SpaceDev, Inc.


                      Employee Stock Purchase Plan of 1999
                                   Prospectus


                                 AUGUST 31, 2000



Note:  This  Prospectus,  when combined with the Company's Form S-8 registration
statement,  the  Plan referenced above and each of the documents incorporated by
reference  into  the  Form  S-8 registration statement and this Prospectus, when
taken  together, constitute as prospectus that meets the requirements of Section
10(a)  of the Securities Act. This Prospectus will be sent or given to employees
as  specified by Rule 428(b)(1) of the General Regulations of the Securities Act
of  1933.  The  information  contained  in this Prospectus is not required to be
filed  with  the  U.S.  Securities  Commission  either  as  part of the Form S-8
registration  statement  or  as  a  prospectus  pursuant  to  Rule  424.

                    PART I TO FORM S-8 REGISTRATION STATEMENT

                      EMPLOYEE STOCK PURCHASE PLAN OF 1999

              INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

Item  1.  Plan  Information.

     General  Plan  Information

     The  Employee  Stock  Purchase Plan of 1999 (the "Plan") was adopted by the
shareholders  of SpaceDev, Inc. (the "Company") at its 1999 Annual Shareholders'
Meeting  on June 30, 1999. The Plan was adopted to enable the Company to provide
a  convenient  method  for  eligible  employees  to  become  shareholders in the
Company.  The  Company  believes that employee participation in the ownership of
the  business  will  be to the mutual benefit of both employees and the Company.

     The  Plan  automatically terminates on June 30, 2005, but may be terminated
or  suspended  at  an  earlier  date upon the occurrence of one of the following
events:

1)  The filing for dissolution by the Company, or the merger or consolidation of
the  Company
wherein  the  Company  is  not  the  surviving  entity;

2)  Termination  by the Board of Directors, provided that no employee's existing
rights  under  the Plan  are  adversely  affected;  and

3)  All  shares  reserved  under  the  Plan  have  been  purchased.

     The  Board  of  Directors  may  amend  the Plan at any time without notice,
provided  that  no  employee's  existing  rights under any offering already made
under  the  Plan  are  not  adversely  affected.  The Plan may not be amended to
increase  the  number  of  Shares reserved for the Plan to a number in excess of
1,000,000  unless  shareholder  approval  is  obtained.

     The Plan is not subject to the provisions of the Employee Retirement Income
Security  Act of 1974 ("ERISA"). The Plan is administered by the Company's Board
of  Directors,  which may appoint an administrative committee. The Directors are
elected  to  the Board at each annual  shareholder meeting of the Company, for a
term of one year or until the next annual shareholder meeting. The Directors may
be  removed  by  a  vote  of  the shareholders, or by a majority of the Board of
Directors  under  certain circumstances. Any vacancies on the Board of Directors
may be filled by a majority vote of the Board of Directors until the next annual
shareholder  meeting.

     You  may  obtain  additional  information  regarding  the   Plan  and   its
administrators by contacting the Company at 13855 Stowe Drive, Poway, California
92064,  telephone  number  (858)  375-2000.

Securities  to  be  Offered

     The Company may offer up to 1,000,000 shares of its $.0001 par value common
stock

(the  Shares") pursuant to the Plan. The Company's Common Stock is traded on the
Over  the  Counter

      Bulletin Board from Employee Stock Purchase Plan Prospectus - 1 of 6

     August  1998  under  the  symbol "SPDV." The following table sets forth the
trading  history  of the Common Stock for each quarter as reported by Tradeline.
The  quotations  reflect inter-dealer prices, without retail markup, markdown or
commission  and  may  not  represent  actual  transactions.

<TABLE>
<CAPTION>


END DATE    HIGH          LOW        CLOSE
<S>        <C>      <C>  <C>    <C>  <C>
03/31/99     2 1/2       1 7/8       2 1/4
06/30/99     2 3/8       1 1/2       2 1/4
09/30/99     2 3/8       1 1/8       1 3/8
12/31/99     1 7/8         7/8       1 1/8
03/31/00         2       25/32       1 3/4
06/30/00     1 7/8         1/2       1 1/4
08/31/00*  1 11/16         3/4           1
</TABLE>


*Partial  Period  Information

     Employees  Who  May  Participate  in  the  Plan

     Any employee of the Company or any of its subsidiaries who is in the employ
of  the  Company  or  subsidiary on an offering commencement date is eligible to
participate in that offering, except (a) employees whose customary employment is
less than 20 hours per week, and (b) employees whose customary employment is for
not  more  than  five  months  in  any  calendar  year.

