<PAGE>

================================================================================

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   ----------

                                    FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934
            For the quarterly period ended_________September 30, 2003

                                       OR

              [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934.

                         Commission file number 0-27206

                                   ----------

                             SPACEHAB, Incorporated
                              601 13/th/ Street, NW
                                 Suite 900 South
                              Washington, DC 20005
                                 (202) 488-3500

      Incorporated in the State               IRS Employer Identification
      of Washington                           Number 91-1273737

The number of shares of Common Stock outstanding as of the close of business on
November 3, 2003:

              Class                            Number of Shares Outstanding
--------------------------------------    --------------------------------------
           Common Stock                               12,397,416


Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports, and (2) has been subject to such
filing requirements for the past 90 days.
Yes  [X]    No  [_]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in rule 12b-2 of the Exchange act).
Yes  [_]    No  [X]

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                     SPACEHAB, INCORPORATED AND SUBSIDIARIES
                September 30, 2003 QUARTERLY REPORT ON FORM 10-Q

                                TABLE OF CONTENTS

PART 1  -  FINANCIAL INFORMATION                                            Page
                                                                            ----

  Item 1.  Unaudited Condensed Consolidated Financial Statements

           Unaudited Condensed Consolidated Balance
           Sheets as of September 30, 2003 and June 30, 2003                   2

           Unaudited Condensed Consolidated Statements of Operations
           for the three months ended September 30, 2003 and 2002              3

           Unaudited Condensed Consolidated Statements of Cash Flows
           for the three months ended September 30, 2003 and 2002              4

           Notes to Unaudited Condensed Consolidated Financial Statements      5

  Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                          10

  Item 3.  Quantitative and Qualitative Disclosure about Market Risk          15

  Item 4.  Controls and Procedures                                            15

PART II  - OTHER INFORMATION

  Item 1.  Legal Proceedings                                                  16

  Item 4.  Submission of Matters to a Vote of Security Holders                16

  Item 6.  Exhibits and Reports on Form 8-K                                   16

                                       1

<PAGE>

PART 1: FINANCIAL INFORMATION
Item 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SPACEHAB, INCORPORATED AND SUSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share data)
                                                  September 30,
                                                      2003           June 30,
                 ASSETS                            (unaudited)         2003
                                                  -------------   -------------
Cash and cash equivalents                         $          --   $       1,301
Short-term investments                                   10,926          14,047
Restricted short-term investments                           552              --
Accounts receivable, net                                  8,709           6,780
Prepaid expenses and other current assets                   711             343
                                                  -------------   -------------
   Total current assets                                  20,898          22,471
Property, plant, and equipment, net of
 Accumulated depreciation and amortization
 of $49,112 and $48,700, respectively                    82,606          83,689
Goodwill, net                                             8,274           8,274
Investment in Guigne, net                                 1,800           1,800
Other assets, net                                         4,781           5,122
                                                  -------------   -------------
   Total assets                                   $     118,359   $     121,356
                                                  =============   =============

     LIABILITIES AND STOCKHOLDERS' EQUITY
Convertible notes payable to shareholder                    677           2,004
Mortgage loan payable                                     2,265           2,218
Revolving loan payable                                      497              --
Accounts payable and accrued expenses                     8,775           7,283
Accounts payable- EADS                                    5,500           7,824
Accrued subcontracting services                             467             522
Deferred revenue                                          6,334           7,370
                                                  -------------   -------------
      Total current liabilities                          24,515          27,221
Accrued contract cost and other                             223             255
Deferred revenue                                          8,377           8,734
Convertible subordinated notes payable                   63,250          63,250
Mortgage loan payable                                    14,275          14,860
Other long term liability                                 1,606           1,946
                                                  -------------   -------------
         Total liabilities                              112,246         116,266
Commitments and contingencies
Stockholders' equity
   Preferred Stock, no par value, convertible,
    authorized 2,500,000 shares, issued and
    outstanding 1,333,334 shares,
    (liquidation preference of $12,000)                  11,892          11,892
   Common stock, no par value, authorized
    30,000,000 shares, issued and outstanding
    12,513,516 and 12,484,779 shares,
    respectively                                         83,469          83,446
   Additional paid-in capital                                16              16
   Less treasury stock, 116,100 and 109,800
    shares, respectively                                   (117)           (111)
   Accumulated other comprehensive loss                  (1,606)         (1,946)
   Accumulated deficit                                  (87,541)        (88,207)
                                                  -------------   -------------
      Total stockholders' equity                          6,113           5,090
                                                  -------------   -------------
   Total liabilities and stockholders' equity     $     118,359   $     121,356
                                                  =============   =============

See accompanying notes to unaudited condensed consolidated financial statements.

                                       2

<PAGE>

                     SPACEHAB, INCORPORATED AND SUBSIDIARIES
            Unaudited Condensed Consolidated Statements of Operations

                                                           (Unaudited)
                                                           Three Months
(In thousands, except share data)                       Ended September 30,
                                                   ---------------------------
                                                        2003          2002
                                                   -------------  ------------
Revenue                                            $      18,850  $     26,812
Costs of revenue                                          13,527        21,634
                                                   -------------  ------------
Gross profit                                               5,323         5,178
                                                   -------------  ------------
Operating expenses
   Selling, general and administrative                     2,932         3,414
   Research and development                                   --            14
                                                   -------------  ------------
      Total operating expenses                             2,932         3,428
                                                   -------------  ------------
      Income from operations                               2,391         1,750
Interest expense                                          (1,740)       (1,859)
Interest and other income, net                                33             9
                                                   -------------  ------------
Income (loss) before income taxes                            684          (100)
Income tax (expense) benefit                                 (18)            6
                                                   -------------  ------------
   Net income (loss)                               $         666  $        (94)
                                                   =============  ============
Income (loss) per share
Net income (loss) per share - basic                $        0.05  $      (0.01)
                                                   =============  ============
Shares used in computing net income
 (loss) per share - basic                             12,370,955    12,154,465
                                                   =============  ============
Net income (loss) per share - diluted              $        0.05  $      (0.01)
                                                   =============  ============
Shares used in computing net income (loss)
 per share - diluted                                  13,745,450    12,154,465
                                                   =============  ============

See accompanying notes to unaudited condensed consolidated financial statements.

