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...............December 31, 1998



                                       OR


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


                         Commission file number 0-27206


                             SPACEHAB, Incorporated
                                300 D Street, SW
                                   Suite 814
                             Washington, D.C. 20024
                                 (202) 488-3500



 Incorporated in the State of Washington         I.R.S. Employer
                                                 Identification
                                                 No. 91-1273737


The number of shares of Common Stock outstanding as of the close of business
                                          on January 31, 1999:


              Class               Number of Shares
                                  Outstanding
              Common Stock                       11,188,836


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
                                                             ------ -----


<PAGE>


                  DECEMBER 31, 1998 QUARTERLY REPORT ON FORM 10-Q
                                 TABLE OF CONTENTS




PART 1   FINANCIAL INFORMATION                                    Page

Item 1.   Unaudited Condensed Consolidated Financial Statements

         Condensed Consolidated Balance Sheets as of 
         December 31, 1998 and June 30, 1998                         3

         Condensed Consolidated Statements of Operations for the 
         Three and Six Months ended December 31, 1998 and 1997       4

         Condensed Consolidated Statements of Cash Flows for the
         Six Months ended December 31, 1998 and 1997                 5

         Notes to Unaudited Condensed Consolidated Financial 
         Statements                                                  6


Item 2.  Management's Discussion and Analysis of Financial 
         Condition and Results of Operations                         9


PART II - OTHER INFORMATION

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

Item 6.  Exhibits and Reports on Form 8-K                            17

<PAGE>

PART 1:  FINANCIAL INFORMATION
Item 1.  UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                    SPACEHAB, INCORPORATED AND SUBSIDIARIES
                     Condensed Consolidated Balance Sheets




(In thousands, except share data)                 December 31,       June 30,
                                                      1998             1998
                                                  (unaudited)       (audited)
                                               ---------------  ---------------
                              ASSETS
Cash and cash equivalents                        $     38,787      $    92,327
Receivables                                            18,968            5,979
Prepaid expenses and other current assets               1,695              550
                                               ---------------  ---------------
     Total current assets                              59,450           98,856
Property, plant and equipment, net of
 accumulated depreciation and amortization
 of $46,221 and $43,338                               115,805          112,588
Goodwill, net of accumulated amortization of           27,148            3,224
$804 and $230
Other assets, net                                       6,675    
                                                                         5,936
                                               ---------------  ---------------
     Total assets                               $     209,078    $     220,604


      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Loan payable, current portion               $      2,824     $      2,824
     Loan payable under credit agreement,                 333              500
current portion
     Accounts payable and accrued expenses             10,683            6,204
     Accrued subcontracting services                    8,629           13,177
     Deferred revenue                                   8,953   
                                                                        13,491
                                               --------------    -------------
          Total current liabilities                    31,422           36,196

Accrued contract costs                                    906                -
Notes payable to shareholder                            7,860           11,895
Loan payable under credit agreement, net of                           
  current portion                                         667            1,000
Loan payable, net of current portion                    7,765            9,177
Convertible notes payable                              63,250           63,250
Deferred income taxes                                   2,094            2,678
                                               --------------   --------------
          Total liabilities                           113,964          124,196
Commitments and contingencies
Stockholders' equity:
    Common stock, no par value, authorized
       30,000,000 shares, issued and outstanding
       11,176,651 and 11,168,161 shares,               
respectively                                           81,383           81,239 
     Additional paid-in capital                            16               16
     Retained earnings                                 13,715           15,153
                                               --------------   --------------
          Total stockholders' equity                   95,114           96,408 
                                               --------------   --------------
          Total liabilities and stockholders'   
          equity                                $     209,078     $    220,604 
                                                =============     ============ 
     

      See accompanying notes to unaudited condensed consolidated financial
                                  statements.



<PAGE>

                    SPACEHAB, INCORPORATED AND SUBSIDIARIES
           Unaudited Condensed Consolidated Statements of Operations



<TABLE>
<CAPTION>

                                               Three Months              Six Months
(In thousands, except share data)           Ended December 31,       Ended December 31,
                                          -----------------------  ------------------------
                                            1998         1997          1998         1997
                                          ----------  -----------   -----------  -----------
<S>                                             <C>          <C>           <C>         <C>  
Revenue                                    $  23,634    $ 17,756      $ 51,907    $ 20,293
Costs of revenue:
   Integration and operations                 14,547       6,143        33,237       9,961
   Depreciation                                1,259       1,224         2,517       2,446
   Insurance and other direct costs            4,350         553         6,142         752
                                          -----------  ----------   -----------  ----------
      Total costs of revenue                  20,156       7,920        41,896      13,159
                                          -----------  ----------   -----------  ----------
Gross profit                                   3,478       9,836        10,011       7,134
Operating expenses:
   Marketing, general and administrative       4,722       3,243         8,857       5,881
   Research and development                      763         760         1,010       1,051
                                          -----------  ----------   -----------  ----------
      Total operating expenses                 5,485       4,003         9,867       6,932
                                          -----------  ----------   -----------  ----------
      Income (loss) from operations          (2,007)       5,833           144         202
Interest expense, net of capitalized           1,227       1,176         2,658       1,379
amounts
Interest and other income                      (918)     (1,148)       (1,437)     (1,410)
Other expense                                      -           -           550           -
                                          -----------  ----------   -----------  ----------
      Income (loss) before income taxes      (2,316)       5,805       (1,627)         233
Income tax expense (benefit)                   (465)          78         (189)         160
                                          -----------  ----------   -----------  ----------
      Net income (loss)                   $  (1,851)     $ 5,727    $  (1,438)       $  73
                                          ===========  ==========   ===========  ==========

Basic earnings per share:
Net income (loss) per share- basic        $   (0.17)   $    0.51    $   (0.13)   $    0.01
                                          ===========  ==========   ===========  ==========
Shares used in computing net income
   Per share- basic                       11,176,651   11,149,789   11,172,507  11,148,830
                                          ===========  ==========   =========== ===========
Diluted earnings per share:
Net income (loss) per share - diluted     $   (0.17)   $    0.43    $   (0.13)   $    0.01
                                          ===========  ==========   ===========  ==========
Shares used in computing net income
   Per share - assuming dilution          11,176,651   15,034,271   11,172,507   11,401,426
                                          ===========  ==========   ===========  ===========
</TABLE>









      See accompanying notes to unaudited condensed consolidated financial
                                  statements.