     If you own 5% or more the Company's total combined voting stock or value of
all  classes  of  its  shares,  you  are  not  eligible  for Plan participation.
Additionally,  you  are  not  eligible  for  Plan participation if your right to
purchase  Shares under this Plan, and all other employee stock purchase plans of
the  Company or its subsidiaries, will accrue at a rate which exceeds $25,000 of
the  fair  market value of the Shares for each calendar year in which your right
to  subscribe  is  outstanding.

     Purchase  of  Securities  Pursuant  to  the Plan and Payment for Securities
Offered

     The  Company  will  conduct  twelve six-month offerings under the Plan. The
first  of  these  offerings  commenced  on  August  1,  1999, with each offering
thereafter  commencing  on  either  August  1  or  February 1 of each year until
termination  of  the  Plan.  The  final offering under the Plan will commence on
February  1,  2005  and  end  on  June  30, 2005. In order to become eligible to
purchase  Share  under  the  Plan,  you  must sign an enrollment agreement on or
before  commencement of the offering in which you would like to participate. The
Company  will commence making payroll deduction from your base pay, as indicated
in  your  enrollment  agreement, on the offering date, and will continue to make
the  deductions  until  the  offering  is  terminated.

                Employee Stock Purchase Plan Prospectus - 2 of 6

     Although  the Company will automatically re-enroll you for participation in
the  next  offering, you are not required to continue your participation and may
file  for  withdrawal  at  any  time  during  the  offering  period.  If you are
re-enrolled  for  subsequent  offerings under the Plan, the Company will use the
balance in your account for option exercises in the new offering. The balance of
your  account  will  be  refunded  to  you  upon termination of the Plan or your
employment  with  the  Company.

     At  the end of each offering, the number of Shares purchased by you will be
deposited  into  an  account  established in your name with a stock brokerage of
other  financial  services  firm.

     The purchase price per share for Shares purchased in any offering under the
Plan shall be the lesser of (a) 85% of the fair market value of the stock on the
offering  date;  or  (b)  85%  of the fair market value of the stock on the last
business  day  of  the  offering. The fair market value of the stock will be the
closing  ask price as reported on the Nasdaq Over-The-Counter Bulletin Board or,
if  the  stock  is  traded  on  an exchange, the closing price on that exchange.
Currently,  the  Company's  Common  Stock  is  being  traded  on  the  OTCBB.

     Shares  may  be  purchased  in  an offering under the Plan only by means of
payroll  deduction. You may not make any separate cash payment into your account
or  use  cash  to purchase Shares. At the time you file your authorization for a
payroll  deduction,  you may elect to have deductions made from your pay on each
payday  during  the  time  you participate at a rate of 2%, 4%, 6%, 8% or 10% of
your  base  pay. You may discontinue your participation in the Plan, but may not
make  any  other  change during an offering. Specifically, you may not alter the
rate  of  your  payroll  deduction  for  that  offering.

     Resale  Restrictions

     The  Plan  is  designed  to  meet  the  requirements  of Section 423 of the
Internal  Revenue  Code  of  1986, as amended (the "Code"). Section 423 requires
employees  participating in the Plan to hold their stock for a period of two (2)
years  from  the  granting of an option or one (1) year from the date the Shares
are transferred to him or her. In addition, you will be required to remain as an
employee  of  the  Company  at all time from the date an option is granted until
three  (3) months before the date of exercise. As a participant in the Plan, you
are  free  to undertake a disposition of the Shares in your account at any time,
whether by sale, exchange, gift or other transfer of legal title, so long as you
have  met  the  appropriate  holding period. Once you have satisfied the holding
requirements,  you  may  move your Share to another brokerage account or request
that  a  stock  certificate  be  issued  and  delivered  to  you.

NOTE: If you are a participant who is not subject to payment of U.S. income tax,
you  may  move  your shares or request a stock certificate without regard to the
Section  423  holding  period.