                                       3

<PAGE>

SPACEHAB, INCORPORATED AND SUBSIDIARIES

            Unaudited Condensed Consolidated Statements of Cash Flows

                                                          Three Months Ended
(In thousands)                                               September 30,
                                                          2003          2002
                                                       ----------    ----------
Operating activities                                   $      666    $      (94)
   Net income (loss)
   Adjustments to reconcile net income (loss) to
    net cash (used in) provided by
    operating activities
   Depreciation and amortization                            1,527         3,141
   Changes in assets and liabilities
      (Increase) in accounts receivable                    (1,929)         (808)
      (Increase) in prepaid expenses
       and other current assets                              (368)         (445)
      Decrease (increase) in other assets                     208          (550)
      (Decrease) in deferred revenue                       (1,393)       (2,111)
      (Decrease) increase in accounts payable,
       accrued expenses and accounts payable- EADS           (832)        1,479
      (Decrease) in accrued subcontracting
       services and other                                     (53)         (216)
                                                       ----------    ----------
      Net cash (used in) provided by
       operating activities                                (2,174)          396
                                                       ----------    ----------
Investing activities
   Payments for flight assets under construction              (49)         (109)
   Payments for building under construction                  (307)           --
   Purchases of property, equipment and
    leasehold improvements                                     --           (11)
   Proceeds received from sale of property
    and equipment                                              11           125
   Proceeds from sale of investments                        2,569            --
   Decrease in restricted cash                                 --           549
                                                       ----------    ----------
      Net cash provided by investing activities             2,224           554
                                                       ----------    ----------
Financing activities
   Payment of loan payable                                     --           (42)
   Proceeds from issuance of common stock                      23            47
   Purchase of treasury stock                                  (6)           --
   Proceeds from (repayment of) revolving
    loan payable, net                                         497        (1,420)
   Repayment of mortgage loan                                (538)         (494)
   Payment of convertible note payable
    to stockholder                                         (1,327)         (612)
                                                       ----------    ----------
      Net cash  (used in) financing activities             (1,351)       (2,521)
                                                       ----------    ----------
      Net change in cash and cash equivalents              (1,301)       (1,571)
   Cash and cash equivalents at beginning
    of period                                               1,301         2,145
                                                       ----------    ----------
   Cash and cash equivalents at end of period          $       --    $      574
                                                       ==========    ==========

See accompanying notes to unaudited condensed consolidated financial statements.

                                        4

<PAGE>

SPACEHAB, INCORPORATED AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements

1.  Basis of Presentation

In the opinion of management, the accompanying unaudited condensed consolidated
financial statements reflect all adjustments, consisting of only normal
recurring accruals necessary for a fair presentation of the consolidated
financial position of SPACEHAB, Incorporated and subsidiaries ("SPACEHAB" or the
"Company") as of September 30, 2003, and the results of its operations and cash
flows for the three month periods ended September 30, 2003 and 2002. However,
the consolidated financial statements are unaudited, and do not include all
related footnote disclosures. Certain amounts presented for prior periods have
been reclassified to conform with the fiscal year 2004 presentation.

The consolidated results of operations for the three month period ended
September 30, 2003 are not necessarily indicative of the results that may be
expected for the full year. The Company's results of operations have fluctuated
significantly from quarter to quarter. The interim unaudited condensed
consolidated financial statements should be read in conjunction with the
Company's audited consolidated financial statements appearing in the Company's
Annual Report on Form 10-K for the year ended June 30, 2003.

The Company's cash and short-term investments are approximately $11.5 million as
of September 30, 2003 of which approximately $0.6 million is restricted pursuant
to the Company's revolving loan payable. Management believes that the Company
has sufficient liquidity to fund ongoing operations for at least the remainder
of this fiscal year but may experience a reduction in cash balances during
fiscal year 2004 to fund its operating and financing activities. The Company
also expects to utilize existing cash and any potential payment from U.S.
National Aeronautics and Space Administration ("NASA") to support strategies for
new business initiatives and reduce debt service requirements. However, under
certain scenarios the Company could be facing liquidity concerns after the end
of fiscal year 2004.

2.  Earnings per Share

(in thousands except per share data)

<TABLE>
<CAPTION>
                                         Three months ended                     Three months ended
                                         September 30, 2003                     September 30, 2002
                               -------------------------------------  -------------------------------------
                                 Income        Shares      Per Share    Income        Shares      Per Share
                               (Numerator)  (Denominator)   Amount    (Numerator)  (Denominator)   Amount
                               -------------------------------------  -------------------------------------
<S>                            <C>          <C>            <C>        <C>          <C>            <C>
Basic EPS:
Income (loss) available to
 common stockholders           $       666     12,370,955  $    0.05  $      (94)     12,154,465  $   (0.01)
Effect of dilutive
securities:
   Convertible notes payable            --             --         --          --              --         --
   Options and warrants                 --         41,161         --          --              --         --
Convertible preferred shares            --      1,333,334         --          --              --         --
                               -------------------------------------  -------------------------------------
Diluted EPS:
Income (loss) available to
 common stockholders
                               $       666     13,745,450  $    0.05  $      (94)     12,154,465  $   (0.01)
                               =====================================  =====================================
</TABLE>

Convertible notes payable outstanding as of September 30, 2003, convertible into
4,642,202 shares of common stock at $13.625 per share and due October 2007, were
not included in the computation of diluted EPS for the three months ended
September 30, 2003 and 2002, as the inclusion of the converted notes would be
anti-dilutive for these periods.

                                        5

<PAGE>

Options to purchase 2,100,582 shares of common stock, at prices ranging from
$0.93 to $12.00 per share, were outstanding at September 30, 2003 but were not
included in diluted EPS as the option prices were greater than the average
market price of the common shares during the three months ended September 30,
2003. The options expire between October 9, 2003 and August 7, 2013.

Options to purchase 361,000 shares of common stock at $0.70 per share were
outstanding as of September 30, 2002, but were not included in the computation
of diluted EPS as the inclusion of these options would be anti-dilutive for the
three months ended September 30, 2002. These options expire on September 17,
2012.

Options to purchase 2,185,650 shares of common stock, at prices ranging from
$1.15 to $14.00 per share, were outstanding at September 30, 2002 but were not
included in diluted EPS as the option prices were greater than the average
market price of the common shares during the three months ended September 30,
2002. The options expire between October 9, 2002 and July 23, 2011.