<PAGE>

                    SPACEHAB, INCORPORATED AND SUBSIDIARIES
           Unaudited Condensed Consolidated Statements of Cash Flows


   (In thousands)                               Six Months Ended December 31,
                                                  1998             1997
                                              --------------  ---------------
   Cash flows provided by (used for)
   operating activities:
     Net income (loss)                          $    (1,438)      $       73
                                                    
     Adjustments to reconcile net income
      (loss) to net cash provided by 
      (used for)operating activities:
      Depreciation and amortization                   3,693            2,790
      Changes in assets and liabilities:
        Increase in accounts receivable             (4,624)          (2,915)
        Increase in prepaid and other
          current assets                              (639)            (954)
        Increase in deferred mission costs                -          (1,149)
        Increase in other assets                      (233)          (1,575)
        Increase (decrease) in deferred                 
          revenue                                   (4,539)           9,171
        Increase (decrease) in accounts
          payable and accrued expenses              (3,589)             887
        Decrease in accrued consulting
          and subcontracting services               (4,570)            (693)
                                              --------------  ---------------
            Net cash provided by (used for)        
            operating activities                   (15,939)            5,635
                                              --------------  ---------------
   Cash flows used for investing activities:
     Payments for flight assets under               
       construction                                 (3,948)          (8,339)
     Payments for building under
       construction                                   (446)          (2,046)
     Purchase of property and equipment and 
       other assets                                 (2,061)            (687)
     Purchase of Johnson Engineering, net of       
       cash acquired                               (25,344)                -
                                              --------------  ---------------
            Net cash used for investing            
            activities                             (31,799)         (11,072)
                                              --------------  ---------------
   Cash flows provided by (used for)
   financing activities:
     Payment of note payable to Insurers              (500)            (500)
     Payment of  debt placement fees                      -          (3,822)
     Proceeds from issuance of convertible            
       notes payable                                      -           63,250
     Payment of note payable to shareholder         (4,035)                -
     Proceeds from note payable                           -           13,413
     Payment of loan payable                        (1,412)                -
     Proceeds from issuance of common stock             145               66
                                              --------------  ---------------
            Net cash provided by (used for)         
            financing activities                    (5,802)           72,407
                                              --------------  ---------------
            Net increase (decrease) in cash
             and cash equivalents                  (53,540)           66,970
   Cash and cash equivalents at beginning of                          
   period                                            92,327           12,887
                                              --------------  ---------------
   Cash and cash equivalents at end of period  $     38,787     $     79,857
                                              ==============  ===============





      See accompanying notes to unaudited condensed consolidated financial
                                  statements.

<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  December  31,  1998,  and the results of
their  operations  for the three and six month periods  ended  December 31, 1998
and 1997 and their cash flows for the six months  ended  December  31,  1998 and
1997.  However,  the  consolidated  financial  statements are unaudited,  and do
not  include all  related  footnote  disclosures.  The  consolidated  results of
operations for the three and six months ended December 31, 1998 and 1997 are not
necessarily  indicative  of the results  that may be expected for the full year.
The Company's  results of  operations  fluctuate  significantly  from quarter to
quarter (see note 4). 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 Form 10-K for the
year ended June 30, 1998.

2.  Earnings per Share:

In December 1997,  the Company  adopted the provisions of Statement of Financial
Accounting  Standards (SFAS) No. 128, Earnings Per Share,  which establishes new
guidelines, for the calculations of earnings per share.


The following are  reconciliations  of the numerators and  denominators of
the  basic  and  diluted  earnings  per  share  computations  for the  three and
six-month periods ended December 31, 1998 and 1997, respectively:

(In thousands except   Three months ended          Three months ended 
 per share data)        December 31, 1998           December 31, 1997
                      Income      Shares    Per    Income    Shares        Per
                                           Share                           Share
                   (Numerator)(Denominator)Amount(Numerator)(Denominator) Amount
                    ------------------------------------------------------------
 Basic EPS:
 Income available                      
 to common           
 stockholders        $(1,851)  11,176,651 $(0.17)   $5,727   11,149,789   $0.51

 Effect of dilutive
 securities:
 Convertible notes
 payable                 -          -       -         $797    3,626,446       -
 Options and           
 warrants                -          -       -          -        258,036       -
                        --------------------------------------------------------
 Diluted EPS:
 Income available                      
 to common 
 stockholders        $(1,851)  11,176,651  $(0.17)  $6,524   15,034,271   $0.43


                       Six months ended                 Six months ended 
                       December 31, 1998                December 31, 1997
                      Income     Shares     Per     Income     Shares       Per
                                           Share                           Share
                   (Numerator)(Denominator)Amount (Numerator)(Denominator)Amount
                        --------------------------------------------------------
 Basic EPS:
 Income available                                        
 to common                                              
 stockholders        $(1,438)  11,172,507  $(0.13)     $73   11,148,830   $0.01
                                   
 Effect of dilutive
 securities:
 Convertible notes 
 payable                   -            -       -        -           -       - 
 Options and           
 warrants                  -            -       -        -      252,596      -
                        --------------------------------------------------------
 Diluted EPS:
 Income available 
 to common                                                   
 stockholders :      $(1,438)  11,172,507  $(0.13)     $73   11,401,426   $0.01
       

Convertible   notes   payable   outstanding   as  of  December  31,  1998,
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  and six  months  ended  December  31,  1998  or the  six  months  ending
December  31,  1997  as  the   inclusion  of  the   converted   notes  would  be
anti-dilutive for these periods.
 
