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SpaceDev Reports First Quarter Fiscal 2007 Results

Revenue Increases 26%, Net Income Increases by Over $100K, EBITDA Increases 177%

POWAY, CA -- (MARKET WIRE) -- 05/14/07 -- SpaceDev, Inc. (OTCBB: SPDV) reported its financial results for the three months ended March 31, 2007 with revenue of over $9.0 million, net income of over $100,000 and EBITDA of over $640,000.

"This was our strongest quarter since our merger with Starsys Research in the first quarter of 2006," said Mark N. Sirangelo, SpaceDev Chief Executive Officer and Chairman of the Board. "The acquisition and subsequent infrastructure investment fundamentally expanded our business profile and provided us with a substantial manufacturing operation. This is a critical factor to our growth in the coming years giving us the ability to successfully take on even more exciting programs and projects. Our core operations continue to perform and we are on track in executing our plan."

The Company's primary financial information is shown below, comparing the first quarter of 2006, to the first quarter of 2007:

Revenue -- SpaceDev reported revenue of approximately $9.1 million for the three months ended March 31, 2007, an increase of approximately $1.9 million, or 25%, from the approximate $7.2 million in revenue reported for the same period in 2006.

Income from Operations -- The Company realized income from operations of approximately $221,000 in the first quarter of 2007, which included approximately $105,000 for stock option expense, compared to an operating loss of $46,000 for the same three months in 2006, which included approximately $91,000 for stock option expense. The Company implemented SFAS No. 123R in the first quarter of 2006.

During the first quarter of 2007, the Company's EBITDA increased to approximately $642,000, or 7.1% of net sales, compared to an EBITDA of $192,000, or 2.7% of net sales, for the same quarter in 2006.

Net Income -- Net income for the 2007 first quarter was approximately $109,000, compared to approximately $7,000 for the same period in 2006 with ($0.00) earnings per share for both quarters.

"We kept our focus this quarter on driving certain fixed price development contracts towards completion, as well as improving overall program efficiency and profitability," stated SpaceDev President and Chief Financial Officer, Richard B. Slansky. "We have begun to see some tangible improvements from our actions related to the turn-around of Starsys and growth of our combined company. We have completed the first phase of our major relocation and expansion of our production facilities with the second phase scheduled to complete in the 2nd quarter of this year. This will assist in continuing to drive operating efficiencies and profitability, as well as provide additional capacity for our future growth plans."

Cash Position -- At March 31, 2007, the Company's cash position, which included cash reserves and cash available for investment, was approximately $3.5 million compared to approximately $1.4 million at December 31, 2006, an increase of approximately $2.4 million.

First Quarter Conference Call Details

SpaceDev will host a conference call on Tuesday, May 15, 2007 at 11:00 a.m. EDT to discuss the quarter results. All those interested in hearing management's discussion are invited to join the call by dialing (866) 289-3234 and then entering PIN #8832 when prompted. A replay of the conference call will also be available for seven days through the investor relations section of SpaceDev's website, www.spacedev.com.

Non-GAAP Financial Measures

For the three months ended     March 31, 2007   March 31, 2006
                                 (Unaudited)      (Unaudited)
                               ---------------  ---------------
Net Income                     $       109,263  $         7,017
                               ---------------  ---------------

Interest Income                        (20,956)         (33,615)
Interest Expense                        75,358            5,283
Non-Cash Loan Fee                       86,301                -
Provision for Income Taxes                 800            4,235
Depreciation and Amortization          316,238          147,370
Stock Option Expense                   104,619           90,701
Gain on Building Sale                  (29,318)         (29,318)
                               ---------------  ---------------
EBITDA                         $       642,305  $       191,673
                               ===============  ===============

This release contains disclosure of EBITDA, which is a non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Because not every company defines EBITDA in the same way, our EBITDA figures may not be fully comparable to those reported by other companies. We define EBITDA as net income before interest, taxes, depreciation, amortization, stock option expense, and gain on our 2003 building sale. The Company believes that EBITDA provides an important additional perspective on its operating results, its ability to service its long-term obligations, its ability to fund continuing growth, and its ability to continue as a going concern. The Company's management regularly evaluates its progress based on EBITDA. The Company believes that EBITDA, while providing useful information, should not be considered in isolation or as an alternative to other financial measures determined under GAAP, such as net income or loss (as an indicator of operating performance) or cash flow (as a measure of liquidity).

About SpaceDev

SpaceDev, Inc. is a space technology/aerospace company that creates and sells affordable and innovative space products and mission solutions.

For more information on SpaceDev, please review the Company's filings on the SEC EDGAR system at www.sec.gov or at www.spacedev.com.

Except for factual statements made herein, this news release consists of forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict. 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, and are not guarantees of performance. The Company's actual results could differ materially from its current expectations. Factors that could contribute to such differences include risks and uncertainties associated with: the Company's ability to effectively integrate acquisitions; rescheduling or cancellation of customer orders; uncertainties in the government budgeting process; ability to control costs and expenses; and the possible need for additional financing. Reference is also made to other factors described in the Company's periodic reports filed with the SEC, including the Company's most current Annual Report on Form 10-KSB and subsequent Quarterly Report on Form 10-QSB. These forward-looking statements speak only as of the date of this release. Execept as may be required by law, SpaceDev does not undertake any obligation to publicly update these forward-looking statements.

