Press Release

SpaceDev Reports Financial Results for the Second Quarter of 2003

By SpaceRef Editor
August 14, 2003
Filed under , ,

SpaceDev, Inc.
, a leading provider of microsatellites and hybrid
propulsion technology, today reported financial results for the second quarter
of 2003.

Net sales for the six-month period ending June 30, 2003 were approximately
$1.3 million as compared to net sales of approximately $1.8 million for the
same six-month period in 2002. Sales in 2003 were comprised of approximately
$397,000 from a proprietary propulsion program, $331,000 from the CHIPSat
program, $250,000 from a completed Missile Defense Agency (MDA) project,
$242,000 from Air Force Research Laboratory (AFRL) projects and approximately
$67,000 from all other programs. In the first six-months of 2002, sales were
comprised of approximately $806,000 from the CHIPSat program, $807,000 from a
proprietary propulsion program and $199,000 from all other programs.

During the six-months ending June 30, 2003, the Company incurred a net
loss of approximately $918,000, or 71% of net sales, compared to a net loss of
approximately $117,000, or 6% of net sales, for the same six-months ending in
2002. The increase in the net loss was primarily due to a reduction in
revenues attributable to the substantial completion of the CHIPSat program,
and to deferred or delayed new programs and an increase in operating expenses
of approximately $976,000, or 76% of net sales. Operating expenses for the
six-months ending June 30, 2002 were approximately $368,000, or 20% of net
sales.

Operating expenses for the second quarter of 2003 included:

— general and administrative expenses (which increased approximately
$226,000 due to an increase in rent expense, amortization of
previously capitalized technology costs, and fees related the
Company’s revolving credit facility with Laurus Master Fund, Ltd.
announced in a Form 8-K filed June 18, 2003;

— increased marketing and sales expenses of approximately $130,000
(primarily due to the expansion of the Company’s marketing and
product development department); and,

— research and development expenses of approximately $252,000, of
which approximately $171,000 was in connection with our hybrid
rocket propulsion design and the remaining $81,000 was part of the
Company’s satellite bus design and development.

Recent Events

On July 15, 2003, SpaceDev announced that it had been awarded a contract
to develop micro- and nano-satellite bus and subsystem designs from the AFRL
Small Business Innovation Research (SBIR) program, which will enable SpaceDev
to explore the further miniaturization of its unique and innovative microsat
subsystems. Other recent awards include a second SBIR contract by the AFRL to
design and begin the development of the SpaceDev Streaker(TM) small launch
vehicle (SLV) (announced on July 18) as well as a second contract by the
Missile Defense Agency (MDA) to explore the use of microsatellites in national
missile defense (announced on July 24). On July 24, SpaceDev was awarded a
commercial study by Lunar Enterprise of California (LEC) for a first phase
project to begin developing a conceptual mission and spacecraft design for a
lunar lander program.

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

About SpaceDev

SpaceDev (OTC Bulletin Board: SPDV) creates and sells affordable and
innovative space products and solutions to government and commercial
enterprises. SpaceDev products and solutions include the design, manufacture,
marketing and operation of sophisticated micro and nano satellites, hybrid
rocket-based orbital Maneuvering and orbital Transfer Vehicles (MTVs) as well
as safe sub-orbital and orbital hybrid rocket-based propulsion systems.
SpaceDev has been awarded contracts from NASA, National Reconnaissance
Organization (NRO), Boeing, Jet Propulsion Laboratory (JPL), California Space
Authority (CSA), Air Force Research Lab (AFRL) and several commercial
customers. SpaceDev is also developing commercial hybrid rocket motors and
small high performance space vehicles and subsystems.

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, the level of sales to key customers; the
economic conditions affecting our industry; actions by competitors;
fluctuations in the price of raw materials; the availability of outside
contractors at prices favorable to the Company; our dependence on
single-source or a limited number of suppliers; our ability to protect our
proprietary technology; market conditions influencing prices or pricing; an
adverse outcome in litigation, claims and other actions, and potential
litigation, claims and other actions by or against us; technological changes
and introductions of new competing products; the current recession; terrorist
attacks or acts of war, particularly given the acts of terrorism against the
United States on September 11, 2001 and subsequent military responses by the
United States; mission disasters such as the loss of the space shuttle
Columbia on February 1, 2003 during its re-entry into earth’s atmosphere;
ability to retain key personnel; changes in market demand; exchange rates;
productivity; weather; and market and economic conditions in the areas of the
world in which we operate and market are products. The Company’s actual
results may differ materially from current expectations. Readers are cautioned
not to put undue reliance on forward-looking statements contained in this
release and to read it in conjunction with the Company’s annual report on Form
10-KSB, including the consolidated financial statements filed therewith. 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.