Options and warrants to purchase  1,425,373 shares of common stock for the three
month period ended December 31,1998,  at prices ranging from $8.88 to $24.00 per
share,  were  outstanding  as of December  31, 1998 but were not included in the
computation  of diluted EPS because the  options'  exercise  prices were greater
than the average market price of the common shares during the three months ended
December 31, 1998. The options  expire  between  February 19, 1999 and August 3,
2007.

Options and  warrants to purchase  1,342,000  shares of common stock for the six
months  ending  December 31, 1998,  at prices  ranging from $9.875 to $24.00 per
share,  were outstanding but were not included in the computation of diluted EPS
because the options'  exercise prices were greater than the average market price
of the common shares during the six months ended  December 31, 1998. The options
expire between February 19, 1999 and August 3, 2007.

Options and  warrants to purchase  1,161,650  shares of common  stock,  at
prices ranging from $11.00 to $14.88 per share,  were  outstanding for the three
and six month  periods  ended  December  31, 1997 but were not  included in the
computation  of diluted EPS because the options' and warrants'  exercise  prices
were  greater  than the average  market  price of the common  shares  during the
three  and  six  month  periods  ended  December 31, 1997.  The  options  expire
between  January  31, 1998 and October  21,  2004 and  warrants  expire  between
December 31, 1997 and June 21, 1998.


3.  Acquisition of Johnson Engineering:

On July 1, 1998, the Company  acquired all of the outstanding  shares of capital
stock  of  Johnson  Engineering  Corporation  ("Johnson  Engineering").  Johnson
Engineering  performs several  critical  services for NASA including flight crew
support  services,  operations,  training and  fabrication  of mockups at NASA's
Neutral  Buoyancy  Laboratory and at NASA's Mockup and  Integration  Laboratory,
where  astronauts train for both Space Shuttle and  International  Space Station
missions.  Johnson  Engineering  also designs and  fabricates  flight  hardware,
such as flight crew  equipment  and crew  quarters  habitability  outfitting  as
well as provides  stowage  integration  services.  Johnson  Engineering  is also
responsible  for  configuration  management of the  International  Space Station
(ISS).

The Company paid approximately  $25.3 million,  including  transaction costs, to
acquire  all  of  the  capital  stock  of  Johnson  Engineering.   The  business
combination is being  accounted for using the purchase  method under  Accounting
Principles  Board  Opinion No. 16,  Business  Combinations,  (APB Opinion 16) to
record  the  purchase  of all the  capital  stock of  Johnson  Engineering.  The
purchase price has been allocated to the assets and  liabilities  acquired based
on  preliminary  estimates  of fair value as of the date of  acquisition.  Based
on the allocation of the net assets acquired,  goodwill of  approximately  $24.6
million was  recorded.  Such  goodwill  is being  amortized  on a  straight-line
basis over 25 years.  The  purchase  price has been  allocated  as follows (in
thousands):


            Cash                       $        2
            Prepaid and other  current        
              assets                          306
            Accounts receivable, net        8,366
            Inventory                           5
            Property, plant and       
            equipment, net                    446
            Other assets                      622
            Goodwill                       24,562
            Current liabilities           (8,070)
            Accrued contract costs          (928)
                                            ---- 
            Total purchase price         $ 25,311
                                         ========
                                        


APB Opinion 16 requires,  for purchase business  computations,  the presentation
of pro  forma  combined  results  of  operations  for the  current  year and the
preceding  year as if the  combination  had  occurred  at the  beginning  of the
periods presented.  The following  unaudited pro forma  consolidated  results of
operations are not necessarily indicative of actual or future results of 
operations.

(in thousands except per       Three Months             Six Months
 share data)                 Ended December 31,      Ended December 31,
                               1998         1997        1998           1997
                            ------------------------------------------------
 Revenue                  $   23,634  $    29,151   $   51,907     $   45,467
 Gross profit                  3,478       11,397       10,011          9,648
 Net income (loss)        $  (1,851)  $     5,708      (1,438)     $       21
                          ==========    ==========   ==========     =========

 Net income (loss) per 
 share - diluted          $   (0.17)  $      0.43    $   (0.13)     $    0.00  
                          ==========    ==========   =========      ========= 

4.  Revenue Recognition:

Under the Mir contract,  revenue was recognized  upon  completion of each module
flight,  total  contract  revenue  was  allocated  to each  flight  based on the
amount  of  services  the  Company  provided  on the  flight  relative  to total
services  provided for all flights under contract.  Obligations  associated with
a specific  mission,  e.g.,  integration  services,  were also  recognized  upon
completion  of the  mission.  For the  REALMS  contract  and  for  new  contract
awards for which the  capability  to  successfully  complete the contract can be
reasonably  assured and the costs at  completion  can be reliably  estimated  at
contract   inception,   revenue   is recognized   under   the
percentage-of-completion  method.  This  percentage-of-completion  method allows
the Company to report  revenue  based on costs  incurred on a per mission  basis
over the period of that mission.  The  percentage of completion  method  results
in the recognition of revenue over the period of contract  performance,  thereby
decreasing  significant  quarter by quarter  fluctuations  in reported  revenue.
Revenue provided by the Astrotech  payload  processing  facilities is recognized
ratably  over  the  occupancy   period  of  the   satellites  at  the  Astrotech
facilities.  Revenue  provided  by Johnson  Engineering  is  primarily  based on
cost-plus  award fee contracts,  whereby  revenue is recognized to the extent of
costs    incurred   plus   estimates   of   award   fee   revenues   using   the
percentage-of-completion  method.  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 are awarded.

5.  Statements of Cash Flows - Supplemental Information:

(a)   Cash  paid  for  interest  costs  was  $3.8  million  and $0.9 million for
the six months ended December 31, 1998 and 1997, respectively.   The  Company
capitalized  interest of  approximately  $1.2 million and $0.8 million during
the six months ended December 31, 1998 and 1997, respectively.

(b) The Company paid $4 thousand and $1.4 million for income taxes during the
six months ended December 31, 1998 and 1997, respectively.