     Shares  sold  under  the  Plan  will  generally  be restricted as to resale
pursuant  to  the  Securities  Act  of  1933 Rule 701 and Rule 144. However, the
Company  has  filed for registration of the Shares on Form S-8 in order to allow
employees  participating  in  the  Plan  to re-sell their Shares pursuant to the
Reoffer  Prospectus  which  is  a part thereof. Please be advised that any sales
made  pursuant to the Reoffer Prospectus must either be registered or subject to
an  available  exemption  on  the  securities  laws  of  the  state in which the
purchaser  resides.


                Employee Stock Purchase Plan Prospectus - 3 of 6

     Tax  Effects  of  Plan  Participation

     Set  forth  below  is a brief discussion of certain specific federal income
tax  considerations for recipients of awards under the Plan, as set forth in the
Internal  Revenue  Code  of  1986,  as amended (the "Code"), and the regulations
promulgated thereunder. The discussion does not purport to deal with all aspects
of  federal  taxation  that  may be relevant to particular investors in light of
their personal investment circumstances. Accordingly, you are advised to consult
your  own  tax  advisor  regarding  the  federal,  state,  local  or  other  tax
consequences  of  awards  granted  to  you  under  the  Plan.

     STOCK  GRANTS  AND PURCHASES. A stock grant or purchase under the Plan will
generally be treated as a purchase of stock. The tax consequences of these types
of  awards  will  vary  depending on whether the stock is vested at the time you
receive  it,  and  whether you make a section 83b election as to unvested stock.
Generally, your stock is vested if you can sell it, or if you can keep the stock
(or  at  least receive full value for it) when you stop working for the Company.
If  you cannot sell the stock and you either forfeit it or sell it back for less
than  full  value if you leave your job, the stock is not vested under the Code.

Vested  Stock  - When you receive vested stock from the Company, you must report
income  for  the year you receive it in an amount equal to the fair market value
of the stock at the time you received it, reduced by the amount you paid for it,
if any. Although you may experience capital gain upon a later sale of the stock,
the income you must report upon receipt of the award is compensation income. The
amount  of tax you pay will, of course, depend on your tax bracket, and there is
a  chance  that  the  value of the stock will push you into a higher tax bracket
than  your  usual  one.

If  you  are  an employee of the Company, the Company is required to withhold on
the  income  you  report.  In order to satisfy this requirement, the Company may
require  you  to  pay  the  withholding  amount in cash at the time the award is
granted.  The  amount  paid  to cover the applicable withholding taxes will be a
credit  against  the  tax  you  owe  when  you  file  your  return,  but  may be
insufficient  to cover the full amount of the tax due on the compensation income
reported,  depending  on  a  number of factors, including your tax bracket. Note
that  the  withholding tax may not be included in your capital gain upon a later
sale  of  the  stock.

When you do sell the stock, you will be treated the same as if you had purchased
it  on the date the Company gave it to you for an amount equal to the amount you
paid  plus the amount of income you reported. In other words, even if you didn't
pay  anything  for  the stock, you will have basis equal to the amount of income
reported.  If you sell the stock after holding it for a year or less, you should
experience shortterm capital gain or loss on the sale. If you hold the stock for
more  than  a  year, you should experience long-term capital gain or loss on the
sale.

Unvested  Stock  -  When you receive unvested stock from the Company, you have a
choice  as  to  tax treatment. Under the general rule, you report nothing at the
time of receipt, but you will be required to report compensation income equal to
the  difference  between  the fair market value of the stock and the amount that
you  paid for it when it does vest. Since fair market value is determined on the
vesting  date,  if  the  value  of  the
stock  goes  up while you hold it, you will end up reporting that added value as
compensation


                Employee Stock Purchase Plan Prospectus - 4 of 6

income  when the stock vests. Prior to the vesting of the stock, you must keep a
record  of what stock you acquired, when you received it and the amount, if any,
you  paid  for  it, so that you can report income/loss or capital gain/loss when
the  stock  vests  or  upon  a  later  sale  of  the  stock,  respectively.

Upon  sale  of  the  stock, you will experience a capital gain or loss. However,
your  basis  here  will  be the amount you paid for the stock plus the amount of
income you reported at the time the stock became vested. You will only recognize
a  long-term  gain  if  you  hold the stock more than one year after the vesting
date.

NOTE:  Although  it  is the Company's current policy not to pay dividends on its
Common  Stock,  you  should  be  aware that if dividends are paid out during the
period  between  receipt  of  the  stock grant and the vesting of the stock, the
dividends will be taxed as compensation, and will be included on your W-2 rather
than  on  Form  1099-DIV.

