SpaceDev subsidiary Starsys, Inc., was recently awarded a contract by Lockheed Martin to provide antenna pointing gimbals for the Mobile User Objective System (MUOS) program, which is under direction of the U.S. Navy. MUOS is a next-generation narrowband tactical satellite communications system designed to significantly improve ground communications for U.S. forces on the move.

The initial award is for two flight shipsets and includes two standard A2100 5-meter antenna gimbal assemblies, four Ka-Band antenna gimbal assemblies and two 14-meter gimbal assemblies. Options are included for 12 additional gimbals supporting three additional spacecraft. The contract will include the development and qualification of the Ka-Band and 14-meter gimbal designs in addition to the standard gimbals and solar array deployment hinges Starsys has previously provided for the A2100 bus. Total contract value, with options exercised, exceeds $6 million.

“This is an important award for our Company that continues Starsys’ long term support of Lockheed Martin-built spacecraft programs,” said Mark N. Sirangelo, Chief Executive Officer and Vice Chairman of SpaceDev.

MUOS will replace the current narrowband tactical satellite communications system known as the Ultra High Frequency Follow-On (UFO) system and provide mobile warfighters a considerable increase in communications capability with improved robustness in the presence of weather, foliage, or other environmental effects. The new communications system will provide ten times more throughput, or volume of information currently transmitted.

Lockheed Martin Space Systems, Sunnyvale, California, is the prime contractor and systems integrator for the MUOS program. The Navy’s Program Executive Office for Space Systems, Chantilly, VA, and its Communications Satellite Program Office, San Diego, California, are responsible for the MUOS program. The first MUOS satellite is scheduled for on-orbit hand over to the Navy in 2010.

Robert Vacek, Starsys’ President and General Manager commented, “With the completion of this contract we will have provided hardware for a large number of Lockheed Martin spacecraft, including antenna gimbals for several A2100 spacecraft programs. The inclusion of the 14M antenna gimbal development is particularly exciting as it broadens our gimbal product offerings, to include the pointing of large spacecraft structures and subsystems.”

About SpaceDev

SpaceDev (OTCBB: SPDV – News) 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.

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