6.  Credit Facilities:

On June 16,  1997,  the  Company  entered  into a $10.0  million  line of credit
agreement  with a  financial  institution.  Outstanding  balances on the line of
credit  accrue  interest  at either the  lender's  prime  rate or a  LIBOR-based
rate,  and are  collateralized  by certain  assets of the  Company.  The term of
the  agreement is through  October  1999.  As of December 31, 1998,  the Company
had not drawn against the line of credit.

On July 14,  1997, the Company's  wholly owned  subsidiary,  Astrotech,  entered
into a five-year  credit  facility with a financial  institution for loans of up
to $15.0  million.  This loan is  collateralized  by the assets of Astrotech and
certain  other  assets  of the  Company,  and  is  guaranteed  by  the  Company.
Interest  accrues at LIBOR plus three  percent.  As of December  31,  1998,  the
Company had drawn $14.1  million  against this loan. As of December 31, 1998 and
1997,  the  outstanding  balance  on this  loan  was  $10.6  million  and  $13.4
million, respectively.

In October 1997, the Company  completed a private  placement  offering for $63.3
million of aggregate  principal of 8% Convertible  Subordinated  Notes due 2007.
Interest is payable  semi-annually.  The notes are  convertible  into the common
stock of the  Company at a rate of $13.625  per share.  This  offering  provided
the Company  with net  proceeds of  approximately  $59.9  million to be used for
capital  expenditures  associated with the development and construction of space
related  assets,  the  purchase  of Johnson  Engineering  and for other  general
corporate purposes.

In December 1998, the Company amended the agreement with Alenia Spazio S.p.A., a
shareholder,   relative  to  subordinated  notes  payable  with  an  outstanding
principal  balance of $11.9  million and due in August  2001.  In  exchange  for
payment of $4.0  million of  principal  payable on or before  December 31, 1998,
Alenia agreed to waive the interest  payment due for the quarter ended  December
31, 1998 and reduce the annual interest rate on the subordinated  notes from 12%
to 10% on the  outstanding  balance as of January 1, 1999. The interest  expense
benefit,$0.4  million  for the  payment  waived,  is  being  amortized  over the
remaining term of the loan which is due August 2001.  Beginning January 1, 1999,
the same interest rate will be applied to the senior debt (the  Insurers'  note)
that has an outstanding balance of $1.0 million as of December 31, 1998.



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) the "General"
and   "Liquidity  and  Capital   Resources"   sections  of  this  Item  2.  Such
statements  are  subject to certain  risks and  uncertainties,  including  those
discussed  herein,  which could cause actual results to differ  materially  from
those projected in such statements.

      SPACEHAB was  incorporated in 1984 to  commercially  develop space habitat
modules to operate in the cargo bay of the Space Shuttles.

The Company  currently  operates under two contracts with NASA: the Research and
Logistics Module Services  Contract,  (the "REALMS  Contract"),  a $87.8 million
contract for two research  missions  aboard the Space  Shuttle and two logistics
missions to resupply  the  International  Space  Station;  and,  the Flight Crew
Systems  Development  Contract (the "FCSD Contract")  currently a $324.9 million
multitask cost-plus-award and incentive-fee contract, that commenced in May 1993
and will  conclude  in April 2001.  The value of the NASA  portion of the REALMS
contract is $63.0  million for four firm  missions and the  commercial  value is
currently  $24.8  million.  The Company has the  potential to increase the total
REALMS contract value by additional  $12.5 million through module usage sales to
commercial  customers for microgravity space research such as the European Space
Agency (ESA),  the National  Space  Development  Agency of Japan (NASDA) and the
Canadian Space Agency (CSA). The first mission under the REALMS Contract, STS-95
which carried Senator John Glenn back into space, was completed in October 1998.
The three remaining  flights are scheduled for launch in May 1999,  October 1999
and December  2000.  Under the FCSD  Contract,  Johnson  Engineering  provides a
variety of critical crew training, support and manufacturing functions on a cost
plus award fee and incentive fee basis.




<PAGE>

Revenue

      SPACEHAB  generates  revenue  by:  (i)  providing  lockers  and/or  volume
within the SPACEHAB  Modules;  (ii) integration and operations  support services
provided to scientists and researchers  responsible for the experiments;  and/or
(iii)  from NASA or  International  Agencies  to carry  logistics  supplies  for
Module  missions  aboard  the  Shuttle  system.  Under  the  Mir  Contract,  the
Company  recognized  revenue  only  at the  completion  of  each  Space  Shuttle
mission  utilizing  Company  assets.   Accordingly,   the  Company's   quarterly
revenue  and  profits  had  fluctuated   dramatically  based  on  NASA's  launch
schedule  and will  continue to do so under any  contract  for which  revenue is
recognized  only upon  completion of a mission.  For the REALMS contract and for
future  contract  awards for which the capability to  successfully  complete the
contract can be demonstrated at contract  inception,  revenue  recognition under
the  percentage-of-completion  method is being  reported based on costs incurred
on   a   per   mission   basis   over   the   period   of   the   mission.   The
percentage-of-completion  method results in the  recognition of revenue over the
period  of  contract   performance,   thereby   significantly   decreasing   the
quarter-by-quarter fluctuations in reported revenue.

      Astrotech   revenue  is  derived  from  various   multiyear   fixed  price
contracts  with  satellite and launch  vehicle  manufacturers.  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 of the
satellite,  installation  of the solid  rocket  motors,  loading  of the  liquid
propellant,   encapsulation   of   the   satellite   in  the   launch   vehicle,
transportation  to the  launch pad and  command  and  control  of the  satellite
during  pre-launch   countdown.   Revenue  provided  by  the  Astrotech  payload
processing  facilities  is recognized  ratably over the occupancy  period of the
satellites  in the  Astrotech  facilities.  In  addition,  Astrotech  expects to
generate  additional  revenue from an exclusive  multiyear  agreement to process
all  Sea  Launch  program  payloads  at  the  Boeing  facility  in  Long  Beach,
California.