If  you  stop working for the Company prior to the vesting of the stock, you may
be required to forfeit the stock or sell it back to the Company at the price you
paid for it, if any. If you forfeit the stock in this manner, you will report no
gain  or  loss.  Because you did not report income upon receipt of the stock you
will  have  no  deduction for any increase in value while you held the stock. If
you sell the stock back to the Company for less than you paid for it, you should
be  able  to  report  a  capital  loss.

Section  83b  - As an alternative to the general tax treatment of unvested stock
described  above,  the  recipient  of unvested stock may elect to be taxed under
Section  83b of the Code. In order to make a Section 83b election, you must send
a  notice  to  the Internal Revenue Service within 30 days after you receive the
stock.  You are advised to consult with your personal financial advisor prior to
making  any  Section  83b  election  as to the advisability of the resulting tax
treatment.

If  you  make an election under Section 83b, you are treated as though the stock
were  vested  upon receipt. (See the preceding discussion regarding vested stock
for  tax  treatment.)  You  must  value the stock as of the date of receipt, and
ignore  any  temporary  restrictions  on  your  ability  to  transfer ownership.

There  is  a risk to making a Section 83b election on unvested stock because, if
you  forfeit  the  stock  after  making  the election, the law does not permit a
deduction  for  the  taxes  reported  or  paid  upon  receipt  of  the  stock.

     STOCK  OPTIONS. On the offering date (either August 1st or February 1st for
each  year  the  Plan  is  in  effect), the Company is deemed to have granted an
option  to each participant for as many full shares as he or she will be able to
purchase  with  the  payroll  deductions  credited  to the participant's account
during  participation.  An  employee  who  continues  to  be a participant in an
offering  on  the  last  business  day  of that offering shall be deemed to have
exercised  his  or her option on that date and shall be deemed to have purchased
the  number  of  full Shares reserved for the Plan as the employee's accumulated
payroll

deductions will pay for at the option price. If you are the recipient of such an
option,  you  will  be  taxed  upon  the  exercise  of  the  option



                Employee Stock Purchase Plan Prospectus - 5 of 6

(the  last  date of the Offering). Your income tax treatment will vary, however,
according  to  whether the Shares received are vested or unvested, and according
to  your  tax bracket. You may make a Section 83b election as the unvested stock
received.  (See  the  above  discussions  of  vested  and unvested stock for tax
treatment  uponexercise.)

     Unlike an NSO, the Company is not allowed to take a deduction for the value
of options or stock issued under an ISO. The Company will receive a deduction in
the  amount  of  the  holder's  taxable  gain  on  NSOs  issued  under the Plan.

     Withdrawal  from  the  Plan;  Assignment  of  Interest

     You  may  withdraw from an offering under the Plan at any time prior to the
last business day of the offering by delivering a notice to the Company, and the
Company  will refund the entire balance of your deductions. In order to re-enter
the  Plan,  you would then file a new enrollment agreement. Your re-entry in the
Plan will not become effective until the next offering. If you are an officer of
the  Company,  you  may not re-enter the plan before the beginning of the second
offering  following  your withdrawal, in order to meet the provisions of Section
16  of  the  Securities  Exchange  Act  of  1934.

     You  may  not  sell,  assign,  transfer,  pledge or otherwise dispose of or
encumber either the payroll deductions credited tot he employee's account or any
rights  with  regard to the exercise of an option or to receive Shares under the
Plan,  other  than  by will or the laws of descent and distribution. You may not
subject  your  rights  and  interests  under the Plan to any debts, contracts or
other  liabilities.

Item  2.  Registrant  Information  and  Employee  Plan  Annual  Information

     Upon  the  written or oral request by a participant in any of the Plan, the
Company will provide any of the documents incorporated by reference in Item 3 of
Part  II  of  its  Registration  Statement  on  Form  S-8  (which  documents are
incorporated  by  reference  into  this Section 10(a) prospectus), any documents
required  to  be  delivered  to  participants  pursuant to Rule 428(b) and other
additional  information  about such plans. All of such documents and information
will  be  available without charge. Any and all such requests should be directed
to  the  Company at 13855 Stowe Drive, Poway, California 92064, telephone number
(858)  375-2025,  attention  Corporate  Secretary.

                Employee Stock Purchase Plan Prospectus - 6 of 6