3.  Revenue Recognition

Revenue generated under the Research and Logistics Mission Support ("REALMS")
contract and for all other contract awards for which the capability to
successfully complete the contract can be reasonably assured and costs at
completion can be reliably estimated at contract inception, is recognized under
the percentage-of-completion method based on costs incurred over the period of
the contract. Revenue provided by SGS is primarily derived from cost-plus award
fee contracts, whereby revenue is recognized to the extent of reimbursable costs
incurred plus award fee. Award fees which provide earnings based on the
Company's contract performance as determined by NASA evaluations, are recorded
when the amounts can be reasonably estimated or awarded. Changes in estimated
costs to complete and provisions for contract losses and estimated amounts
recognized as award fees are recognized in the period they become known. Revenue
provided by Astrotech's payload processing services is recognized ratably over
the occupancy period of the satellite while in the Astrotech facilities. For the
multi-year contracts with Boeing and Lockheed, revenue is billed and recognized
on a quarterly basis for costs incurred.

4.  Statements of Cash Flows - Supplemental Information

(a) Cash paid for interest costs was $0.4 million for the three months ended
September 30, 2003 and 2002. The Company did not capitalize any interest costs
during the three months ended September 30, 2003 and 2002.

(b) The Company paid no income taxes during the three months ended September 30,
2003 and 2002.

5.  Credit Facilities

On November 15, 2001 the Company entered into an agreement with Alenia Spazio
S.P.A. ("Alenia") to restructure the terms of its $11.9 million debt. The terms
of the restructure provide for a $3.0 million payment of principal and interest
on December 31, 2001 and quarterly amortization of the remaining principal
beginning March 2002 through December 2003. In addition, the interest rate was
reduced to 8% effective January 1, 2002. The outstanding balance is $0.7 million
as of September 30, 2003.

On August 29, 2002 the Company entered into a $5.0 million line of credit with a
new financial institution. This credit facility replaced a previous credit
facility which was repaid and expired on July 31, 2002. The term of this new
credit facility is through August 28, 2005. As of September 30, 2003, $0.5
million was drawn on this line of credit. Covenants include a liquidity ratio
and a limited pledge of $5.6 million of the Company's investment account.
Short-term investments are restricted under the pledge agreement. The
restriction on the Company's investment balance is limited to 111% of the
Company's borrowings on the line of credit.

On August 30, 2001, SPACEHAB's Astrotech subsidiary completed a $20.0 million
financing of its satellite processing facility expansion project in Titusville,
Florida with a financial institution. The proceeds of this financing were used
to complete the construction of the payload processing facility and supporting
infrastructure. The loan is collateralized primarily by the multi-year payload
processing contracts with The Boeing Company ("Boeing") and

                                        6

<PAGE>

Lockheed Martin Corporation ("Lockheed Martin"). Interest accrues on the
outstanding principal balance at a LIBOR-based rate, adjustable quarterly. The
loan matures on January 15, 2011. The loan was converted from a construction
loan to a term loan on December 31, 2001. Amortization of loan principal began
on January 15, 2002 and continues on a quarterly basis through the loan maturity
date. For the three months ended September 30, 2003, approximately $0.5 million
of principal was repaid and the remaining balance is $16.5 million (see note 9).

In conjunction with this financing, a swap agreement was required to be entered
into to provide for a fixed rate of interest under the loan commitment beginning
January 15, 2002. The fixed rate of interest on the outstanding principal
balance is 5.62% plus 225 basis points. The value of the swap agreement
increased by approximately $0.3 million during the three months ended September
30, 2003 due to increases in the market rate of interest and is recorded in
other comprehensive loss. The objective of the hedge was to eliminate the
variability of cash flows in the interest payments for the total amount of the
variable rate debt, the sole source of which is due to changes in the
USD-LIBOR-BBA interest rate. Changes in the cash flows of the interest rate swap
are expected to exactly offset the changes in cash flows attributable to
fluctuations in the USD-LIBOR-BBA interest rates on the total variable rate
debt. The fair value of the swap agreement was a liability of approximately $1.6
million and $1.9 million as of September 30, 2003 and June 30, 2003,
respectively, and is recorded in other comprehensive loss in the statement of
stockholders' equity. The comprehensive income (loss) for the three months ended
September 30, 2003 and 2002 was $1.0 million and $(0.9) million, respectively.
Comprehensive income (loss) is the sum of net income (loss) and other
comprehensive income (loss).

6.  Segment Information

Based on its organization, the Company operates in four business segments:
SPACEHAB, now designated SPACEHAB Flight Services ("SFS"), SPACEHAB Government
Services ("SGS"), Astrotech and SMI. SFS was founded to commercially develop
space habitat modules to operate in the cargo bay of the Space Shuttles. SFS
provides access to the modules and integration and operations support services
for both NASA and commercial customers. SGS is primarily engaged in providing
engineering services and products to the Federal government and NASA. Astrotech
provides payload processing facilities to serve the satellite manufacturing and
launch services industry. Astrotech currently provides launch site preparation
of flight ready satellites to major U.S. space launch companies and satellite
manufacturers. SMI was established in April 2000, to develop space themed
commercial business activities.

On April 3, 2003, the Company changed the name of its Johnson Engineering
subsidiary to SPACEHAB Government Services, Incorporated to more appropriately
reflect the subsidiary's strategic direction of operating in the government
business section. As part of the realignment of the Company's operating units,
the Strategic Programs operating unit, which was included in the Other Segment,
was moved into SGS in the fourth quarter of the Company's fiscal year ended June
30, 2003. Segment amounts have been restated based on the revised reporting
structure.

The Company's chief operating decision maker utilizes both revenue and income
(loss) before income taxes, including allocated interest based on the investment
in the segment, in assessing performance and making overall operating decisions
and resource allocations. As such, taxes and corporate overhead have not been
allocated from SFS to the various segments.