      Johnson  Engineering  generates  revenue primarily from its multiyear cost
plus award and incentive-fee  contract with NASA. Johnson  Engineering's  flight
crew support  services include  operations,  training and fabrication of mockups
at NASA's  Neutral  Buoyancy  Laboratory,  and at NASA's Mockup and  Integration
Laboratory,  where  astronauts  train for both Space  Shuttle and  International
Space Station missions.  Johnson  Engineering also designs and fabricates flight
hardware  including  flight  crew  equipment  and  crew  quarters   habitability
outfitting  and  provides  stowage   integration   services.   Johnson  is  also
responsible  for  configuration  management  of the  ISS.  Revenue  provided  by
Johnson  Engineering  is recognized  to the extent of costs  incurred plus award
fee using the  percentage  of  completion  method,  measured on costs  incurred.
Award fees, which provide  earnings based on contract  performance as determined
by periodic  NASA  evaluations,  are recorded when the amounts can be reasonably
estimated or are awarded.

Costs of Revenue

      Costs  of  revenue  for  SPACEHAB   missions   include   integration   and
operations   expenses   associated  with  the  performance  of  three  types  of
efforts:  (i)  sustaining  engineering  in  support  of  all  missions  under  a
contract,  (ii)  mission  specific  support  and (iii)  other  costs of  revenue
including  depreciation  expense,  related insurance,  costs associated with the
Astrotech  payload  processing  facilities and Johnson  Engineering  costs under
the  FCSD  Contract.   Expenses  associated  with  sustaining   engineering  are
expensed as incurred.


RESULTS OF OPERATIONS

For the three  months  ended  December  31, 1998 as compared to the three months
ended December 31, 1997.


      Revenue.  Revenue  increased  by 33% to  approximately  $23.6  million  as
compared  to $17.8  million for the three  months  ended  December  31, 1998 and
1997,  respectively.  Revenue of $9.4  million  was  recognized  from the REALMS
contract  with NASA and with related  commercial  customers,  $11.9 million from
Johnson  Engineering  under the FCSD  contract and $2.3 million from  Astrotech.
In  contrast,  for the  quarter  ended  December  31,  1997,  revenue  of $13.6
million  was  recognized  for the  fifth  Mir  mission  upon the  return  of the
module,  $1.7  million was  recognized  under the REALMS  contract for both NASA
and related  commercial  customers  and revenue of $2.5 million was generated by
Astrotech.  Johnson's  revenue was reduced  during the quarter  ended  December
31,  1998 by $0.7  million as the result of the  receipt of their  award  score,
for the award  period  April-September  1998,  which was lower than  accrued and
resulted  in  no  fee  earned  for  the  period.  The  fee  reduction  addressed
performance  at  Johnson  prior  to  its  acquisition  by  SPACEHAB.  Corrective
action has been taken and the award  score has been  appealed  to NASA.  For the
current  award  period,  Johnson  has  been  recognizing  revenue  based  on  an
anticipated  award score of 75%,  which  management  of the Company  believes is
reasonable  based on its  understanding of the reasons for the low score and the
corrective   actions  taken  by  the  Company  in  response  to  the  customer's
concerns.  There can be no assurance that Johnson will achieve that score.

      Costs of  Revenue.  Costs of revenue for the quarter  ended  December  31,
1998  increased  by 254% to $20.2  million,  as compared to $7.9 million for the
prior  year's  quarter.  This  significant  increase is due to the  inclusion of
Johnson Engineering's costs of $11.6 million, primarily for costs incurred in
support  of the  FCSD  contract.  For the  quarter  ended  December  31,  1998,
integration  and  operations  costs  for  the  REALMS  and  related   commercial
customer  contracts  were $6.2  million,  $1.1  million  for  Astrotech  payload
processing  and $1.3  million  of  depreciation  expense.  For the three  months
ended December 1997, the components of costs of revenue include  integration and
operations  costs under the Mir contract of $4.6  million,  $1.0  million  under
the  REALMS  and  related  commercial  customer  contracts,  $1.1  million  for
Astrotech payload processing, and depreciation expense of $1.2 million.

      Operating  Expenses.  Operating  expenses  increased  approximately 37% to
approximately  $5.5  million for the three  months  ended  December  31, 1998 as
compared to  approximately  $4.0 million for the three months ended December 31,
1997.  This  increase  is due  primarily  to the  Company's  efforts to increase
staff  during  fiscal year 1998 by adding  strength in  engineering,  design and
research and  development  capabilities  and also reflects the additional  costs
of  approximately  $0.7 million  incurred for operating the Johnson  Engineering
subsidiary,  which was  acquired in July 1998.  Research and  development  costs
were essentially the same for the two corresponding periods.

      Interest  and Other  Expense.  Interest  expense  was  approximately  $1.2
million  for  the  three  months   ended   December  31,  1998  as  compared  to
approximately  $1.2 million for the three months ended December 31, 1997.  There
was also  approximately  $0.6 million and $0.5  million of interest  capitalized
for the quarters ended  December 31, 1998 and 1997,  respectively.  Interest was
capitalized  based on the  construction  of the Company's  research  module with
double   module   hardware,   the  ICC  and  an  additional   facilities   being
constructed by Astrotech.
 
            Interest   and  Other   Income.   Interest   and  other  income  was
approximately  $0.9  million  and  $1.1  million  for  the  three  months  ended
December 31, 1998 and 1997,  respectively.  Interest is earned on the  Company's
short-term  investments of proceeds  received from the Company's debt financings
completed during July and October 1997.

Income Taxes. Based on the Company's  projected taxable earnings for fiscal year
1999, the Company has recorded a $0.5 million income tax benefit for the quarter
ended December 31, 1998.

      Net  Income (Loss).  Net income (loss) was  approximately  ($1.9)  million
and  $5.7   million  for  the  quarter   ended   December  31,  1998  and  1997,
respectively.  Basic earnings per share for the quarter ended  December 31, 1998
and 1997 was  ($0.17)  per  share on  11,176,651  shares  and $0.51 per share on
11,149,789  shares, respectively.  Diluted  earnings  per share for the  quarter
ended  December  31, 1998 and 1997 were ($0.17) per share on  11,176,762  shares
and $0.43 per share on 15,034,271 shares, respectively.
 

For the six months  ended  December 31, 1998 as compared to the six months ended
December 31, 1997.