                                                             SpaceDev, Inc.
                                                           and Subsidiaries

                                                Consolidated Balance Sheets

                                                  March 31,   December 31,
                                                    2007          2006
                                                ------------  ------------


Current Assets
   Cash                                         $  3,494,313  $  1,438,146
   Accounts receivable                             6,852,937     7,289,720
   Inventory                                         453,634       309,205
   Other current assets                            1,024,667       599,565
                                                ------------  ------------
Total Current Assets                              11,825,551     9,636,636

Fixed Assets - Net                                 3,989,394     3,793,365

Intangible Assets                                    817,448       841,133

Goodwill                                          11,233,665    11,233,665

Other Assets                                         733,099       626,086
                                                ------------  ------------

                                                ------------  ------------
Total Assets                                    $ 28,599,157  $ 26,130,885
                                                ============  ============

Liabilities and Stockholders' Equity

Current Liabilities
    Accounts payable and accrued expenses       $  1,565,631  $  1,755,985
    Current portion of capitalized lease
     obligations                                      74,121        35,441
    Accrued payroll, vacation and related taxes    1,114,610     1,184,457
    Billings in excess of costs and deferred
     revenue                                       2,545,173     2,816,072
    Revolving line of credit                       3,427,443       805,172
    Other accrued liabilities                      1,985,753     1,602,561
                                                ------------  ------------

Total Current Liabilities                         10,712,731     8,199,688

Notes Payable, Less Current Maturities                50,193        50,193

Capitalized Lease Obligations, Less Current
 Maturities                                          278,961       136,709

Deferred Gain - Assets held for sale                 684,087       713,405

Other Long Term Liabilities                           15,266        15,266
                                                ------------  ------------
Total Liabilities                                 11,741,238     9,115,261

Commitments and Contingencies

Stockholders’ Equity
   Convertible preferred stock, $.001 par
    value, 10,000,000 shares authorized, and
    252,677 and 252,963 shares issued and
    outstanding, respectively
   Series C Convertible preferred stock                  248           248
   Series D-1 Convertible preferred stock                  5             5
   Common stock, $.0001 par value;
    100,000,000 shares authorized, and
    29,627,692 and 29,550,342 shares issued
    and outstanding, respectively                      2,963         2,953
    Additional paid-in capital                    33,027,353    33,150,566
    Accumulated deficit                          (16,172,650)  (16,138,148)
                                                ------------  ------------
Total Stockholders’ Equity                        16,857,919    17,015,624
                                                ------------  ------------
Total Liabilities and Stockholders' Equity      $ 28,599,157  $ 26,130,885
                                                ============  ============

Please reference the Company's Form 10-QSB to access the notes which are an integral part of the consolidated financial statements

                                                             SpaceDev, Inc.
                                                           and Subsidiaries

                                      Consolidated Statements of Operations

                                        Three Months Ended
March 31,                   2007          %           2006          %
                        -----------  -----------  -----------  -----------
Net Sales               $ 9,057,048        100.0% $ 7,174,778        100.0%
Total Cost of Sales*      6,966,071         76.9%   5,265,106         73.4%
                        -----------  -----------  -----------  -----------

Gross Margin              2,090,977         23.1%   1,909,672         26.6%
                        -----------  -----------  -----------  -----------
Operating Expenses

  Marketing and sales       586,614          6.5%     643,560          9.0%
  Research and
   development               39,360          0.4%      81,777          1.1%
  General and
   administrative         1,243,555         13.7%   1,230,733         17.2%
                        -----------  -----------  -----------  -----------
Total Operating
 Expenses*                1,869,529         20.6%   1,956,070         27.3%
                        -----------  -----------  -----------  -----------
Income/(Loss) from
 Operations                 221,448          2.4%     (46,398)        -0.6%
                        -----------  -----------  -----------  -----------
  Interest and other
   income                    20,956         -0.8%      33,615          0.5%
  Interest expense and
   loan fee                 (75,358)         0.2%      (5,283)        -0.1%
  Gain on building sale      29,318          0.3%      29,318          0.4%
  Non-cash loan fee         (86,301)        -1.0%           -          0.0%
                        -----------  -----------  -----------  -----------

Total Non-Operating
 Income                    (111,385)        -1.2%      57,650          0.8%
                        -----------  -----------  -----------  -----------

Income Before Taxes         110,063          1.2%      11,252          0.2%

Income Tax Provision            800          0.0%       4,235          0.1%
                        -----------  -----------  -----------  -----------

Net Income              $   109,263          1.2% $     7,017          0.1%
                        ===========  ===========  ===========  ===========

Net Income                  109,263                     7,017
  Less Preferred
   Dividend Payments       (143,762)                 (140,740)

  Adjusted Net
   Income (Loss) for
   EPS Calculation          (34,499)                 (133,723)

Net Income Per Share:   $     (0.00)              $     (0.00)
                        -----------  -----------  -----------  -----------

   Shares Outstanding    29,570,306                27,276,451

Fully Diluted Net
 Income Per Share:      $     (0.00)              $     (0.00)
                        -----------  -----------  -----------  -----------
  Fully Diluted
   Shares Outstanding    29,570,306                27,276,451
                        ===========  ===========  ===========  ===========

 * The following table shows how the Company's stock option expense would
   be allocated to all expenses.  These non-cash stock option expenses are
   included in the unaudited operating results stated above.

  Cost of sales         $    41,373               $         -
  Marketing and sales        13,652                         -
  Research and
   development                    -                         -
  General and
   administrative            49,594                    90,701
                        -----------  -----------  -----------  -----------
Total Non-Cash Stock
 Option Expense         $   104,619               $    90,701
                        ===========  ===========  ===========  ===========

Please reference the Company's Form 10-QSB to access the notes which are an integral part of the consolidated financial statements

SpaceDev Investor Relations
Investor Contact:
Richard Slansky
Jessica Gerstenkorn
Media Contact:
Mark Sirangelo
(858) 375-2026

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