SpaceDev, Inc., the world’s first publicly traded space
exploration and development company, today announced its financial results for
the Second Quarter of 2001.
For the quarter, company sales increased by 8.7%
over the same quarter of 2000, and EBITDA losses were down 63.3% from the
First Quarter of 2001.

Sales for the second quarter 2001 totaled $941,000 versus $537,000 for the
first quarter 2001 and $866,000 for the second quarter of last year.
For the
second quarter 2001 losses before depreciation, amortization, interest and
taxes were $130,000 compared to losses in the first quarter 2001 of
$354,000 and earnings of $145,000 in the same period last year.

Sales in the first six months of $1.5 million were comprised of
$1.2 million from the CHIPSat program, $200,000 for the Office of Space Launch
(OSL) and $110,000 from the Boeing Mars Sample Return project and all other
programs.
In 2000, there was $1.1 million of sales from CHIPSat, $325,000
from the OSL, and $570,000 from all other programs.

The bottom line results for the second quarter of 2001 were better than
the first quarter of 2001 primarily due to higher sales and to the completion
of the R&D program expenditures made during the first quarter on our Hybrid
Propulsion product line.

“We have completed our R&D on the Hybrid Propulsion project and the
company is now allocating more time and resources in generating new business
in this area,” stated Jim Benson, Chairman and CEO.
“This shift in focus is a
natural transition as we continue to move more of our product lines out of the
R&D stage.
As such, we believe we will continue to see favorable near term
results in the new business area from these efforts.”

The company had a net loss after interest and other income of $429,000
compared to a net loss after interest and other income of $659,000 for the
first quarter of 2001.
The decrease in net loss was due to higher sales
volume and lower R&D expenditures.

The company reported a net increase in cash during the three months ended
June 30, 2001, of $57,000, compared to a net decrease of $237,000 for the
first three months of 2001.
Net cash for the year to date is down $180,000
from year-end 2000.
Net cash used by operating activities totaled ($206,000)
for the six months ended June 30, 2001 while net cash provided by financing
activities is $35,000 for the year to date.

“We have made significant and rapid progress during the past year to
establish strong financial health for SpaceDev, including major operating
changes designed to improve productivity and margins, adding key members in
the aerospace industry to our board of directors and increasing our sales and
marketing team,” stated Charlie Lloyd, CFO and COO.
“We are building this
structure to drive growth and future returns.
In the short term, our
management team has accomplished many of its initial goals related to
stabilizing the business and setting the stage for generating quality
earnings.”

As of June 30, 2001, the company’s backlog of business was approximately
$2.7 million, as opposed to approximately $4.9 million as of June 30, 2000.
To date in 2001, the company has added about $1.1 million in new business
including an increase of $600,000 in the CHIPSat small satellite project and
almost $200, 000 in additional California grant funds and $250,000 from the
Boeing Mars Sample Return program.

Outlook for 2002

Benson said that management remains “optimistic” about fiscal 2002, and
has established the goal of reaching a positive earnings performance.
“With
the operating improvements we have implemented, the revenues we generate
should carry better margins than in the past,” he noted.

“Most of our key markets particularly in the United States are just now
realizing the need for smaller, lower-cost, commercial space missions,
satellites and deep space spacecraft.
SpaceDev’s innovative and affordable
space launch vehicle, propulsion products, and space services are unmatched in
the industry.
As a result, current and new prospective customers are
discussing projects with us.”

Benson concluded:
“We see the second half of 2001 as the beginning of a
metamorphosis for SpaceDev.
We are proud of our accomplishments in this
regard.
The focus in the remainder of FY 2001 and for FY 2002 is on
cultivating existing relationships and generating new business.
The company
is developing marketing and business strategies to drive revenue growth.
We
are looking forward to implementing and testing these strategies over the next
12 to 18 months.
We believe SpaceDev will begin to see the increased demand
for our systems start translating into revenues.”

Founded in 1997, SpaceDev is the world’s first publicly traded commercial
space exploration and development company.
SpaceDev designs, assembles, tests
and markets affordable micro space systems including sophisticated micro-
satellites, low-power high performance flight computers, miniature S-Band
transponders, hybrid rocket-based orbital maneuvering and orbital transfer
vehicles (MTVs), and safe hybrid rocket motors for sub-orbital space tourism
applications.
SpaceDev is working with Sea Launch to explore offering low-
cost launches for secondary payloads, and has been working with the Air Force
to develop orbital maneuvering vehicles and kick motors for micro-satellites.

For more information regarding the company, please review the company’s
filings on the SEC EDGAR system at www.sec.gov.

This news release may contain forward-looking statements concerning the
company’s business and future prospects and other similar statements that do
not concern matters of historical fact.
Forward-looking statements 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.

For further information, please contact Elyesse Concepcion of eConcep
Public Relations, +1-949-642-7700, for SpaceDev, Inc.; or SpaceDev Investor
Relations, +1-858-375-2062.