      Revenue.  Revenue  increased  by 156% to  $51.9  million  as  compared  to
$20.3   million  for  the  six  months   ended   December  31,  1998  and  1997,
respectively.  Revenue  recognized  during the six  months  ended  December  31,
1998 was from:  REALMS  and  commercial  customer  contracts  of $20.8  million;
Astrotech  operations  of $4.8  million and Johnson  Engineering  operations  of
$26.3 million primarily under the FCSD contract.  Conversely, for the six months
ended December 31, 1997 the Company's revenue was attributable to the fifth 
mission under the Mir Contract of $13.6 million, REALMS and commercial  customer
contracts of $1.7 million and Astrotech  operations  of $5.0 million.  Johnson's
revenue  was  reduced  during  the  quarter  ended  December  31,  1998 by $0.7
million  as the  result  of the  receipt  of their  award  score,  for the award
period  April-September  1998,  which was lower than  accrued and resulted in no
fee earned for the period.  The fee reduction  addressed  performance at Johnson
prior to its  acquisition  by  SPACEHAB.  Corrective  action  has been taken and
the  award  score has been  appealed  to NASA.  For the  current  award  period,
Johnson has been  recognizing  revenue  based on an  anticipated  award score of
75%,  which  management  of the  Company  believes  is  reasonable  based on its
understanding  of the  reasons  for the low  score  and the  corrective  actions
taken by the  Company in response to the  customer's  concerns.  There can be no
assurance that Johnson will achieve that score.

Costs of  Revenue.  Costs of revenue  for the six months  ended  December
31, 1998 increased  318% to $41.9 million,  as compared to $13.2 million for six
months ended December 31, 1997.  The primary  components of costs of revenue for
the six months ended December 31, 1998 include  integration  and operation costs
under  the  REALMS  and   commercial   customer   contracts  of  $12.3  million,
Astrotech  operations  $2.3  million  and  Johnson  Engineering  $24.8  million.
Depreciation  expense for the period was $2.5 million. In contrast,  the primary
components  of costs of  revenue  for the six months  ended  December  31,  1997
included  integration  and  operations  costs  under  the Mir  contract  of $7.5
million,  REALMS  and  commercial  customers  contracts  of  $1.1  million,  and
Astrotech  operations  of $2.1  million.  Depreciation  expense  for the  period
was $2.5 million.

   Operating  Expenses.  Operating  expenses  increased by approximately  42% to
approximately  $9.9  million  for the six  months  ended  December  31,  1998 as
compared to  approximately  $6.9 million for the six months  ended  December 31,
1997.  This  increase  is due  primarily  to the  Company's  efforts to increase
staff,  adding  strength in  engineering,  design and research  and  development
capabilities  during fiscal year 1998.  In addition,  $1.4 million of costs were
incurred for operating  Johnson  Engineering.  Research and development  expense
is similar to the prior year.

   Interest and Other Expense.  Interest and other expense was  approximately  
$3.2 million for the six months ended December 31, 1998 as compared to  
approximately $1.4 million for the six  months  ended  December  31,  1997.  
There was  approximately  $1.2 million  and $0.8  million of  capitalized  
interest  for the six  months  ended December  31,  1998 and 1997, respectively.
Interest  for the  current  fiscal year is  capitalized  primarily on the  
construction  of the  Company's  science module with  adapter  hardware, the ICC
and an additional payload processing facility being  constructed  by  Astrotech.
The  increase in interest  expense between  the  two  periods  is due  primarily
to the  interest  accrued  on the convertible notes that were issued on
October 21, 1997.     Additionally during the six months  ended  December  31, 
1998,  the Company  recognized  $0.6 million in other expense  related to costs 
associated with a debt offering that the Company canceled in July.

   Interest  and Other  Income.  Interest  and other  income  was  approximately
$1.4  million for the six months  ended  December  31,  1998 and 1997.  Interest
income is due to short-term  interest  earned by the Company for the  investment
of  proceeds  received  from  the  Company's  credit  facilities.

Income Taxes. Based on the Company's  projected taxable earnings for fiscal year
1999,  the Company has  recorded a $0.2  million  income tax benefit for the six
months ended December 31, 1999.

    Net  Income (Loss).  Net  income (loss) was approximately ($1.4) million, or
($0.13) per share (basic and diluted EPS),  on 11,172,507  shares as compared to
$0.1  million,  or $0.01 per share (basic EPS and  diluted),  for the six months
ended December 31, 1997, on 11,148,830 shares and 11,401,426 respectively.


LIQUIDITY AND CAPITAL RESOURCES

The Company has  historically  financed its capital  expenditures,  research and
development and working capital  requirements  with progress  payments under its
various  contracts,  as well as with  proceeds  received  from  private debt and
equity  offerings  and  borrowings  under  credit  facilities.  During  December
1995,  SPACEHAB  completed  an  initial  public  offering  of common  stock (the
"Offering"),  which  provided  the Company  with net  proceeds of  approximately
$43.5  million.  In June 1997,  the Company signed an agreement with a financial
institution  securing a $10.0 million  revolving line of credit (the  "Revolving
Line of Credit") that the Company may use for working  capital  purposes.  As of
December  31,  1998,  no  amounts  were  drawn on this line of  credit.  In July
1997,  Astrotech  obtained a  five-year  term loan (the "Term Loan  Agreement"),
which is guaranteed  by SPACEHAB,  and provides for draws of up to $15.0 million
for general corporate  purposes.  As of December 31, 1998, the Company had drawn
$14.1  million  on this  loan and had an  outstanding  balance  on that  date of
$10.6 million.  On October 21, 1997, the Company  completed a private  placement
offering  of  convertible  subordinated  notes  (the  "Notes  Offering"),  which
provided  the Company  with net proceeds of  approximately  $59.9  million to be
used for capital  expenditures  associated with the development and construction
of space related assets,  the purchase of Johnson  Engineering,  and for general
corporate  purposes.  In December 1998,  the Company  amended its agreement with
Alenia Spazio S.p.A. relative to subordinated  notes payable with an outstanding
balance of  $11.9  million.  In  exchange  for  payment  of  $4.0  million  of
principal,  Alenia agreed to reduce the annual  interest rate from 12% to 10% on
the outstanding  balance as of January 1, 1999 and the interest  payment due for
the quarter  ended  December 31, 1998 was waived.  An agreement with the senior
debt  holders under the Insurers' note requires that the same  interest  rate be
applied to the senior debt with an outstanding balance of $1.0 million as of
December 31, 1998.
 
