"We are thrilled to once again be part of the Scaled Composites/VirginGalactic team and to be able to assist the team on this historic aviationand space endeavor," said Mark N. Sirangelo, Chairman and CEO of SpaceDev."Burt Rutan, Doug Shane and the Scaled team have yet again created anoutstanding design that will be the first commercial venture to open spaceto large numbers of the public."

Under the contract, SpaceDev will be the lead rocket motor team member forSpaceShipTwo and will collaborate with Scaled's internal design team todevelop a production ready hybrid rocket motor. The SpaceDev teaming willbe similar to that done from 2001 through 2004 on the SpaceShipOne program,in that SpaceDev will be providing engineering services to refine thedesign of the hybrid rocket motor being developed by Scaled Composites, aswell as providing the development, manufacture and integration of keyrocket motor system components. Also, SpaceDev will again be conductingground tests on those motor components and will be working to assist Scaledin the full-scale rocket test program both on the ground and duringSpaceShipTwo flight tests. The contract, which runs through 2012, has aninitial value of approximately $15 million for work to be primarilycompleted over the next two years.

"Scaled and SpaceDev have worked together successfully in the past and weare very pleased to welcome them back onto the team," commented Doug Shane,President of Scaled Composites. "We look forward to a long relationshipthat will result in the successful initiation of commercial human spacetravel."

Additional information regarding the contract can be found at:www.spacedev.com/sec_filings_financial_reports.php then click on 8-Kreports.

Additional information regarding the program can be found at:www.virgingalactic.com and www.scaled.com.

About SpaceDev

SpaceDev, Inc. is a space technology/aerospace company that creates andsells affordable and innovative space products and mission solutions. Formore information, visit www.spacedev.com.

Except for factual statements made herein, this news release consists offorward-looking statements that involve risks, uncertainties andassumptions 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 meanthat a statement is not forward looking. Forward-looking statements arebased on the Company's current expectations, and are not guarantees ofperformance. The Company's actual results could differ materially from itscurrent expectations. Factors that could contribute to such differencesinclude risks and uncertainties associated with: the Company's ability toeffectively integrate acquisitions; rescheduling or cancellation ofcustomer orders; uncertainties in the government budgeting process; abilityto control costs and expenses; and larger competitors' competitiveadvantages. Reference is also made to other factors described in theCompany's periodic reports filed with the SEC, including the Company's mostcurrent Annual Report on Form 10-KSB. These forward-looking statementsspeak only as of the date of this release. SpaceDev does not undertake toupdate these forward-looking statements.