                                        7

<PAGE>

Three Months Ended September 30, 2003

                                         Income (Loss)      Net     Depreciation
                                            Before         Fixed        And
                              Revenue    Income Taxes     Assets    Amortization
                              --------------------------------------------------
SPACEHAB Flight Services      $ 11,777  $         (107)  $  34,235  $        893
SPACEHAB Government Services     3,533            (238)        220            22
Astrotech                        3,373           1,062      48,151           502
SMI                                167             (33)         --            --
                              --------------------------------------------------
                              $ 18,850  $          684   $  82,606  $      1,417
                              ==================================================

Three Months Ended September 30, 2002

                                         Income (Loss)      Net     Depreciation
                                            Before         Fixed        And
                              Revenue    Income Taxes      Assets   Amortization
                              --------------------------------------------------
SPACEHAB Flight Services      $ 12,367  $       (1,006)  $ 122,096  $      2,150
SPACEHAB Government Services    11,475             670       1,156           271
Astrotech                        2,846             318      49,477           525
SMI                                124             (82)         64            65
                              --------------------------------------------------
                              $ 26,812  $         (100)  $ 172,793  $      3,011
                              ==================================================

7.  Stock - Based Compensation

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation--Transition and Disclosure--an amendment of SFAS No. 123." This
statement amends SFAS No. 123, "Accounting for Stock-Based Compensation," to
provide alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation. In
addition, this statement amends the disclosure requirements of SFAS No. 123 to
require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The Company has chosen to
continue to account for stock-based compensation using the intrinsic value
method prescribed in APB Opinion No. 25 and related interpretations.
Accordingly, compensation expense for stock options is measured as the excess,
if any, of the fair market value of the Company's stock at the date of the grant
over the exercise price of the related option.

Had compensation costs for the Company's stock options been determined based on
SFAS No. 123, "Accounting for Stock-Based Compensation," the Company's net
income (loss) and earnings (loss) per share would have been as follows (in
thousands, except per share amounts).

                                        8

<PAGE>


                                             Three Months
                                          Ended September 30,
                                        -----------------------
                                           2003         2002
                                        -----------------------
Net income (loss), as reported          $      666   $      (94)
Deduct:  Total stock-based
 compensation expense
 determined under fair value based
 method (SFAS No. 123) for all
 awards, net of related tax effects            (91)        (151)
                                        -----------------------
Pro forma net income (loss)             $      575   $     (245)
Earnings (loss) per share:
   Basic - as reported                  $     0.05   $    (0.01)
   Diluted - as reported                $     0.05   $    (0.01)
   Basic - pro forma                    $     0.05   $    (0.02)
   Diluted - pro forma                  $     0.04   $    (0.02)

8.  Stock Repurchase

On March 25, 2003 the Board of Directors authorized the Company to repurchase up
to $1.0 million of the Company's outstanding common stock at market prices. Any
purchases under the Company's stock repurchase program may be made from
time-to-time, in the open market, through block trades or otherwise in
accordance with applicable regulations of the Securities and Exchange
Commission. For the three months ended September 30, 2003, the Company
repurchased 6,300 shares at a cost of $5,825.

9.  Subsequent Events

On October 1, 2003, Astrotech was notified by The Boeing Company ("Boeing") that
effective October 1, 2003 it would exercise its right under the contract with
Astrotech to terminate its payload processing contract. Astrotech was in full
compliance with the contract terms at the time of the termination. Boeing
indicated that the decision to terminate was based on the downturn of the
commercial expendable launch market rather than due to performance related
considerations. Under the terms of the contract termination provision, Boeing
will pay Astrotech $17.5 million. Astrotech will use the proceeds from the
termination payment to service the mortgage on Astrotech's Titusville, Florida
facility and repay funds used to complete construction of the unique five-meter
class Spacecraft Processing Facility ("SPF"). Astrotech is in the process of
evaluating options available for repayment of the loan. Astrotech's SPF mortgage
is approximately $16.5 million as of September 30, 2003. The Company will
perform a goodwill impairment test in the second quarter of fiscal year 2004 in
accordance with SFAS No. 142, Goodwill and Intangible Assets. Astrotech's net
goodwill balance is approximately $2.5 million as of September 30, 2003.

On October 1, 2003, the Company announced that it will be closing its corporate
office in Washington, D.C. and consolidating those operations into its
headquarters in Houston, Texas. The Company has initiated these actions as part
of its continuing efforts to further reduce operating expenses and improve
profitability. The Company expects to complete this transition by December 31,
2003. The Company intends to sublease its Washington, D.C. facility which is
under lease through May 31, 2006.

On November 5, 2003, NASA notified the Company that it was not awarded the ISS
Mission Integration contract. Additionally, the Boeing team's bid for the Cargo
Mission contract with NASA, of which SGS was a subcontractor, was not selected
for contract award. As the result of the loss of these contract awards, the
Company intends to make

                                        9

<PAGE>

significant adjustments to its staffing and cost base structure during the
second fiscal quarter of 2004. The Company will perform a goodwill impairment
test in the second quarter of fiscal year 2004 in accordance with SFAS No. 142,
Goodwill and Intangible Assets. SGS's net goodwill balance is approximately $5.7
million as of September 30, 2003.

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations.

General

This document may contain "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including (without limitation) statements under "Company
Strategy," "Products and Services," "Competition," "Dependence on a Single
Customer," "Research and Development," and "Backlog" in Item 1 and "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
General" and "Liquidity and Capital Resources" in Item 7. Such statements are
subject to risks and uncertainties that could cause actual results to differ
materially from those projected in the statements. In addition to those risks
and uncertainties discussed herein, such risks and uncertainties include, but
are not limited to, whether the Company will fully realize the economic benefits
under its U.S. National Aeronautics and Space Administration ("NASA") and other
customer contracts, continued utilization by NASA and others of the Company's
habitat modules and related commercial space assets, completion of the
International Space Station ("ISS"), continued availability and use of the U.S.
Space Shuttle system, technological difficulties, product demand and market
acceptance risks, the effect of economic conditions, uncertainty in government
funding and the impact of competition, delays and uncertainties in future space
shuttle and ISS programs, and resolution of the Company's indemnification claim
with NASA arising from the loss of the Columbia orbiter and its crew during the
STS-107 mission.

Management believes that NASA, as well as future Space Shuttle and ISS programs
will continue to be funded and supported by the U.S. Government. Furthermore,
management believes that it is highly unlikely that any decision to discontinue
these programs would be made during the next twelve months. However, the Company
is subject to risks and uncertainties, including but not limited to, whether the
Company will fully realize the economic benefits under its NASA and other
customer contracts, the utilization of new commercial space assets, continued
deployment of the ISS, technological difficulties, product demand and market
acceptance risks, the effect of economic conditions, uncertainty in government
funding, the impact of competition and delays and uncertainties in future Space
Shuttle and ISS programs, and resolution of the Company's indemnification claim
with NASA arising from the loss of the Columbia orbiter and its crew during the
STS-107 mission.