For the period ended  December  31,  1998,  the Company was in breach of certain
loan  covenants  of the term loan and line of  credit  facility.  The  covenants
had been  negotiated  prior to the  acquisition  of Johnson  Engineering.  While
the Company  has not drawn  against the line of credit,  covenant  waivers  were
requested  and received  from both lending  institutions.  The Company is in the
process or renegotiating the loan covenants.

   Cash Flows from  Operating  Activities.  Cash  flows  provided  by (used for)
operating  activities for the six months ended December 31, 1998 and 1997,  were
($15.9)  million  and $5.6  million  respectively.  The  decrease  in cash flows
provided by operating  activities  for the current  period is due to a number of
factors.  Deferred  flight  revenue  decreased  by $4.5  million  during the six
months ended December 31, 1998.  Accrued  consulting and subcontracting services
decreased by $4.6 million.  Accounts payable  decreased by $3.0 million. 
Accounts  receivable  increased by $3.6 million related to missions currently 
under contract.

   Cash Flows from  Investing  Activities.  For the six  months  ended  December
31,  1998  and  1997,  cash  flows  used  for  investing   activities  consisted
primarily  of  capital  expenditures  related  to  the  acquisition  of  Johnson
Engineering  in July  1998 for  $25.3  million.  Additional  investing  included
approximately  $3.9 million  attributable to the  construction of the ICC system
and the  Company's  research  module with  adapter  hardware.  $0.5  million was
invested in the  expansion  of the  Astrotech  facilities,  $1.2 million for the
purchase  of  additional  property  and  equipment  and $0.8 million  in a joint
venture with Guigne Technologies Limited.

   Cash Flows from  Financing  Activities.  Cash  flows  provided  by (used for)
financing  activities  were  approximately  ($5.8) million and $72.4 million for
the six  months  ended  December  31,  1998 and 1997,  respectively.  During the
period  ended  December  31,  1998, the Company  made an early  payment of $4.0
million of Alenia debt in  exchange  for a lower  interest  rate and a waiver of
interest  expense  due and payable for the quarter  ended  December  31,  1998.
Additional  payments were made on outstanding  debt of $1.9 million.  During the
six months  ended  December  31,  1997,  the Company  received  net  proceeds of
approximately  $13.4  million  under the Term Loan  Agreement.  In August  1997,
the  Company  also made the  first  payment  of $0.5  million  under the  Credit
Agreement.  In October 1997, the Company  received net proceeds of approximately
$59.9 million by  completing an offering of $55.0 million of its 8%  Convertible
Subordinated   Notes  due  2007  as  well  as  exercise  of  the   underwriters'
over-allotment for an additional $8.3 million.

The Company  believes that cash flows from the Notes Offering,  the Term Loan
Agreement,  the Revolving Line of Credit and other current financing  activities
will be  sufficient  to meet any cash  flow  requirements  from  operations  and
other funding  requirements  for capital asset  construction and development for
at least the next twelve months.



<PAGE>

Recent Accounting Pronouncements

In June 1997,  the FASB issued SFAS No. 131,  "Disclosures  about Segments of an
Enterprise  and  Related  Information"  (SFAS  131).  SFAS 131  establishes  new
procedures and requirements for the (i)  determination of business  segments and
(ii)  presentation  and  disclosure  of  segment  information.  The  Company  is
required to adopt the provisions of SFAS 131 for the year ended June 30, 1999.


Year 2000 Readiness Disclosure Statement

The Year 2000 ("Y2K") issue is the result of computer programs that were written
using two digits rather than four to define the  applicable  year.  Any computer
program that has  date-sensitive  software may  recognize the date using "00" as
the year 1900  rather  than the year 2000.  This error  could  result in systems
failures and computational errors causing disruptions of operations,  including,
among other  things,  the  temporary  inability  to process  transactions,  send
invoices or engage in similar normal business activities.

SPACEHAB has  established  a Y2K program to address both  information-technology
("IT") and non-IT problems that may exist within the SPACEHAB system,  including
its vendors and  customers,  e.g.- NASA and the Space  Shuttle.  SPACEHAB's  Y2K
program  is divided  into five  major  phases-  Awareness  and Risk  Assessment,
Inventory and Risk Assessment, Repair, Replacement and Renovation,  Verification
and Validation, and Implementation and Monitoring.
 
Phases

AWARENESS   AND  RISK   ASSESSMENT-   This  phase  is  intended  to  ensure  the
establishment  of the Y2K  program  and the  awareness  of  potential  risks and
issues.  This phase  involves  communicating  the status and progress of the Y2K
program  within  SPACEHAB and to third parties.  It is an on-going  activity and
will continue as SPACEHAB proceeds through the other phases.

INVENTORY  AND RISK  ASSESSMENT-  This phase  involves  taking an  inventory  of
SPACEHAB  hardware,  software and  infrastructure to identify those systems that
are and are not Y2K  compatible.  The  emphasis  is on those  items,  which  are
believed  by  SPACEHAB  to have a  significant  impact  on the  business  from a
financial, legal or service perspective. While this process is ongoing, SPACEHAB
estimates that this phase is  substantially  complete for Company owned hardware
and  software.  SPACEHAB is in the process of surveying  third party  vendors to
determine their state of readiness.

REPAIR,  REPLACEMENT AND RENOVATION- This phase, also known as "conversion",  is
intended to ensure that the appropriate  items identified in the preceding phase
are upgraded to meet the Y2K compliance criteria. Material repairs, replacements
and renovations will be substantially  complete by the end of the current fiscal
year for systems that are under direct  control of SPACEHAB.  No  assessment  of
completion dates are available for which third parties are responsible until the
completion of that portion of the Inventory and Risk Assessment phase.

