall liquidity.

On February 11, 2008, SPACEHAB entered into a Stock Purchase Agreement with certain investors for the purchase of 55,000 shares of the Company's Series D convertible preferred stock for a total price of $5.5 million. Consummation of the transaction is contingent upon NASA awarding SPACEHAB a funded Space Act Agreement under the Commercial Orbital Transportation Services (COTS) program and shareholder approval of the transaction. The Company issued 150,150 shares of common stock to these investors as a commitment fee upon their entering into the Stock Purchase Agreement.

Update of Ongoing Operations
In January 2008, the Company announced a major corporate restructuring and the formation of three new subsidiaries - SPACEHAB Orbital Transportation, Inc., SPACEHAB Microgravity Sciences, Inc., and SPACETECH, Inc. - created to advance SPACEHAB's heritage capabilities to capture newly-identified business opportunities. SPACEHAB's other two business segments, Astrotech Space Operations and SPACEHAB Engineering Services (formerly SPACEHAB Government Services) continue profitable operations.

Also in January 2008, SPACEHAB's Board of Directors approved the addition of General (Ret.) Lance W. Lord, R. Scott Nieboer, John A. Oliva, and William F. Readdy to SPACEHAB's Board of Directors. The Board determined that John A. Oliva qualifies as an independent director and financial expert. Mr. Oliva was appointed Chairman of the audit committee.