SPACEHAB Flight Services ("SFS") generates revenue by providing a turnkey
service that includes access to the modules and unpressurized cargo carriers and
integration and operations support to scientists and researchers responsible for
the experiments and/or logistics supplies for module missions aboard the Space
Shuttle. Revenue generated under the Research and Logistics Mission Support
("REALMS") Contract, and under new contract awards for which the capability to
successfully estimate costs and complete the contract can be demonstrated at
contract inception, is recognized under the percentage-of-completion method and
is being reported based on costs incurred over the period of the contract.

SPACEHAB Government Services primarily operated under the Flight Crew System
Development ("FCSD") Contract which was a $399.1 million multi-task cost-plus
award and incentive-fee contract. The contract commenced in May 1993 and
concluded in April 2003. Portions of the contract were under recompete and those
portions were awarded to another bidder and transitioned to that successful
bidder in April 2003. Two of the original seven FCSD tasks remain under new
contracts with SGS. Those contracts are the Configuration Management Contract
("CM") and the Stowage Engineering and Decal Contract ("SEDC"). SGS performs
services under a cost-plus award and incentive-fee contracts directed by NASA.

Astrotech revenue is generated from various multi-year, fixed-price contracts
with launch service providers. The services and facilities Astrotech provides to
its customers support the final assembly, checkout and countdown functions
associated with preparing a satellite for launch. This preparation includes: the
final assembly and checkout

                                       10

<PAGE>

of the satellite, check-out and installation of the solid rocket motors, loading
of the liquid propellants, encapsulation of the satellite in the launch vehicle
payload fairings, payload transportation to the launch pad and command and
control of the satellite during pre-launch countdown. Under the multi-year
contracts for payload processing services with commercial launch vehicle
providers, revenue is billed and recognized on a quarterly basis as costs are
incurred. Costs incurred by Astrotech are recognized as incurred. The revenue
generated from other payload support contracts, such as those with NASA, is
recognized ratably over the occupancy period of the satellites in the Astrotech
facilities.

The Company's revenues for the three months ended September 30, 2003 and 2002
were generated primarily from the REALMS contract and contracts with related
commercial customers in the SFS segment, the remaining contracts under the FCSD
contract in the SGS segment and the contracts with The Boeing Company ("Boeing")
and Lockheed Martin Corporation in the Astrotech segment. Revenues for SMI were
immaterial for the three months ended September 30, 2003 and 2002.

The Company was under contract with NASA to support the STS-107 mission on its
Columbia orbiter. The mission utilized the Company's Research Double Module
("RDM") flight asset. On February 1, 2003 the RDM was lost in the tragic STS-107
accident. The RDM was partially covered by commercial insurance. The commercial
insurance on the module was $17.7 million. The net book value of the RDM was
$67.9 million.

At this time, the Company does not plan to replace the RDM. SPACEHAB's Space
Flight Services business unit has two additional modules and other flight assets
available to support the Company's current NASA contract. These modules and
assets can also be used to support future NASA contracts.

In July 2003 the Company submitted a detailed claim in draft to NASA for
recovery of its RDM investment in the amount of $87.0 million. The claim is
anticipated to be revised in the second quarter of fiscal year 2004 to
incorporate the findings of the Columbia Accident Investigation Board, and upon
revision will be refiled with NASA. The Company believes it has a basis for
recovery of the loss from NASA but there can be no assurance as to the timing or
the amount, if any, to be received from the claim. Upon resolution of the claim,
any proceeds from NASA would be recorded in the period in which the claim is
resolved.

Based on public statements made by NASA, the Company believes the Shuttle will
return to flight; however, that return is currently expected to be no earlier
that September or October 2004.

SPACEHAB's Space Flight Services business unit is continuing its operations,
preparing for the STS-114, STS-116 and STS-118 missions. SPACEHAB is providing a
cargo carrier, known as the External Stowage Platform 2, or ESP2, that will be
deployed and permanently mounted to the orbiting International Space Station
("ISS"). The Company continues to support two additional ISS resupply missions,
STS-116 and STS-118. The Company is currently in negotiations with NASA for
equitable adjustments on its three scheduled missions due to the launch date
slippage in accordance with its REALMS contract. The equitable adjustments
available under its contract with NASA will compensate the Company for the
additional costs incurred during the extended period of delay in NASA's return
to flight.

On October 1, 2003, Astrotech was notified by Boeing that effective October 1,
2003 it would exercise its right under the contract with Astrotech to terminate
its payload processing contract. Astrotech was in full compliance with the
contract terms at the time of the termination. Boeing indicated that the
decision to terminate was based on the downturn of the commercial expendable
launch market rather than due to performance related considerations. Under the
terms of the contract termination provision, Boeing will pay Astrotech $17.5
million. Astrotech will use the proceeds from the termination payment to service
the mortgage on Astrotech's Titusville, Florida facility and repay funds used to
complete construction of the unique five-meter class Spacecraft Processing
Facility ("SPF"). Astrotech is in the process of evaluating options available
for repayment of the loan. Astrotech's SPF mortgage is approximately $16.5
million as of September 30, 2003. The contract termination will reduce
Astrotech's backlog by $34.9 million to $15.0 million as of October 1, 2003. The
Company will perform a goodwill impairment test in the second quarter of fiscal
year 2004 in accordance with SFAS No. 142, Goodwill and Intangible Assets.
Astrotech's net goodwill balance is approximately $2.5 million as of September
30, 2003.

                                       11

<PAGE>

On November 5, 2003, NASA notified the Company that it was not awarded the ISS
Mission Integration contract. Additionally, the Boeing team's bid for the Cargo
Mission contract with NASA, of which SGS was a subcontractor, was not selected
for contract award. As the result of the loss of these contract awards, the
Company intends to make significant adjustments to its staffing and cost base
structure during the second fiscal quarter of 2004. The Company will perform a
goodwill impairment test in the second quarter of fiscal year 2004 in accordance
with SFAS No. 142, Goodwill and Intangible Assets. SGS's net goodwill balance is
approximately $5.7 million as of September 30, 2003.