                       SpaceDev, Inc. and Subsidiaries
                    Condensed Consolidated Balance Sheets
                                 (Unaudited)

    June 30,                                          2003           2002

    Assets

    Current Assets
      Cash                                           $80,734       $135,370
      Accounts receivable                            142,759        201,331

    Total current assets                             223,493        336,701

    Fixed Assets - Net                               127,314      2,130,306

    Capitalized Software Costs                        33,375        172,513

    Other Assets                                      34,502        158,292

                                                    $418,684     $2,797,812


                       SpaceDev, Inc. and Subsidiaries
                    Condensed Consolidated Balance Sheets
                                 (Unaudited)

    June 30,                                          2003            2002

    Liabilities and Stockholders' Deficit

    Current Liabilities
      Current portion of notes payable               $52,000       $218,257
      Current portion of capitalized
       lease obligations                              26,629         37,604
      Notes payable - related party                   80,000         80,000
      Convertible debt notes payable                 332,847             --
      Accounts payable and accrued expenses          338,432        226,659
      Accrued payroll, vacation
       and related taxes                             122,129        145,581
      Customer deposits and deferred revenue              --        238,362
      Billing in excess of costs incurred
       and estimated earnings                             --        441,720
      Provision for anticipated loss                   5,174         47,341
      Income taxes payable                             2,526             --

    Total current liabilities                        959,737      1,435,524

    Notes Payable, Less Current
     Maturities                                       65,260      2,350,797

    Capitalized Lease obligations,
     Less Current Maturities                           6,558         23,780

    Notes Payable - Related Party,
     Less Current Maturities                         517,630        568,865

    Deferred Gain - Assets Held for Sale           1,123,857             --

    Deferred Revenue                                   5,000          5,000

    Total liabilities                              2,678,042      4,383,966

    Commitments and Contingencies

    Stockholders' Deficit
      Convertible preferred stock,
       $.0001 par value, 10,000,000 shares
       authorized no shares issued
       or outstanding                                     --             --
      Common stock, $.0001 par value;
       25,000,000 shares authorized,
       and 15,338,907 and
       14,858,396 shares issued
       and outstanding, respectively                   1,533          1,485
      Additional paid-in capital                   8,728,659      8,224,827
      Additional paid-in
       capital - stock options                       750,000        750,000
      Deferred compensation                         (250,000)      (250,000)
      Accumulated deficit                        (11,489,550)   (10,312,466)

    Total stockholders' deficit                   (2,259,358)    (1,586,154)

                                                    $418,684     $2,797,812


                       SpaceDev, Inc. and Subsidiaries
               Condensed Consolidated Statements of Operations
                                 (Unaudited)

                                           Three-Months Ending
    Three-Months Ending
     June 30,                2003            %          2002             %

    Net Sales              753,956          100%      862,638          100%

    Total Cost of Sales    577,874           77%      729,614           85%

    Gross Margin           176,082           23%      133,024           15%

    Operating Expenses
      Marketing and
       sales expense       134,005           18%       42,527            5%
      Research and
       development         251,983           33%           --            0%
      General and
       administrative      155,006           21%      113,241           13%

    Total Operating
     Expenses              540,994           72%      155,768           18%

    Profit (Loss) from
     Operations           (364,912)         -48%      (22,744)          -3%

    Other Income (Expense)
    Interest income
     (expense)             (14,179)          -2%      (64,852)          -8%
    Non-Cash interest
     income (expense)
     debt discount
                          (100,453)         -13%           --            0%
    Gain on Building
     Sale                   29,318            4%           --            0%

    Total Other Income
     (Expense)             (85,314)         -11%      (64,852)          -8%

    Loss Before Taxes     (450,226)         -60%      (87,596)         -10%

    Income tax provision   (37,474)          -5%           --            0%

    Net Loss              (412,752)         -55%      (87,596)         -10%

    Net Loss Per Share:
      Net loss               (0.03)                     (0.01)

      Weighted-Average
      Shares
      Outstanding       15,092,489                 14,858,396



                       SpaceDev, Inc. and Subsidiaries
               Condensed Consolidated Statements of Operations
                                 (Unaudited)

                                           Six-Months Ending
    Six-Months Ending
     June 30,               2003             %         2002              %

    Net Sales            1,286,795          100%    1,812,408          100%

    Total Cost of Sales  1,039,484           81%    1,441,577           80%

    Gross Margin           247,311           19%      370,831           20%

    Operating Expenses
      Marketing and
       sales expense       199,047           15%       68,772            4%
      Research and
       development         251,983           20%           --            0%
      General and
       administrative      524,922           41%      298,964           16%

    Total Operating
     Expenses              975,952           76%      367,736           20%

    Profit (Loss) from
     Operations           (728,641)         -57%        3,095            0%

    Other Income (Expense)
    Interest income
     (expense)             (34,628)          -3%     (120,012)          -7%
    Non-Cash interest
     income (expense)
     debt discount
                          (200,908)         -16%           --            0%
    Gain on Building
     Sale                   48,863            4%           --            0%

    Total Other Income
     (Expense)            (186,673)         -15%     (120,012)          -7%

    Loss Before Taxes     (915,314)         -71%     (116,917)          -6%

    Income tax provision     2,526            0%           --            0%

    Net Loss              (917,840)         -71%     (116,917)          -6%

    Net Loss Per Share:

      Net loss               (0.06)                     (0.01)

      Weighted-Average
       Shares
       Outstanding      15,092,489                 14,842,070

SpaceRef staff editor.