VERIFICATION AND VALIDATION- This phase ensures that critical processes, systems
and  infrastructure  are verified and tested to ensure Y2K issues will not cause
major  disruptions  in the  on-going  operations  and  business of the  Company.
Verification  and testing of systems  under  SPACEHAB's  direct  control will be
performed by SPACEHAB personnel and personnel of Spacehab's major subcontractor,
Boeing.  SPACEHAB  expects that all testing of these systems will be complete by
the end of the Company's fiscal year.

IMPLEMENTATION  AND  MONITORING-  Y2K upgrades  are and will be  installed  into
SPACEHAB's operating systems as necessary. Monitoring will be employed to ensure
that unforeseen Y2K critical items are appropriately prioritized for correction.
SPACEHAB's implementation and monitoring activities are ongoing.


State of Readiness

While there is uncertainty  inherent in the Y2K problem  resulting in large part
from the  uncertainty  of the  readiness  of  third  party  vendors,  SPACEHAB's
progress  towards  completing  risk  assessment  within the SPACEHAB  systems is
expected to be completed before the end of 1999.

A) Based on an ongoing  assessment,  the  Company has  determined  that the vast
majority of the hardware and software used in its  administrative  functions are
Y2K  compliant.  The computers  that are not compliant  will be replaced  during
1999.

B) Some  computer  hardware  used in the  operations  function of SPACEHAB  will
require  upgrading.  The computers at  SPACEHAB's  Payload  Process  Facility in
Florida  used for  ground  support  electrical  testing  (GSE)  are  antiquated,
inefficient  and are not Y2K  compatible.  A proposal has been to upgrade  those
systems during 1999.

C) Surveys  and/or  questionnaires  are being sent to those third  parties  that
might  have an  impact  on  SPACEHAB's  business  to  determine  their  state of
readiness.  Those third parties include;  NASA, Boeing,  Lockheed-Martin and the
various utility service companies serving our locations.
 
Costs

The costs associated with required modifications to become Y2K compliant are not
expected  to  be  material  to  SPACEHAB's  financial  position  or  results  of
operations.   The  current   estimate  to  become  Y2K   compliant  is  minimal,
approximately  $0.2 million,  for the  replacement of all hardware and software.
This  estimate  excludes  system  enhancements,  modifications  and  upgrades to
replace  inefficient  and antiquated  GSE equipment.  The costs of the Year 2000
program are being expensed as incurred.

Risks

In a likely worse case  scenario,  the failure to correct a material Y2K problem
could result in an  interruption  in, or a failure of, certain  normal  business
activities  or  operations,  including  operations  that  are  essential  to the
provision of SPACEHAB's services. Due to the general uncertainty inherent in the
Y2K  problem,  resulting  in major  part  from the state of  readiness  of third
parties,  SPACEHAB is unable to determine at this time whether the  consequences
of Y2K failures will have a material impact on SPACEHAB's results of operations,
liquidity or financial  condition.  The potential Y2K impacts from third parties
include;  the failure of the utility  companies  and power  grids,  NASA and the
shuttle in particular  and from the customer  owned IT systems which are located
at Astrotech's payload processing facilities.

Contingency Plans

After gathering information from SPACEHAB's Y2K readiness program and to prepare
for the possibility that certain  information  systems or third parties will not
be Y2K compliant, SPACEHAB intends to develop appropriate contingency plans. The
GSE at  SPACEHAB's  payload  processing  facility  in  Florida,  while  not  Y2K
compliant,  is still usable.  The only functionality of the GSE that is expected
to be  impaired  is the  printing  of the  correct  date on  computer  generated
reports.

Readers are cautioned that the discussion of SPACEHAB's efforts and expectations
related  to Year  2000 are  forward  looking  statements  and  should be read in
conjunction  with  SPACEHAB's  disclosure  under  "Management's  Discussion  and
Analysis of  Financial  Condition  and Results of  Operations-  Forward  Looking
Statements."



<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


      The Annual Meeting of  Shareholders was held on October  20, 1998.

      ( a )       At the Annual Meeting of Shareholders, the existing Board of
Directors stood for and were duly reelected, with each nominee receiving a
vote of at least 8,731,770 votes.
           The reelected directors are:
           Hironori Aihara
           Robert A. Citron
           Dr. Edward E. David, Jr.
           Dr. Shelley Harrison
           Dr. Shi H. Huang
           Chester M. Lee
           Gordon S. Macklin
           Dr. Brad M. Meslin
           Dr. Udo Pollvogt
           Alvin L. Reeser
           James R. Thompson
           Giuseppe Viriglio
      ( b ) The appointment of KPMG LLP as the Company's  independent
auditors for fiscal year 1999 was also approved and ratified.
For 9,386,175           Against     830         Abstain     11,155




ITEM 5.  OTHER INFORMATION

      NONE





ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits.  The separate Index to Exhibits accompanying this filing is
         incorporated herein by reference.

(b)   Reports on Form 8-K.
 
         None

      Exhibit No.             Description of Exhibits

10.85 Letter Agreement between the Company and Alenia Aerospazio

10.86 Employment and Non-Interference Agreement dated July 1, 1998 between the
                  Company and William A. Jackson

10.87 Employment and Non-Interference Agreement dated July 1, 1998 between the
                  Company and Eugene A. Cernan

10.88 Employment and Non-Interference Agreement dated July 1, 1998 between the
                  Company and W.T. Short

10.89 Modification S/A 14 to NAS9-97199 dated November 25, 1998, between the
                  Company and NASA

      11.         Statement regarding Computation of Earnings Per Common Share.

      27          Financial Data Schedule

 
 





<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: February 16, 1999        /s/ Mark A. Kissman
                                      ----------------------------------
                                      Mark A. Kissman
                                      Vice President, Finance 
                                      and Chief Financial Officer


                                      /s/ David A. Rossi
                                      ----------------------------------
                                      David A. Rossi
                                      President and Chief Operating
                                      Officer