Costs of revenue include integration and operations expenses associated with the
performance of two types of efforts: (i) sustaining engineering in support of
all missions under a contract and (ii) mission specific support. Costs
associated with the performance of the contracts using the
percentage-of-completion method of revenue recognition are expensed as incurred.
Costs associated with the cost-plus award and incentive-fee contracts are
expensed as incurred by SGS. Other costs of revenue include depreciation expense
and costs associated with the Astrotech payload processing facilities. Flight
related insurance covering transportation of the SPACEHAB modules from
SPACEHAB's payload processing facility to the Space Shuttle, in-flight insurance
and third-party liability insurance are also included in costs of revenue and
are recorded as incurred. Selling, general and administrative and interest and
other expenses are recognized when incurred.

RESULTS OF OPERATIONS

For the three months ended September 30, 2003 as compared to the three months
ended September 30, 2002.

Revenue. Revenue decreased approximately 30% to $18.9 million as compared to
$26.8 million for the three months ended September 30, 2003 and 2002,
respectively. For the three months ended September 30, 2003 revenue of $11.8
million was recognized from the REALMS contract with NASA and with related
commercial customers, $3.5 million from SGS primarily under the CM and SEDC
contracts, $3.4 million from Astrotech and $0.2 million from SMI, primarily from
the Space Store. In contrast, for the three months ended September 30, 2002
revenue of $12.4 million was recognized from the REALMS contract with NASA and
with related commercial customers, $11.5 million from SGS primarily under the
FCSD contract, $2.8 million from Astrotech and $0.1 million from SMI, primarily
from the Space Store. The decrease in revenue under the REALMS contract and
related commercial customers is attributable to the mix of missions under
contract and the temporary grounding of the Shuttle fleet due to the STS-107
accident. Revenue at SGS decreased due to the loss of significant portions of
the FCSD contract in the third fiscal quarter of fiscal year 2003. Astrotech's
revenue increase is due primarily due to two payload processing missions
completed in the period ended September 30, 2003 as compared to three missions
under integration efforts, not completed, in the same period ended September 30,
2002.

Costs of Revenue. Costs of revenue for the three months ended September 30, 2003
decreased by 37% to $13.5 million, as compared to $21.6 million for the prior
year's quarter. For the three months ended September 30, 2003, integration and
operations costs for the REALMS and related commercial customer contracts were
$8.0 million, $3.1 million for SGS, $1.2 million for Astrotech payload
processing and $0.1 million for SMI. Costs of revenue also includes $1.1 million
of depreciation expense. In contrast, for the three months ended September 30,
2002, integration and operations costs for the REALMS and related commercial
customer contracts were $7.8 million, $10.0 million for SGS, $1.4 million for
Astrotech payload processing and $0.1 million for SMI. Costs of revenue also
include $2.3 million of depreciation expense. Integration and operations costs
for the REALMS and related commercial customer contracts increased slightly but
less revenue was recognized primarily as the result of the margin on the costs
incurred due to the temporary grounding of the Shuttle fleet due to the STS-107
accident. SGS's costs decreased due to the loss of significant portions of the
FCSD contract in the third fiscal quarter of fiscal year 2003. Astrotech's costs
decreased from the three months ended September 30, 2002 due primarily to
decreased expenses associated with reimbursable costs at Astrotech's Florida
facility. The decrease in depreciation expense was primarily related to the loss
of the Research Double Module ("RDM") in the STS-107 accident in February 2003.

Operating Expenses. Operating expenses decreased 14% to approximately $2.9
million for the three months ended September 30, 2003 as compared to
approximately $3.4 million for the three months ended September 30, 2002.

                                       12

<PAGE>

Selling, general and administrative expenses decreased as compared to the same
period last year primarily due to the elimination of $0.4 million compensation
and benefit expenses as the result of staff reductions. The remaining decrease
in selling, general and administrative expenses was primarily the result of
continuing cost reductions and a decrease in depreciation expense as certain
assets were fully depreciated as of June 30, 2003.

Research and development expenses were immaterial for the three months ended
September 30, 2003 and 2002 as the Company continued to emphasize utilizing its
existing assets base and limiting new investments in research and development.

Interest and Other Expense. Interest expense was approximately $1.7 million for
the three months ended September 30, 2003 and approximately $1.9 million for the
three months ended September 30, 2002. The decrease is due primarily to the
reduction in the Company's debt. No interest costs were capitalized during the
three months ended September 30, 2003 and 2002.

Interest and Other Income. Interest and other income was immaterial for the
three months ended September 30, 2003 and 2002. Interest income is earned on the
Company's short-term investments.

Income Taxes. Based on the Company's projected taxable status for fiscal year
2004, the Company recorded a nominal tax expense for the three months ended
September 30, 2003. A tax benefit was recorded for the quarter ended September
30, 2002.

Net Income (Loss). Net income for the three months ended September 30, 2003 was
approximately $0.7 million or $0.05 per share basic and diluted EPS on
12,370,955 shares and 13,745,450 shares, respectively, as compared to a net loss
of $0.1 million or $0.01 per share (basic and diluted EPS) on 12,154,465 shares
for the three months ended September 30, 2002.

Liquidity and Capital Resources

Historically the Company obtained operating and capital investment funds from
the proceeds of its initial public offering of common stock and an offering of
Series B Senior Convertible Preferred Stock. The Company also completed a
private placement offering of convertible subordinated notes to support capital
investments required for development and construction of space flight assets.

The Company's primary source of liquidity is cash flow from operations and
short-term investments. The principal uses of cash flow that affect the
Company's liquidity position include both operational expenditures and debt
service payments. Management is focused on increasing the Company's cash flow
and on managing cash effectively through limiting cash investments in long-term
assets.

The Company currently maintains a working capital line of credit facility
totaling $5.0 million in order to ensure appropriate levels of liquidity. As of
September 30, 2003, amounts unused and available under this credit facility were
$4.5 million.

Cash Flows From Operating Activities. Cash (used in) provided by operations for
the three months ended September 30, 2003 and 2002 was ($2.2) million and $0.4
million respectively. For the three months ended September 30, 2003, the
significant items affecting cash used in operating activities were an increase
in accounts receivable of $1.9 million and a decrease in deferred revenue of
$1.4 million. Accounts payable, accrued expenses and accounts payable-EADS
decreased by $0.8 million. For the three months ended September 30, 2002, the
significant items affecting cash provided by operating activities were
depreciation and amortization of $3.1 million and a decrease in deferred revenue
of $2.1 million. Accounts receivable increased $0.8 million and accounts
payable, accrued expenses, and accounts payable- EADS increased $1.5 million.

