Kistler has moved quickly to reassure the industry that the new financing arrangements with Northrop Grumman will enable the final round of development to be completed. Northrop will also hold options for a further $120 million investment, which would make Northrop one of the largest shareholders in Kistler. Northrop will further assist Kistler by forming an industry consortium to raise additional capital.

"We are very pleased to be partnering with Northrop Grumman," said Robert Wang, chairman of Kistler Aerospace Corp. "We believe this strategic partnership with a recognized industry leader demonstrates considerable confidence in the K-1 program. We look forward to a long and prosperous relationship."

Over the last several years, Northrop Grumman has been an integral part of the Kistler K-1 development team, responsible for the design, development and manufacturing of the primary structural components for the vehicle.

"I am a strong believer in Kistler's viability as a provider of low-cost access to space," said Robert Soikkeli, vice president special projects of Northrop Grumman. "Our team has been working with Kistler for over two years now, and we are confident that Kistler has the management team and technology necessary to make this program successful. The market is certainly ready for a low-cost alternative such as Kistler."

"From a technical perspective, this partnership is very exciting," said Dr. George Mueller, Kistler's chief executive officer. "We view Northrop Grumman's industry expertise and the K-1's innovative two-stage design as a winning combination."