Cash Flows From Investing Activities. For the three months ended September 30,
2003 and 2002, cash flows provided by investing activities were $2.2 million and
$0.6 million, respectively. For the three months ended September 30, 2003 minor
expenditures were made for flight assets while approximately $0.3 million was
spent on

                                       13

<PAGE>

property and equipment to support processing operations on upcoming government
satellite missions. The Company expects to incur capital expenditures this
fiscal year of approximately $1.3 million for all business units, including
approximately $0.8 million of flight assets required to be replaced as a result
of the STS-107 disaster. Cash flows from investing activities were primarily
generated by the sale of $2.6 million of short-term investments during the
period ended September 30, 2003. For the three months ended September 30, 2002
excess machinery and equipment was sold for $0.1 million which was offset by
minor expenditures in flight assets and property and equipment of $0.1 million.
In addition, cash that was restricted at June 30, 2002 is no longer restricted.

Cash Flows From Financing Activities. For the three months ended September 30,
2003 and 2002, cash flows used in financing activities were $1.4 million and
$2.5 million, respectively. For the three months ended September 30, 2003 the
Company paid $1.9 million of obligations under various credit agreements and
borrowed $0.5 million under the revolving credit facility. For the three months
ended September 30, 2002 the Company paid $2.6 million of obligations under
various credit agreements.

The Company's liquidity has been constrained over the previous two fiscal years.
A significant portion of this constraint arose from funding of new operations
and assets in development to support future Company growth, funding a portion of
the construction cost of the Astrotech Florida facility and funding of required
debt repayments. In addition, the Company was committed to capital investments
to complete certain flight assets.

Beginning in the third quarter of fiscal year 2001, management began an
aggressive multi-faceted plan to improve the Company's financial position and
liquidity. This plan included restructuring and repayment of certain debt
obligations.

Under this plan, the Company undertook extensive efforts to reduce cash required
for both operations and capital investments. Additionally, the Company completed
planned divesting of non-core assets. Development and construction of new assets
is currently limited to those assets required to fulfill existing commitments
under contracts and to replace certain flight assets as the result of the
STS-107 disaster. The Company has no further on going commitments to fund
development or construction of any other assets. The Company completed the
planned restructuring of certain debt obligations and continues to focus on
reducing its outstanding debt.

On March 25, 2003 the Board of Directors authorized the Company to repurchase up
to $1.0 million of the Company's outstanding common stock at market prices. Any
purchases under the Company's stock repurchase program may be made from
time-to-time, in the open market, through block trades or otherwise in
accordance with applicable regulations of the Securities and Exchange
Commission. As of September 30, 2003, the Company had repurchased 116,100 shares
at a cost of $117,320 under the program. The Company will continue to evaluate
the stock repurchase program and the funds authorized for the program.

The Company was under contract with NASA to support the STS-107 mission on its
Columbia orbiter. The mission utilized the Company's RDM flight asset. On
February 1, 2003 the RDM was lost in the tragic STS-107 accident. The RDM was
partially covered by commercial insurance. During the three months ended March
31, 2003 the Company received $17.7 million from commercial insurers. The
Company does not plan on replacing the RDM. The Company has two additional
modules available to support the Company's current NASA contracts. The Company
has invested the majority of the commercial insurance proceeds in U.S. Treasury
securities, Federal sponsored agencies and repurchase agreements collateralized
by U.S. Treasury securities in order to safeguard capital and provide ready
liquidity. In July 2003 the Company submitted a detailed claim in draft to NASA
for recovery of its RDM investment in the amount of $87.0 million. The claim is
anticipated to be revised in the second quarter of fiscal year 2004 to
incorporate the findings of the Columbia Accident Investigation Board, and upon
revision will be refiled with NASA. The Company believes it has a basis for
recovery of the loss from NASA but there can be no assurance as to the timing or
the amount, if any, to be received from the claim. Upon resolution of the claim,
any proceeds from NASA would be recorded in the period in which the claim is
resolved.

Management continues to focus its efforts on improving the overall liquidity of
the Company through identifying new business opportunities within the areas of
the Company's core competencies, reducing operating expenses and limiting cash
commitments for future capital investments and new asset development. SPACEHAB
Government

                                       14

<PAGE>

Services is pursuing significant new contracts to provide service for the
International Space Station. In the event that SPACEHAB Government Services is
not successful in its effort to secure additional contracts, management would
further rightsize the Company's cost structure and evaluate remaining long-lived
assets and goodwill. The Company has continued to restrict new capital
investment and new asset development, limiting projects to those required to
support current contracts and facility maintenance. Additionally, management
continues to evaluate operating expenses in an effort to reduce or eliminate
costs not required to effectively operate the Company.

The Company's cash and short-term investments are approximately $11.5 million as
of September 30, 2003 of which approximately $0.6 million is restricted pursuant
to the Company's revolving loan payable. Management believes that the Company
has sufficient liquidity to fund ongoing operations for at least the remainder
of this fiscal year but may experience a reduction in cash balances during
fiscal year 2004 to fund its operating and financing activities. The Company
also expects to utilize existing cash and any potential payment from NASA to
support strategies for new business initiatives and reduce debt service
requirements. However, under certain scenarios the Company could be facing
liquidity concerns after the end of fiscal year 2004.

The Company's contractual obligations as of September 30, 2003 are as follows:

<TABLE>
<CAPTION>
                                                      Remaining
                                                         in:
                                                        Fiscal    Fiscal    Fiscal    Fiscal     Fiscal
                                      September 30,      Year      Year      Year      Year       Year
Contractual Obligations                  2003            2004      2005      2006      2007       2008     Thereafter
---------------------------------------------------------------------------------------------------------------------
<S>                                   <C>             <C>         <C>       <C>       <C>       <C>        <C>
Long-term Debt                        $      63,927         677        --        --        --     63,250   $       --
Mortgage Loan Payable                        16,540       1,680     2,412     2,625     2,529      1,734        5,560
Capital Leases                                  272         205        67        --        --         --           --
Operating Leases, Net                         8,726       2,018     3,026       579       259        (99)       2,943
                                      -------------------------------------------------------------------------------
Total Contractual Cash Obligations    $      89,465   $   4,580   $ 5,505   $ 3,204   $ 2,788   $ 64,885   $    8,503
                                      ===============================================================================
(Excluding interest payments)
</TABLE>

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk.

The Company has no material changes to the disclosure made on this matter in the
Company's Annual Report on Form 10-K for the year ended June 30, 2003.

ITEM 4.  Controls and Procedures

Under the supervision and with the participation of the Company's management,
including its principal executive officer and principal financial officer, the
Company has evaluated the effectiveness of the design and operation of its
disclosure controls and procedures within 90 days of the filing date of this
quarterly report, and, based on its evaluation, the Company's principal
executive officer and principal financial officer have concluded that these
controls and procedures are effective. There were no significant changes in the
Company's internal controls or in other factors that could significantly affect
these controls subsequent to the date of their evaluation.

Disclosure controls and procedures are the Company's controls and other
procedures that are designed to ensure that information required to be disclosed
by the Company in the reports that the Company files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Securities and Exchange Commission's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by the
Company in the reports that we file under the Exchange Act is accumulated and
communicated to its management, including its principal executive officer and
principal financial officer, as appropriate to allow timely decisions regarding
required disclosure.

                                       15

<PAGE>

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     NONE

ITEM 2. CHANGES IN SECURITIES

     NONE

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     NONE

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     NONE

ITEM 5. OTHER INFORMATION

     NONE

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     a)   99.1   Certification pursuant to 18 U.S. C. Section 1350, as adopted
                 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

          99.2   Certification pursuant to 18 U.S. C. Section 1350, as adopted
                 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

          10.121 Second amendment to Finance and Security agreement, dated
                 August 29, 2002, by and among Riggs Bank, N.A. and the Company,
                 SPACEHAB Government Services, Inc. and Astrotech Space
                 Operations, Inc.

     b)   Reports on Form 8-K.

          -      The Company's earnings release for the period ended June 30,
                 2003 was filed on Form 8-K on August 29, 2003.

          -      The Company's press release relative to the Boeing contract
                 termination was filed on Form 8-K on October 23, 2003.

          -      The Company's earnings release for the period ended
                 September 30, 2003 was filed on Form 8-K on November 7, 2003.

                                       16

<PAGE>

                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                        SPACEHAB, INCORPORATED


Date: November 10, 2003                 /s/  Michael E. Kearney
                                        ----------------------------------------
                                        Michael E. Kearney
                                        President and Chief Executive Officer


                                        /s/  Julia A. Pulzone
                                        ----------------------------------------
                                        Julia A. Pulzone
                                        Senior Vice President, Finance
                                        and Chief Financial Officer


                                       17

<PAGE>

                                 CERTIFICATIONS

I, Michael E. Kearney, certify that:

     1.   I have reviewed this report on Form 10-Q of SPACEHAB, Incorporated;

     2.   Based on my knowledge, this quarterly report does not contain any
          untrue statement of a material fact or omit to state a material fact
          necessary to make the statements made, in light of the circumstances
          under which such statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge, the financial statements, and other financial
          information included in this quarterly report, fairly present in all
          material respects the financial condition, results of operations and
          cash flows of the registrant as of, and for, the periods presented in
          this quarterly report;

     4.   The registrant's other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
          and we have:

          a.   Designed such disclosure controls and procedures to ensure that
               material information relating to the registrant, including its
               consolidated subsidiaries, is made known to us by others within
               those entities, particularly during the period in which this
               quarterly report is being prepared;

          b.   Evaluated the effectiveness of the registrant's disclosure
               controls and procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c.   Presented in this quarterly report our conclusions about the
               effectiveness of the disclosure controls and procedures based on
               our evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent evaluation, to the registrant's auditors and the
          audit committee of registrant's board of directors (or persons
          performing the equivalent function):

          d.   All significant deficiencies in the design or operation of
               internal controls which could adversely affect the registrant's
               ability to record, process, summarize and report the financial
               data and have identified for the registrant's auditors any
               material weaknesses in internal controls; and

          e.   Any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal controls; and

     6.   The registrant's other certifying officers and I have indicated in
          this quarterly report whether or not there were significant changes in
          internal controls or in other factors that could significantly affect
          internal controls subsequent to the date of our most recent
          evaluation, including any corrective actions with regard to
          significant deficiencies and material weaknesses.


Date: November 10, 2003


                                        /s/  Michael E. Kearney
                                        ----------------------------------------
                                        Michael E. Kearney
                                        President and Chief Executive Officer


                                       18

<PAGE>

                                 CERTIFICATIONS

I, Julia A. Pulzone, certify that:

     1.   I have reviewed this report on Form 10-Q of SPACEHAB, Incorporated;

     2.   Based on my knowledge, this quarterly report does not contain any
          untrue statement of a material fact or omit to state a material fact
          necessary to make the statements made, in light of the circumstances
          under which such statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge, the financial statements, and other financial
          information included in this quarterly report, fairly present in all
          material respects the financial condition, results of operations and
          cash flows of the registrant as of, and for, the periods presented in
          this quarterly report;

     4.   The registrant's other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
          and we have:

          a.   Designed such disclosure controls and procedures to ensure that
               material information relating to the registrant, including its
               consolidated subsidiaries, is made known to us by others within
               those entities, particularly during the period in which this
               quarterly report is being prepared;

          b.   Evaluated the effectiveness of the registrant's disclosure
               controls and procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c.   Presented in this quarterly report our conclusions about the
               effectiveness of the disclosure controls and procedures based on
               our evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent evaluation, to the registrant's auditors and the
          audit committee of registrant's board of directors (or persons
          performing the equivalent function):

          a.   All significant deficiencies in the design or operation of
               internal controls which could adversely affect the registrant's
               ability to record, process, summarize and report the financial
               data and have identified for the registrant's auditors any
               material weaknesses in internal controls; and

          b.   Any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal controls; and

     6.   The registrant's other certifying officers and I have indicated in
          this quarterly report whether or not there were significant changes in
          internal controls or in other factors that could significantly affect
          internal controls subsequent to the date of our most recent
          evaluation, including any corrective actions with regard to
          significant deficiencies and material weaknesses.


Date: November 10, 2003


                                        /s/   Julia A. Pulzone
                                        ------------------------------
                                        Julia A. Pulzone
                                        Senior Vice President, Finance
                                        and Chief Financial Officer

                                       19